Huff v. Fuller

• Decision Date: 15 December 1922
• Citation: 246 S.W. 149,197 Ky. 119
• Parties: HUFF v. FULLER ET AL.
• Court: Kentucky Court of Appeals

246 S.W. 149

197 Ky. 119

HUFF v. FULLER ET AL.

Court of Appeals of Kentucky.

December 15, 1922

Appeal from Circuit Court, Fayette County.

Action by V. H. Fuller and another against Ira C. Huff. Judgment for plaintiffs and defendant appeals. Affirmed.

Bailey D. Berry, of Lexington, for appellant.

Allen &amp Duncan, of Lexington, for appellees.

THOMAS J.

Appellees V. H. and E. H. Fuller, in March, 1919, executed and delivered to appellant, Ira C. Huff, an oil and gas lease on a tract of land in Powell county. The lease was for a term of five years, and as much longer thereafter as oil and gas are produced, and expressed a nominal consideration of $1, and obligated the lessee to drill a well upon the premises within one year from its date, or pay stipulated rentals until a well was completed, and further provided that the lessors should receive one-eighth of all the crude oil produced and $100 per year for each producing gas well thereon. It also contained stipulations for the usual license privileges for the lessee to develop the property as contemplated. The lessee thereafter organized a corporation in which he was the principal stockholder, and he put into it the above and other leases in payment or part payment of his stock in the corporation. That corporation afterwards sold all of its properties, including the above lease, to another one whereupon the lessors filed this ordinary action against the lessee in the Fayette circuit court to recover from him a judgment for $4,000, upon the ground, as alleged in the petition as amended, that the lease was delivered to defendant upon the agreement and understanding that he was to sell it, and if he did so he was to pay plaintiffs the sum of $4,000, but, if he organized a corporation, and sold the lease to it, then plaintiffs were to be paid $2,000 stock in the organized corporation and $2,000 in money, the defendant to receive all above $4,000 which he obtained for the lease. It was then alleged that he had disposed of the lease in the manner indicated, and that he neither delivered nor offered to deliver plaintiffs any stock in that corporation, nor had he paid them any part of the $4,000, but, on the contrary refused to do so upon demand.

A demurrer filed to the petition was overruled, and an answer controverting its allegations was filed with a second paragraph setting up the lease as constituting the entire contract, to which paragraph a demurrer was sustained, and upon trial there was a verdict in favor of plaintiffs for the full amount sued for, which the court declined to set aside on a motion for a new trial, and defendant has appealed.

Two contentions are made by defendant's counsel for a reversal of the judgment, which are: (1) That the terms of the contract contained in the lease are conclusive, and cannot be varied by parol testimony; and (2) that the lease, being a conveyance of an interest in land for more than one year, is required by the statute of frauds to be in writing, and because thereof no action is maintainable on the parol agreement relied on.

Answering contention 1, it is readily admitted as a firmly established rule relating to written contracts, when they are not ambiguous and appear on their face to contain all the terms of the agreement, that it is incompetent to add to or alter their terms by proof of prior or contemporaneous oral agreements, since in such cases the writing is conclusively presumed to contain all of the terms. But an exception to that rule is that it is competent to prove by parol testimony a different consideration from that expressed in the writing. The right to so impeach the expressed consideration is a statutory one in this jurisdiction, being expressly given by subsection 7 of section 470 of Kentucky Statutes, which is our statute of frauds, and by section 472, and it may be done without a pleading alleging the failure to...