Dillard v. Wheelock

• Decision Date: 04 November 1926
• Docket Number: 6 Div. 439
• Citation: 110 So. 278,215 Ala. 195
• Parties: DILLARD v. WHEELOCK.
• Court: Alabama Supreme Court

110 So. 278

215 Ala. 195

DILLARD v. WHEELOCK.

6 Div. 439

Supreme Court of Alabama

November 4, 1926

Appeal from Circuit Court, Walker County; R.L. Blanton, Judge.

Bill in equity by Charles F. Wheelock against J.W. Dillard. From a decree for complainant, defendant appeals. Reversed and remanded.

A.F Fite, of Jasper, and C.H. Roquemore, of Montgomery, for appellant.

W.F Finch, of Lake Worth, Fla., and Vassar L. Allen, of Birmingham, for appellee.

BOULDIN J.

The bill was filed by Charles F. Wheelock against J.W. Dillard to declare a resulting trust in lands, because of the equities growing out of a contract between them to share the "commissions or profits or other compensation" derived from a sale of mineral interests in lands of Lost Creek Coal & Mineral Land Company, known in briefs as Lost Creek Company.

The equity of the amended bill was sustained on former appeal. Wheelock v. Dillard, 211 Ala. 599, 100 So. 840.

On final hearing on pleadings and proof, complainant was granted relief. Defendant appeals.

In reviewing the decree as related to the pleadings and proof we first give our conclusions of fact upon a study of the record.

The essential features of the contract, dated November 24, 1919, are: Recital in the preamble that Dillard had a contract with the owner, whereby he was to be paid "a commission for the sale of all or a part of the lands"; that Wheelock "will lend such aid and assistance as shall lie in his power to effect such sale"; that, in the event of a sale of "said lands, or any part thereof, by him (Dillard) under any agreement with said company," Wheelock should receive one-third "the commissions or profits or other compensation" coming to Dillard in connection with said "sale or sales."

Without here giving details of evidence, we find this contract was not subject to approval of unnamed associates of Dillard, and that it was disapproved and notice thereof given to Wheelock. The subsequent acts of both parties, including correspondence, negative such contention on the part of appellant.

The Lost Creek Company owned some 6,300 acres of mineral lands, The only committal in writing binding on the company at the time was an agreement to allow $1.50 per acre for the sale of the entire holdings at $15 per acre, or a sale to net the company $13.50 per acre. Tentative verbal understandings had existed to receive and pass upon offers submitted by Dillard and to give him exclusive agency in that regard until further notice. But, by contract, the parties thereto clearly became associated in a joint adventure to sell the lands, or any part thereof, under any present or future arrangement with the company, and to share in the profits or commissions.

On February 9, 1920, Dillard took an option on 2,800 acres of the land at $15 per acre net to the company. We conclude from the whole evidence that this option was taken on lands selected and listed by Wheelock, a mining engineer, having some knowledge of the sale value; that it was taken, on his advice, for the purpose of getting control of these selected lands; that it was not an independent deal by Dillard in his own behalf; that it was not for purposes of an investment, but as an aid to the sale; and that, at the time and thereafter, Wheelock was recognized as entitled to share in the benefits of this option.

On March 1, 1920, Wheelock negotiated an agreement between Dillard and Moss & McCormack, in substance, as embodied in a written proposition drawn at the time, tendered to Dillard for signature, with check for the $500 cash payment. We find Dillard had verbally authorized and personally assented to and agreed to sign such agreement.

In effect, the agreement was to assign the option to Moss & McCormack for $11,250, payable $500 cash, and the balance when titles were approved and deed made under the option. It bound Moss & McCormack to exercise the option and take the property covered thereby. At the same time, it contemplated an effort of Moss & McCormack to purchase all the holdings of the Lost Creek Company, in which event the compensation going to Dillard and Wheelock should be increased to $15,000. Moss & McCormack were ready, able, and willing to comply with their agreement. Dillard declined to sign the agreement or accept the check. Soon thereafter he arranged with Faucett & Thomas, of Prattville, to furnish $10,000, which, with $500 theretofore paid by Dillard, met the cash payment called for by the option. Dillard then closed the deal with Lost Creek Company, taking a deed in his own name, giving a mortgage for $31,500, evidenced by three notes of $10,500 each, due in one, two, and three years, with interest at 6 per cent. Pursuant to tentative understanding, Dillard later executed a deed to Faucett & Thomas to a three-fifths interest in the property, retaining two-fifths interest. At this stage, we deal with a question of estoppel, or coming into equity with unclean hands, set up in the answer and evidence.

The evidence sufficiently discloses that, upon refusal of Dillard to carry out the deal with Moss & McCormack, Wheelock proceeded with negotiations in behalf of Moss & McCormack, seeking to acquire the property for them from the Lost Creek Company by purchase or by acquiring the stock of the company. We conclude Dillard is not in position to deny Wheelock's interest under the option, because of this, for the following reasons:

The move to take over the property by Dillard and shut out Wheelock was in fraud of the latter's rights in the option, and contrary to the purposes for which it had been obtained.

The proposal of Moss & McCormack to take over the entire property was in harmony with the agreement Dillard had negotiated through Wheelock. Wheelock, as the equitable owner of a joint interest in the option, had been morally committed to Moss &amp McCormack, with Dillard's knowledge...