[310 U.S. 404, 405] Mr. Charles H. Garnett, of Oklahoma City, for petitioners.
Mr. J. Louis Monarch, Sp. Asst. to Atty. Gen., for respondent.
Mr. Justice MURPHY delivered the opinion of the Court.
Oklahoma City Company in 1931 owned certain royalty interests, fee interests, and deferred oil payments in properties in Oklahoma. During that year it entered into a written contract with petitioner Prichard providing for the conveyance to him of these interests for the agreed consideration of one hundred sixty thousand dollars, payable fifty thousand in cash and one hundred ten thousand from one-half of the proceeds received by him which might be derived from oil and gas produced from the properties and from the sale of fee title to any or all of [310 U.S. 404, 406] the land conveyed. Interest at the rate of 6% per annum was to be paid from the proceeds of production and of sales upon the unpaid balance. Oklahoma Company was to have in addition a first lien and claim against 'that one half of all oil and gas production and fee interest ... from which the $110,000 is payable', the lien and claim 'not in any way (to) affect the one-half interest in all oil and gas production and fee interest or the revenue therefrom which ... (it) is to have and receive under this agreement.' The proceeds derived from the oil and gas produced and from sales of the fee interests were to be paid directly to Prichard who was to deposit one-half of them at a designated bank, at intervals of 90 days, to the credit of Oklahoma Company. The agreement recited that Oklahoma Company desired 'to sell all of its right, title and interest of whatsoever nature' in the described properties, and provided that a copy of the agreement and a release be placed in escrow for delivery to Prichard upon payment in full of the one hundred ten thousand dollars and interest. Immediately upon the execution of the contract the properties were conveyed to Prichard without reservation. 1 In entering into the agreement Prichard acted not only for himself but also for petitioner Anderson, each of them having a 45% interest.