Alford v. Hesse

THE COURT.

An appeal by one of the plaintiffs in the above action from a judgment on the pleadings in favor of the defendant.

The action was one for the cancellation of two promissory notes executed by the plaintiffs to the defendant on October 8, 1926, and the latter by his cross-complaint sought to recover on the notes. The amended complaint alleged that the defendant was the owner of a permit to prospect for oil and gas upon certain lands owned by the United States, which permit was issued to him by the Secretary of the Interior; that the consideration for the notes was the execution on the above date by the defendant to the plaintiffs of an agreement granting the latter the sole right and permission to go into possession of these lands, to drill and develop the same for oil, gas and other hydrocarbon substances, to extract such substances therefrom under the permit and under a lease or any extension or renewal thereof that might be granted by virtue of the permit, and to enjoy all the privileges of the permittee or lessee thereunder. It was further alleged that to procure the exeeu

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tion of the notes the defendant represented that he was the only person interested in the lands so far as such interest related to the right to prospect for or develop oil thereon; that there were no liens or encumbrances thereon which would in any way affect the rights granted by the agreement, and that he was entitled to the possession thereof. That. plaintiffs believed the above representations to be true and, relying thereon, executed the notes, which they would not otherwise have done; that the representations were untrue; that the defendant had in fact on or about August 24, 1923, assigned an interest in the above land and in the oil therein to Jacob F. Karr, who ever since that date had been the owner and holder of an interest therein, and that defendant on or about April 17, 1924, also assigned a similar interest therein to Julius Segall and Sam Marshall, who have since been the owners and holders of such interest.

An answer to the cross-complaint was filed by the plaintiffs, alleging that the only consideration for the notes was cross-complainant’s assumption of the promises and obligations set forth in the agreement mentioned, and that the notes were executed and delivered without consideration.