Court Opinion

ID: 9652839
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:33:19.247488+00
Date Added: 2024-06-11T18:12:54.524834
License: Public Domain

McCORD, Circuit Judge
(dissenting).
The plaintiffs here, finding no market price for. the gas at the well in question, Went out and sought until they found the fair market value of the gas as best they could in the field and elsewhere, and thereupon brought in such evidence to the court and presented it to the jury. The law is well settled, I think, to the effect that where the plaintiffs have made out a prima facie case, and much more is made out here, the burden thereupon shifts to the defendant to go forward with the evidence. Certainly this is true where the defendant, because of the lease contract, has all the facts in its possession and owes a duty to the plaintiffs to disclose honestly such facts. Selma, Rome & Dalton R. R. Co. v. United States, 139 U.S. 560, 561-568, 11 S.Ct. 638, 35 L.Ed. 266; Miller v. Lykes Bros.-Ripley S. S. Co., 5 Cir., 98 F.2d 185; Manufacturers’ Finance Co. v. Marks, 6 Cir., 142 F.2d 521, 527.
The defendant knew accurately the “fair market value”, the “fair value”, and the “market price” of the gas; it also knew how much gas had been taken from the well, the kind of gas taken, when taken, where taken, and the actual cost price for piping the gas to where it was delivered to the plants of defendant and there used and the refuse afterwards sold to others. What is important here is that the defendant refused to go forward with the evidence after the plaintiffs had rested their case. The defendant declined to offer any evidence. It also rested its case. It in effect said to the court and to the jury that “we know all this and more about the gas in question; we have taken over the one-eighth royalty gas, the proceeds from which belongs to the plaintiffs and we have used it and sold it, but you find out, if you can, what became of it and its fair market value.” Thereupon, the court submitted the issues to the jury for their determination and they returned a verdict for the plaintiffs.
This defendant now comes forward and presents to the court several intricate and difficult briefs, like those in the case of Phillips Petroleum Co. v. Johnson, 5 Cir., 155 F.2d 185, which bitterly complain of the entire court proceedings in the two cases. These briefs compare favorably with the lamentations of Jeremiah, but when we come to find out that in neither case did this defendant offer one scintilla of evidence, these briefs fall of their own sheer weight, unless one treats them as evidence.
Let us examine the cases which this court has heard heretofore, and in which “market value,” “fair market value” and the “fair value” are discussed, and compare them with the issues here involved: Shamrock Oil & Gas Corporation v. Coffee, reversed and remanded, 5 Cir., 140 F.2d 409; Phillips Petroleum Co. v. Oschsner, reversed and remanded, 5 Cir., 146 F.2d 138; Phillips Petroleum Co. v. Record, reversed and remanded, 5 Cir., 146 F.2d 486; Arkansas Natural Gas Co. v. Sartor (Louisiana case), 5 Cir., 78 F.2d 924. This case has been before this court at least six times and was finally affirmed January 23, 1946, 152 F.2d 758.
I do not contend that decisions in these cases are wrong. I desire only to point out that our opinions as to the. evidence necessary to disclose fair market value, which is the important and controlling issue in nearly every one of these cases, seem to have been confusing and misleading. Lawyers and counselors have not been able to use them as a guide and thereby escape reversal when they come to us on appeal.
We are not dealing here with fiduciary, relations, with trusts, or with principal and agent. Like all the cases adverted to, it involves a contract and was tried at law, and it was and is a duty of the law court to call upon the defendant to disclose fully, fairly and honestly those matters and facts which are peculiarly within its knowledge and which it gained by reason of the lease contract. When the defendant refused to offer such evidence the plaintiffs were entitled to a directed verdict.
This case, like the case of Phillips Petroleum Co. v. Johnson, 5 Cir., 155 F.2d 185, must now go back for another and dif*201ficult trial with the issues, if possible, I submit, more nearly cluttered up than they have ever been before. After paying all the costs, the plaintiffs must again try to prove the “market price” of the gas “at the mouth of the well,” when, as a matter of fact, there is no such market price, and failing in this, then go to the defendant and beg it to kindly inform as to the fair market value of one-eighth royalty gas it has taken over, the net proceeds of which belong to the plaintiffs. Moreover, this opinion and also the opinion in the case of Phillips Petroleum Co. v. Johnson further complicate the issues by bringing in the equity question and “implied, constructing and resulting trusts,” etc., and they differ from each other in more than one particular, and also from the opinions in the other cases just adverted to.
The life of these Panhandle Gas Field wells is probably twenty years, and at the expiration of that time it may be that the fair market value of the gas may be found and established, and also the amount owing may be ascertained, to the end that the heirs of the now owners of these lands on which the wells are located may finally secure a settlement.
The admonition of the elders that, "Judges and Courts should be the hope of all who suffer and the dread of all who wrong,” seems to have gone into the discard.
The judgment should be affirmed.