84 W. Va. 701 | W. Va. | 1919
This suit .was brought in the court of common pleas of Kan-•awha county by W. A. Kennedy, H. C. Nease, G-. N. Hancock, M. C. Barger, M. A. Boland, S. B. Thomas, and C. J. Van Fleet against L. D. Burns, G. W. Stage, Samuel H. Meyers and A. C. Lawrence, to compel performance of a contract or option, made between Samuel H. Meyers and W. A. Kennedy and C. J. Van Fleet on the 18th day of July, 1918, •and hereinafter described. That court granted plaintiffs relief by decreeing that, upon the payment by them of $2,250.-■00, with interest thereon from August 3, 1918, to the general receiver of the court, to be disbursed to the party or parties •entitled thereto, when that question should be thereafter determined, defendants Samuel Meyers, G. W. Stage and L. D. Burns sign, seal, acknowledge and deliver to W. A. Kennedy, ■as trastee, a deed conveying the one-half undivided interest in the lease in question, which interest was to be held by him in trust for the benefit of himself and those associated with him in the Kennedy Oil Company, and upon their failure to ■execute the deed within ten days after payment of said sum, ■a commissioner was appointed and authorized to make such ■deed in their stead.
On appeal to the circuit court of said county, the decree was reversed and plaintiffs’ bill dismissed, by a decree entered by said court on the 14th day of June, 1919. From the last mentioned decree this appeal is taken.
The contract, or option sought to be enforced by the bill -was drawn to be executed by both Samuel H. Meyers and
Said company issued a certificate to said Samuel Meyers, certifying that he was the owner of “ten shares of the Kennedy Oil Company. Full paid and non-assessable, ” and stating that the owner thereof is entitled to the one-sixteenth of all dividends from the proceeds of said company from the production of oil and gas or any products therefrom on the Ramsey lease, and that one well was to be “completed without charge against this interest, which will be drilled to the Berea sand. ’ ’ The certificate is signed by W. A. Kennedy, President, and C. J. Van Fleet, Secretary, and it, together with a form of deed intended to be executed by said Meyers conveying his one-half undivided interest in the lease to "W. A. Kennedy, was presented to said Meyers. He declined to accept it, or to execute the deed, on the ground that the conditions of the writing of July 18, 1918, had not been complied with, that the formation of a corporation was the only kind of company contemplated. However, he offered to sell outright his interest in the lease to Kennedy and Van Fleet for $2,250.00, payable $1,000.00 in cash and balance in six months to be evidenced by a good note. The exact date of this proposition does not appear, but it does appear that the money was to be paid and the note delivered on the following Saturday, which was the 3rd of August, 1918. Not having the cash in hand, Van Fleet swears he made arrangements with the Merchants & Mechanics Bank of Charleston to borrow the money, and went to the bank on that day for that purpose, and, finding the bank officer with whom he had arranged to get the money absent, he then immediately went to Meyers’ place of business and saw his brother, Alex. Meyers, whose agency for Samuel Meyers is not controverted. Alex. Meyers conducted nearly all the negotiations respecting this matter. Van Fleet says he was then told by Alex. Meyers that it would be satisfactory if the money was paid on the following Monday; that he again went to the bank on Monday, and was notified that Mr. Meyer,s had
The two principal defenses to the bill are, first, that the conditions of the option had not been complied with, and, therefore, the writing of July 18, 1918, never became a binding contract; and, second, that said Meyers did not thereafter,, at any time, agree to sell his interest to Yan Fleet and Kennedy, or either of them, at the price of $2,250.00, or at any-other price.
The first defense is well taken. The terms of the option clearly indicate that an incorporated company was the kind of company contemplated, not an association of individuals, forming a partnership, unlimited in respect to the liability of its members. The writing provides that the company is to be capitalized at $16,000.00, and that the shares of capital stock to be issued to Meyers are to be fully paid and non-assessable. Only an incorporated company has the power to issue such stock. The liability of a shareholder in an incorporated company for the debts of the company is very different from the liability of an owner of shares or interests in the property or business of an unincorporated company, or a partnership. His lliabililty in the former affects only the stock owned by him, whereas in the latter, unless expressly limited in the manner provided by the statute, chapter 100 of the Code, his liability for the company’s debts is unlimited. It is true the certificate tendered to Meyers states that he is not to be liable for any of the expenses of drilling one well,
There is much conflict in the testimony as to the kind of "company orally agreed to by the parties, but it is unnecessary to review the evidence in this opinion. It is evident therefrom, read in connection with the writing itself, that Meyers was anxious to provide against any failure liability that might arise out of the operation of the property. The conflicting evidence raises at least a serious doubt in our mind as to whether Meyers afterwards actually waived the condition requiring the formation of a corporation, and it is a well established principle of equity that, in order to entitle one to specific performance, all the material provisions of the contract must be distinctly and clearly proven. Equity will .not enforce a doubtful contract for fear of doing a greater "wrong by doing so than by leaving the parties to their legal :remedy. Specific performance is not an absolute right, but an equitable remedy resting in the sound discretion of the court. Reger v. McAllister, 70 W. Va. 52; Smith v. Mullen, 113 Va. 671; and 12 Enc. Dig. Va. & W. Va. Cases, page 482.
Kennedy and Van Fleet employed A. C. Lawrance to drill a well, not according to the plan as stipulated in the agreement, which was to raise the necessary fund therefor by the sale of capital stock of the company, but instead, they agreed to give Lawrence, for drilling the .well, ten-thirty-seconds of ■the working interest in the lease. Our conclusion is there has not been such substantial compliance with the terms of the ‘■option contract as entitles plaintiffs to have it performed by “defendant Meyers.
The second ground of defense relates to the alleged contract "for the sale of his interest in the lease by Meyers to Kennedy -•and Van Fleet, made about the 1st or 2nd of August, 1918. 'This is the contract of which the court of common pleas 'decreed performance. The bill alleges that Meyers agreed to 'sell his interest to Kennedy and Van Fleet for $2,250.00, payable $1,000.00 cash and $1,250.00 in six months, to be secured “by a good note. It does not allege whether this agreement was .made orally or in writing, hence, the defense o fthe stat
The oil and gas lease from Ramsey and wife to Meyers and Martin was for a period of ten years at least, and longer If oil or gas was produced, and was made in 1916. It, therefore, had nearly eight years to run from the date of the alleged agreement, and if oil or gas was discovered and produced within the term, its duration would become indefinite, and, hence, had to be, and was in writing. Clause six of the statute of frauds requires a “contract for the sale of real -estate, or the lease thereof for more than a year” to be in writing in order to maintain a suit or action thereon. Chapter 98, Code. The lease itself being required- to be in writing, an agreement to transfer or assign it, or any interest in it, must likewise be expressed in writing. Interest in or a •demise of land, lying only in a grant, can not be sold or transferred except by writing. 1 Thornton on Oil and Gas, Sec. 101, supported by the following adjudicated cases: Kingsley v. Siebrecht, 92 Me. 23, 69 Am. St. Rep. 486; 1 Ventris, 362, 86 Eng. Rep. 233; and Todd v. Bettingen, 98 Minn. 170. It appears from the report of the ease last cited that the plaintiff and defendant owned two elevator companies, and in consequence of negotiations between them, the ■former agreed in North Dakota to transfer his stock in one elevator to the latter in consideration of the transfer by him to the plaintiff of his stock in the other company and in addition the transfer of a certain elevator situated on a railroad right of way in Dresden, North Dakota. That agreement was mutually carried but by the parties in respect to the transfer of stock, but the defendant failed to transfer the elevator at Dresden, its transfer depending upon an agreement with the railroad company. The elevator had been con
We affirm the decree of the Circuit Court.
Decree Affirmed