Hays and Co. v. Ancro Oil & Gas, Inc.

• Decision Date: 15 November 1991
• Docket Number: No. 20213,20213
• Citation: 411 S.E.2d 478,186 W.Va. 153
• Court: West Virginia Supreme Court
• Parties: HAYS AND COMPANY, a Corporation, Appellee, v. ANCRO OIL & GAS, INC., a Corporation, E.V. Byard, Adeline Line, Barbara Reems, A.G. Anderson, Hobert Kincaid, Eunice Krebs, Hospital Development Company, a Corporation, Kathleen Young, and Dan C. Anderson, Defendants Below, Appellees, B.R. Hays, G.V. Adams, Charles Adams, Gregory V. Adams, Betty Jane Goodwin, and Christine M. Hedges, Administratrix of the Estate of Elizabeth Hedges, Appellants.

Page 478

411 S.E.2d 478

186 W.Va. 153

HAYS AND COMPANY, a Corporation, Appellee, v. ANCRO OIL & GAS, INC., a Corporation, E.V. Byard, Adeline Line, Barbara Reems, A.G. Anderson, Hobert Kincaid, Eunice Krebs, Hospital Development Company, a Corporation, Kathleen Young, and Dan C. Anderson, Defendants Below, Appellees B.R. Hays, G.V. Adams, Charles Adams, Gregory V. Adams Betty Jane Goodwin, and Christine M. Hedges Administratrix of the Estate of Elizabeth Hedges, Appellants.

No. 20213.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 11, 1991.

Decided Nov. 15, 1991.

Syllabus by the Court

1. "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syllabus Point 3, Aetna Casualty & Sur. Co. v. Federal Ins. Co., 148 W.Va. 160, 133 S.E.2d 770 (1963).

2. " ' "While the general rule is that the construction of a writing is for the court; yet where the meaning is uncertain and ambiguous, parol evidence is admissible to show the situation of the parties, the surrounding circumstances when the writing was made, and the practical construction given to the contract by the parties themselves either contemporaneously or subsequently. If the parol evidence be not in conflict, the court must construe the writing; but, if it be conflicting on a material point necessary to interpretation of the writing, then the question of its meaning should be left to the jury under proper hypothetical instructions." Syllabus Point 4, Watson v. Buckhannon River Coal Co., 95 W.Va. 164, 120 S.E. 390 (1923).' Syllabus Point 1, McShane v. Imperial Towers, Inc., , 267 S.E.2d 196 (1980)." Syllabus Point 1, Leasetronics, Inc. v. Charleston Area Medical Center, Inc., 165 W.Va. 773, 271 S.E.2d 608 (1980).

3. Unless otherwise provided for in the assignment, the assignor retains the right to the income and profits that have already accrued on the assigned property at the time the property is transferred.

Richard H. Brumbaugh, Spencer, for appellees Ancro Oil & Gas, Inc. and Dan C. Anderson.

George M. Scott, Spencer, for appellants.

MILLER, Chief Justice:

The appellants, B.R. Hays, G.V. Adams, Charles Adams, Gregory V. Adams, Betty Jane Goodwin, and Christine M. Hedges, Administratrix of the Estate of Elizabeth Hedges (assignors), appeal a final order of the Circuit Court of Roane County, dated December 21, 1990, granting summary judgment in favor of Ancro Oil & Gas, Inc., and Dan C. Anderson (assignees). The critical issue on appeal is whether the assignors of an oil and gas lease are entitled to sale proceeds accrued, but held in escrow, prior to the assignment.

I.

The assignors had an undivided working interest in two oil and gas wells located in Roane County. Hays and Company is a corporation engaged in distributing income from the sale of oil and gas, including the income from the two wells at issue.

In 1978, a dispute concerning the price of natural gas arose between several independent oil and natural gas producers, including the assignors, and a purchaser of natural gas, Consolidated Gas Transmission Corporation (Consolidated). Proceedings to resolve the dispute were held before the Federal Energy Regulatory Commission (FERC). While the FERC proceedings were pending, Consolidated continued paying the independent oil and gas producers the old rate and placed in escrow the difference between that rate and the proposed new rate.

In 1981 and 1982, several of the owners of the undivided leasehold interest assigned their interests to Dan C. Anderson. The assignment provided, in pertinent part:

"[T]he said Assignor does hereby sell, transfer, set over and assign unto the said Assignee, all right, title, and interest in and to that certain oil and gas lease and oil and gas leasehold estate created thereby, covering a tract [description of 82-acre tract].

"Together with all Working Interest in those certain wells situate on said leasehold known as Groves No. 1 and Groves No. 2, together with appurtenances thereto."

Thereafter Anderson assigned his interest in the two wells to Ancro Oil & Gas, Inc. (Ancro), a corporation wholly owned by him.

In late 1985, the FERC litigation was settled, and Hays was authorized to distribute the escrow funds. The assignors and the assignees both contended that they were entitled to the oil and gas proceeds that had been placed in escrow and had accrued prior to the assignment. The assignors claimed that the leasehold interest they sold did not include profits realized prior to the assignments. Ancro claimed that under the plain language of the assignment, it received "all right, title and interest" which included the escrowed funds. Hays, as stakeholder of the funds realized from escrow, filed this interpleader action to determine which party it should pay. ¹

II.

Our longstanding rule on when it is appropriate to grant summary judgment is found in Syllabus Point 3 of Aetna Casualty & Surety Co. v. Federal Insurance Co., 148 W.Va. 160, 133 S.E.2d 770 (1963):

"A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law."

See also Stemple v. Dobson, 184 W.Va. 317, 400 S.E.2d 561 (1990); Beard v. Beckley Coal Mining, 183 W.Va. 485, 396 S.E.2d 447 (1990); Pauley v. Pauley, 164 W.Va. 349, 263 S.E.2d 897 (1980); Parkway Fuel Serv. Co. v. Pauley, 164 W.Va. 344, 263 S.E.2d 893 (1980).

III.

With this standard as guidance, we address the merits of the controversy. Initially, we observe that the assignment forms were prepared by the attorney of the original assignee, Anderson. As we explained in Western v. Buffalo Mining Co., 162 W.Va. 543, 546, 251 S.E.2d 501, 503 (1979): "An assignment does not differ in its essential elements from any other contract. Conservative Life Insurance Co. v. National Exchange Bank of Wheeling, 118 W.Va. 44, 188 S.E. 755 (1936)." Thus, as with contracts in general, "any ambiguity in [an assignment] must be resolved against the party who prepared it." Nisbet v. Watson, 162 W.Va. 522, 530, 251 S.E.2d 774, 780 (1979). (Citations omitted). See also Henson v. Lamb, 120 W.Va. 552, 199 S.E. 459 (1938); Charlton v. Chevrolet Motor Co., 115 W.Va. 25, 174 S.E. 570 (1934).

There is no language in the assignments regarding the escrow funds, even though both the assignees and the assignors were aware of them when the leases...