Fullerton v. Kaune, 7077

• Citation: 382 P.2d 529, 72 N.M. 201, 1963 NMSC 78
• Case Date: April 15, 1963
• Court: Supreme Court of New Mexico

Page 529

382 P.2d 529 72 N.M. 201 Reese P. FULLERTON, Plaintiff-Appellant,
v.
Lucille C. KAUNE, Individually, and as Executrix of the Last
Will and Testament of Henry E. Kaune, Deceased,
and Edward Kaune, Defendants-Appellees. No. 7077. Supreme Court of New Mexico. April 15, 1963.
Rehearing Denied June 24, 1963.

Page 531

[72 N.M. 202] Charles B. Barker, Santa Fe, Reese P. Fullerton, Scottsdale, Ariz., for appellant.

Bigbee & Stephenson, Harl D. Byrd, Santa Fe, for appellees.

CHAVEZ, Justice.

This is an action for a declaratory judgment in which the trial court entered an order and judgment dismissing the action, because it construed the action to be one for specific performance of an oral contract involving an interest in land and thus barred by the statute of frauds. No evidence was presented other than the [72 N.M. 203] exhibits attached to the complaint. No findings of fact were made. For the purpose of this appeal, we take the allegations of the complaint as being true.

Appellant alleged that he entered into an oral agreement in 1922 with Henry E. Kaune, now deceased, to the effect that a mineral prospecting permit would be acquired on lands owned by the federal government, with the understanding that the application for the permit would be in the name of decedent and that any lease procured would also be taken in decedent's name. The decedent would pay all monies, charges and expenses required to be paid; appellant was to prepare all necessary papers and to perform all legal work in connection with the enterprise. Resulting profits were to be shared equally between appellant and the decedent. Appellant did prepare the necessary papers and performed required legal work; the decedent furnished the required monies; a prospecting permit was obtained; and mineral leases were issued to the decedent. In time, the leases were assigned to an operator to procure their development. Overriding royalties of 6 1/4% of the value of all oil and gas produced and saved from the lands were reserved by the decedent.

In 1943, natural gas in paying quantities was discovered in well number 1. Shortly thereafter, the decedent represented to appellant that the decedent's brother had actually furnished the money that had been spent in connection with the procurement of the permit, leases, and all other matters relating to the same. He asked appellant if he would consent to receiving one-third of the reserved royalty with the balance to be split equally between the decedent and his brother. Appellant assented. At the suggestion of the decedent, an 'Agreement' was entered into and signed by decedent and appellant by which appellant was assigned a noe-third interest of the interest which the decedent had in the proceeds from well number 1. The decedent was to collect all the money from the royalty and then pay appellant one-third of such money. Appellant agreed to accept the one-third of the proceeds from the royalty as full payment for all services he rendered in connection with the lease or agreements for development of the quarter section of land described in the agreement, and for all claims that appellant might have against the decedent for services rendered or monies advanced in connection with the described quarter section. Until August 12, 1948, appellant received payments from the decedent in accordance with this agreement.

On August 12, 1948, a new agreement was made. Pursuant thereto, the decedent assigned his interest in well number 3 to appellant and decedent was to assign his interest in wells numbered 1 and 2 to himself[72 N.M. 204] and his brother. Decedent did execute and deliver an assignment to appellant but did not make an effective assignment to his brother. The reason for making this agreement and the subsequent assignments was so that appellant, the decedent, and the decedent's brother each could have the entire 6 1/4% royalty in one well.

Appellant alleged that while the decedent represented to him that wells numbered 2 and 3 had been developed on the leases in August, 1948, that in fact wells numbered 2, 3, 4 and 5 had been developed at that

Page 532

time, which fact had been fraudulently concealed by the decedent from appellant.

Appellant alleged that he had performed his part of the contract and still stood ready and willing to perform such acts as are necessary for the furtherance of the mutual interest of the parties.

The remainder of the complaint deals with the description of the realty involved, the location of the wells, the sands from which gas is being produced, and the statement of the claim for relief of appellant, which is to the effect that appellant is entitled to be paid the value of 6 1/4% of the gas produced and saved from well number 3 as it now exists, plus one-third of...