Sample v. Romine

• Decision Date: 25 May 1942
• Docket Number: 34945.
• Citation: 8 So.2d 257,193 Miss. 706
• Court: Mississippi Supreme Court
• Parties: SAMPLE et al. v. ROMINE.

8 So.2d 257

193 Miss. 706

SAMPLE et al. v. ROMINE.

No. 34945.

Supreme Court of Mississippi

May 25, 1942

Saye and Saye, of Longview, Tex., and Bridgforth & Love, of Yazoo City, for appellants.

Watkins & Eager, of Jackson, Henry & Barbour, of Yazoo City and Walter L. Brown, of El Dorado, Ark., for appellee.

ROBERDS Justice.

Appellee Romine, by bill in equity sought (1) to have established in and conveyed to himself a one-third interest in nine mineral and royalty leases on an aggregate of 884 acres of land in Yazoo County, Mississippi, and (2) for an accounting of the profits and recovery of one-third thereof which defendants had realized on such leases. The bill prayed for an attachment against the interest of said defendants in such leases and joined as defendant-garnishee the Union Producing Company, which concern was developing for oil the lands covered by one of the leases and was indebted to Sample and Mrs. Mucher through such operations. The leases stood in the names of J. C. Falvey and Clark Sample. The rights of Romine were grounded on a verbal arrangement he claims to have had with Falvey and Sample and acts and conduct of the parties pursuant thereto, as will be more fully set out hereinafter. Mrs. Mucher is the widow and sole devisee in the will of Dr J. C. Falvey, deceased.

Sample and Mrs. Mucher denied the material allegations of the bill and the rights asserted therein; plead Section 3348, Code of 1930, requiring creations of trusts to be in writing, stale claim and laches.

The Chancellor found the facts substantially as hereinafter set out; held that Romine was entitled to a one-third interest in the leases and the minerals and that Sample and Mrs. Mucher held title thereto as trustees for Romine's interest ordered them to convey to Romine such one-third within thirty days, failing in which he empowered and ordered the clerk of the court as a commissioner thereof to execute the conveyance, and appointed a master to state an account of the income and profits from the operations under the leases.

The first question we must determine is the relation which existed between Romine and Falvey and Sample. This necessitates a statement of our conception of the ultimate facts shown by the evidence.

Dr. Falvey and Sample and Romine were friends and all lived at El Dorado, Arkansas. Falvey and Sample were then bachelors and lived together. Dr. Falvey was a general medical practitioner, Sample a prominent business man, and Romine operated a large restaurant. Falvey and Sample were men of financial means, and Romine a man of considerable experience and knowledge in the oil and gas business and especially in procuring mineral leases. On November 1, 1929, Dr. Falvey called Romine into his office and told him that he had been informed by a "scout" for a large oil company that prospects were good for oil in Yazoo County, where a well was then being drilled. Dr. Falvey suggested that he would put up five hundred dollars and would get another person to put up a like sum and turn that over to Romine if Romine would go to Yazoo County and buy oil and gas leases, scattered through such area as Romine might think wise, and the three would share one third each in the enterprise, after repayment of the thousand dollars, the leases to be taken in the names of Falvey and the other party. Romine agreed to that proposition. On November 4, 1929, Dr. Falvey informed Romine that Mr. Sample was agreeable to the plan, and had paid to him, Falvey, the other five hundred dollars, which, in fact, he had done. This arrangement was all verbal. Falvey and Romine went to a bank in El Dorado, where Dr. Falvey procured a cashier's check for one thousand dollars, payable to Romine, and delivered it to him. Romine and his wife, in Romine's automobile, left for Yazoo County. Romine placed the amount of this check to his credit in a bank in Yazoo City. He went about over the County, contacting land owners, and finally procured the nine leases, all in the name of Falvey and Sample, scattered and blocked as he thought advantageously. He worked at that for six days. He paid the owners one dollar per acre for the leases, aggregating $884.00 for the nine, by checks drawn in his name on the Yazoo bank. He witnessed the signatures of the lessors to all of the leases and made affidavit of their execution for purpose of having them recorded. He filed all of the leases with the Chancery Clerk for record and procured from the Clerk certified copies thereof. He also obtained maps and plats of the county and the leased premises and data on the titles of the lessors. He then went back to El Dorado and made a written report to Dr. Falvey, showing all of the leases, the amount paid for each, and showing also he had expended $33.60 for recording the leases, for certified copies, maps, etc., leaving $82.40 which, by direction of Dr. Falvey, he applied on his expenses, which had exceeded that amount. Under the arrangement Romine kept in his possession all of the papers, bank records, paid checks, data, leases, and documents. It appears the original leases, after being recorded, were mailed to Dr. Falvey, who delivered them to Romine. It was also understood that Romine was to keep in touch with developments in Yazoo County and mainly look after the handling of the properties, Dr. Falvey suggesting they would try to sell some of the leases and "clear out"-meaning, we assume, the repayment of the furnished money-and retain and develop the remainder.

The well then being drilled proved to be a dry hole, and oil activity in that section died out.

Dr. Falvey and Sample moved to Texas, from which place they, as well as Romine, had come to Arkansas.

In December, 1938, Dr. Falvey died, leaving a will in which his widow was the sole beneficiary. She remarried and became Mrs. Mucher.

In August, 1939, there were again signs of oil in Yazoo County from another well then being drilled. Romine returned to Yazoo County to investigate and look over the situation. He was impressed with the possibility of oil in that territory. He called Sample over the telephone and he also wrote him a letter, giving an account of the oil prospects, and recited in his letter the understanding he had had with Dr. Falvey. To this time the matter had not been discussed personally between Romine and Sample, although witnesses testified to hearing conversations between Falvey and Sample, and some also quoted Falvey and Sample in conversations with the witnesses, substantiating the arrangement as heretofore set out. Following up this letter Romine mailed the leases to Sample. He also wrote one Clapp, who had been secretary to Dr. Falvey and who was assisting Mrs. Mucher in the handling of her business, reporting the oil situation in Yazoo County and setting out the oral arrangement with Dr. Falvey and, in substance, what had been done thereunder, later sending to Clapp, in response to Clapp's written request, a copy of the statement he had furnished Falvey on his return to El Dorado.

The Union Producing Company, when suit was filed, had brought in an oil well on one tract of the leased premises, and Sample and Mrs. Mucher had received from the operation of the properties more than the thousand dollars.

There were conferences between Sample, Mrs. Mucher and their attorney and Romine. Sample and Mrs. Mucher then denied all claims of Romine.

The leases conveyed a one-half interest in each (1) the minerals in place, (2) the royalties and (3) future rentals to keep the leases alive, all under and subject to prior leases on the premises in favor of one Evans.

The Chancellor admitted over objection proof of prior similar dealings between Romine and Dr. Falvey and between Romine and Sample and one Lake, all verbal, in which each party had an interest in the property and which were handled generally in the same manner as the venture under consideration was to be handled, some of the former leases being taken in the name of one, or more, but not all, of the interested parties, some being in the name of Mrs. Romine, but all held and used for the common benefit. In some, but not all, of these cases letters were later written by the title holders to the other interested parties confirming the oral arrangement.

We are not certain of the particular bases on which the Chancellor grounded the rights of Romine growing out of the foregoing state of facts, but one was that of a joint adventure. We think that is the true relation between the parties.

While perhaps no exact definition of a joint adventure can be given, nor can a general rule be laid down by which the question as to what amounts to a joint adventure can be answered, the answer in each case depending on the terms of the agreement, the acts of the parties, the nature of the undertaking and other facts (30 Am.Jur. page 680, Sec. 7; State ex rel. Ratliffe v. Superior Court, 108 Wash 443, 184 P. 348), some definitions have been attempted. In 30 Am.Jur. page 677, Sec. 3, it is said: "A joint adventure has been broadly defined as an enterprise undertaken by several persons jointly, and, more particularly, as an association of two or more persons to carry out a single business enterprise for profit * * * an association of persons to carry out a single business enterprise for profit, for which purpose they combine their property, money, effects, skill and knowledge". In Simpson v. Richmond Worsted Spinning Co., 128 Me. 22, 145 A. 250, 253, the Court said a "'joint adventure' has been defined as 'an association of two or more persons to carry out a single business enterprise for profit.' * * *" A federal court said "'Joint adventure' exists when two or more persons combine in joint business enterprise for their mutual benefit with understanding that the...