Whiston v. Pelham

STROTHER, J.,

pro

tem.

This suit was brought by plaintiffs to require an accounting by defendant of proceeds of sale of oil and gas from an oil well in Long Beach, and for judgment for whatever might be found due them.

Defendant had sold and conveyed to plaintiffs R. Whiston and Celia Whiston, his wife, a three per cent interest in an oil lease and in a well which was then being drilled on the leased property. In this conveyance the Whistons were named as parties of the first part and Pelham as party of the second part. The Whistons conveyed a part of their interest to the plaintiff Stevens. The conveyance by defendant Pelham provided, “the party of the second part hereby sells, conveys and assigns to parties of the first part a three per cent (3%) interest in one certain oil and gas Lease on Lots 12, 13 and 14 in- said Block ‘H’ to the party of the second part and his associates, given by J. W. Paul-son et al. and C. W. Long, together with the same .interest in one oil well now drilling on said location. Said well to be drilled, completed and put upon production at the cost and expense of party of the second part and his associates. Said three per cent (3%) shall be of the whole of said well and assigned out of the interest and share of the party of the second part.” Under the arrangement made with the purchaser of the oil and gas, payments were made to Pelham for the whole of his original share, and he in turn made settlements with the plaintiffs for their part.

Defendant answered to the complaint alleging that he had fully accounted to plaintiffs for their part of the proceeds of such sales. In a separate defense he set out the total amount realized from sales, deducting the royalty payments under the lease, and expense of marketing the products and maintaining the well. He further set forth that he had sold the Whistons a one and one-half per cent interest in another well out of his interest therein, the payments on account of sales to the extent of their interest being made direct to the Whistons, without deduction for operating expenses, taxes, and maintenance, which were charged to him against his remaining interest. This was not alleged specifically as an offset or counterclaim, but was apparently so treated on the trial.

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