Pownall v. Cearfoss

Decision Date21 December 1946
Docket Number9788.
Citation40 S.E.2d 886,129 W.Va. 487
CourtWest Virginia Supreme Court

[Copyrighted Material Omitted]

Syllabus by the Court

1. Equity has jurisdiction of a suit to settle the affairs of a joint adventure and to direct an accounting between one of the parties to a contract of joint adventure and the successor to the other party to such contract.

2. A contract in writing between two parties, providing for a particular enterprise, by which one of the parties agrees to contribute his services of a designated character, including the making of sales of real estate, and the other agrees to contribute real estate, to pay expenses, and to execute deeds to the purchasers, in the development of the enterprise, the value of which real estate and the expenses are to be repaid to the party contributing the real estate, before any division of profits from the enterprise, and by which the parties agree that settlements of accounts shall be made between them semi annually at specified times, and that after repayment of the value of the real estate and the expenses the profits arising are to be shared equally by them, but which contract does not contain an express agreement to share losses, creates a joint adventure between the parties to such contract.

3. In the absence of a provision in a contract of joint adventure for its termination upon the death of any party thereto, the death of the party two contributes real estate used in its development does not terminate such contract; and the rights, the interests, and the obligations of the deceased party pass to his personal representative, or to his heirs or the beneficiary under his will, or some of them to each, depending, in the particular case, upon the character of the rights, the interests, and the obligations of the deceased party under the contract.

Martin & Seibert, of Martinsburg, for appellant.

J. O. Henson, of Martinsburg, for appellee.


This appeal was granted upon the petition of the defendant Augusta M. Cearfoss, surviving executrix, and the sole residuary legatee under the will of Jesse O. Snyder, deceased, who seeks reversal in this Court of the judgment of the Circuit Court of Berkeley County, entered June 26, 1945. The decree of which the defendant complains granted the plaintiff, Charles V. Pownall, the relief prayed for in his bill of complaint and held that the contract in suit constituted a joint adventure, which the plaintiff was entitled to have carried out, and that he was entitled to have a settlement of the accounts between the parties to this suit and a sale of the remaining unsold assets of the joint adventure.

The question of controlling importance here is whether a written contract, entered into December 11, 1934, between Jesse O. Snyder, now deceased, and the plaintiff, Charles V. Pownall, created a joint adventure or the relationship of principal and agent between the parties to that agreement. The plaintiff contends that the contract established a joint adventure and set up a trust between the parties which is cognizable in a court of equity. The defendant insists that the contract created the relationship of principal and agent, and that the plaintiff has an adequate remedy at law. Other issues, which are hereafter discussed, are also presented.

This suit was instituted in August, 1944. An order of attachment was issued against the estate of the defendant sufficient to pay the sum of $5,000.00 and the costs of the suit, which order was returnable October 17, 1944, and under it a levy was made upon the real estate, located in Berkeley County, West Virginia, covered by the contract involved in this litigation. The original tract contained approximately fifty-five acres, the title to which, according to the terms of the order of attachment, was held by the defendant as executrix of J. O. Snyder, deceased. Upon motion of the defendant the order of attachment was quashed by the court on December 9, 1944. No question concerning the action of the court in this respect arises on this appeal.

The bill of complaint charges, in effect, that by virtue of a written agreement between the plaintiff and Jesse O. Snyder, now deceased, dated December 11, 1934, a joint adventure was created between the parties to the agreement covering a tract of approximately fifty-five acres of land in Berkeley County, West Virginia, owned by Snyder; that the plaintiff had performed certain obligations imposed upon him by the agreement; that after the death of Snyder, because of the refusal of the defendant, as executrix of the will of Snyder, and in her own right as sole residuary legatee, to execute a deed for some of the unsold portion of the real estate which plaintiff has had an opportunity to sell, he has been unable to consummate proposed sales; and that the defendant, after the death of Snyder, has repudiated and refused to execute his obligations under the agreement. The prayer of the bill of complaint is, in part, that the contract be construed and enforced; that the remaining real estate of the joint adventure be sold and the proceeds divided equally between the plaintiff and the defendant; that there be an accounting between the parties to this suit; and that the plaintiff be granted general relief.

The defendant, a nonresident of this State, who lives in Hagerstown, Maryland, entered a general appearance in the suit and filed a written demurrer to the bill of complaint. The demurrer, which assigns numerous grounds, was overruled. The defendant then filed her answer, in which she denies all the material allegations of the bill of complaint except the execution of the contract, the payment by Snyder of the bills presented to him by the plaintiff, the sale of the lots set forth in the answer, the death of Snyder in 1941, the execution of his will, its recordation in Berkeley County, her qualification under the will, and the effort of the plaintiff, in 1944, to induce her to execute a deed after she had told him, in 1941, that she would not revive the contract. In the answer she also alleges that the contract was abandoned by the plaintiff in 1938 and that he made no effort, after that time, to sell the lots which had been laid out upon the property.

The cause was heard upon the bill of complaint, the answer of the defendant, the general replication of the plaintiff, and the evidence of the parties and various witnesses produced to the court; and on June 26, 1945, the court entered the adverse decree, reversal of which the defendant seeks in this Court.

The agreement upon which this suit is grounded, filed as an exhibit with the bill of complaint, provides, in substance, that Snyder and Pownall should proceed to develop a tract of real estate of about fifty five acres, referred to as the Patterson Farm Property, situated approximately one fourth of a mile north of Martinsburg, in Berkeley County, West Virginia, about fifty three acres of which are located on the west side, and the remaining portion of about two acres on the east side, of U.S. Route No. 11, which land Snyder had purchased on November 14, 1934, and for which he paid $6,200.00; that Pownall should have complete charge of, and proceed with, the development of the property with reasonable speed, which development specifically included surveying, plotting, laying of streets and sidewalks, advertising and selling lots, by auction or otherwise, receiving and collecting cash, notes and liens, receiving, depositing and disbursing the proceeds of sales, and repairing all buildings on the property to the extent deemed advisable by him; that Snyder should bear and pay all the expenses of the development, as the bills for such expenses, approved by Pownall, were presented to Snyder for payment, which expenses were to be payable from the proceeds of the sales of the property when they became available; that all notes and liens should be taken in the name of Snyder, who should make proper deeds to the purchasers as they became entitled to such deeds; that all expenses should be satisfied, and $6,200.00, without interest, paid to Snyder before any return of profits should be received by either Snyder or Pownall; that Pownall should receive no compensation for his services until after the payment of the expenses and $6,200.00 to Snyder; that Snyder and Pownall should share equally in all profit then remaining; and that Snyder and Pownall should have a statement and a settlement of accounts on July 1 and January 1 of each and every year, beginning July 1, 1935, until all operations under the contract should be completed.

This agreement, signed by both parties, was acknowledged by them on December 11, 1934, in Washington County, Maryland, before Augusta M. Cearfoss, the defendant, who had been secretary to Snyder for twenty-two years before his death, and who, according to her testimony, was familiar with the agreement and many of the transactions of the parties which arose from it. She also had in her possession, prior to and at the time of the trial, the records which had been, in large measure, kept by her in his office and which related to the transactions covered by the agreement.

At the time the foregoing agreement was made, Snyder was a successful and well to do lawyer of Hagerstown, Maryland, and Pownall had been actively engaged in the real estate business for many years at Martinsburg, West Virginia.

Snyder became ill in 1939, having suffered a slight paralytic stroke at that time, but he continued to transact his business affairs until August or September, 1940. His will was written March 18, 1940. From September, 1940, until his death February 10, 1941, he was unable to transact any business. By his will, after disposing of...

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