# Phillips Petroleum Co. v. Johnson > Court of Appeals for the Fifth Circuit · February 1, 1946 · 155 F.2d 185 URL: https://www.frixlaw.com/law-library/cases/9652856 ## Case - **Full name:** Phillips Petroleum Co. v. Johnson - **Court:** Court of Appeals for the Fifth Circuit - **Decided:** February 1, 1946 - **Citations:** 155 F.2d 185; 1946 U.S. App. LEXIS 3259 - **Precedential status:** Published - **Opinion:** On rehearing by Sibley - **Judges:** Sibley, McCord, and Waller, Circuit Judges - **Cited by:** 52 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9652856 ## Opinion text SIBLEY, Circuit Judge. Each party has moved for a rehearing, but neither has convinced us that anything in the opinion is wrong. To prevent misunderstandings, however, we will further state our views on some points. 1. The contracts in some other cases pressed upon us spoke of the making of gasoline from the gas as the “use” to be made of it. Such being the express agreement, it was a use of it under those contracts. At a previous time when such gas was drained of its gasoline and the residue thrown away, this being the only use for the gas, very likely gasoline extraction was generally spoken of as using the gas. *194 These parties before us knew that under present Texas conservation laws the gas could not be thus thrown away in great part, and that it is now the common practice to do what was done with this gas, when a sale to the pipelines for light and fuel could not be made. What they meant by the term “used” is illustrated by their circumstances, and especially by their conduct under this contract. Johnson knew that Phillips was putting the gas from his well into Phillips’ pipeline, condensing the gasoline vapors out, and selling the residue, and has never objected. We are clear that thus mingling the gas with similar gas for convenience in transportation was not using it. Putting aside the early months when casinghead gas was thought to be involved, Phillips has monthly rendered statements to Johnson which did not on their face purport to be for the value of the gas at .the mouth of the well, as Phillips now contends would be proper, but they purported to show the amount of gasoline taken out and its value and the proceeds of sale of the residue, with deductions from both supposedly for expenses. Johnson has never contested this basis of accounting, or that it was proper to treat the gas from his well as average gas in the mixture dealt with. He has claimed and now claims only that more gasoline was taken out than was stated, and that it was worth more, and that the proceeds from the residue were more than stated, and that the deductions for handling were too much. In his last filed brief he states: “All the plaintiff seeks is the value of the gasoline content and the net proceeds of the residue. He is willing to allow all reasonable expenses in separating the gas into usable commodities.” This substantially recognizes the basis of accounting which we have established, and it is the basis indicated, so far as the present record shows, by the monthly statements rendered. The correctness of the debits and credits constitutes the matter for trial. 2. We have not said this petition might not have been treated as one in equity and tried by the judge, with the nomenclature and mechanics of equity. We say an account between persons jointly interested as these are can be had at law, 1 Am.Jur., Accounts and Accounting, § 43, or in equity, Id. § 51. There is not much, if any, difference in the principles or results of either procedure. Id. § 49. What we said is that a jury was demanded as in a law suit and the demand was acquiesced in, and the trial had was that of a law suit, in which it is best not to confuse the jury with equity terms and concepts. In a law trial, discovery can now be had from the defendant by interrogatories, or by taking depositions of its officers, and agents. We have made no rulings on the burden of proof because none were made in the court below or invoked here. It would seem, however, as we have already said, that the defendant, following proof or admission that it has used gasoline vapors out of the gas, and has sold the remainder, ought to show the amount of each for every month, and what the proceeds were of that sold, for these things are peculiarly in its knowledge, and as the accounting party it ought to have a record of them or bear the inconvenience of its failure to keep it. So as to the deductions for expense of handling the gas. If the expense cannot be accurately shown, of course, customary charges for such service or even opinion evidence from witnesses, qualified to testify about it, may be resorted to. The question as to the market value of gasoline is a matter open to the information of both parties, and if the plaintiff disputes the value put on it by defendant he may show it to be wrong by evidence. So he may rebut by evidence any item of receipts or expense set up by the defendants. We do not understand the assertion that the proceeds of the residue gas cannot be proven and therefore the value of this gas can be shown by tshowing what Huber got out of such gas. Surely both Phillips and the purchaser of this gas have records of what was paid, the gross proceeds. If the proceeds can be arrived at, the worth of the gas is, under this contract, immaterial. We have not examined the pleadings to see just how the issues are made, but have spoken generally as to how it seems to us these parties ought to approach a solution of their differences. 3. As to the statute of limitations, the cause of action is not a fraud but breach of a contract to pay money. The appropriate limitation began to run against each installment as it fell due. If there was any concealment of any part of that cause of action which was fraudulent the statute would not run while the concealment continued. The burden is on Johnson to show the facts necessary to relieve him *195 of the bar of the statute. He knows whether and when and how long he was deceived and must make that clear. The testimony he delivered was not at all clear, but was, as we pointed out in the opinion, ambiguous if not self-contradictory. Perhaps he can clarify the matter on another trial. Both motions for a rehearing are denied. McCORD, Circuit Judge, dissents. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9652856. Public record. Not legal advice.