Smith v. Kirkpatrick

LANGDON, J.

Plaintiffs brought this action as assignees of the Orange County Drilling Company, for the benefit of the creditors of said company. They alleged that the defendants and each of them had received $215,000 from said company for the use of said company. This allegation was denied by defendants. The essential facts were stipulated by the parties to be as follows: Some time in September, 1922, the Orange County Drilling Company entered into a contract with the Kirkpatrick Bros. Syndicate to drill a well at Santa Fe Springs for a price of $155,000, and this consideration was paid $90,000 in cash and $65,000 in units of the Syndicate. In October, 1922, the Kirkpatrick Syndicate No. 2, an independent syndicate, made and entered into a contract with the Orange County Drilling Company for the drilling of a well at Santa Fe Springs for the total consideration of $175,000. In November, 1922, the Kirkpatrick Syndicate No. 3 made and entered into a contract with the Orange County Drilling Company for the drilling of a third well at Santa Fe Springs for a total cash consideration of $175,000. At the time of making the contracts, and at all times mentioned in the complaint, the defendants, C. H. Kirkpatrick, W. O. Kirkpatrick and Willis H. Cates, were the trustees of Kirkpatrick Bros. Syndicate, and the defendants C. H. Kirkpatrick and Willis H. Cates were the trustees of Kirkpatrick Syndicates 2 and 3. During the times mentioned in the complaint R. W. Edens was president and general manager of the Orange County Drilling Company and owner of all the stock in the company, and he returned to C. H. Kirkpatrick, W. O. Kirkpatrick and Willis Cates said units of Kirkpatrick Syndicate of the par value of $65,000, which said units were part of the consideration for the drilling of the well provided for in the contract of September, 1922. These units were sold afterward by the defendants for about $40,000 in cash. R. W. Edens, in his official capacity, returned to the defendants C. H. Kirkpatrick and Willis H. Cates $75,000 in cash out of the contract price for drilling the second well and also returned to said C. H. Kirkpatrick

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and Willis H. Cates a like sum out of the contract price for drilling the third well.

The judgment went against the three defendants in the sum of $190,000. The theory upon which this judgment was predicated is not clear from the record, but it is immaterial, for we think that the agreed facts do not entitle the assignees of the Orange County Drilling Company to recover.