## Facts

- J. M. Childers, Ramey, and S. H. Neely each held fractional interests in multiple oil-and-gas leases.
- The parties jointly developed and operated the leases, including drilling and producing oil and gas.
- They agreed that each would receive production or proceeds in proportion to his fractional lease interest.
- There was no express written or oral agreement stating that the parties formed a partnership.
- Disputes arose over the parties’ relationship and the accounting for operations and proceeds.
- Childers and Ramey asserted the joint operations constituted a partnership requiring dissolution and an accounting; Neely asserted the arrangement was only co-ownership or a joint enterprise.

## Issues

1. Whether co-owners of oil-and-gas leases who jointly operate the leases and share proceeds in proportion to their lease interests form a partnership as between themselves, despite no express partnership agreement.
2. Whether equity may grant partnership-type relief—dissolution, comprehensive accounting, and managerial control of the property—based on the parties’ conduct in operating the leases.

## Decision

- The Supreme Court of Appeals of West Virginia affirmed the equity decree for Childers and Ramey.
- The court treated the parties’ relationship as a partnership for purposes of dissolution and accounting.
- The court upheld equitable relief requiring an accounting of the venture’s dealings and transactions and related management measures to administer the property during the wind-up.

## Legal Principles

- A partnership may be found from the substance of the parties’ conduct and mutual undertaking, not solely from formal labels or an express agreement.
- Co-owners who unite to operate mineral leases as a continuing business and divide returns according to their respective interests may be treated as partners, at least for equitable purposes such as accounting and dissolution.
- Joint operation and shared returns can support partnership-type remedies in equity when necessary to settle the parties’ common affairs.

## Conclusion

Because the parties jointly operated oil-and-gas leases as a continuing enterprise and allocated returns by agreed proportions, the court affirmed treating their relationship as a partnership in equity and upheld dissolution-and-accounting relief despite the absence of a formal partnership agreement.


Childers v. Neely, 34 S.E. 828 (W. Va. 1899)