Watson v. Bettman

• Decision Date: 19 July 1898
• Parties: WATSON v. BETTMAN et al.
• Court: U.S. Court of Appeals — Fourth Circuit

88 F. 825

WATSON v. BETTMAN et al.

United States Circuit Court, D. West Virginia.

July 19, 1898

A. Leo Weil, A. Dewey Follett, and B. Mason Ambler, for plaintiff.

Frank B. Enslow, John T. McGraw, and John G. McCluer, for defendants.

V. B Archer, for Joseph Louchheim.

JACKSON District Judge.

On the 21st day of May, 1898, Gilbert L. Watson filed his bill in equity against Marcus A. Bettman, David Bettman, Emanuel W Bloomingdale, in his own right and as trustee, and Marcus A Bettman and David Bettman, executors of the last will and testament of Meyer H. Bernheimer, deceased, and Mamie Mann executrix of the said Bernheimer, deceased. The bill charges that prior to the month of December, 1897, Watson was a member of the firm of Bettman, Watson & Bernheimer, which firm was the owner of certain oil lands, oil properties, and leaseholds in the states of Ohio, Indiana, West Virginia, and Pennsylvania, and that the said firm also operated a manufacturing plant in Pleasants county, W. Va., and a general supply store in the city of Parkersburg; that Bernheimer died in the month of December, 1897, and that the business, after his death, was carried on in the partnership name by the surviving partners; that the partnership was engaged in the production of oil, and was dealing in oil-well supplies; that the partners of the firm each held a one-fourth interest; that prior to the 5th day of March, 1898, the plaintiff and his associates had been engaged for more than eight years in the oil business, and that they had acquired a large amount of property, and had drilled upon their various properties in the different states over 300 wells, most of them being productive and remunerative, and from which large quantities of oil have been taken and sold, realizing to the firm from $10,000 to $25,000 monthly; and that, in addition to the revenue realized from this source, the firm had sold leaseholds and other properties, amounting to $330,000,-- making a total of about $600,000, of which $300,000 is claimed to have been net profit; and that all the funds realized from this source had gone into the control of Stettheimer & Bettman, who are bankers and brokers. The bill charges that the Bettmans are brothers, and that their wives are sisters of Bernheimer, and that David Bettman was a member of the firm of Stettheimer & Bettman, consisting of Henrietta Stettheimer and David Bettman. The bill further charges that there was another firm doing business under the name of Stettheimer & Co., composed of Joseph Stettheimer and Marcus and David Bettman; that, Joseph Stettheimer having died, the business was continued under the name of Stettheimer & Co. by the surviving partners; that Stettheimer & Co. were owners of oil property in Pennsylvania. It appears from the bill that Watson, the plaintiff in this action, had control of all the operations in the oil fields, as well as of the manufacturing supply company, and that the management of the accounts of the firm and its finances were intrusted to his associates, who assured the plaintiff from time to time that the business was profitable, and that the accounts were accurately and honestly kept. It is charged that the accounts of Bettman, Watson & Bernheimer were not kept in separate books, but that they were kept in the books of Stettheimer & Bettman, in New York City; and when the plaintiff made a demand that separate books should be opened and kept of the transactions of the partnership, his associates promised to do so, but the promise, to this date, has never been kept. The plaintiff also demanded and tried to get a settlement of the co-partnership business, but has never been able to do so. It is further charged that there are five different firms composed of the Bettmans, Watson, and others: First, the firm of M. A. and D. Bettman, composed of M. A. Bettman and David Bettman; second, the firm of Stettheimer & Bettman, composed of Henrietta Stettheimer and M. A. Bettman; third, the firm of J. Stettheimer & Co., composed of the executors of J. Stettheimer and the Bettmans; fourth, Bettman & Watson, composed of M. A. and D. Bettman and Gilbert L. Watson; fifth, the firm of M. A. Bettman, David Bettman, and Gilbert L. Watson, composing the partnership of Bettman, Watson & Bernheimer. That these five different firm are composed of the Bettmans, Watson, Bernheimer, and Stettheimer; the Bettmans being members of all the firms, while Watson is only a member of two of them. Bettman, Watson & Bernheimer is the oil firm, whose business is the subject-matter in controversy in this case, being the same firm that has been carried on in the name of Bettman, Watson & Bernheimer since the death of Bernheimer. It is charged that the accounts of Bettman, Watson & Bernheimer have been kept upon the books of Stettheimer & Bettman, one of the other firms, and have become so interwoven and entangled with the accounts of the other firms that it is difficult, at this time, to determine what moneys and revenues derived from the oil properties of the firm of Bettman, Watson & Bernheimer belong to it. It is not alleged in the bill that the firm of Bettman, Watson & Bernheimer is insolvent, but that the revenues have been misappropriated and misapplied in such a manner as to deprive the plaintiff in this action of his rights and interest in the co-partnership property and its revenues; but it is admitted and claimed in the answer of Bloomingdale, the trustee in these various assignments, that the oil firm of Bettman, Watson & Bernheimer is insolvent. It is charged that L. G. Bloomingdale has large judgments against the Bettmans, amounting to about $70,000; that E. W. Bloomingdale, the trustee in these various assignments, is interested in the business of Bloomingdale Bros., as appears from the bill, and his answer does not deny, but seems to admit, it, and the allegation of the bill is sustained by the testimony of the Bettmans. It appears that there are judgments amounting to nearly $600,000 against the Bettmans and other parties, for which the interest of the Bettmans in the co-partnership of Bettman, Watson & Bernheimer is liable. Stettheimer & Bettman claim directly against the firm of Bettman, Watson & Bernheimer $192,000, and, in addition to this claim, it is claimed that the firm of Bettman, Watson & Bernheimer is liable as indorser for said firm for $109,000. In addition to the allegations of the bill heretofore referred to, it appears that sundry judgments have been rendered in the courts of New York by confession against the firm of Stettheimer & Bettman, and other firms of which Bloomingdale is assignee, in favor of the wives of the Bettmans. Two judgments alone against Stettheimer & Bettman amount to $236,327, which judgments are expected to be made and satisfied out of the interest of the Bettmans in the firm of Bettman, Watson & Bernheimer.

It is apparent from this state of facts that E. W. Bloomingdale occupies a dual relation under his appointment as trustee and he must, on the one hand, enforce collection of the claims of Stettheimer & Bettman against the property of the firm of Bettman, Watson & Bernheimer, one of the...