Court Opinion

ID: 6884482
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:24:32.295471+00
Date Added: 2024-06-11T16:05:40.716894
License: Public Domain

PHILLIPS, Circuit Judge
(concurring).
The amended complaint in this case as originally drafted sounded in conversion. This court, in United States v. Stanolind Crude Oil Purchasing Co., 10 Cir., 113 F. 2d 194, held that none of the oil produced under the leases from Osage Tribe of Indians belonged to the Tribe. Thereupon, the United States abandoned the conversion theory. Instead of recasting the pleading, the United States simply amended the pleading by eliminating therefrom certain of the allegations relating to conversion, and sought to maintain its action on the theory of fraud and deceit.
The amended complaint as finally amended alleged that by virtue of the provisions of the division orders, Sinclair had been designated and selected by the lessees, and the purchasers of oil produced from the lands of the Tribe, as trustee and common carrier, to receive such oil and to correctly measure and correctly report same; that by the terms of such division orders, it was provided that the measurements of Sinclair and its predecessors should in all instances govern and control settlements and payments to be made to the Tribe as royalty; that by reason of the provisions of the division orders' and the applicable departmental regulations, Sinclair and its predecessors in measuring and gauging the oil and in reporting the measurements, was the trustee, agent, and representative of the purchasers of such oil and of the United States and occupied toward the United States a relation of trust and confidence; and that it was the duty of Sinclair and its predecessors, in carrying out and performing the terms of such regulations and division orders, to exercise the utmost good faith toward the United States; that Sinclair and its predecessors, as the agent of the purchasers, measured and computed *833the oil purchased by such purchasers, produced from the lands of the Tribe, and transported such oil to the purchasers; that Sinclair and its predecessors, by its agents, servants, and employees “purposely and fraudulently so measured all oil purchased by said purchasers and produced from the lands” of the Tribe “so as to receive * * * an amount largely in excess of 100 per cent of all the oil received into their lines for said purchasers * * * that after so fraudulently and incorrectly measuring and computing said oil, said defendant [Sinclair] and its * * * precedessors * * * have, * * * received into their pipe lines, * * * such oil so incorrectly and fraudulently measured, computed and reported.”
There is no specific allegation of the facts and circumstances constituting the fraud with particularity as required by Rule 9(b) of the Rules of Civil Procedure; and there is no allegation that fraudulent reports were made except by way of recital. There is no specific allegation that the Tribe relied on such reports, was deceived thereby, and in such reliance, acted, or failed to act, to - its prejudice. All those matters are left to implication.
While th'e pleading was defective, the defects could have been cured by proper amendments and therefore the motion for judgment on the pleadings and for summary judgment should have been denied.1 But I do not think we should tacitly give our approval to such an imperfect pleading. Rather, I think we should reverse and remand with instructions to require the United States to allege with particularity the facts and circumstances constituting the fraud, how, and in what way the oil was incorrectly measured; and, if such were the facts that incorrect reports of measurements were made, that the Tribe' relied thereon, and because of such reliance, did, or failed to do, something to its prejudice, as required by settled rules respecting the pleading of fraud. The failure to plead the fraud with particularity places Sinclair at great disadvantage since it must defend against charges covering a period of many years, and against charges leveled against its predecessors on a claim of assumption of liability.

 Geck v. Security State Bank, 133 Okl. 67, 271 P. 152, 155; Owens v. Moraine, 105 Okl. 285, 232 P. 818; Abraham v. Gelwick, 123 Okl. 248, 253 P. 84, 85, 86; Good v. First National Bank of Roff, 88 Okl. 110, 211 P. 1051, 1052; Wallace v. Collier, 59 Colo. 144, 147 P. 660, 661; Consolidated Music Co. v. Morrison, 30 Cal.App. 303, 158 P. 342; Bates v. Escondido Union High School District, 133 Cal.App. 725, 24 P.2d 884, 886; Jamestown Iron & Metal Co. v. Knofsky, 291 Pa. 60, 139 A. 611; Vierling v. Baxter, 293 Pa. 52, 141 A. 728, 729; Bell v. Friedman, 161 Minn. 408, 201 N.W. 614.