QUADRANGLE PETROLEUM CO. v. WESTERN DRILLING CO.

QUADRANGLE PETROLEUM CO. v. WESTERN DRILLING CO.
1926 OK 768
251 P. 1004
123 Okla. 79
Case Number: 15011
Decided: 09/28/1926
Supreme Court of Oklahoma

QUADRANGLE PETROLEUM CO.
v.
WESTERN DRILLING CO. et al.

Syllabus

¶0 1. Judgment -- Grounds for Vacating Default Judgment--Lack of Notice of Ruling on Demurrer.
In the absence of fraud or mistake, it is not sufficient ground upon which to vacate a default judgment that the defendant or his attorneys of record had no notice of the hearing of a demurrer and overruling same, and granting time to further plead, after which time the judgment was rendered.
2. Partnership--Debts--Nonliability of Outsider with Rights Under Subcontract with Partner.
A contract between a member of a partnership and an outsider to give him an interest in the profits accruing to such member from the business or enterprise in consideration of his paying a part of said member's expenses in carrying on the business, is a subcontract and does not make the outsider a member of the partnership or liable to third parties for debts of the partnership.
3. Same--Outsider as Mining Subpartner not Estopped to Deny Liability.
Where it is sought to hold an outsider liable for a debt of a mining partnership as a member of the same, and the evidence shows that said outsider often counseled and advised with the members of the partnership and signed power of attorney authorizing the partnership to procure money and to mortgage his interest as a subpartner to pay debts of the partnership these acts are not sufficient to create an estoppel on his part to deny liability for debts to third parties in general in the face of a recorded contract made with said outsider showing that the only interest he had in the partnership was that of subpartner, said interest being for a part of the profits accruing to a member of the partnership.

Commissioners' Opinion, Division No. 3.

Error from District Court, Stephens County; M. W. Pugh, Judge.

Action by Western Drilling Company, a partnership, against Quadrangle Petroleum Company et al. Judgment for plaintiff, and defendant named appeals. Affirmed in part, and reversed in part.

McKeever, Moore & Elam, for plaintiff in error.
H. Grady Ross, for defendant in error, Western Drilling Company.
Carl Kruse, for other defendants in error.

THREADGILL, C.

¶1 This action was brought by the Western Drilling Company, a partnership composed of G. A. Goldsmith, P. C. Matthews, and Ed McAdams, against the Graham Production Company, a partnership, to recover on an account for $ 250 and two notes, one for $ 1,000 and one for $ 2,000, with interest and attorneys' fees, as a balance due for drilling an oil and gas well, No. 6, on the oil and gas lease located on the Dow farm in section 30, T. 1 N., R. 8 W., in Stephens county. Plaintiff alleged that the defendant partnership was composed of John S. Graham, O. A. Triplett, O. F. Cameron, Foster Cameron, Lester Cameron, Theo. Harris, Minnie M. Kent, P. D. McClung, W. L. Kendall, C. M. Hunter, George West, Jr., C. T. Kent, E. A. Myers, and that the Quadrangle Petroleum Company, a corporation, was a joint owner with the above named partnership and individuals, and that all the said parties were jointly and severally liable for said indebtedness for which plaintiff asked judgment. The defendants filed demurrers, which were overruled, and saved exceptions. In the case of the Quadrangle Petroleum Company, its demurrer was overruled on July 25, 1922, and 20 days given by the court in which to answer. It filed no answer, and on August 30, 1922, upon motion of plaintiff, the court rendered a default judgment against this defendant for the full amount sued for. Thereafter, on October 4, 1922, said defendant Quadrangle Petroleum Company filed a petition to set aside the default judgment, and to permit said defendant to plead and defend in the action. The ground was that neither defendant nor its attorneys had any notice of the time of hearing the demurrer; that it had a complete and adequate defense to the action, the same being that it was not a member of the Graham Production Company partnership; that its only interest in the Dow lease was that of mortgagee, and its mortgage was being foreclosed in the court against said Graham Production Company. It attached a copy of the judgment, and an affidavit of one of its attorneys stating that neither the company nor the attorneys had any knowledge or notice of the time when the demurrer was passed on or when the default judgment was rendered. On May 26, 1923, the same date the case was tried, and after the evidence on the issues joined was heard, the court passed on defendant's petition to set aside the default judgment and denied the same. Thereupon, the Quadrangle Petroleum Company filed its motion for a new trial on the ground that the evidence was not sufficient to sustain the judgment, and errors of law occurring at the trial, which were excepted to by defendants. This motion was overruled, and said defendant has appealed by petition in error and case-made attached.

¶2 The assignments of error go to incompetent evidence admitted and competent evidence rejected, errors in overruling demurrer to the evidence, error in overruling the motion for a new trial, and in overruling petition to vacate the default judgment. After stating five assignments of error in its brief, defendant fails to discuss any of them, and fails to give any reason or cite any authorities to show that the court committed error in denying its petition to set aside the default judgment. It says in its brief that the only question involved in the appeal is whether or not defendant was a member of the partnership known as the Graham Production Company. Plaintiff does not agree with said defendant that this is the only question in said defendant's appeal, and calls our attention to the record.

¶3 We have examined the record, and we are forced to agree with the contention of plaintiff. The first question, and the one decisive of said defendant's case, is whether or not the court committed error in denying its petition to set aside the default judgment. The ground alleged in the petition to set aside this judgment, as above stated, under the unavoidable casualty or misfortune provision of section 810, Comp. St. 1921, was not sufficient to invoke the discretion of the court to order the relief asked, and if the court had granted the petition, the order would have been reversible error. Wagner v. Lucas, 79 Okla. 231, 193 P. 421; Baker v. Hunt & Co., 66 Okla. 42, 166 P. 891; Uncle Sam Oil Co. v. Richards, 73 Okla. 328, 176 P. 240; Board of County Commissioners v. Barber Asphalt Paving Co., 83 Okla. 54, 200 P. 990.

¶4 We must, therefore, conclude, under the status of the record before us and the above authorities, that the trial court did not commit error in denying the Quadrangle Petroleum Company's petition to set aside the default judgment.

¶5 The other defendants interested in this appeal filed answers, consisting, first, of general denial, and then they specially deny membership in the Graham Production Company partnership, and all liability for plaintiff's claim. A jury was waived and the issues, as made up by these answers, were tried to the court, and resulted in a judgment for plaintiff and against the defendants and each of them for the amounts sued for.