Penix v. No. 2 Gas Coal Co.

• Decision Date: 02 June 1925
• Docket Number: 5060.
• Citation: 129 S.E. 127,99 W.Va. 310
• Parties: PENIX v. NO. 2 GAS COAL CO. ET AL.
• Court: West Virginia Supreme Court

129 S.E. 127

99 W.Va. 310

PENIX v. NO. 2 GAS COAL CO. ET AL.

No. 5060.

Supreme Court of Appeals of West Virginia.

June 2, 1925

Submitted October 21, 1925.

Rehearing Denied Sept. 3, 1925.

Syllabus by the Court.

A case in which point 3 of the syllabus of the case of McBee v Duesenberry, 128 S.E. 378, decided this term, is followed and applied, and the judgment of the lower court on the facts affirmed.

Appeal from Circuit Court, Kanawha County.

Suit by C. R. Penix against the No. 2 Gas Coal Company and others. From a judgment for plaintiffs, defendant Tom L. Johnson and another appeal. Affirmed.

J. F Cork, J. W. Kennedy, and Donald L. Cork, all of Charleston for appellants.

E. S Bock and Ben Moore, both of Charleston, for appellee.

HATCHER J.

This is a suit in chancery, brought in the court of common pleas of Kanawha county, wherein the plaintiff seeks an accounting from the defendant company, and from Tom L. Johnson and C.J. Van Fleet, joint defendants with the company, and a recovery from the defendants of a one-third share of profits derived from the sale of the property of the company to one E. M. Spangler. From a decree adjudging that the plaintiff was the owner of a one-fourth interest in the property and entitled to a one-fourth interest in the proceeds of the sale thereof, after payment of the debts of the company, and rendering judgment for the plaintiff against defendants Johnson and Van Fleet for $2,418.16, the balance due plaintiff on the amount determined by the court to be the one-fourth interest of the profits, Johnson and Van Fleet have brought the case here on appeal.

The evidence is so conflicting, indefinite, and lacking in details that it is impossible to properly determine from the record just what took place between the parties in regard to some of the important matters in litigation. It seems that in the winter of 1920 defendant Johnson conceived the idea of obtaining a lease on a tract of coal land owned by a Mr. Wiley. Johnson states that he sent a man named Delaney to act as his agent and secure the lease. Delaney says that he was not acting as an agent, but was to be the owner of a one-half interest in the lease. Delaney also states that he put up one-half of the $187 which was paid on the lease as royalty. Delaney did not know the plaintiff, but says that Mr. Johnson at the time stated that a man named Penix, or some such name as that, would "come into the thing and take a third interest with us." Shortly afterwards, Delaney sold his interest in the lease, whatever it may have been, to V. T. Harrison. Harrison sold a portion of his interest to one Clyde Swinburn. What that interest was the record does not disclose, and later Swinburn and Harrison sold their several interests, whatever they were, to defendant Van Fleet. The evidence does not show the interests which they purported to sell, neither does it show the interests which Van Fleet thought he was buying.

While negotiations were pending with Wiley, Johnson approached the plaintiff, and, according to the plaintiff, arranged for Penix to have a one-third interest in the lease. Penix put up $529 in all for the one-third interest, as he understood it. Johnson denied that Penix was to have a one-third interest in the lease, but states he was to have $500 in the stock of the defendant corporation when the notes with which Penix had borrowed the $529 were paid. Shortly after securing the lease, Johnson formed the defendant corporation to which he assigned the lease. He had himself elected president, Penix vice president, and Harrison secretary and treasurer. The capital stock was $10,000. No stock was ever issued to any one as a stockholder. A certificate for $9,500 was made out in the name of Johnson, but it was for the sole purpose of being put up as collateral on a loan of money secured for the corporation. Johnson claimed that he personally was entitled to all of the shares of the...