HUNTER V. SHELL OIL CO. 198 F.2d 485 (5th Cir. 1952) CASE BRIEF

HUNTER V. SHELL OIL CO.

198 F.2d 485 (5th Cir. 1952)

NATURE OF THE CASE: Hunter (D) appealed the judgment of district court awarding damages to Shell (P) impressing constructive trusts upon certain royalty interests, mineral interests, and leasehold estates in oil, gas, and other minerals acquired by Ds, in an action alleging breach of fiduciary duty and self-dealing by D, the former employee.

FACTS: D was employed by Shell Oil Company as senior geologist in its Houston office. P discovered that D had been unauthorizedly divulging confidential information to others who then bought up royalty and other interests in oil lands discovered by D in Texas, Louisiana and Arkansas. As part of the scheme, D got fractional participations in their purchases. D was fired and P thereafter instituted these suits against him and some of those acting in concert with him in buying up mineral interests based upon the confidential information. P sought an accounting from each of the Ds and that they be required to convey to P their interests conditioned upon P reimbursing Ds for the costs to them of such mineral interests. P claimed that D breached his fiduciary duty to his employer and thus those who acquired mineral interests through his unauthorized disclosures, hold such interests as constructive trustees for P. Judgment was entered impressing trusts upon the interests acquired by Ds in 59 areas, as well as upon P's 1/4 stock ownership in Rotex Company. Ds were also required to convey to P all such interests as were still held by them, and which P elects to recover in kind, conditioned upon P reimbursing defendants for the original cost of such interests. P was also permitted to recapture any conveyances to non bona fide purchasers by payment of the purchase price. Money judgments were also entered against some of the Ds in the aggregate sum of $130,378.92, representing income and other money accruals from their ostensible ownership of the interests upon which trusts were impressed, some of which had been sold by Ds to bona fide purchasers.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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