Lampkin v. Heard

Ethridge, J., delivered the opinion of the court. The appellant and appellee entered into the following-contract : ‘ ‘ This contract made and entered this 1st day of July, 1919, by and between Gr. T. Heard of Brooksville, Noxubee county, Miss., party of the first part, and C. B. Lampkin, of Columbus, Lowndes county, Miss., party of the second part, witnesseth: “That the said party of the first part is the owner in fee simple of the certain tract of land situated in Lowndes county, Miss., and among which is about two hundred seventeen acres of land on the opposite side of Luxapalila creek from the city of Columbus, and about forty-eight acres on the same side of the creek with the said — 533 — city of Columbus, and all of said land being in section 14, township 18, range 18 west, Lowndes county, Miss. “That for the consideration of the sum of one dollar cash in hand paid, the receipt whereof is hereby acknowledged and other good and valuable considerations this day had and received, the said first party does by these presents grant to the said party of the second part an option on the said laiid for a period of six months from the 1st day of July, 1919, at and for the sum and price of twenty-five dollars per acre for the land on the opposite side of the creek from the said city of Columbus ana at the sum and price of seventy-five dollars per acre for the land on the same side of the said creek with the city of Columbus, provided the said party of the second part shall find oil or gas on the land during the said six months, otherwise this contract shall not operate to give to the said second party any option on the said land at all. “In the event that the said second party shall find oil or gas on the said land or shall find evidence sufficient to justify the said parties.hereto to believe that there is oil or gas on the said land, then the said party of the second-part shall have an additional six months time in which to verify such belief or evidence as to the existence of oil or gas. “It is further agreed that in the event that it should be determined to exploit the said land for gas or oil and in sufficient quantities for development, then the said parties shall determine between themselves whether they will sell the said land or develop the gas or oil so found upon the said land. In the event that it is determined to sell the said land, then the price of twenty-five dollars per acre and seventy-five dollars per acre respectively shall be deducted from any sale price of the said land, and the difference shall be considered profit, aud shall be divided equally between the parties hereto. “In the event the said parties shall determine not to sell the said land but to develop the gas and oil industry — 534 — themselves and in order to do so it shall he necessary to procure funds sufficient to finance, same, then additional arrangements shall he made between them as to financing the said project. “It is further agreed and understood between the parties that the said first party shall finance the purchase of all other properties that both of said parties shall agree as needed or wanted by them” for' the production of oil or gas or both. “And it is further agreed between the parties that any lands that have been spoken of by said party of the second part to the said party of the first part as desirable or necessary to purchase for the development of oil or gas and said lands are rejected by the said party of the first part, then all of the said spoken of lands can be handled by the second party and the knowledge thus divulged concerning said land by the second party as to such oil or gas signs, or as to their intention to purchase, shall be held in strict confidence by the said party of the first part. “It is further understood that the first party has at the present time an option to purchase certain lands from one J. W. McKissick and for the above considerations does by these presents assign to the second party an undivided one-half interest in and to such option. “Witness our signature this 6th day of August, 1919.” In 1920 an original bill was filed which was dismissed without prejudice, and on the 12th day of September, 1921, the appellant filed the present bill setting up the contract. The complainant also alleged that certain lands were purchased by the defendant, Heard, known as the McKissick land and the Puckett land; that the McKissick land contained sixty-three acres taken in the name of Heard at and for the price of seventeen dollars and fifty cents per acre about December 6,1919, and that the Puckett land consisted of eighteen acres purchased at a price of eight dollars per acre on November 18, 1919. Complainant also alleges that he is in equity the owner of an — 535 — undivided one-half interest in fee simple in said tracts of land, but alleges that Heard on the 1st day of January, 1921, conveyed said lands to J. T. and Irene Elliott at and for the sum of one hundred twenty-five dollars per acre; other-lands were conveyed in the deed from Heard to Elliott also. Complainant alleged that he claimed no share of the profits on the other lands, but was entitled to the profits on the MeKissick and Puckett lands, making a total profits of $4,163.75, of which he was entitled to one-half. The sale to Elliott was for part cash and part deferred notes. Complainant claimed a proportionate part of the five thousand dollars cash payment and a proportionate part of the notes, etc. The defendant denied the complainant’s right to share in the profits of the said transaction, but claims to have bought the property on his own account; also that he reserves the oil and gas rights in the 'conveyance of the property to the Elliotts, and that the complainant’s rights were dependent upon finding oil and gas upon the lands involved. There was considerable correspondence introduced in evidence, and both Lampkin and Heard testified orally before the Chancellor. Heard testified that he did not purchase the property under the option which he had from MeKissick at the time of the execution of the contract, and also testified that there never was found a sufficient indication of oil to warrant the belief that oil existed in said lands. Heard also testified that he had employed Lampkin to represent him in certain matters referred to in the correspondence and had paid him for that service. He also testified that Lampkin had refused to pay any part of the purchase price of the said lands. Some of the questions and answers in his evidence were as follows: “ Q. Did he ever pay any part of the purchase price of the land? A. No, sir. “Q. Did he ever say anything about paying up for half of the purchase price of the land? A. Mr. Lamp-kin refused to pay me money, stating at various times — 536 — that he had no interest in land, stating that he had interest in oil rights. “Q. Did you ask him to pay any interest? A. Yes, sir. “Q. Then he positively refused to exercise any option on the lands? A. Yes, sir, on any lands. “Q. Mr. Heard, did you later buy the land from Mc-Kissick under the option or not? A. I did not. “Q. How was that? And how was that that you did not buy it under the option? A. Well, I suppose we did not agree any way, I did not get it under the option, and did not buy it until several months afterwards under a different contract. “Q. Mr. Heard, did Mr. Lampkin and yourself ever agree that the McKissick land was land that you. and he both wanted for. the production of oil and gas? A. He did not. “Q. Did you and Mr. Lampkin buy together the Mc-Kissick land? A. We did not. ” Lampkin testified to the contrary. Heard also testified that he paid Mr. Puckett eight dollars an acre for the Puckett land; that that was full value for the land and it was not worth any more than that, and that that was more than the value of the land at the time, and that the present value of those lands is now less; that neither of these tracts had improvements on them; and that there were improvements on other parts of the land sold to Elliott. Taking the contract between the parties as an entirety, we think the rights of Lampkin were limited to the business of dealing in oil and gas lands either for sale or production. In other words, the agreement was intended to cover the business of either developing oil properties or of speculating in them, and, unless there was some evidence within the option period that oil was produced or could be produced or existed in the lands, the rights of the complainant would expire at the end of the option period. There was a dispute between the complain — 537 — ant and the defendant as to -whether there were evidences of the existence of oil in the lands. The sale by Heard to Elliott was not made until the extended period or additional six months mentioned in the option had expired. The chancellor decreed for the defendant, and on the record we are unable to say that he was not correct in so doing. The judgment will therefore be affirmed. Affirmed.