Cull v. Cavanaugh

• Decision Date: 19 June 1923
• Docket Number: Case Number: 11482
• Citation: 95 Okla. 157,218 P. 299,1923 OK 388
• Parties: CULL et al. v. CAVANAUGH et al.
• Court: Oklahoma Supreme Court

1923 OK 388

218 P. 299

95 Okla. 157

CULL et al. v. CAVANAUGH et al.

Case Number: 11482

Supreme Court of Oklahoma

Decided: June 19, 1923

Syllabus

¶0 1. Appeal and Error--Review of Equity Case--Findings.

In an action for equitable relief a finding of facts by the court upon conflicting testimony will not be disturbed by this court, unless against the clear weight of the evidence.

2. Fraud--Relief--Equity Powers of District Court.

In an action for relief from fraud, where the allegations consist of facts constituting fraud, that such fraud will continue unless relief is granted, and a relief is of such character as only a court of equity can give, the district court of this state, being vested, both with the powers of a court of law and equity, will exercise its equity powers in granting proper relief.

3. Same--Character of Action--Materiality.

It is not essential to equitable relief that an action be to enforce an express trust or to have declared a resulting trust or for the enforcement or annulment of a contract, nor that the fraud be of a particular character; it will suffice in equity if fraud has been designedly perpetrated to the substantial detriment of the defrauded party and the law is inadequate to a proper relief.

4. Same--Fraud of Joint Adventurer--Relief--Title--Constructive Trust.

Where two parties agree upon a joint venture, each to contribute an equal sum, and title is taken in the name of one, but paid for with the money of the other, where the one contributes nothing toward the purchase price and where every effort contributed and all time devoted by the one is for the apparent purpose of effectuating his intended fraud, equity will arrest such fraud and decree title to such property in the party whose money purchased it, together with the profits which his money has earned.

Error from District Court, Tulsa County; Owen Owen, Judge.

Action by N. B. Cavanaugh and others against M. E. Cull and others to recover interest in oil property. Judgment for plaintiffs, and defendants bring error. Affirmed.

Foster & Feuquay and S. A. Horton, for plaintiffs in error.

Breckenridge, Bostick & Daniel and Pat Malloy, for defendants in error.

HARRISON, J.

¶1 This was a suit to have certain deeds and oil and gas leases declared to be conveyances in trust, and to have plaintiffs' interest in same determined and decreed. It was instituted by N. B. Cavanaugh, L. A. O'Connell, J. V. Sharp, James Kelly, J. W. O'Connell, J. M. Camalier, and George Hock, plaintiffs, against M. E. Cull, M. B. Cull, E. C. Cull, Cull Oil Company, a corporation, Mary Anglefinger, James Russell, Catherine Russell, James T. Quinn, Patrick McKenna, Patrick Fitzpatrick, Elizabeth Lovell, Anna Marie Keith, Patrick Madden and W. N. Harsha, defendants,

¶2 Plaintiffs were residents of Pittsburg, Pa., and all except George Hock were clergymen. The gist of their allegations was that defendants M. E. Cull, M. B. Cull, and E. C. Cull had represented to plaintiffs that they, the Culls, knew of opportunities for making great profits by investment in oil leases in Oklahoma; that M. E. Cull was an experienced oil man, had made a large fortune in the oil business, and was in position to secure oil properties that would prove to be profitable investments, and proposed a joint adventure in the oil business with plaintiffs; that if plaintiffs would contribute a certain amount of money, defendants Cull would put up an equal amount and would invest the total sum in oil properties in Oklahoma and take joint conveyances to same in the name of all the parties contributing; that relying upon such promises, plaintiffs contributed the several amounts alleged in their petition, but defendants contributed nothing; that defendants took the money which plaintiffs contributed, purchased various tracts of lands and oil and gas leases with the plaintiffs' money, and at much lower prices than defendants had represented such properties would cost; that instead of procuring joint conveyances, as plaintiffs had been lead to believe would be done, defendants procured conveyances in their own names; that though defendants had contributed none of the purchase price of such properties, and though same had been paid for with plaintiffs' money, and though they had been purchased at far less figures than plaintiffs had been lead to believe they would cost, yet defendants had not accounted to plaintiffs for the balance of money paid to defendants by plaintiffs, but had embezzled same and converted same, amounting to several thousands of dollars, to defendants' own use and benefit. Having been thus defrauded, plaintiffs sought relief by this suit.

¶3 The issues of fact and the effect of the testimony upon such issues are stated in the court's findings of fact as follows:

"Journal Entry of Judgment.

"Now, on this 2nd day of July, 1919, this cause coming on to be heard in its regular order, and the plaintiffs appearing by their attorney, Pat Malloy, and the defendants, M. B. Cull, Mary Anglefinger, James Russell Catherine Russell and James T. Quinn, sometimes in the cause referred to as cross-petitioners, and defendants appearing by their attorney W. J. Gregg, and defendants, M. E. Cull and E. C. Cull and the Cull Oil Company, a corporation, appearing by their attorneys, Davidson & Williams and the defendants, Dunnigan, having heretofore entered his appearance in this cause and filed his disclaimer herein and the defendants having announced ready for trial in open court, and waive a trial of this issue involved in the case by a jury and agreed to a trial of the same by the court. Said cause was heard and the trial thereof had, and the court having heard the evidence and argument of counsel and considered the same and being fully advised in the premises, finds:

"First: M. E. Cull was a resident of Oklahoma and lived at or near all of the property involved in this litigation during all of the times mentioned. The plaintiffs and M. B. Cull were residents of Pittsburg, Pa., and adjoining towns, and are wholly unacquainted and inexperienced in the oil business. M. E. Cull had experience in the oil business and held himself out by representation to the plaintiffs and M. B. Cull as being the owner of production and expert in the oil and familiar with the value of oil properties and experienced in the operation thereof.

"Second: That the allegations of plaintiff petition are true, except as in this finding stated. The court find that in November, 1913, the defendant, M. E. Cull, through his cousin, M. B. Cull, represented to the plaintiffs, N. B. Cavanaugh, L. A. O'Connell, J. V. Sharp, James Kelly, J. M. Camalier, and George Rock, that an oil and gas lease covering the Timothy Asbury allotment described in the petition could be purchased or acquired for $ 2,400; that the purchase could and would be made as a joint venture, in which M. E. Cull, M. B. Cull and the plaintiffs last named would acquire by such purchase an interest in said lease proportionate to their contributions thereto, which interest and contributions would be as follows: M. E. Cull, an undivided one-fourth; M. B. Cull, an undivided one-fourth; and the plaintiffs so named, an undivided one-half, which undivided one-half interest should be apportioned among said plaintiffs named according to their contribution to the fund of $ 2,400.

"The court finds that the representations made by M. E. Cull and so communicated to said named plaintiffs by M. B. Cull as aforesaid were that the plaintiffs so named and M. B. Cull should come in on what was known as the "ground floor" and acquire their respective interests in the lease at cost. Relying upon the truth of these representations the plaintiffs so named jointly contributed $ 1,200; M. B. Cull $ 600, and M. E. Cull nothing.

"The court finds that the lease in fact cost M. E. Cull but $ 100. The sum of $ 1,800 so raised was delivered to M. E. Cull.

"The representations so made by him, therefore, on a material fact, to wit, the cost of the lease, was false and fraudulent and was relied upon by the parties so contributing as set forth to their injury. The defendant, M. E. Cull was, therefore, guilty of fraud. It was an active fraud. At the time of the institution of the suit, the legal or record title in this lease was as follows: M. E. Cull, 1-4; M. B. Cull, 1-4; N. B. Cavanaugh, 1-16; L. A. O'Connell, 1-8; J. V. Sharp, 1-16; James Kelley, 1-8; J. M. Camalier, 1-16; George Hock, 1-16.

"Third: In February, 1913, at the request of M. E. Cull, the parties named as holding interests in said Timothy Asbury lease, agreed and determined to drill a well on same. M. E. Cull represented to M. B. Cull, and through him to the plaintiffs holding such interest in said lease, that the cost of drilling said well would be about $ 3,200 and assessments were made accordingly by M. E. Cull. Of that amount, the plaintiffs so named contributed in the months of March and April, 1914, one-half, M. B. Cull, one-fourth. The money so raised was delivered to M. E. Cull. M. E. Cull contributed nothing. The representations made by him, therefore, in this connection were false and fraudulent in that he did not and it was not his intent to contribute any part of said $ 3,200. The money was paid to him upon the faith of said representation. The said M. E. Cull was, therefore, guilty of fraud. It was an active fraud.

"At the instance of M. E. Cull, about April, 1914, after the receipt of said monies, it was decided by the parties that instead of drilling a well on the said Asbury lease, a well should be drilled on the Rayford Pouncil allotment described in the petition; such well to be drilled under a contract with the owner, the Mooney Oil & Gas Company, for an undivided one-half interest in the Rayford & St. Pouncil leases. A contract was executed with the said Mooney Oil & Gas Company and M. E. Cull. For the purpose of performing the terms of said contract, the said M. E. Cull purchased a Standard drilling rig with

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