Standard Drilling Co. v. Slate

• Decision Date: 06 June 1924
• Parties: STANDARD DRILLING CO. v. SLATE.
• Court: Kentucky Court of Appeals

262 S.W. 969

203 Ky. 599

STANDARD DRILLING CO. v. SLATE.

Court of Appeals of Kentucky.

June 6, 1924

Appeal from Circuit Court, Warren County.

Action by the Standard Drilling Company against J. M. Slate. Judgment for defendant, and plaintiff appeals. Reversed, with directions to sustain motion for new trial.

Charles R. Bell and John L. Stout, both of Bowling Green, for appellant.

Denhardt & Huntsman, of Bowling Green, for appellee.

THOMAS J.

Some time prior to May 25, 1920, the appellee and defendant below J. M. Slate, procured leases for operating for oil and gas from 12 different persons on as many pieces of land in Warren county, in or near Bowling Green, and two other similar leases on other tracts had been procured by other parties. On that day they were all assigned to J. K. White, and he in turn executed a deed conveying them to defendant as trustee without designating in the deed any cestui que trust, but it is admitted in the pleadings and by defendant in his testimony that he was trustee for the Delafield Oil Syndicate, an unincorporated association of persons, of which both White and defendant were members. It had been formed with the understanding that the syndicate should procure the leases and operate or otherwise handle them so as to realize a profit for its members and for convenience the title to all of them was made to defendant, trustee for the syndicate. It furthermore appears that the ultimate purpose was to incorporate the syndicate, and that it was later done under the name of Delafield Oil Company, but not until after the happening of the transactions here involved.

At some time during the transactions, but just when is not shown some of the members of the syndicate, being a majority, and other persons, organized the corporate plaintiff and appellant, Standard Drilling Company, with the chartered right to drill oil and gas wells and to do any and all things necessary for the accomplishment of that purpose. After that and while defendant was holding the title to the leases and operating as trustee, he and some, if not all, of his associates in the syndicate agreed with the Standard Drilling Company, in which they were stockholders and some of them officers, for it to drill a well on one of the leases held by defendant as trustee for the syndicate to a depth of 1,030 feet, for which it was to be paid the sum of $3.50 per foot. At the time the drilling company began work on the drilling of that well, defendant was sick, and when he recovered the drilling under the contract had commenced, and he paid the company as the work progressed $2,105, at different times by checks, upon each of which was written "Delafield Oil Syndicate, not incorporated," and they were signed the same way "By J. M. Slate, Trustee." Five hundred dollars was paid by Edward Lytle, who succeeded defendant as trustee before the well was completed, leaving a balance of $1,000, due the drilling company, for which it has never received payment. It brought this action against the defendant as trustee to recover that balance and he answered, admitting that it was due, and that he "as trustee" owed it, but that he did not owe it individually, and he expressed a willingness that a judgment against him as trustee might be rendered. An amended petition was filed seeking the recovery of a judgment against him personally, which was answered by him, and in his answer he denied personal liability.

The evidence heard upon the trial proved the above-recited facts and the judge of the court, to whom the cause was submitted without a jury, dismissed the petition, and on motion of plaintiff he filed a separation of law and facts. Plaintiff's motion...