Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MONSANTO CHEMICAL COMPANY v. GRANDBUSH

June 4, 1958

MONSANTO CHEMICAL COMPANY, PLAINTIFF,
v.
A.J. GRANDBUSH, TRUSTEE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John E. Miller, District Judge.

  This case is before the Court upon certain objections filed by interested parties to the Master's Interim Report No. 4 and the Master's Report No. 5.

As originally instituted in this Court, the case was an interpleader action by plaintiff, Monsanto Chemical Co. (hereinafter referred to as Monsanto), against a large number of defendants, the purpose of the action being to determine the ownership of a large sum of money representing oil purchases made by Monsanto from four leases designated as the Smith lease, Taylor lease, Reynolds-Berg lease, and Reynolds Bros. lease. In view of the complexity of the issues in the case the Court on December 4, 1956, appointed a Special Master to hear the evidence of the parties upon all issues in the case. The Master was particularly directed "to determine the amount due, if any, from the plaintiff to each of the defendants, and the amount due each intervenor, if any, from the various defendants, insofar as the funds now in the Registry of the Court, or that may hereafter be deposited in said Registry, are concerned."

The Master assumed his duties, and on April 12, 1957, filed his Interim Report No. 1, setting out the amount of money then in the Registry of the Court and recommending that the Court pay $20,374.03 to six parties out of said funds. On the same date the Court entered an order in accordance with the Master's recommendation, and no objection has been made by any party to said report or order.

On April 19, 1957, the Master filed his Interim Report No. 2, in which he determined the amount due 114 of the parties, and recommended payment thereof out of the funds in the Registry of the Court. On April 19, 1957, the Court entered an order confirming the Master's Report and ordering distribution of $223,825.91 in accordance therewith. No party has objected to this report or order.

The Master's Interim Report No. 3, filed August 23, 1957, relates to a controversy between the defendant, Dr. J.A. Brooks (hereinafter referred to as Brooks), and the defendants, Al Grandbush and A.J. Grandbush (hereinafter referred to as the Grandbushes). This report was rendered moot by a settlement between Brooks and the Grandbushes, and the Court took no action on the Master's Interim Report No. 3.

The Master's Interim Report No. 4, dated February 3, 1958, relates to a controversy between the Grandbushes and A.O. Shepherd and his assignees with respect to a variable overriding royalty interest in the Smith lease, as well as to several other matters. On February 4, 1958, the Court entered an order approving the Master's Report as to all matters except the controversy between the Grandbushes and Shepherd, and the Court allowed the Grandbushes ten days in which to file written objections to the Master's Report. Such objections were filed by the Grandbushes, and this is one of the matters now before the Court for determination.

On February 12, 1958, the Court entered an order allowing the Master an additional fee of $3,000 (he had previously been allowed a total of $5,000) for his services, and the order further provided that the Master "shall have a lien on any and all funds now in the hands or hereafter received by any pipeline company or purchaser of the oil runs from any of the leases herein involved." The Court allowed Crumpler and Smead a fee of $1,218.75 against the Grandbushes, and gave them a lien upon all right, title, and interest, including all oil and gas runs purchased by and still in the hands of any pipeline company to the credit of Brooks or the Grandbushes, upon the Taylor, Smith, Reynolds Bros., and Reynolds-Berg leases. The Court deferred action on the remainder of the report to give Brooks and the Grandbushes an opportunity to file objections to said report. McMillan and McMillan objected to the Master's Report No. 5 because it did not specifically create a lien against the interest of Brooks and the Grandbushes in the lands as well as in the oil and gas runs. The Grandbushes filed objections to the Master's Report No. 5 on the ground that the attorneys' fees allowed McMillan and McMillan and Kitchens were excessive, and on the further ground that none of the fees should be declared a lien upon the Grandbushes' property.

On May 23, 1958, the Court conducted a hearing on the objections to the Master's Reports Nos. 4 and 5, and at the conclusion of the hearing took the case under advisement to give the Court an opportunity to give full consideration to the entire record before passing upon the objections.

Objections to the Master's Interim Report No. 4

These objections relate to the disposition of certain monies in the Registry of the Court resulting from a variable overriding royalty provision in connection with the Smith lease. On July 9, 1955, Raymond E. Smith and wife assigned to A.O. Shepherd a full 7/8ths leasehold working interest in the Smith lease as to formations below "2,200 feet subsurface". The assignment further provided that Shepherd would pay to Smith as an excess, or overriding royalty, the equal 1/8th part and portion of the oil produced and saved from the formations covered by the assignment when the daily average production per well per calendar month from said formations equaled or exceeded 50 barrels; that when the daily average production per well per month was less than 50 barrels, Shepherd was obligated to pay the equal 1/16th part of the oil produced, and when the daily average production per well per month was less than 20 barrels, the assignee was required to pay Smith the equal 1/32nd part of the oil produced from the formations covered by the assignment.

On August 1, 1955, Shepherd assigned to A.J. Grandbush, Trustee, 52 percent of 7/8ths of all the oil, gas and other minerals that might be produced from the Smith lease, above referred to. The lease specifically provides that:

    "It is mutually agreed that A.J. Grandbush will
  have (52%) fifty-two percent of 7/8th interest in
  all wells drilled and produced by him on the
  above acreage and any and all overrides are to be
  taken from interests other than the assignee
  herein."

Production has been less than 50 barrels daily per month per well, and there is now in the Registry of the Court the sum of $1,113.61, representing the difference between a full 1/8th interest and the amount actually paid Smith under the variable overriding royalty provision by reason of the small amount of production. The question before the Court is whether this entire sum should be paid to A.O. Shepherd and his assignees or whether the Grandbushes are entitled to 52 percent of said sum.

When the two leases are construed together, the Court is of the opinion that the assignment from Shepherd to Grandbush gives the latter no interest in the variable overriding royalty provision, or in the money now in the Registry of the Court resulting from the operation of said provision. This is particularly true since the 48 percent of the lease reserved by Shepherd in his assignment to Grandbush is specifically charged with the burden of paying the variable overriding royalty due Smith.

Therefore, an order should be entered overruling the Grandbushes' objections to the Master's Interim Report No. 4, and adopting and confirming said report in its entirety. The order should further direct the Clerk to issue voucher or check in the sum of $1,113.61 payable to H.W. McMillan, attorney for A.O. Shepherd and his assignees, and mail said voucher or check to the Special Master, who will forward it to Mr. McMillan.

Objections to Master's Report No. 5

The objections to the Master's Report No. 5 relate to the amount of the attorneys' fees to be allowed McMillan and McMillan (since H.W. McMillan seems to have handled the matter in its entirety, the Court for the most part will refer to him as being the attorney involved) and W.H. Kitchens, Jr., and to the further question of whether said fees, as well as the fees of Lamar Smead and Harry Crumpler should be declared liens upon the interest of the Grandbushes in the Smith, Taylor, Reynolds Bros., and Reynolds-Berg leases.

The Court will first consider the objections of the Grandbushes to the amount of the attorneys' fees allowed McMillan and Kitchens. In this connection, the Arkansas attorney's lien statute, Sec. 25-301, Ark.Stats., among other things provides that an attorney "shall have a lien upon his client's cause of action, claim or counter-claim, which attaches to any settlement, verdict, report, decision, judgment or final order in his client's favor and the proceeds thereof in whosoever hands they may come; and said lien cannot be defeated and impaired by any subsequent negotiation or compromise by any parties litigant * * *."

The statute further provides that:

    "* * * the same lien herein created shall
  attach in favor of the attorney, solicitor or
  attorneys from and after the commencement of an
  action or special proceeding or the service upon
  an answer containing a counter-claim, in favor of
  the attorney, solicitor and counsellor who
  appears for and signs a pleading for his client
  in said action, claim or counter-claim in which
  said attorney, solicitor and attorneys have been
  employed to represent such client.
    "And in case a compromise or settlement is made
  by the parties litigant to the action after
  service of said notice by registered mail and
  before the filing of suit or if made after suit
  is filed upon said action and such compromise or
  settlement be made without the consent of such
  attorney, solicitor or counsellor at law, the
  court of proper jurisdiction

  shall, upon motion, enter judgment for a
  reasonable fee or compensation against all of the
  parties to such compromise or settlement so made
  without such consent of such attorney, solicitor,
  or attorneys and the amount of such fee or
  compensation shall not be necessarily limited to
  the amount, if any, of the compromise or
  settlement between the parties litigant."

Section 25-302, Ark.Stats., provides:

    "The court before which said action was
  instituted, or in which said action may be
  pending at the time of settlement, compromise, or
  verdict, upon the petition of the client or
  attorney, shall determine and enforce the lien
  created by this act [section]. [Act May 31, 1909,
  No. 293, § 2, p. 892; C. & M. Dig., §
  629; Pope's Dig., § 669.]"

It is well settled that the statute is remedial in character, and must be liberally construed to effectuate the purpose sought to be accomplished. Slayton v. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.