Fullerton v. Kaune

• Decision Date: 15 April 1963
• Docket Number: No. 7077,7077
• Parties: 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.
• Court: New Mexico Supreme Court

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.

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 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 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 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 6 1/4% of the value of the gas produced and saved from wells numbered 4 and 5, plus one-third of 6 1/4% of the gas or oil produced from wells numbered 1, 2 and 3, if new sands are tapped by further drilling and development of those wells.

In his first point on appeal, appellant contends that his complaint shows that a relationship of joint adventurers existed between the decedent and appellant. Assuming the existence of such a relationship, appellant has not properly pleaded its existence so that we may consider it. We are bound by the record. Otero v. Dietz, 39 N.M. 1, 37 P.2d 1110. This case consists of the complaint, the answer, the order and judgment of the trial court, and various documents dealing with this appeal. The complaint alleges the existence of certain facts but does not allege all of the elements of a joint adventure. A joint adventure is formed when, by agreement between the parties to the joint adventure, the parties combine their money, property or time in the conduct of some particular business deal, agreeing to share jointly in the profits and losses of the venture, and with a right of mutual control over the subject matter of the enterprise or over the property. 30 Am.Jur., Joint Adventures, Sec. 6, p. 942, Sec. 10, p. 945. The complaint alleges that all monies, charges and expenses required are to be paid by Kaune. There is no allegation that appellant is to share in the losses. Nothing is alleged in the complaint which can be construed to mean that appellant had any voice in the venture. While it is true that the right of control may be expressly...