Fifer v. Smyers 2 Monag. 180

Fifer v. Smyers.

In an action of debt, there was offered in evidence a contract which provided that the plaintiff was to receive a stipulated sum per foot for boring an oil-well, and a one-eighth working interest in all leases held by the defendants, the plaintiff to bear one-eighth of the expense thereafter incurred in operating and developing the leases, as well as one-eighth of the expenses already incurred in taking and recording them ; the defendants to furnish apparatus for drilling the well, except the drilling tools and the labor, which were to be furnished by the plaintiff, who was also to bear one-eighth of the necessary expense of putting down the well, the plaintiff to have a one-eighth interest in the drilling apparatus furnished’by the defendants ; defendants to put and keep in a designated bank sufficient money to put said well at least two thousand feet deep, the same to be drawn out only on checks in- favor of the plaintiff, who agreed that the bank should return any of the money left after receiving what was due him when the well was completed. The plaintiff was also to have the refusal of all drilling to be done on said leases, at going prices. The plaintiff claimed to recover in the action for drilling the well 1913 feet and for reaming it down 336 feet. The court entered a compulsory non-suit on the ground that the contract created a cotenancy or partnership, and that the action would not lie without a previous settlement. Held, not to be error.

Oct. 17, 1888.

Error, No. 171, Oct. T. 1888, to C. P. Butler Co., to review a judgment of compulsory non-suit, in an action of debt, by James Kifer against D. L. Smyers, S. A. Crittenton, R. B. Hawkins and V. Whitner, at March T. 1887, No. 23.

The plaintiff’s affidavit of claim averred:

“That, on July 31, 1886, he entered into a written agreement with defendants to drill, for said defendants, an oil-well in Addison township, Somerset county, Pa, on leases in said township, owned by said defendants, said well to be drilled to any depth said defendants might desire, in consideration whereof said defendants agreed to pay said plaintiffs the sum of $1.50 per every foot of said well so drilled by plaintiff, and also to give said plaintiff a one-eighth working interest in all leases, taken or held and owned by said defendants, in said township, up to Aug.- 1, 1886, including the lease on which said well was to be drilled, said plaintiff to bear one-eighth of the expense thereafter incurred in properly operating and developing said leases, as well as one-eighth of expenses already incurred in taking and recording said leases ; and it was further agreed upon, there and then, between plaintiff and said defendants, that they, defendants, would furnish all necessary apparatus for drilling said well, except the drilling tools and the labor, which were to be furnished by the plaintiff, who was also to -bear one-eighth of the necessary expense incurred in putting down said well.

“That, pursuant to said agreement, plaintiff proceeded to drill said well, and did drill the same, in accordance with the desire of said defendants, to the depth of 1,913 feet, and the said defendants, believing the said depth to be a sufficient test of the territory on which said well was located, did not desire to have the same drilled deeper.

“ That, in addition to drilling said well said depth, the said plaintiff also “ reamed down ” the same to the depth of 336 feet, for which he was and is entitled to be paid at the rate of $1.50 per foot.

*181“ That, by the terms of said written agreement, said plaintiff was to receive from said defendants the compensation agreed upon as aforesaid, in the following manner, to wit: $500 cash when said well should be cased and the fresh water shut off, all of which plaintiff did, and the balance when said well should be completed, of which amount, so agreed to be paid to defendant, he has received $540 in cash and no more.” Following this was a.statement of items charging the defendant as claimed above, and crediting “ by cash, $540;” and “ cost of well, including machinery, etc., $617.43,” leaving a balance of $2,216.07 yet due.

Accompanying the statement of claim was the following agreement, under seal, between plaintiff and defendants í

“Said party of the second part [ Kifer ] doth hereby agree to drill a well on leases that said first parties now have in Addison township, Somerset county, and state of Pennsylvania, for the following consideration, to wit: The sum of one and fifty-one hundredths dollars per foot for every foot that said first parties may desire said second party to drill said well, to be paid as follows, to wit: The sum of five hundred dollars cash when said well is cased and the fresh water shut off, and the balance when said well is completed, said first parties to also give said second party, as part of the above-named consideration, a one-eighth interest (working interest) in'each and every lease that they now have — that is, all they have taken or hold in said Addison township, Somerset county, in the state of Pennsylvania, before or up to the first day of August, A. D. 1886, said first parties to also assign and transfer said one-eighth interest in all of the leases above mentioned to said second party and to cause such assignment to be duly recorded at and in the office of the register and recorder of the proper county. Said one-eighth of the working interest of, in and to the above mentioned leases is assigned and transferred to said second party at cost — that is, that said second party, or his assigns, will have to bear one-eighth of the expenses which may hereafter be incurred in properly operating and developing said leases. Said first parties to furnish all necessary apparatus for drilling said well, except the drilling tools and the labor. Said first parties to furnish a good rig and good machinery, fittings and fixtures all in good order ready to drill for said well. Said second party to take as good care as can be done consistently with the purpose for which he shall use the same, and when he is through with the above mentioned well, to leave said rig, machinery, fittings and fixtures in as good order and condition as when received, reasonable wear and tear excepted. It is agreed that said second party shall bear one-eighth of the necessary expenses incurred in putting the well above mentioned down, and also one-eighth of all necessary expenses already incurred in taking and recording leases, and that he shall own one-eighth interest of, in and to all the machinery, fittings and fixtures furnished by said first parties. Said first parties to put and keep sufficient money in the Iron City Na*182tional Bank of Pittsburgh, Pa., to put said well at least two thousand feet deep, same to be deposited to. the credit of D. L. Smyers, only to be drawn out on checks drawn by said D. L. Smyers in favor of James Kifer, said second party. Said James Kifer hereby agrees that said bank shall return any of said money that may be left and in excess, when he shall receive all cash that shall be due him after said well is completed. It is further agreed and understood that said second, party shall have the property in the drilling tools furnished by him, and the right to remove the same when the well is completed.

“ Said second party to have the refusal of all drilling to be done on said leases at" going prices, he to do the same in a good workman-like manner.” .

An affidavit was filed to the merits; also with an averment that the remedy was not at law but in equity.

At the trial, before Hazen, P. J., the plaintiff offered evidence in support of his affidavit of claim. At the conclusion of the plaintiff’s case, defendants moved for a non-suit on the ground thatpláintiff and defendants were tenants in common and partners. The court entered a compulsory non-suit, which it subsequently refused to take off.

The assignment of error specified the refusal of the court, to take off the compulsory non-suit.

J. M. Galbreath, of Mcjunkin & Galbreath, with them E. Mcjunkin and J. M. Thompson, for plaintiff in error.

So far as the work of drilling was concerned, the parties were not partners. The plaintiff was, by the contract, to do that individually and was to receive a stipulated price. Defendants were to keep a deposit in bank to be drawn out only on checks in favor of the plaintiff The drilling tools to be furnished by plaintiff were to remain his own property. Plaintiff had simply the refusal of drilling the other wells “ at going prices.”

Granting that a partnership did exist in the matter of drilling this well, it was a single venture. Under the contract there was but one well to be drilled, that one was to be drilled by the plaintiff, and the defendants were to pay him for it. The plaintiff is therefore entitled to recover in this form of action; and especially so as there is no allegation of debts due by or in favor of the firm. Galbreath v. Moore, 2 Watts, 86; Wright v. Cumpsty, 41 Pa. in.

An agreement to pay money to launch the partnership is an individual engagement of each partner to the other, and an action at law will lie. Story, Eq., 5th ed., p. 739, § 665; Story, Partnership, p. 343, § 218.

If the action can be tried and decided properly, irrespective of the accounts of the partners, and if the damages sought will, when secured, belong, not to the firm (including the defendants to the action), but exclusively to the plaintiff, and if he will not have to con*183tribute to his own payment, then an action will lie, notwithstanding the partnership. Lindley, Partnership, *728.

Oct. 29, 1888.

There were no unsettled accounts here. The machinery was to be furnished in kind, and the ascertainment of its value was unnecessary to a settlement between plaintiff and defendants, nor were defendants entitled to a credit on that account; and if it was intended by the agreement that defendants should have a credit of one-eighth of the money agreed to be paid plaintiff, that was a mere matter of division and deduction, and in no proper sense a matter of account. Defendants cannot complain that they have been allowed a credit to which they were not entitled.

The amount recovered would belong to the plaintiff individually, as the money deposited was to be drawn out on checks in his favor.

Charles McCandless and Greer & Ralston, not heard, for defendants mi error.

The contract created a partnership between the parties, and the accounts between them cannot be settled by an action of debt, unless the partners have settled an account and struck a balance: Ozeas v, Johnson, 1 Binn. 191; and also made an express promise to pay: Killam v. Preston, 4 W. & S. 14.

A bill in chancery, or an action of account-render, is the only remedy by which one partner can recover the amount due to him by the firm, but there can be no recovery in any form of action in which one of the firm is both plaintiff and defendant. McFadden v. Hunt, 5 W. & S. 468 ; Ferguson, Adm’r, v. Wright, 61 Pa. 258; Klase v. Bright, 71' Pa. 193; Andrews v. Allen, 9 S. & R. 241.

There is not one settled question in the claim. Had plaintiff completed his contract according to agreement ? If so, how many feet did he drill? Is he entitled to anything for reaming the well? How much ? To how much of a credit are defendants entitled for machinery and taking and recording leases? Who paid the $540 ? How do the other members of the company stand ? Who must contribute and how much ? In an action of debt, the verdict would be generally against all of them. Some of the defendants may be insolvent; the solvent members, including the plaintiff, would have to pay the share of the insolvents. Before the other members can be called on to contribute, the company must first exhaust its assets. These questions cannot be settled in an action of debt.