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Meihsner v. Runyon

JANUARY 5, 1960.

EDNA G. MEIHSNER, PLAINTIFF-APPELLEE,

v.

DELBERT RUNYON, D/B/A DELBERT RUNYON OIL PRODUCERS, DEFENDANT-APPELLANT. B.G. FINNEGAN, PLAINTIFF-APPELLEE,

v.

DELBERT RUNYON, D/B/A DELBERT RUNYON OIL PRODUCERS, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Marshall county; the Hon. JOHN T. CULBERTSON, JR., Judge, presiding. Affirmed.

JUSTICE WRIGHT DELIVERED THE OPINION OF THE COURT.

This is an appeal from judgments entered in two cases by the Circuit Court of Marshall County against the defendant, Delbert Runyon, d/b/a Runyon Oil Producers, in favor of the plaintiff, Edna G. Meihsner, in the sum of $2,225, and in favor of the plaintiff, B.G. Finnegan, in the sum of $750. The cases were consolidated for trial and are similar except for the amounts involved and were submitted to the court without a jury on stipulated facts.

The defendant, Delbert Runyon, d/b/a Runyon Oil Producers, during the years of 1952 and 1953 was engaged in the business of developing oil and gas leases with offices in Olney, Illinois. During 1952 and 1953, the defendant entered into four separate written transactions with the plaintiffs, three with Meihsner and one with Finnegan, in reference to developing undeveloped oil and gas leases that the defendant owned in Southern Illinois and Kentucky. The agreements were identical in form, differing only as to date, location of property, amount of interest and sums of money due. Each instrument was entitled Letter of Assignment. For reference, we quote one of these instruments in full:

"PLAINTIFFS' EXHIBIT I.

"LETTER OF ASSIGNMENT

"RE: McCloskey test unless oil is discovered at a lesser depth.

"KNOW ALL MEN BY THESE PRESENTS:

"That the undersigned, Delbert Runyon of Olney, Richland County, Illinois, hereinafter called `assignor', in consideration of One and no/100 ($1.00) dollars, the receipt whereof is hereby acknowledged, does hereby sell unto Mrs. L.T. Meihsner of Henry, Illinois hereinafter called `assignee,' an undivided 1/64th interest in the 7/8th or working interest in the first oil and/or gas well to be drilled upon the location upon the following described real estate, to-wit:

The South One Half (S 1/2) of the South East Quarter (SE 1/4) of the North East Quarter (NE 1/4) of Section Nine (9), Town Three (3) North, Range Ten (10) East of the Third P.M., containing Twenty (20) acres more or less.

"This assignment is subject to a 3/32nd of the 7/8th override.

"That the proposed well will be drilled on the communized acreage of the above described tract wherein Otto Hahan and etals of Olney, Illinois, and John Herman and etal of Olney, Illinois, are the owners of said real estate. That a unitization agreement has been made by the assignor and the Sun Drilling Company of Olney, Illinois, in order to comply with the State Law on twenty acre locations with the intentions of drilling for oil and/or gas, which is expected to be found in a line formation. If no well is commenced on or before the lease or lease extension expires the assignor will refund to the assignee the full amount paid for the said interest.

"Should oil or gas be produced in paying quantities from the well to be drilled in which the assignee herein named is a participant, then it will be necessary for the assignor, his heirs, agents, or assigns, to equip the well with casing, pumps, tanks, pipe lines, etc., and therefore it will be necessary for each owner, as their interests may show before the assignment, to contribute their pro rata part in this additional expense of equipping and marketing the production from this well.

"The assignee herein, as a participant in the drilling in the proposed oil, gas, or mineral well, will have to contribute his or her pro rata part of this additional expense of putting the producing well on production. The assignee will be notified by registered mail his or her estimated amount of the additional expense; that the assignee within the ten (10) days, will forward to the assignor, or his representative the amount due from the assignee or within the said period, notify the assignor or his representative that he or she, the assignee, does not desire to continue further as an associate in this adventure and will forfeit and surrender and assign his or her interest to the assignor for the purpose of reassignment to some individual, partnership or corporation, who will assume the obligation of the pro rata expense of equipping and marketing the production from said well.

"In the event that additional wells should be drilled, the assignor will notify the assignee of his intention to drill such a well or wells by registered mail. The assignee will forward to the assignor his or her pro rata share of the estimated cost in drilling such well within ten (10) days after such notification or surrender his or her ...


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