Jones v. Draper

16 Ohio C.C. Dec. 785, 4 Ohio C.C. (n.s.) 105
CourtWood Circuit Court
DecidedNovember 15, 1903
StatusPublished
Cited by1 cases

This text of 16 Ohio C.C. Dec. 785 (Jones v. Draper) is published on Counsel Stack Legal Research, covering Wood Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jones v. Draper, 16 Ohio C.C. Dec. 785, 4 Ohio C.C. (n.s.) 105 (Ohio Super. Ct. 1903).

Opinion

MOONEY, J.

Plaintiffs in their petition allege, in substance, that some months prior to November 8, 1902, they undertook the promotion of a corporation to be known as the Cleveland-Scranton Oil Company, designed to engage in the business of developing, operating for, and producing oil in the Ohio oil fields, and to that end solicited numerous persons to subscribe and pay for stock of the corporation to be organized, said payments to be made to plaintiffs, as trustees, to purchase oil producing properties and to hold title to the same until such time as the proposed corporation should be organized and empowered to do business in Ohio, when said title should be conveyed to the corporation and stock therein issued to the contributors of the purchase price of said properties; that plaintiffs were then without experience in the oil business and had then no knowledge of the market value of oil producing properties in this state, and for these reasons they associated themselves with and employed as their trusted and confidential agent, to examine and select such oil properties to be purchased, one A. J. Thomas, of Findlay, Ohio, a man of great experience in the business of producing oil in the Ohio fields, and plaintiffs relied exclusively upon the business judgment and fidelity of said Thomas in making said selection and in closing said purchases ; that among the properties selected by said Thomas as said agent were certain oil leases with the wells, machinery, fixtures and appliances then situated thereon owned by defendant at the price of $60,000; that at the time of said selection by Thomas, and at all times thereafter until December 18, 1902, the wells on said leases were out of repair and not in actual operation, and for that reason it was impossible to ascertain what said wells were capable of producing when in repair and in proper working order; that defendants represented to plaintiff that said wells were then capable of producing at least forty barrels of oil daily, and that no wells had ever -been drilled upon any part of said land except upon the outside edges thereof, and that the whole central area of said land was virgin oil territory with' many inside locations defined and known to be prolific territory which had never been drilled to drain or deplete the oil in said land, upon all of which statements so made by defendant, these plaintiffs and their beneficiaries relied; that after all this and on November 8, 1902, said Thomas as said agent and confiden[788]*788'■tial adviser recommended to plaintiffs, as said trustees, the purchase by them of said property of defendant for $60,000; that on said day plaintiffs did accept-a conveyance of said property for said price, less $300 deducted therefrom for repairs, and then paid to defendant in money $9,700, and delivered to defendant their notes aggregating $50,000, which notes and money are still retained by defendant; that on said day plaintiffs took possession of said property, and thereafter expended a large sum of money to put said property in condition to operate and to. determine the character and capacity of said wells; that plaintiffs have just discovered and now charge:

First, that defendant paid said Thomas a large commission to induce him to recommend said property to plaintiffs and to procure said purchase by plaintiffs; second, that the statement that no wells had been drilled within the central area of said land was and is untrue; third, that the wells on said lease were not and are not capable of producing forty barrels of oil per day, nor any amount in excess of. ten or. twelve barrels per day; fourth, that both defendant and said Thomas at the time “they beguiled plaintiffs into making said fraudulent contract” well knew that the market value of said property did not exceed $15,000; that plaintiffs before the commencement of this action tendered to defendant a reconveyance of said property and demanded a neturn of the money paid and notes delivered by them to defendant as heretofore stated, and defendant declined to accept said reconveyance or to comply with said demand.

The prayer is, that said contract and conveyance be adjudged void; that said notes be canceled and said money be ordered returned; that the money expended by plaintiffs upon said property be found to be a lien upon said property and the amount thereof be ascertained on an account taken, and for all proper relief.

Defendant by answer admits the transaction, but denies the fraud. He states that long before said transaction, or any off said negotiations, said Thomas had been retained as a broker by him to make sales of said property, all of which was known to plaintiffs; that the defendant had been interested in said property only about one year, had been upon „the same only a few times, and gave plaintiffs all the information he had concerning all the wells drilled on said lease in response to plaintiffs’ inquiries. Defendant expressly denies that he stated that the ■central area of said property was then undrilled, but that on the contrary he stated that the same had been drilled, and that one of the wells drilled thereon had the reputation of producing 8,000 barrels of oil per day; defendant further states that he furnished plaintiffs with [789]*789the pipe line statement showing the oil produced from said wells in. July and August, 1902, and all of which facts were known to plaintiffs? at the time of said sale. All allegations of the petition not admitted by ■ the answer are denied. Plaintiffs by reply deny all the affirmative alie- ■ gations of the answer.

The case was heard and submitted here upon these pleadings and-the evidence. A transcript of the testimony given at the trial in the--common pleas court was used here.

The objections made there appear in this transcript. We find’ no rulings there made on the evidence that we are very solicitous to charge, and counsel have argued no questions arising thereon which they deem important. We abide therefore by the rulings made below.

From the evidence it appears that Harry Jones, a resident of Cleveland, one of the plaintiffs here, prior to August, 1902, formed the purpose to associate himself with other persons, then undetermined by him, to purchase oil properties, organize a corporation to own and operate the same, and to reap a joint profit for himself and associates by conveying the property so purchased to said corporation and selling the stock of said corporation to an amount sufficient to pay the cost price of the property and the amount of profit which the promoters might require. At this time Jones was without experience in or knowledge of the oil business or the'market value of oil-producing properties.’ Jones made known his purposes and intentions to A. J. Thomas, of Findlay, who at that time was experienced in the oil business and was acquainted with the market values of Ohio oil-producing properties. An arrangement was entered into between Jones and Thomas whereby Thomas undertook to find, if possible, one or more oil properties that could be purchased and would be suitable for the proposed enterprise. At this time Thomas contracted to associate himself with Jones in the general plan. After this arrangement was made, Thomas learned that the defendant’s property was for sale, and upon inquiry of Draper was informed that the price was $60,000. On or about September 16, 1902, Jones, together with one Wilson, who as an expert was visiting the property in behalf of some intending investor or investors other than himself, met Thomas by arrangement and they went to the defendant’s lease. Here they met one Hendricks, who at that time was with defendant a joint owner of this property.

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Bluebook (online)
16 Ohio C.C. Dec. 785, 4 Ohio C.C. (n.s.) 105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jones-v-draper-ohcirctwood-1903.