Mary H. Moorcones, Tom F. Moorcones, and Anthony P. Moorcones v. Shell Oil Company

U.S. Court of Appeals for the Fourth Circuit
Mary H. Moorcones, Tom F. Moorcones, and Anthony P. Moorcones v. Shell Oil Company, 424 F.2d 254 (4th Cir. 1970)
1970 U.S. App. LEXIS 9931

Mary H. Moorcones, Tom F. Moorcones, and Anthony P. Moorcones v. Shell Oil Company

Opinion

PER CURIAM:

This appeal involves interpretation of a complicated “primary lease-financing-leaseback” agreement between the appellants and Shell Oil Company. Pursuant to the agreement, money was lent to the appellants by Shell to build a service station, and Shell obtained a long-term lease so that only its products would be distributed from the station.

*255 The appellants claim that the agreement was merely in the nature of a financing arrangement, entered into to secure the loan. Therefore, it is said, if the loan should be paid off, it would be a constructive fraud to allow the long-term lease to Shell to remain in effect. Shell, on the other hand, argues that the purpose of the agreement was to create a new service station through which to distribute its products. One method of guaranteeing a site for the sale of its products in a given area is through a long-term lease, and the agreement in question was not merely a financing arrangement to secure the loan, but primarily a long-term lease to secure this outlet.

The District Judge held that the appellants’ claim of a constructive fraud was lacking in evidentiary support and, for the reasons stated in his opinion, we agree. Accordingly, the order of the District Court is

Affirmed.

Reference

Full Case Name
Mary H. MOORCONES, Tom F. Moorcones, and Anthony P. Moorcones, Appellants, v. SHELL OIL COMPANY, Appellee
Status
Published