Court Opinion

ID: 6886185
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:28:55.496008+00
Date Added: 2024-06-11T16:05:43.168110
License: Public Domain

HUTCHESON, Circuit Judge,
(dissenting).
I regard the majority opinion as a thorough and well reasoned exposition of the view it espouses, ajid would agree with it if I could accept the assumption upon which it is based that the purchasers got nothing by their purchases except “an interest in land in the specific tract or tracts purchased by them but no more”. I cannot, however, accept this premise, for the record does not support the view of the opinion that no engagements whatever were made as to drilling a well or conducting an enterprise of any sort. It is true 'that no such express engagements were made, but it is equally true, especially in cases of fraud doing, that implied agreements bind as firmly as express ones. A careful reading, of the record convinces me that here was no mere sale of leases. Here was also the sale of an interest in an enterprise, the drilling of exploratory wells on a block of leases by which drilling alone value was imparted to them. This is made plain both by the oral testimony and the exhibits. The exhibits are the conventional development letters spread with molasses to catch flies, the molasses being the understanding, implied in most of the cases and expressed in some of them, that an exploratory well would be drilled. For instance, in plaintiffs’ Exhibit 17, Joiner advises that wells are in process of drilling and should be completed during August, and agrees “These developments should be of short duration. Therefore, we are here offering you leases around these two wells * * *j You may have 10 acres around one or both wells at $5.00 per acre cash payable by August 1, 1941, and $5.00 per acre additional, payable Nov. 1, 1941, or 30 days after both wells are completed. * * * This offer is limited and your offer must be in the mail by August 1, 1941. If it is in the mail when and if we strike the pay, your order will be filled, and we feel sure that you would have no opportunity later to invest in leases around either of these two wells. This offer goes to you now who have at some time invested in a lease or leases around some well that the C. Joiner interests have drilled." (Emphasis supplied.)
*247At the end of one of his letters he says:
“We know of no investment of greater promise than an investment in an oil lease around a drilling well in 'the State of Texas.
Climax 5

"In a continuation of our efforts to make you money, if you send in an order for twenty acres around either or both of these wells, after the date of this letter, you will get ten acres Free in the next block of acreage we drill which is most likely to be in Concho County, Texas. You will really be in the oil business.”

Johnson was enjoined as a dealer in investment contracts and properly so. Joiner ought to be enjoined for his own activities and for those of Johnson too. I think it plain under this evidence that Joiner was not merely selling oil leases, that is, interests in land, he was selling investment contracts, that is, leases coupled with an implied, if no't in some cases, an express, obligation to give value to the lease by drilling exploratory wells. While then I agree with the majority that a mere sale of interests in land or leases without more does not make one a dealer in investment contracts, I think the judgment ought to be reversed because the proof here showed much more. What really occurred was a sale of a lease coupled with an implied contract to drill an exploratory well. I have little doubt that each of the purchasers acquired not only title to the lease he bought but a contract right against Joiner in respect of the oil development held out, and, therefore, that Joiner was dealing not merely in leases but in investment contracts. I respectfully Dissent.