Wetzel v. Jones, (No. 2447.)

• Court: Supreme Court of West Virginia
• Writing for the Court: LYNCH
• Citation: 75 W.Va. 271,84 S.E. 951
• Parties: WETZEL. v. JONES et al.
• Decision Date: 15 December 1914
• Docket Number: (No. 2447.)

84 S.E. 951
75 W.Va. 271

WETZEL.
v.
JONES et al.

(No. 2447.)

Supreme Court of Appeals of West Virginia.

Dec. 15, 1914.

[84 S.E. 951]

Rehearing Denied April 20, 1915.

(Syllabus by the Court.)

Appeal from Circuit Court, Ritchie County.

Action by William Wetzel against J. N. Jones and others. From judgment for defendants, plaintiff appeals. Reversed in part, affirmed in part, and remanded.

J. W. Vandervort and R. E. Bills, both of Parkersburg, for appellant.

J. N. Jones and Robinson & Prunty, of Harrisville, for appellees.

LYNCH, J. As partners, William Wetzel and J. N. Jones, some time prior to September 12, 1910, conducted drilling operations for the production of oil and gas in Ritchie and other counties of this state. They then were also joint owners in their own right of oil and gas leases on various tracts of land located in the same county, among them being lands of John Denning, on which they had drilled a paying gas well, the lands of R. R. Jones and others. The production of the Denning well they sold to the Mountain State Gas Company, and it to the Hope Natural Gas Company. Having arranged to leave for South America on that day, Wetzel executed his note for $300 at three months, payable to Jones at the Citizens' National Bank of Pennsboro, and, to" secure its payment when due, gave a deed of trust on the Denning well and fixtures, including tubing and casing; C. H. Broadwater being named trustee. The note having matured on December 12th and remaining unpaid, Jones caused the trustee to advertise the property for sale, and at the sale purchased it for $440, and promptly thereafter procured a deed therefor and its recordation. The other leases, held by them under the firm name, Jones & Wetzel, either had previously lapsed because of noncompliance with their terms, or Jones thereafter permitted them to lapse and took new leases on the same tracts in his own name. Jones' purchase at the trust sale, and the procurement of the leases, were for his sole benefit.

To set aside and annul the sale to Jones, to cancel the deed to him by the trustee, and to have decreed to him an interest in the renewed leases are the objects sought by Wetzel, but which the lower court denied, and he has appealed.

As to the irregularities relied on as vitiating the sale, we are unable to perceive in what respect Wetzel was prejudiced. Of these one is that, though the grant was in trust to H. C. Broadwater, the notice of sale was given, the sale made, and deed executed by C. H. Broadwater, trustee. The transposition of initials evidently resulted from inadvertence on the part of the scrivener in preparing the deed; there being no proof or suggestion of the existence of any other person, or of an intention to select any person other than C. H. Broadwater as trustee. The other irregularity urged is that Broadwater was not present at the time and place first named in the sale notice, when, because of his inability, by reason of illness, to attend, the sale was postponed two weeks; notice thereof being published and posted together with the original, at which time the property was sold, Broadwater then personally superintending the sale.

The questions vitally affecting the validity and propriety of the sale under the trust and the purchase by Jones are whether there was such fiduciary or trust relation incident to the partnership which, viewed in the light of his conduct towards the plaintiff and the social assets, forbade the sale and purchase, and whether the price offered and paid was so disproportionate to the market value of the property as to warrant annulment of the sale and deed.

Jones and Wetzel sold the firm's drilling tools and appliances some time prior to Sep-

[84 S.E. 952]

tember 12, 1910. Jones and his wife testified that at their home in Doddridge county before the 12th the partners settled the accounts between them, when they ascertained Wetzel owed Jones $1,140, and agreed to meet on that day at Parkersburg for final adjustment of the amount by payment in cash or by notes; Jones having received the proceeds derived from the sale of the drilling equipment. The finality of the settlement Wetzel denies. He says that, as he and Jones were not competent to make a settlement, they agreed to meet at Parkersburg and lay the accounts before R. E. Bills, an attorney, and for that purpose Jones, who had kept the firm accounts so far as any were kept and had collected and disbursed the partnership funds, agreed to produce the books and vouchers before Bills; that as he failed to bring them, and because Wetzel had made arrangements to leave for South America on that day, they entered into a partial settlement, resulting in the ascertainment of an indebtedness in Jones' favor of $1,840 instead of the amount first ascertained, in discharge of which Wetzel executed the $300 note and permitted Jones to retain the share of the money then in his hands belonging to Wetzel. In some respects, Bills corroborates Wetzel as to the purpose of the meeting, the agreement to produce the books of account, and Jones' failure to bring them. Though, as we have intimated, and as later clearly will appear, the partners claimed equal interests in the Denning well, Jones sought to explain the difference in the amounts found due him on the two settlements by saying that as he and Wetzel had become jointly liable for $1,500 advanced by Seiple for drilling the Denning well on condition that each of the three should have equal interests in its production, and as Jones had assumed payment thereof, the first sum ascertained to be due was increased to that extent. Wetzel denied liability as to this advancement on the ground that as the sole condition for such interest was payment by Seiple before the completion of the well, a condition with which Wetzel testified Seiple did not comply, having paid that amount to Jones, he, and not the partnership, received the benefit, and therefore should refund it. But the fact remains that Wetzel to some extent acceded to Jones' demand in this particular, by what occurred between them on the 12th of September.

In addition to the note and trust securing it, two other papers were then executed, one by Jones and Wetzel under seal, one by Wetzel only, but of which Jones was fully advised. The first may not improperly be treated as a division order pertaining to the rental or consideration payable to the partners for the Denning well production, whereby the gas company was directed to pay each of them his share; the other appointed C. T. Hiteshew as attorney in fact for Wetzel, and authorized him to receive and receipt for Wetzel's share of the stipulated monthly payments for gas taken...