Case Title: Martin v. Hunter

Citation: 179 Kan. 578, 297 P.2d 153

Docket Number: 40,064

State: kansas

Court: Kansas Supreme Court

Date: 1956-05-05T00:00:00Z

Document:
179 Kan. 578 (1956)
297 P.2d 153
LOUIS H. MARTIN and WATSON B. JOYES, Appellants,
v.
ROY M. HUNTER, Appellee.
No. 40,064

Supreme Court of Kansas.
Opinion filed May 5, 1956.
Riley W. MacGregor, of Medicine Lodge, and Robert Smith, of Tulsa, Oklahoma, argued the cause, and Vernon F. Coss, and John W. MacGregor, both of Medicine Lodge, were with them on the briefs for the appellants.
O.M. Wheat, of Medicine Lodge, and Carter Smith, of Tulsa, Oklahoma, argued the cause, and were on the briefs for the appellee.
The opinion of the court was delivered by
WERTZ, J.:
This was an action to expunge from the records in the office of the register of deeds an agreement placed of record by defendant, casting a cloud on plaintiffs' title in certain oil and gas leases and to quiet title to such interest in plaintiffs.
Appellants Louis H. Martin and Watson B. Joyes will be hereinafter referred to as plaintiffs, or separately as Martin and Joyes, and the appellee Roy M. Hunter as defendant or Hunter.
Plaintiff Martin was an aviation pilot and had been acquainted with Hunter about two years, and they acquired and developed oil and gas leasehold estates together.
Plaintiff Joyes was for many years a promoter in the drilling of leasehold estates for oil and gas. He had known Hunter for many years, but was not then acquainted with Martin.
Defendant Hunter was a petroleum engineer and had devoted *580 more than forty years to various phases of the oil and gas business and the development of oil and gas leases.
Some months prior to the institution of this action, Martin represented to Hunter that he had relatives and acquaintances in and around Hardtner in Barber county and, through such relationships, and acquaintance of his kindred with the landowners there, he could secure a block of acreage in that vicinity, provided a test well could be drilled somewhere on a block of acreage in approximately six months from the date of the proposed leases.
Martin secured for Hunter a Kansas blueprint oil and gas map from a Wichita map company, reflecting the landowners and the leases on the proposed block. Martin cross-marked with a pencil all the acreage he thought could be leased including two tracts of land, one of 160 acres and another of 80 acres belonging to Edd and Helena Sterling. After studying the map, Hunter went to the office of Joyes and exhibited the map to him, telling him of the acreage Martin thought he could secure, including the Sterling property. Joyes expressed a willingness to join in the enterprise, provided he could participate equally with Hunter and Martin. Hunter informed Martin of his conference with Joyes and urged that Joyes be taken in on the deal. Thereafter Hunter took Martin to see Joyes and they agreed to work together on the project. After working together for some time they entered into the following written agreement:
"Witness our hands this 22nd day of March, 1954.
Subsequent to the signing of this agreement, Martin proceeded to block some 2,000 acres, some in his and some in the name of Joyes. The first lease was taken March 24, the Sterling leases on March 25, the Platt lease on April 3, and the Achenbach lease on April 8. The dates of other leases are not material here.
A portion of the block was assigned to the Aurora Gasoline Company who entered and drilled a producing gas well on the Rathgeber lease within the block in September, 1954.
In November, Martin made a division of the profits of the enterprise which he claimed at the trial was a full settlement. At the time, Hunter did not know whether Martin had conveyed the Sterling leases to get the well drilled, or sold the leases and contributed the money to the promotion of the Rathgeber well.
Hunter made a trip to Medicine Lodge, January 8, 1955, and discovered from the records in the office of the register of deeds that the Sterling leases were in the name of defendants Martin and Joyes, each owning an undivided one-half interest, with a well being drilled thereon at the time by Aurora Gasoline Company. Hunter contacted Joyes at Tulsa, Oklahoma, and demanded his interest in the leases, and Joyes advised him that he had been paid enough out of the deal. Hunter then made written demand on Martin and Joyes for his interest in the Sterling leases.
Hunter then filed the aforementioned written agreement between the parties of record in the office of the register of deeds of Barber county, after making a notation thereon that it was applicable to the Sterling leases. Martin and Joyes then filed the present action asking that the contract so recorded be stricken from the record and that title be quieted in them as plaintiffs.
Hunter filed a cross-petition asserting that by reason of the contract with the plaintiffs the relationship of joint adventurers existed, *582 and that by reason of the fiduciary relationship he was entitled to his undivided one-third interest in the Sterling leases.
The case was tried by the court on a partial stipulation of facts, and the evidence presented by the respective parties. The court made the following findings of fact:
Plaintiffs' abstract contained seven specifications of error. However, after an examination of their brief, they may be summarized as (1) the decision of the court was contrary to the evidence; (2) the trial court erred in holding the joint venture or partnership covered the Sterling leases, and (3) in entering judgment allowing Hunter a one-third interest in the Sterling leases subject to the drilling contracts made by the plaintiffs.
Plaintiffs first contend that the transactions with respect to the two Sterling leases were individual transactions of Martin, in which Hunter had no interest or claim. It is asserted that these dealings by Martin were no part of the original joint adventure, but were personal dealings not associated therewith, and that the Sterling leases formed no part of the block of acreage secured under the agreement between the parties.
Defendant Hunter contends that the Sterling leases were a part of the joint adventure, and that the map presented by Martin to him for consideration was to be presented to Joyes in an attempt to get a drilling contract for a well some place in the block, and that Martin had plainly marked thereon the two Sterling leases as a part of the block which might be obtained.
The evidence was highly conflicting, each party offering proof to sustain the respective contentions. The court by its findings concluded the Sterling leases were a part of the joint adventure, and included in the acreage to be obtained by Martin for the benefit of all parties. Both Hunter and his son testified that when Martin brought the map from the Kansas Blueprint Company, the Sterling leases were plainly marked, along with other land in the block, open for leasing. It was stipulated that Martin took the first leases in the block on March 24, 1954; the Sterling leases on March 25, the Platt lease on April 3, and the Achenbach on April 8; that the *584 leases, except Sterling's, were put in the block and accounted for by Martin; that the gas well on the block was brought in as a producer in September, 1954. The evidence disclosed that subsequent thereto, Martin assigned a half interest in the Sterling leases to Joyes, and a well was brought in on the Sterling leases in January, 1955. Hunter checked the records and found for the first time that the Sterling leases were being held by Martin and Joyes and no accounting had been made to him on these leases.
No useful purpose could be gained by narrating all the controversial evidence contained in the record. Suffice it to say that the mentioned facts were sustained by ample, competent evidence, and the court did not err in holding that the Sterling leases were part of the block of acreage obtained in the joint adventure of the parties.
This is essentially a fact case. Plaintiffs, in effect, ask this court to retry their lawsuit. We cannot do so.
It has been a well-established rule in this state for more than ninety years that this court accepts as true the trial court's findings of fact when they are based upon competent evidence; and on appeal it is of no consequence that there may have been much contradictory evidence adduced at the trial, which, if believed by the trial court, would have compelled entirely different findings of fact and an entirely different judgment, and when the error assigned is that the findings and judgment are contrary to the evidence, it is only necessary on appeal to consider whether there is some competent and sufficient evidence upon which the judgment is based; and a consideration or recital of the contradictory evidence cannot aid in correctly determining that question. (Bayer v. Cockerill, 3 Kan. 282; Bruington v. Wagoner, 100 Kan. 439, 164 Pac. 1057.) In Stanley v. Stanley, 131 Kan. 71, 289 Pac. 406, we said:
In Jones v. Jones, 161 Kan. 284, 296, 167 P.2d 634, it is stated:
See, also, Gilpin v. Burch, 145 Kan. 224, 231, 65 P.2d 308; Tucker *585 v. Hankey, 173 Kan. 593, 250 P.2d 784; In re Estate of Beeler, 175 Kan. 190, 194, 262 P.2d 939; Rupp v. Rupp, 171 Kan. 357, 233 P.2d 709.
Under the record in this case it was established that the relationship of joint adventurers existed between plaintiffs and defendant and, as such, they stood in a close relationship of trust and confidence, and were bound by the same standards of good conduct and square dealing as are required by partners. Each of the parties had the right to demand and expect from his associate full, fair, open and honest disclosure of everything affecting the relationship. Under such conditions, Martin could not act in such a manner that his personal interest was hostile to that of Hunter.
One of the leading cases on the law pertaining to joint adventurers is Meinhard v. Salmon, 249 N.Y. 458, 463, 164 N.E. 545, wherein Chief Judge Cardozo, speaking for the New York Court, said:
In Potucek v. Blair, 176 Kan. 263, 270 P.2d 240, and cases therein cited, we held that the relationship of joint adventurers is a fiduciary one based on mutual confidence and trust.
Under the contract between the parties in the instant case, it was the duty of Martin and Joyes to write the oil and gas leases in the block upon the most favorable terms possible and, for the purposes of facilitating negotiations, the leases should have been taken in the names of Joyes or Martin and, when the leases were secured, Joyes was to proceed to use his best efforts to promote a test well on the block, and whatever monies, overriding royalties, and or leases which might be cleared on the deal should have been divided between Martin, Hunter and Joyes, share and share alike. Martin and Joyes accounted to Hunter for all the leases except the Sterlings. *586 These they withheld for their own personal interests, even though taken at the identical time other leases were taken under the joint adventure. The general rule is that until the joint adventure has terminated or the enterprise has been abandoned, a joint adventurer cannot exclude his associates from an interest in the property by purchasing it for his individual account; neither can he acquire for his individual benefit, or for the benefit of himself and one of the other co-adventurers, an interest therein antagonistic to the interest of his co-associates, and if he does so purchase or acquire such interest in breach of his duty to his co-adventurers, he must account to them therefor. (Kincaid v. Miller, 129 Colo. 552, 272 P.2d 276; Crawford v. Crawford, 163 Kan. 126, 181 P.2d 526.)
Plaintiffs contend the court erred in refusing to permit, on rebuttal, the introduction of a blueprint map dated May, 1954, reflecting the fact that the Sterling property was still under an oil and gas lease. The court properly rejected this evidence as it was stipulated between the parties that the Sterling property had been under a lease to Mr. Coppinger but these leases were released of record on February 26, 1952. Moreover, the record disclosed Martin had secured a lease on the Sterling property March 25, 1954.
After a careful review of the entire record, we must conclude, as the trial court, that Martin and Joyes having acquired the Sterling leases, continued to own them or at least had an equitable interest in them, until they were divided equally between them and their co-adventurer Hunter, and the court rightfully ordered plaintiffs to convey to Hunter his undivided one-third interest as set forth in the judgment below. We find nothing in plaintiffs' brief which would justify a reversal of the judgment rendered by the trial court.
The judgment is affirmed.