A. & T. Oil Co. v. Interstate Oil Corp.

Suit was brought by plaintiff against defendant for the recovery of certain sums of money claimed to be due under a contract dated December 31, 1921. From a judgment in plaintiff’s favor defendant has appealed.

The evidence shows that plaintiff owned certain oil leases in the Signal Hill district, Long Beach, California, as well as in the Huntington Beach district. A contract was entered into with defendant whereby plaintiff assigned such leases to the former, the agreement being that defendant was to assume the obligations of the leases so far as the property herein involved is concerned and was to be reimbursed from the proceeds of the oil produced on the property for all moneys expended by it in connection with the obligations of said leases, including the development of wells, and was thereafter to operate such property “as a producing property, and pay the royalties, then the operating expenses including insurance, both compensation and fire, and superintendence, then . . . party of the first part [plaintiff] . . . shall receive 37-%% of the market price of the net oil, or other hydrocarbon substances produced, saved or sold; said market price to be based on the market price…