Myers v. Garland

1927 OK 438, 262 P. 654, 128 Okla. 247, 1927 Okla. LEXIS 439
Supreme Court of Oklahoma·Decided November 22, 1927·No. 18408·Published·Cited by 2 cases

Opinion

HEFNER, J.

E. p. Myers, as plaintiff, sued R. F1. Garland, as defendant, in the district court of Tulsa county. The parties will be referred to in this court as they appeared. in the trial court.

The plaintiff’s cause of action was for the declaration, settlement, accounting, and dissolution of an alleged partnership relation existing between himself and the defendant, and for the setting aside of a settlement of the alleged partnership affairs entered into on the 21st day of April, 1(926. The relief prayed for was based on the grounds of misrepresentation, concealment, adverse pressure, and threats, as contemplated by section 8112, C. O. S. 1921, the same being charged to be part of a general plan and intention on the part of the defendant to cheat and defraud the plaintiff of his interest in the partnership property and to gain a material advantage over the plaintiff in the division of the partnership assets for his own individual use.

The plaintiff, at the time the alleged partnership was formed, owned a block of acreage in Harper county. Kan., of approximately 9,000 acres, which was turned into the alleged partnership and upon which a test well was then 'being drilled, and. thereafter plaintiff and defendant acquired oil and gas leases upon other lands, including the S. % of N. E. % of section 26, 9 north, 6 east, in Seminole county, Okla., upon i which they were required to drill a well. They made a drilling contract with the Independent Oil & Gas Company by which they agreed to convey to the company an undivided one-half interest in the lease and, in addition thereto, two 40-acre tracts as a consideration for the drilling of said well. The well was spudded in on or about the 19th day of April, 1926.

Negotiations for the division of the property held jointly by plaintiff and defendant were begun about the 18th day of April, 1926. Under this settlement the parties divided the acreage owned jointly by them. The court, in one of its findings of fact, discloses how the settlement was made and how the property was divided. The finding is as follows:

“That within a day or two before the 21st of April. 1926, the parties entered into negotiations looking to the closing out of the affairs in which they were jointly interested, and to the plaintiff’s leaving the offices over which the defendant heretofore had control: that various negotiations were had each party making the other various proposals, and which negotiations culminated in the plaintiff’s taking about 1,500 acres of acreage around the Harper county well, keeping an eighth interest in the said well, taking one-third of the Reno county acreage, assigning to the defendant his one-quarter interest in the Seminole county discovery well, and keeping a half interest in 80 acres immediately west of the discovery well and assigning: to the defendant $1,500 of the White Eagle Oil & Refining Company’s purchase order, in, payment of the commissions then owing to the defendant.”

After the settlement the plaintiff continued to drill the well in Harper county, Kan., to a depth of approximately 4,000 feet, and the test was dry. Operations on the well in Seminole county were continued and it was drilled to a depth of approximately 4,000 feet, and on the 16th day of July, 1926, oil in paying quantities was discovered^ The well produced as high as 7,000 ¡or 8,000 barrels per day. This was the real discovery well in the now famous Seminole pool. At the time the settlement was had between the parties, tlie Seminole well was about 1,000 feet deep and was spudded in two or three days before the settlement was consummated. Negotiations for the settlement were begun before the well was spudded in, or at least not later than the day on which it was spudded in. On August 12, 1926, 26 days after the well was brought in, this suit was filed seeking to set aside the settlement made between the parties on April 21, 1926.

The case was tried to the district court of Tulsa county, and, after the evidence was introduced and argument had, the trial court found all issues in favor of defendant and against the plaintiff and entered its judgment accordingly. From this judgment, the plaintiff has appealed to this court.

This is purely an equitable case and this court will consider the whole record and weigh the evidence.

For reversal, the plaintiff relies upon five propositions. Taking the view of the case we do, it will not be necessary for us to notice all of them.

It is first urged that the relationship between plaintiff and defendant was that of ordinary partners. As to this proposition, the court concluded, as a matter of law, that the Seminole county and Harper county properties constituted a mining partnership. For the sake of brevity, we do not set out the evidence on which the court based its judgment, but on an examination of the *249 same, we think the eonrt was justified in reaching this conclusion,

For his second proposition the plaintiff urges that the settlement between the parties should be set aside because of misrepresentation, concealment, threats, and • adverse pressure exerted by the defendant in procuring the same. This proposition raises two questions, the one of fraud and the other of adverse pressure which is not based on fraud. These, as we understand it, are the two principal propositions relied upon by plaintiff for reversal. We will consider them separately.

Plaintiff alleged that during the negotiations for the settlement, the defendant represented to him that the well drilling in Seminole county was running 200 feet geologically low and that it was running lower than the I. T. I. O. well in section 24, township 9, range 6, and that the same was running substantially the same as a ’dry hole south of the discovery well; and that the said well was proceeding in an unsatisfactory condition. With reference to this allegation of fraud, the court made the following finding!:

“That during the said negotiations the defendant did not represent Or state to the plaintiff that the said discovery well was dialling or running 200 feet, or any other depth, geologically low, or that the same was running lower than the I. T. I. O. well in section 24, township 9, range 6, or that the formations therein were running substantially the same as a dry hole south of the discovery well; that he did not state that the said well was proceeding in an unsatisfactory condition.”

One of the leading cases in this state defining what is requisite to prove actionable fraud is Wingate v. Render, 58 Okla. 656, 160 Pac. 614, in which are laid down the six elements of fraud necessary to be proven. In this case, Mr. Ohief Justice ICane, speaking for the court, said:

“To constitute actionable fraud, it must be made to appear: (1) That defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by the plaintiff; (5) that plaintiff acted in reliance upon it; (6) that he thereby suffered injury, and (7) all these facts must be proved with a reasonable degree of certainty, and all of them must be found to exist; the absence of any of them would be fatal to the recovery.”

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Myers v. Garland, 1927 OK 438, 262 P. 654, 128 Okla. 247, 1927 Okla. LEXIS 439 (Okla. 1927).

1927 OK 438 (Myers v. Garland) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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