Neill v. Shamburg , 158 Pa. 263 ( 1893 )

Opinion by

Mr. Justice Mitchell,

There are two main questions of fact upon which the plaintiff’s claim to relief must ultimately rest, first, serious inadequacy of price, and, secondly, fraud, actual or constructive. If either of these grounds fail, the case must fall.

The master finds that there was no inadequacy of price, and' as the learned court concurs in this finding, it would be sufficient for us to say that we have not been shown that it was clear error. But an examination of the whole evidence in deference to the earnestness of counsel who regard this as a turning point in the case, leads us to the same conclusion. At the time of the sale, July 1879, the two hundred acre tract was undeveloped except for one well, No. 8, which had been in operation about three months. The most favorable evidence as to this well was given by James, who said “ my recollection is that it started off between five and seven barrels somewhere,” while the McIntyres, Tucker and other witnesses put its production at from one to three barrels. The same witnesses describe the neighboring territory as “ spotted,” good wells and dry holes being found close together. The fifty acre tract adjoining on the northwest had at that date three wells, two of which, Nos. 5 and 6, were small, and one, No. 7, was a valuable well, having produced as high as seventy-five barrels, and ranging down according to the different witnesses from that to seven or eight barrels, which James McIntyre says was its production in July, 1879. Business was dull, and there was no active market for leases in that neighborhood (Jenkins and Fogle). Under these circumstances it is plain that the value of the lease was almost entirely speculative. Indeed James testifies that the value of oil territory is always speculative until it 10 actually developed. It is a business with elements of great uncertainty, and appears to have been peculiarly so in the present case. Everything depended on whether No. 7, or the little wells near it, should be taken as the best index of the nature of the territory. The three witnesses for plaintiff put the value of the lease at from twenty thousand to eight or ten thousand dollars, the highest estimate being given by Egoff, whose testimony is badly handicapped by the fact that he was a discharged employee who admitted that he had come forward in the case partly “ to get even with ” his former employer. On the other hand we have the testimony of eight or nine witnesses, most of them with superior local knowledge, and several owners of land in the immediate vicinity, with certainly no bias to depreciate the neighborhood, all concurring that the lease was worth nothing beyond the royalty. The decided weight of the evidence is in favor of the adequacy of the consideration paid.

As this finding takes away the foundation of the plaintiff’s-claim to relief, the other matters may be dismissed briefly. There was no proof of actual fraud. No express misrepresentations were shown, all that there was on the subject being the clause in the assignment of the lease stipulating a “ further consideration of one hundred dollars when a well is found on said lease producing six barrels per day,” etc. The master construed this as “ a practical representation that no such well had then been found.” In view of the fact that this is writing into a paper in which the plaintiff is the grantor, and which the grantee has not signed, a representation by the latter which is not to be found in the words used, this construction might be difficult to maintain, but, as it is in favor of the appellant, we need not consider it further. Even conceding that the representation was thus made, the master finds that it has not been shown to be untrue.

It is further claimed that Shamburg, intentionally and in bad faith, concealed from the plaintiff facts relating to the production of oil on the fifty acre lease, which she was entitled to know. It was certainly shown that Shamburg had directed his employees not to give information on this subject, but to refer parties to him. The plaintiff had no interest in the fifty acre lease, but we may concede that when she was about to sell her part of the other lease to her cotenant she became entitled to know such facts with regard to the production of the former as would bear upon the value of the latter. But unless there is some exceptional circumstance to put on him the duty to speak, it is the right of every man to keep his business to himself. Possibly Shamburg was unduly suspicious on this point, but the nature and position of his business suggested caution. Fogle testifies that Shamburg was the only person operating in that neighborhood, and James says that Shamburg told him he had spent near one hundred and fifty thousand dollars in developing that territory, “ and now all these fellows are anxious to pry into my business.” We do not find in the acts of Shamburg, under the circumstances, anything more than a positive intention and effort to reap the benefit of his enterprise by keeping the knowledge of its results to himself, and we agree with the master that this “ falls far short of establishing fraud.”

The claim of constructive fraud is based on the relations of the parties as partners, and as mortgagor and mortgagee.

The master has rightly found that there was no partnership. The parties were tenants in common. No presumption of partnership arose from that relation, Walker v. Tupper, 152 Pa. 1; Dunham v. Loverock [reported above, page 197] and Butler Bank v. Osborne, 159 Pa. 10; and there was no evidence from which to infer a partnership by intention and agreement of the parties.

The relationship of mortgagor and mortgagee, like that of tenants in common, is, in some respects, and to a limited degree, one of confidence. There are certain things, approximating to, if not actually involving a breach of good faith, which neither will be permitted to do, to the prejudice of the other. But we do not find in the present case anything which requires the application of this principle. The mortgage was merely for indemnity against a contingent loss by having to pay a guaranty to third persons. Until such loss occurred Shamburg had no claim on the mortgaged premises which changed the relation of the parties as tenants in common.

Decree affirmed.