524 P.2d 16 (Okla. 1974), 45753, Burton v. Juzwik

Docket Nº:45753.
Citation:524 P.2d 16
Party Name:T. N. BURTON, Petitioner, v. E. A. JUZWIK, Respondent.
Case Date:June 25, 1974
Court:Supreme Court of Oklahoma

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524 P.2d 16 (Okla. 1974)

T. N. BURTON, Petitioner,


E. A. JUZWIK, Respondent.

No. 45753.

Supreme Court of Oklahoma.

June 25, 1974.

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David H. Loeffler, Jr., Loeffler & Allen, Bristow, for petitioner.

Harry M. McMillan, Blackstock & McMillan, Bristow, for respondent.

IRWIN, Justice:

Petitioner (plaintiff), commenced proceedings against respondent (defendant), to recover actual and punitive damages allegedly sustained because defendant breached an oral trust agreement. Plaintiff's action was based on an alleged oral contract whereby defendant, as trustee, acquired title to an oil and gas lease and in breach of the trust, conveyed the oil and gas lease to an innocent third party.

The trial court sustained defendant's motion to strike plaintiff's allegations relating to punitive damages and struck plaintiff's action from the jury docket.

Presented for review is a Certified Interlocutory Order which places in issue plaintiff's right to assert a claim for punitive damages and right to a jury trial. In resolving the issue relating to pounitive damages we must determine whether plaintiff's action comes within the purview of 23 O.S.1971, § 9, which provides:

'In any action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud or malice, actually or presumed, the jury, in addition to the actual damages, may give damages for the sake of example, and by way of punishing the defendant.'

Briefly summarized, plaintiff alleged that: The owners of an oil and gas lease orally agreed to sell the lease to plaintiff's agent and plaintiff paid his agent $2,000.00 for an undivided 1/32nd interest in the lease. Thereafter, the owners of the lease, plaintiff's agent, and defendant orally agreed that defendant would pay the balance of the purchase price of the lease;

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the lease would be transferred to defendant; and defendant would hold the lease in trust for plaintiff and the other rightful owners. The lease was transferred to defendant but defendant transferred the lease to a third party.

In plaintiff's allegation for actual damages, plaintiff alleged that in breach of the trust and oral agreement to convey to plaintiff his undivided 1/32nd interest, defendant assigned the entire lease to a third party and the assignee took the same without notice. Plaintiff alleged that the value of his interest in the lease was $2,000.00, and that he had been damaged $2,000.00 for the wrongful acts of defendant in breaching his oral agreement to convey plaintiff his undivided 1/32nd interest in the lease which defendant held in trust for him.

Plaintiff's allegations relating to punitive damages, which were stricken by the trial court, were: The assignment by defendant of plaintiff's undivided 1/32nd interest in the lease to a third party, which defendant held in trust for plaintiff, was done falsely, fraudulently, willfully and maliciously with the intent to defraud plaintiff of his interest, and in addition to his actual damages, he was entitled to punitive damages in the sum of $6,000.00.

Plaintiff contends that the relationship between defendant and himself was that of trustee/beneficiary and a suit upon breach of a fiduciary duty is not an action based upon contract and § 9 supra, authorizes an award for punitive damages.

In Powell v. Chastain (1957), Okl., 318 P.2d 859, we said that the classic example of a resulting trust is a situation wherein a transfer of real property is made to one person and the consideration therefor is paid by another person; and under such circumstances a trust is presumed to result in favor of the person by or for whom such payment is made.

According to plaintiff's petition, the oil and gas lease was transferred to defendant, and plaintiff paid $2,000.00, through his agent, for an undivided 1/32nd interest in the lease. Whatever might have been the relationship between plaintiff and defendant after the lease was transferred to defendant, the transfer was made pursuant to an oral agreement between the prior owners, plaintiff's agent, and defendant. It is for the breach of this alleged oral agreement that plaintiff seeks damages because the trust was created pursuant to the alleged oral agreement and the rights and obligations of the parties must be measured by the alleged oral agreement.

Plaintiff contends that the gravamen of his action sounds in tort regardless of the nature of the original relationship between the parties and in such instances punitive damages may be awarded.

Plaintiff cites Fort Smith & W.R. Co. v. Ford, 34 Okl. 575, 126 P. 745, wherein we held:

'A petition stating a contract of...

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