Lawrence v. Sutton-Zwolle Oil Co.

190 So. 351, 193 La. 117, 1939 La. LEXIS 1170
CourtSupreme Court of Louisiana
DecidedMay 29, 1939
DocketNo. 35172.
StatusPublished
Cited by1 cases

This text of 190 So. 351 (Lawrence v. Sutton-Zwolle Oil Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lawrence v. Sutton-Zwolle Oil Co., 190 So. 351, 193 La. 117, 1939 La. LEXIS 1170 (La. 1939).

Opinion

FOURNET, Justice.

Plaintiff, Charles H. Lawrence, Jr., instituted this suit against James G. Sutton, Robert J. Boudreau, and Robert R. Stone individually and against two corporations of which they constitute the entire board of directors, namely, the James G. Sutton Oil Company, Incorporated and the Sutton-Zwolle Oil Company, Incorporated (hereinafter referred to as the Sutton Company and the Zwolle Company respectively), seeking to annul and set aside a purported assignment by him to the said Sutton, Boudreau, and Stone of certain oil and gas leases affecting property located in the Parish of Sabine bearing date of October 25, 1937, and an assignment by them of the said leases to the Zwolle Company dated February 4, 1938, and also to reform a verbal contract alleged to have been entered into between him and the Sutton Company for the development of the leases for a stipulated consideration, and, as reformed, that the Sutton Company be compelled to accept the same.

For cause of action, plaintiff alleged that he procured the block of leases in controversy, covering and affecting certain lands situated in Township 7 North, Range 14 West, of Sabine Parish, Louisiana (hereinafter referred to as the Sabine leases), and, in order to have the same developed, some time, during the month of October of 1937, he entered into a verbal agreement with the Sutton Company, represented by its board of directors and officers (Sutton, Boudreau, and Stone), whereby he agreed to assign the leases to the Sutton Company, the consideration therefor being the assumption by it of the drilling obligations of the several lease contracts, and, further, to reimburse plaintiff the expenses incurred by him in securing the leases, aggregating $770, and to pay him the additional sum of $50,000 out of the value of any oil, gas, or other minerals that might be produced from any of the lands covered by the leases; that on the 25th of October, 1937, he signed a sheet of paper prepared by Robert R. Stone as Secretary-Treasurer of the Sutton Company, which was explained to him at the time to be sufficient evidence to carry out the agreement to transfer the leases to the Sutton Company, but that on March 4, 1938, he was' informed that there was placed of record in the conveyance records of Sabine Parish a document pur *121 porting to be an assignment by him of the several leases to Sutton, Boudreau, and Stone individually, instead of to the Sutton Company; that upon investigation he discovered that Sutton, Boudreau, and Stone, intending to defraud him, altered and changed the- instrument signed by him so as to indicate that the intended transfer was to be in favor of the individuals, and, further, that two paragraphs were added to the page signed by him describing certain mineral leases which he had never 'agreed to or intended to transfer either to the said individuals or the Sutton Company; that on February 3, 1938 Sutton, Boudreau, and Stone, pursuant to their conspiracy to defraud plaintiff, organized the Zwolle Company with themselves as the sole subscribers to the stock thereof and on the next day executed an act assigning the leases .in controversy to the company in consideration of the issuance by it to each of them of 120 shares of its capital stock of the par value of $100. The plaintiff further alleged that he was persuaded by Sutton, Boudreau, and Stone, as officers of the Company, to consent to accept an oil payment of $4,000, plus $1,000 cash, instead of $50,000 as originally agreed, on the false representation by them that the corporation had entered into an agreement with William T. Burton to develop the leases jointly with the Sutton Company and that it could not carry out its agreement with him with regard to the $50,000 oil payment because of the objection of Burton thereto.

The defendants filed an exception of vagueness, asking for a bill of particulars, which was never argued because plaintiff promptly and- satisfactorily supplemented his petition. The defendant Sutton Company then filed exceptions of no cause and no right of action, which were overruled by the trial judge. While these exceptions of no cause and no right of action were pending, and prior to an answer having been filed by any of the defendants, Lawrence G. Menuet, asserting his right as a stockholder of the Sutton Company, intervened, joining the plaintiff in his demands. The allegations of his petition are practically the same as those of the plaintiff, with the addition that he stated that the funds of the Sutton Company had been expended in procuring and in drilling the said leases.

Two more interventions were filed, one by William T. Burton, claiming to have a half interest in the production under the leases, in accordance with an alleged contract entered into between himself and the Sutton Company, the other by Dr. Dempsey C. lies, claiming a three-fourth interest in the consideration received and to be received by the plaintiff for his assignment of the leases, in accordance with his contract with the plaintiff.

Intervenor Burton also adopted the allegations of facts contained in plaintiff’s petition and alleged further that during the month of October or November of 1937 he entered into a verbal contract with the Sutton Company whereby it was agreed that the Sabine leases would be developed together with certain other leases owned by him in the Vinton area for their joint benefit, the cost of which was to be paid out of the surplus accumulated by them *123 from the joint development of certain leases in Cameron Parish and known as the “Sutton Joint Account”; that.both the Vinton lease and the Sabine leases were drilled by the Sutton Company, the former resulting in a dry hole, while the latter is now producing, but' that the Sutton Company refuses to recognize his interest in the production under the Sabine leases. In the alternative he alleges that in the event the Sabine leases are legally vested in and owned by the Zwolle Company, the title thereto was acquired by the company without his knowledge, but with full knowledge on the part of the company of his (intervenor’s) ownership of an undivided half interest in the entire production of all oil, gas, or other minerals produced and which may be produced under the said leases. The prayer of his petition is in accordance with his allegations.

Intervenor lies, briefly stated, made the following allegations: That he entered into a verbal agreement with plaintiff to procure the Sabine leases; that under this agreement the leases were to be placed in intervenor’s name and that out of -the profit made from the sale of such leases plaintiff was to receive one-fourth thereof and intervenor three-fourths; that in fraud of said agreement plaintiff had the leases placed in his own name and refused to recognize intervenor’s interest in whatever consideration has been paid and is due from his assignment of the Sabine leases, and prayed for relief accordingly.

Defendants, after the trial judge had disposed of the exceptions of no cause and no right of action filed by the Sutton Company, answered the main suit and all of the interventions denying generally and specifically' all of the allegations of fact which set out a cause of action.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Lawrence v. Boudreau
9 So. 2d 224 (Supreme Court of Louisiana, 1942)

Cite This Page — Counsel Stack

Bluebook (online)
190 So. 351, 193 La. 117, 1939 La. LEXIS 1170, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lawrence-v-sutton-zwolle-oil-co-la-1939.