West v. Madansky

1920 OK 297, 194 P. 439, 80 Okla. 161, 1920 Okla. LEXIS 176
CourtSupreme Court of Oklahoma
DecidedSeptember 14, 1920
Docket9297
StatusPublished
Cited by21 cases

This text of 1920 OK 297 (West v. Madansky) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
West v. Madansky, 1920 OK 297, 194 P. 439, 80 Okla. 161, 1920 Okla. LEXIS 176 (Okla. 1920).

Opinions

*162 HARRISON, J.

This was an action to cancel an assignment of an oil and gas lease, or rather an assignment of a one-eighth interest in a certain lease, the grounds being that the assignment was obtained through fraud.

Max Madansky, plaintiff below, owned a one-eighth interest in an oil and gas lease on a certain tract of land in Tulsa county, viz., the S. W. Yi of sec. 36, twp. 18 N., R. 12 E.

There were seven other parties, each of whom owned a one-eighth interest in said lease, among whom was O. N. West, defendant below, who, volunteering to act for all the interest-holders, represented to Ma-dansky that the lease could be disposed of to a better advantage and for a better price by selling it all together; that if each of the interest-owners would assign his one-eighth interest to him and place such assignment in escrow in a bank, he would find a ■buyer and would assign the entire interest to such buyer. He further represented to Madansky that all the other interest-owners were willing to make such an assignment to him and would do so, and that when he found a buyer ho would assign his interest, together with the interests of the other seven, to such buyer. He made several visits to Madansky for the purpose of obtaining Ma-dansky’s assignment, and of inducing Ma-dansky to make the assignment, and in the course of such visits and in the course of the several conversations between him and Madansky he referred especially to certain wells that were being drilled some distance from their lease, and to the fact that one of said wells was only an 80-barrel well, and the other comparatively a dry hole, and that, therefore, their lease was not valuable and that he would be unable to get a good price for it; and upon such representations as to the depreciated value of the lease, and upon the representations that he and all the other parties were going to put in their interests and assign them all together, and thereby get a better price than by selling singly, Ma-dansky was induced to and did assign his one-eighth interest to West, upon condition that if West found a purchaser for the entire lease, he, Madansky, should receive not less than $400 for his interest. Upon such understanding and agreement, Madansky made an assignment of his interest to West, and West placed same in escrow in a bank, with authority to assign same to a purchaser who was willing to pay not less than $400 for Madansky’s interest.

Within a few days thereafter, West made a sale of six of the one-eighth interests in said lease to J. R. and O. O. Cole, and thereafter Madansky received $400 for his one- > eighth interest.

It developed later that West received $4,000 and an agreement to drill a well on the land, in consideration for the interests he transferred to the Coles.

It developed, also, that West had not transferred the entire interest in the lease to the Coles, as he had led Madansky to believe he would do, but had transferred only six of the one-eighth interests, and had not transferred his own interest, nor the interest of one Phillips, who had not gone into the agreement, and at this time had not assigned his interest to West.

It also developed that a well, known as the Boesche well, had been brought in with a daily production of 800 barrels; that said well was only a quarter of a mile and 200 feet from the line of the lease in question; that West had never reported to Madansky nor said anything to Madansky about the Boesche well, but he had emphasized to Ma-dansky the fact of the other two wells, one being only an 80-barrel well and the other comparatively a dry hole, both of which were some distance further away than the Boesche well.

The assignment from Madansky to West was made on the 26th day of April, the Boesche well was brought in on the 29th day of April, and about the 3rd or 4th of May, West made a sale to the Coles of six of the one-eighth interests, as above stated, receiving in consideration therefor $4,000. Upon learning these facts, Madansky brought suit against West fot the cancellation of the assignment which he had made to West. The suit was filed August 5, 1916.

In the meantime a well had been brought in on the lease in question, daily production about 400 'barrels at the time suit was ■brought and something over 200 barrels at the time the case was tried in January, 1917.

The cause was submitted to the court and judgment rendered in favor of the plaintiff, Madansky. The court held that there was sufficient evidence of fraud to warrant the cancellation of the assignments^ but concluded that as Madansky’s interest had been assigned by West to the Coles and subsequently by the Coles to the corporation known as Cole, Rudd & West, the identity of West’s interest had become lost and merged in the corporation, and that the cancellation of the assignment would not afford the relief to which Madansky was entitled. But as West had assigned his one-eighth interest in the lease to the corporation, taking in consideration therefor a certain number of shares of *163 capital stock, the court rendered judgment in favor of Madansky for the .:apital stock owned'hy West in the corporation, not, however, for the full amount of what Madansky’s one-eighth interest bore to the capital stock owned by West, but taking the view that each of the five other owners of a one-eighth interest had' likewise been defrauded and that each was entitled to his proportionate share, if he should bring suit against West, rendered judgment decreeing Madansky only a one-sixth interest in the capital stock owned by West, reserving the other five-sixths interest for the other five leaseholders, in case they should see fit to bring suit.

From the judgment rendered, West appealed to this court, contending that the court erred in rendering judgment in favor of Madansky for any amount; also contending that Madansky’s remedy was by an action for damages for deceit against defendant and by garnishment against the corporation after suit for damages was filed.

Madansky appealed also, and filed cross-petition in error, contending that the court erred in holding back any of West’s stock for the five other interest-holders who were not parties to the suit, nor claimed any interest in the judgment, and that as Madansky had shown himself entitled to judgment, he was entitled to judgment for such portion of West’s capital stock as West had received for a one-eighth interest in the lease instead of judgment for only a one-sixth portion of same.

The first proposition argued by West is that Madansky alleged two distinct and inconsistent causes of action, and that the court erred in overruling his motion to require Madansky to elect as to which cause of action he relied upon.

If in fact there were two distinct causes of action, inconsistent with each^ other, then the proper proceeding would have been by demurrer on the ground of misjoinder, and not by motion to elect. See Rev. Laws 1910, secs. 4740, 4741, and 4742. Also, C., O. & G. R. Co. v. Burgess, 21 Okla. 653, 97 Pac. 270, wherein it was held that misjoinder of causes of action should be raised by demurrer; and also Oates v. Freeman, 57 Okla. 449, 157 Pac. 74, wherein it is held that mis-joinder of causes of action is properly attacked by demurrer, and not by motion to require plaintiff to elect, and that the defect is deemed to have been waived unless attacked by demurrer.

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Bluebook (online)
1920 OK 297, 194 P. 439, 80 Okla. 161, 1920 Okla. LEXIS 176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/west-v-madansky-okla-1920.