56 W. Va. 650 | W. Va. | 1904
The main question in this case, necessarjr to be considered in. order to determine the propriety of the decree appealed from, is the nature of the respective interests of the plaintiff on one side and the defendants on the other, in a certain mining property in Tucker county, known as the West Virginia Lime and Cement Company property. There is a corporation bearing the' name of the properties, and, as belonging to which, it is treated in the decree complained of, and, in a certain sense, by the parties; but it seems that no formal conveyances of the property have ever been made to it, and that the parties in whose names the legal titles of the property stand have executed no formal contract with the corporation, binding them to convey. Their rights and interests are dependent upon parol evidence, and to effectuate the object of the bill on the one hand, and to maintain the defense on the other, by upholding'the alleged rights of the defendants, specific performance of certain parol contracts, in respect to which, however, there is some correspondence, must be either enforced, or the parties lpft free to vindicate their rights in some other suit. On the basis of the understanding between the parties, concerning this property and its development, the defendants have expended about thirty thousand dollars. They furnished the money and entrusted its expenditure to the plaintiff. After the property had been purchased and the plant erected, the defendants became dissatisfied with the management of the plaintiff and ousted him from the contrql of the business. Dp to the date of this occurrence, about December 1, 1902, there seems to have been no misunderstanding or differences as to the respective interests of the parties, except that when the agreement to form the corporation was presented to the plaintiff, and he was informed that only one share was to stand in his name, for the time being, so that he might be a director, and that, with the exception of four shares, to. be
E. P. Pearson, the plaintiff, had been in the employ of the defendant Weaver, and certain mining and railway corporations, under the management of Weaver as president, in the capacity of civil engineer for some time preceding the starting of the business involved in this case. By reason of his capacity and information possessed by him concerning the business of Weaver and his corporations, his services for some time after he conceived the idea of the development of the property here in controversy were very necessary to his emploj'ers, and there is evidence tending to show that they dissuaded him from leaving their employment and starting on this venture, by offers to furnish the money for the development of the property upon fair and just terms. Pearson’s interest in the property at that time consisted of a lease, dated October 6, 1898, for thirty-five years, authorizing him to mine the coal and manufacture into lime the limestone in two tracts of land, containing together 172% acres, paying to the owner of the land a royalty of three cents a ton for the coal and one-half a cent per bushel for lime.' He had no capital with which to develop this property. From'about August 19, 1901, up until February, 1902, he brought this lease to the attention of Weaver, from time to time, and expressed great anxiety to begin work upon it, and represented to Weaver that other parties were willing to furnish the money. In February, 1902, he went to Chicago, taking the lease with him, and there made the agreement upon the faith of which all this money was expended. What that agreement was depends upon the testimony of himself, Weaver and C. A. Bickett, an associate of Weaver in his mining and railroad enterprises,' and the subsequent conduct and admissions of the parties.
Pearson says that nobody was present when the contract was made except himself and Weaver,' and that the latter proposed
At the date of the meeting, Pearson owned only the lease. Weaver and Bickett say it was agreed at that meeting that the fee in the property on which the lease was held should be purchased and ultimately conveyed to the corporation and the lease thereby extinguished. They say Pearson was distinctly informed that they would have nothing to do with the property unless this could be done. Pearson was authorized to purchase it, and did so, Weaver furnishing the money for that purpose. Other property adjoining this land was also purchased in the same way. These properties cost a little less than six thousand dollars. On ilarcli 31, 1902, about a month after the talk in Chicago, an option on the land on which Pearson’s lease was taken was secured in the name of E. J. Billings by the procurement of Pearson, and assigned to the West Virginia Lime-
It is agreed that Pearson represented that the cost of putting the plant in operation would be about six thousand dollars, on the basis of putting in but one kiln. Bickett, at one time, suggested a six-kiln plant, but that was not carried out. Two were put in, and the total cost of the plant, exclusive of the purchase money for land, amounts to over twenty-three thousand dollars. A costly and possibly useless structure, put up as part of the plant, is a coal chute from the top of the mountain to the kilns. It cost about $10,000.00, and its satisfactory 'working is in dispute, as is also the value of the coal for use in the plant. But Bickett knew it was being put up: As before stated, the defendants furnished this money as demanded by the plaintiff, Pear.son, and entrusted its expenditure to his ability, judgment and discretion. Many complaints were made from time to time by defendants of his failure to render accounts and send in reports. Assuming that attention to the work of erecting the plant and other outside operations were so exacting as not to allow him time for proper bookkeeping, auditing of claims and sending reports, the defendants directed one of their employes by the name of Thomas to go there and assist him. • He declined the proffered assistance and went on in a manner unsatisfactory to defendants. He complains against the defendants ■ of their failure to meet his pay roots promptly and furnish machinery and materials at the stipulated times, by means of all of which he -was embarrassed in his operations. When the plant had been completed and w'as beginning to turn out lime, a difference as to the price at -which it should be sold arose. Pearson '.had represented that it could be produced at a small cost and
Bickett made one or two trips to file plant and was assured by Pearson that his progress was 'good, and does not seem to have made, or to have been there long enough to make, any investigation. They relied upon Pearson. After the differences arose, and when it seemed to the defendants that the plant ought to be running and doing well, but was not, they sent John McFad-yen, a man in whose business capacity and skill as an engineer they had confidence, to make an examination of the plant and report his conclusion as to its value. His report was not in all respects satisfactory, because it showed that the cost of manufacturing lime would be from seven to ten cents, considerably more than was estimated by Pearson. The defendants came to the conclusion also that Pearson’s management was incompetent and extravagant, and they resolved to displace him as manager and did so about December 1, 1902.
It would be a work of great labor and of doubtful utility to review all of the correspondence and the testimony relating to these matters. Enough has been stated to show that the plaintiff and the defendants entered into an arrangement, looking to the development of a property of doubtful and uncertain value. Whether Pearson’s lease was worth anything could only be tested by the expenditure of a large amount of money. Whether the investment of this money would prove to be worth anything to him ox its owners no man could tell without the test, a costly experiment. Though Pearson- does say other per
After having examined all the evidence, much of which can not be set out here for want of space, we are clearly of the ■opinion that the agreement made in Chicago is not what it is claimed, by Pearson, to be, but is substantially what it is •claimed, by the defendants, to be.
After he had been deprived of the management of the plant .and property, Pearson brought this suit in equity, setting out in his bill his pretentions and claims substantially as herein-before stated, and praying alternately that the charter of the West Virginia Lime and Cement Company and its pretended
Prom the finding of the facts already stated, it is apparent that this decree is erroneous, and that the principal errors are-in decreeing to plaintiff fifty-one per cent, of the capital stock and adjudicating the land purchased to he the property of Weaver. We do not think, however, that the evidence fully sustains, in all its details, the claim of defendants. They say no property was to be conveyed to the corporation, and that no stock was to be issued, until all their investment had been returned out of the profits of the enterprise, but that all was to' remain in Weavers’ hands as trustee. This claim is contradicted by Weaver’s letter to Pearson, directing the Baker land to he conveyed to him, because the corporation had not, at ¡Re-time of its -purchase, been chartered and organized. This fact shows iiiat the property was to be conveyed to the corporation, as soon as organized and ready to receive the title. It is not io be assumed that the corporation was to own part of the-property, while another part was to be withheld from it in tru¡-t, without any reason therefor. And it would be inconsistent with business principles to convey the property to the corporation, without receiving anything in return for it. Consistency in the claim of the defendants, also denies the proposition that no stock was to be issued; for a corporation, receiving property or funds without issuing, or recognizing any title to stock is a sort of anomaly, not to be established except by very clear, consistent and positive evidence. We think the trust arrangement in the
Though not entitled to all the relief given him by the decree, the plaintiff is clearly entitled to have specific performance of the contract for the purchase of his lease, conveyance of the land and an adjudication of his right to said twenty-five per cent, of the capital stock of the corporation as aforesaid, and the same issued and delivered to him upon the assignment of the lease and conveyance of the other property. No adequate legal remedy for the vindication of his rights in these respects is perceived. The contract contemplates the full and complete development of a property which seems to have considerable merit and value as a mining property. It embraced among its provisions the vesting in him, as a stockholder, of a beneficial interest in real estate, not only as to the interest in his lease, so indireetty to be retained, but also in the jn’operty purchased for the corporation by Weaver and his associates. It is needless to say that equity has jurisdiction to enforce specific performance of almost all kind of contracts, relating to real es-táte. See West Virginia etc. Co. v. Vinal, 14 W. Va. 637; Oil Co. v. Oil Co., 47 W. Va. 84; Bettman v. Harness, 42 W. Va. 433; 26 Am. & Eng. Ency. Law (2d Ed.) 104. No question is made as to whether the plaintiff has put himself in position to • call for such relief by performing his own duty and demanding performance by the defendants. The demurrer is not insisted
Why there should be any reference as to liens is not perceived. Nobody has asserted and asked enforcement of any liens by any pleadings in the cause. A reference for the settlement of the accounts of the special receiver may become necessary, but no' cause for it appears as yet. 3STo exception to any items of his •report is disclosed by the record. Iiis bill for services, amounting to six hundred dollars was excepted to and its excessiveness-is here admitted by both sides. The claim is not itemized and the court had nothing before it from which the true character and amount of the services could be determined, and no evidence was adduced in support of the claim. Its allowance is, therefore, erroneoiis, but.upon an itemization and proof of his services, the court can, without difficulty, fix the amount of his compensation, and no reference for that purpose is necessary. References are expensive and should not be made without cause.
Por the reasons stated, the decree complained of will be reversed and the cause remanded with directions to decree an assignment by the plaintiff of his lease to the West Yirginia Lime and Cement Company and a conveyance to said corporation, by the defendant, Iienry E. Weaver, of the land purchased, aS' hereinbefore stated, for it, and, by such proper orders as may be necessarjr, to cause such assignment and conveyances to be made and also to require the defendant, the West Yirginia Lime and Cement Company, upon such assignment and conveyance being effected, to issue and deliver to -the plaintiff certificates for one-fourth of its capital stock, fully paid and non-assessable;" and for such further proceedings, aeording to the rules and principles of equity, as may be necessary to secure and protect the-rights and interests of the parties under their said agreement-
Reversad.