Wyoming-Indiana Oil & Gas Co. v. Weston

• Decision Date: 25 January 1932
• Docket Number: 1705
• Parties: WYOMING-INDIANA OIL & GAS CO. v. H. R. WESTON, ET AL
• Court: Wyoming Supreme Court

7 P.2d 206

43 Wyo. 526

WYOMING-INDIANA OIL & GAS CO. v. H. R. WESTON, ET AL

No. 1705

Supreme Court of Wyoming

January 25, 1932

APPEAL from the District Court, Big Horn County; CYRUS O. BROWN Judge.

Action by Wyoming-Indiana Oil and Gas Company, a dissolved corporation against H. R. Weston and others. From a judgment for plaintiff, defendants H. R. Weston and William L. Walls appeal.

Affirmed, with modifications.

For the appellants there was a brief by Ellery and Spencer, of Cheyenne, Wyoming, and oral argument by Mr. C. R. Ellery.

The petition does not allege a joint-adventure agreement between plaintiff and defendants, and no such agreement was shown by the evidence. The pleading indicates a theory of joint-ownership in the lease rather than a joint-adventure. Bowmaster v. Carroll, 23 F.2d 825, (8th Cir.); Columbian Ldy. v. Hencken, 196 N.Y.S. 523; Hutchinson v. Birdsong, 207 N.Y.S. 273; Atlas Co. v. Galt, (Md.) 139 A. 285; Bond v O'Donnell, (Ia.) 218 N.W. 898; Darling v. Buddy (Mo.) 1 S.W. 163. The decree is therefore unsupported by allegations or proof. The voluntary dissolution of plaintiff company by its stockholders, while the contract was in effect, was an abandonment and repudiation thereof. In re Mullings Clothing Co., 238 F. 58 (2d); Okmulgee Co. v. Frink, 260 F. 158, (8th Circ. ); U. S. v. Poe, (Md.) 87 A. 933; Union Trust Co. v. Thomas, (Md.) 66 A. 450; Houston v. Co., (Utah) 187 P. 174; Sharp v. Co., (Cal.) 212 P. 933. If the decree is founded upon the theory of a joint-adventure, such adventure was dissolved by the dissolution of plaintiff corporation. Fried v. Guiberson, (Wyo.) 217 P. 1087; Reece v. Rhoades, 25 Wyo. 91; Andrews v. Bush, (Cal.) 293 P. 153; Van Hoovel v. Roberts, (Ala.) 127 So. 506; Co. v. Johnstone, 249 F. 103 (9th); Beebe v. Allison, (Wash.) 192 P. 17; Smith v. Brd., (Kas.) 232 P. 101; Welling v. Crosland, (S. C.) 123 S.W. 776; 47 C. J. 1111. If it would be assumed that plaintiff corporation and Weston and Walls, owned and held the 1922 Oil & Gas Prospector's Lease as joint-adventurers, then upon the withdrawal of plaintiff corporation from the enterprise, and an agreement for its dissolution by its stockholders, its interest passed to trustees who could acquire no interest in future leases that might be acquired by Weston or Walls, because no legal right of renewal existed as to the 1922, 1923, 1924, 1925 and 1926 leases. Each lease constituted a separate and distinct application. The authority of surviving trustees was limited to liquidating the assets of the corporation in existence at the time of its dissolution. Huckfeldt v. Board of Land Comm'rs., 20 Wyo. 162, 5441-5442 C. S.; Nebraska Co. v. Co., 20 F.2d 330; Houston v. Co., supra; People v. Standard Co., 202 N.Y.S. 840; City of N.Y. v. N.Y. & S. etc. Co., 172 N.Y.S. 495; State ex rel. Walls v. Comm'rs., (Wyo.) 254 P. 491; Words and Phrases, (2nd Series) Vol. 3, 117, 975; Vol. 5, page 269, (2d Series); Haffcke v. Clark, 50 F. 531; Keystone Co. v. Co., 272 F. 242, (2nd Cir.). The claim of the plaintiff Wyoming-Indiana Oil & Gas Co. is barred by laches; Taylor v. Salt Creek Oil Co., 285 F. 532, (8th Cir.); Patterson v. Hewitt, (N. M.) 66 P. 552; Union Oil and Gas Co. v. Cross, (Ky.) 295 S.W. 172. Plaintiff's petition on its face, admits laches and then seeks to excuse such laches, by an allegation that the rental was paid by another on behalf of plaintiff.

For the respondent there was a brief and oral argument by Thos. F. Shea, of Cody, Wyoming.

The statement of the trial court as to the theory of the case as shown by the pleadings, that the parties had an interest in the royalties, but not in the lease itself, and that the lease might be renewed by one or more of the joint-adventurers, is correct, and is sustained by the evidence. No particular form of words are required in alleging a joint-adventure. It is sufficient if it be shown from an examination of the whole pleading. Howard v. Dobson, (Calif.) 176 P. 715; Hoge v. George, 200 P. 96; Botsford v. Van Riper, (Nev.) 110 P. 705; Wilson v. Cole, (Calif.) 252 P. 757. The relations between parties to a joint-adventure is fiduciary in character and requires the utmost good faith. Dike v. Martin, (Okla.) 204 P. 1106; Pomeroy's Eq. Jr. 155; Crawford v. Forrester, (Kan.) 194 P. 635. No rights were lost by laches. Lind v. Webber, 134 P. 461; Seligson v. Weiss, 227 N.Y.S. 338, 10 R. C. L. 396; Miller v. Walser, (Nev.) 181 P. 437. There was no notice given by defendants Weston or Walls of a termination of the agreement of forfeiture of its rights. Saunders v. McDonough, (Ala.) 67 So. 591; Dike v. Martin, 204 P. 1106; Bowmaster v. Carroll, and Columbian Ldry. Co. v. Hencken, cited by appellant differ on the facts from the present case. A discussion of elementary principles relating to partnership and joint-adventure, have no legitimate bearing upon the facts in the present case. Bond v. O'Donnell, cited by appellants, supports respondent's position. Other cases cited by appellant, are readily distinguishable from the case at bar on the facts. Plaintiff's rights were not extinguished by its dissolution. 14 A C. J. Sec. 3810, 3811. In re Mullings Clothing Co., 238 F. 58, cited by appellants, holds that the dissolution of a corporation does not terminate an existing lease. The general rule is that no abandonment of existing contracts results from dissolution, unless such intention be shown. Authorities cited by appellants on the principle of fiduciary relationship, existing in joint-adventures, are correct in principle, but do not aid appellants Walls and Weston, in view of their breach, or breaches of the agreement as shown by the evidence. It is true that no legal right of lease renewal existed. Huckfeldt v. Board, 20 Wyo. 162; but, having been renewed, the law requires the lessee, to hold the title for the benefit of those who have equitable rights therein. Mitchell v. Reed, 61 N.Y. 123; Pomeroy's Eq. Jr. (4th Ed.) 1050; Lind v. Weber, 134 P. 467; Donleavy v. Johnston, (Calif.) 141 P. 229. Authorities cited by appellants, as to technical distinctions between leases, and licenses, cannot be fairly said to have a bearing upon the issues in this case, it being clearly shown, that appellants intended to deprive plaintiff of its interest, and are therefore held accountable. Appellant's contention that plaintiff's claim was barred by laches, is wholly unsupported by the facts or the law. The circumstances under which the doctrine of laches is applied, are so numerous and different, that its applicability depends on the circumstances of each particular case. Taylor v. Salt Creek Consolidated Oil Co., 285 F. 532. There is no apparent analogy between the cases of Patterson v. Hewitt, et al., and Union Oil & Gas Co. v. Cross, cited by appellants, and the facts and circumstances as shown in the present case.

RINER, Justice. KIMBALL, C. J., and BLUME, J., concur.

OPINION

RINER, Justice.

This is a proceeding by direct appeal to review a judgment rendered by the District Court of Big Horn County in favor of the Wyoming-Indiana Oil and Gas Company, a dissolved corporation, hereinafter referred to as the "plaintiff", and against H. R. Weston and Wm. L. Walls, subsequently herein mentioned as the "defendants", or by their respective names, and also against the defendant Continental Oil Company.

The action was originally brought in Park County by the plaintiff and removed on change of venue to Big Horn County. Those made parties defendant in the litigation were H. R. Weston, Wm. L. Walls, and Continental Oil Company aforesaid, and D. E. Hollister, Sarah I. Hogg, W. Telfer Hogg, John L. Hogg and Mary A. Hogg. The five persons last named, with the exception of Sarah I. Hogg, seem to have been disregarded as the case progressed.

Summarized plaintiff's amended petition alleges: That plaintiff existed as a Wyoming corporation from about January 17, 1918, until August 18, 1922, on which date it voluntarily dissolved, having at that time as its directors W. F. May, M. J. Dayer, W. B. Raymond, D. E. Hollister and W. T. Hogg; that owing to the death of Hogg, on May 18, 1922, and the resignation of Hollister prior to the commencement of this action, the other directors named are now the trustees of the dissolved corporation; that in February 1920, W. T. Hogg, acting as agent for the plaintiff, entered into an oral agreement with the defendants Walls and Weston that all three of these parties should secure a state oil and gas prospector's lease on Section 16, Township 51, North of Range 100 West of the Sixth Principal Meridian in Wyoming, which should be taken and held in Weston's name, as trustee for them, each to own an undivided one-third interest therein or in any renewal thereof; that such a lease so held was obtained February 28, 1920; that previous to the expiration of said lease in February 1921, the said Walls, Weston, Hogg and Hollister agreed further that in consideration of plaintiff's expending certain money for the development of the lease and its payment of the 1921 rental therefor, it should have an additional two-ninths interest therein, the rentals thereafter to be paid five-ninths by plaintiff and four-ninths by Weston and Walls; that plaintiff made the expenditure and payment thus agreed; that as evidence of the interest of the plaintiff in the enterprise, Weston thereupon assigned to Hollister a one-third interest in said lease and to W. T. Hogg a two-ninths interest therein; that in receiving these assignments Hollister and Hogg, as President and Vice President respectively, were acting for plaintiff, and though never formally ratified by plaintiff, their acts in the premises were always considered as for plaintiff's benefit and the interests thus taken as belonging to it; that during the...