Lawrence v. Potter S.

• Decision Date: 02 May 1922
• Docket Number: No. 4432.,4432.
• Citation: 91 W.Va. 361
• Court: West Virginia Supreme Court
• Parties: A. C. Lawrence v. James Potter et als.

91 W.Va. 361

A. C. Lawrence

v.James Potter et als.

No. 4432.

Supreme Court of Appeals of West Virginia.

Submitted April 25, 1922.

Decided May 2, 1922.

1. Equity Belay in Prosecution of Suit to Preclude Relief Must Be Under Circumstances to Work Material Prejudice to Defendant.

Though lack of diligence in the prosecution of a suit»in equity, after commencement thereof in due time, may amount to laches and thus preclude relief, the delay in prosecution, to have such effect, must be of such duration and under such circumstances as to work material prejudice to the defendant. (p. 365).

2. Specific Performance Prosecution of Suit for Specific Performance of Contract to Convey Oil and Gas Properly to Final Decree Within Four Years Held to Show Diligence. Prosecution of a suit for specific performance of a contract for conveyance, assignment or transfer of oil and gas property, to final decree, within a period of less than four years, within which voluminous depositions were taken on both sides and the rights of no third parties have intervened, manifestly complies with the requirement of diligence, even though the property has been greatly enhanced in value within such period, by the enterprise and at the cost of the defendant, (p. 365).

3. Compromise and Settlement Bona Fide Claims Under Ad-

verse Titles Giving Rise to Litigation, Constitute Sufficient

Consideration for Compromise Agreement.

Bona Fide claims of right in respect of real estate, under adverse titles, giving rise to litigation between the claimants, constitute sufficient consideration for a compromise agreement between them, and neither can be absolved from the obligation thereby imposed upon him. on the ground of lack of title in the other. (p. 368).

4. Same In Compromise Involving Adverse Title, Party Recog-

nizing Opponent's Claim as Bona Fide Cannot Deny His Obligation for Lack, of Claimant's Title.

If, in such compromise, the right o one of the parties to the adverse title claimed by him, depends upon the true interpretation of an ambiguous contract, and his claim is recognized by his opponent as being bona fide and contracted for by him, in the agreement, he cannot be heard to deny his obligation, on the ground of lack of title in such claimant. (p. 368.)

5. Minks and Minerals Assignors Held Beneficial Owners of

Leases Assigned to Corporation for Operation.

Under an assignment to a corporation of all interest in oil and gas leases by the owners thereof, containing stipulations requiring the corporation to operate the properties and pay to the assignors the proceeds of the oil and gas found and produced, less its expenditures in such operation, and binding the assignors to reimburse it for all losses incurred after 90 days' notice so to do, the assignors are the beneficial owners of the leases. (p. 368).

6. Same One Purchasing With Understanding That Title Shall

Be Clear of Burden of Prior Assignment, Cannot Escape Obligation After Clearing of Title.

One who has contracted for the purchase of the interest of one of the owners of such leases, with the understanding and agreement that the title shall be cleared of the burden of superior right thereto in a stranger, by reason of a prior assignment of the leases, cannot absolve himself from the obligation incurred by him in such purchase, after such outstanding and superior right has been acquired as contemplated, on the ground of the infirmity in the title at the date of the contract. (p. 368).

7. Contracts One of Several Agreements Forming Integral Part

of Entire Transaction Cannot Be Treated, By Party as Disconnected Agreement While Claiming a Right Under Other Parts.

One of several agreements, each of which is an integral part of an entire transaction involving transfers of a number of separate and distinct rights and interests and incurrence of new obligations by some of the parties, cannot be treated by one of the parties thereto as a disconnected agreement or a mere revocable offer, while claiming and acquiring a right belonging to the other by consummation of other parts of the entire transaction. (p. 370).

8. Same Held, That Party Could Not Discharge Himself from Liability Under a Part of An Obligation and Yet Claim Rights Against Another Under it.

Nor is such party discharged from the obligation imposed upon hint by the particular agreement by a declaration of abandonment of the entire transaction, at a time at, which he could rightfully have abandoned, it, if immediately afterwards he renewed negotiations with all of the interested parties except the one in respect of whom he attempted to relieve himself, and procured consummation of all of the parts save such agreement, in such manner as to exclude it, insofar as it imposed the obligation he attempted to evade, but to include it insofar as it took from the other party thereto a right or title constituting a material inducement or consideration for such agreement. (p. 371).

9. Tenancy in Common Party Buying of One Cotenant, Another's Interest in Oil and Gas Lease is Bound to Know Extent of Seller's Authority.

A tenant in common in an oil and gas lease has no implied authority to dispose of his cotenant's interest therein, and an express authority so to do, founded upon no consideration, is revocable. One dealing with a part owner of such a lease in respect of his cotenant's interest, is bound to know the extent of his authority; and, in relying upon such part owner's representations as to it, he acts at his peril. (p. 372).

10. Contracts Limitation in Offer for Immediate Acceptance Held to Relate to Composite Transactions and Not to Integral Part.

A limitation in an offer to consummate a transaction involving a number of contracts respecting separate and distinct rights and interests, saying it is for immediate acceptance, relates to the composite transaction, not to one of its integral parts. (p. 373).

11. Same Repeated Request for Modification, Unaccompanied By Renunciation, Held Not Ground for Renunciation By Others. Repeated requests by one of the parties to a contract, for modification, unaccompanied by any renunciation of it as made, even though annoying and unreasonable, constitute no ground for renunciaiion thereof by the other. (p. 375).

12. Frauds, Statute op Telegram, From Vendor to Purchaser and Undelivered Deeds Held Sufficient Memoranda.

A telegram from a vendor to his vendee, admitted in evidence without objection and impliedly acknowledged in the testimony of the vendor, as having been sent by him, and undelivered deeds executed by him, fully disclosing the terms of the contract, constitute a sufficient memorandum 'thereof, under the statute of frauds. (p. 376).

13. Minks and Minerals Contract for Conveyance or Assign-

ment of Interests in an Oil and Gas Lease May Be Modified in the Course of Negotiations, as any Other Contract. A contract for the sale and conveyance or assignment of interests in oil and gas leases, constituting one of the parts of a transaction involving several other matters, may be modified in the course of the negotiations, as in the case of any other contract, and the modification is deemed to have been made upon a sufficient consideration. (p. 376).

14. Specific Performance Modification of Contract Clearly

Established Will Be Recognized as Part of it.

If such modification is alleged, clearly established by proof and brought within the terms of the memorandum of the contract, it will be recognized and treated as part of the contract, in a suit for specific performance thereof. (p. 376).

(Lively, Judge, absent.)

Appeal from Circuit Court, Lincoln County.

Action by A. C. Lawrence against James Potter and others. Decree for the plaintiff", and James Potter and certain other defendants appeal.

Modified and affirmed.

Mathews, Campbell & McClintic, for appellants. W. E. li. Byrne and Blue & McCabe, for appellee,

POFFENBARGER, PRESIDENT:

The decree complained of on this appeal requires specific performance of an alleged contract on the part of one of the appellants, to convey to the plaintiff the oil and gas and oil and gas rights conferred by two certain leases, upon the lessees therein, one of which is known as the Reece W. Pauley lease covering a 60 acre tract of land and the other, as the Caroline and W. H. Porter lease embracing a 7 acre tract of land. James Potter with whom the contract is alleged to have been made took said leases from the plaintiff and others, by a conveyance, for himself and certain associates, John E. Turner, D. Gr. Williamson, J. A. Williamson and D. E. Williamson, in exchange for another lease known as the Hall lease on a 40 acre tract of land and other considerations, all by way of compromise of conflicting claims of right under leases, on the same land, executed by adverse claimants of title to the lands. By the decree, Potter and his associates above named are required to convey seven-eighths of the working interest in said tracts, to the plaintiff, within thirty days after payment by him, of $25,000.00 to the Citizens National Bank of Charleston, West Virginia, to the credit of this cause.

Although the cause of action stated in the bill arose in June or July, 1917, and plaintiff began this suit July 20, 1917, and eight days later filed his bill and obtained an injunction restraining the defendants Potter and his associates from selling, encumbering or disposing of the property in any way, until the further order of the court, which seems never to have been dissolved, the rule or principle of laches is invoked against the decree, on the ground of lack of diligence in prosecution of the suit. The decree was entered March 11, 1921, about three years and eight months after commencement of the suit. On account of their connection with the transactions giving rise to the alleged cause of action, a number of other persons were made defendants to the bill, and they filed answers to it, December 3, 1917. The separate demurrer and answer of Potter was filed, September 7, 1918. The...