Kash v. United Star Oil Co.

• Decision Date: 04 October 1921
• Parties: KASH ET AL. v. UNITED STAR OIL CO. ET AL.
• Court: Kentucky Court of Appeals

233 S.W. 898

192 Ky. 422

KASH ET AL. v. UNITED STAR OIL CO. ET AL.

Court of Appeals of Kentucky.

October 4, 1921

Appeal from Circuit Court, Kenton County.

Action by Kelley Kash and another against the United Star Oil Company and another. From a judgment of dismissal on demurrer, plaintiffs appeal. Affirmed.

Kelley Kash, of Lexington, and Jackson & Woodward, of Cincinnati Ohio, for appellants.

Myers &amp Howard, of Covington, and Wm. Mix, of Louisville, for appellees.

SAMPSON J.

Appellants Kash and West, became the owners of an oil and gas lease on the Elias Chaney 70-acre tract on Buck creek, in Estill county, in February, 1919, In the following April Kash entered into negotiations with appellee M. Gordon and the United Star Oil Company, Incorporated, whereby he proposed and attempted to sell and assign the lease to them in consideration of $6,000, $1,000 to be paid in the stock of the United Star Oil Company, and the balance in money, the latter to be paid $2,000 in hand and the remainder in installments at stated times. The lease was not assigned or transferred at the time, nor was there any payment on the purchase price. Immediately following the deal which was made in the offices of the company in Louisville, Ky. Kash returned to his home in Irvine and began by telegrams and letters to urge Gordon, who was president and managing officer of the corporation, to come on to Irvine and close up the deal for the lease. About the same time the corporation ran a display advertisement in the Sunday Louisville Herald, in which advertisement was a paragraph in part reading:

"WE'VE BOUGHT ONE LEASE. This lease, on which we have exercised our option, is on a tract of seventy acres on Buck creek in Estill county, immediately adjoining production. We have arranged to have a rig go on this property immediately."

The description in the advertisement would indicate that the lease in question was the one intended. The advertisement was over the corporation's printed signature. No written assignment of the lease was delivered to or accepted by the company or Gordon, and no payments were ever made on the lease, although Kash often importuned Gordon and the company to do so. Failing to collect the sale price of the lease, Kash and West, the joint owners and would-be vendors, began this action in the Kention circuit court against the United Star Oil Company and M. Gordon, to recover $6,000, the alleged agreed price. A general demurrer being filed, the petition was amended more than once, but the demurrer was finally sustained, and, the plaintiffs declining to further plead, and announcing a purpose to stand by their pleadings, which had been held insufficient on demurrer, the court dismissed their cause, from which judgment they appeal to this court. The demurrer was sustained because the trial court was of the opinion that the contract declared upon was within the statute of frauds, there being no sufficient writing signed by the parties to be charged to take the contract out of the operation of the statute.

Does the petition as amended state facts sufficient to constitute a cause of action against the defendants or either of them? This court has frequently held that the vendor in a real estate transfer is the party to be charged. City of Murray v. Crawford, 138 Ky. 25, 127 S.W. 494, 28 L. R. A. (N. S.) 680; Wren v. Cooksey, 147 Ky. 825, 145 S.W. 1116; Henry v. Reeser et al., 153 Ky. 8, 154 S.W. 371; Childers v. Little, etc., 96 Ky. 376, 29 S.W. 319, 16 Ky. Law Rep. 521.

It is also well settled that an oil or gas lease is an interest in land, and must be in writing, and no valid assignment thereof can be made except in writing. Beckett-Iseman Oil Co. v. Backer, 165 Ky. 818, 178 S.W. 1084.

The original petition sets forth no writing whatever signed by the "party to be charged," with the execution of the assignment of the lease or any note or obligation signed by the appellees, or either of them, as vendees, and was of course bad on demurrer. The first amendment related merely to a garnishment which the plaintiffs desired to obtain. The second amended petition averred that--

"Plaintiffs and defendants confirmed, ratified and recognized the contract so alleged by letters, by telegrams, by telephone conversations, and in personal conversations between plaintiffs and defendants."

It then avers that the defendants caused the advertisement set out above to be inserted in the Sunday Louisville Herald, and that the 70 acres referred to in that advertisement are the same 70 acres sold by plaintiffs to defendants, as set forth in the original petition. It is also alleged in said amended petition that one of the plaintiffs, Kelley Kash, sent a telegram from Irvine, Ky. April 17, 1919, to M. Gordon, room No. 607, Republic Bldg., Louisville, Ky. which reads:

"Important you reach here tonight, leaving there two o'clock today."

On the same date Kelley Kash wrote and posted a letter to M. Gordon, Louisville, Ky. in which he said:

"I regard it as very necessary that you come down here at once and look over these properties, the two on which Mr. Lothier gave you option, and the 70-acre lease you are taking from me. You have advertised these options and it is necessary that steps be taken at once to complete the purchase. As to the 70-acre lease, a well is being drilled within less than 400 feet of it and it is important that this deal be closed this week.

I suggest you make an effort to come here so as to reach here Saturday morning, or in fact you can leave Louisville at 2 o'clock Friday afternoon and reach here via. Frankfort at 8:35 tomorrow night. You should arrange to come then."

Again on May 5, 1919, Kash wired Gordon:

"When can I expect you here to close deal? Important."

No answer or response is alleged to have been received by Kash to any of the foregoing telegrams and letter, unless the following telegram, dated May 7, 1919, can be so considered:

"Just arrived I am working on my deal to be closed shortly. The United Star Oil Company has no money at all they did not sell any stock and are not trying to sell any. It is up to me to raise my personal money to buy productions.

M. Gordon."

Thereupon Kash wrote Gordon May 12, 1919, as follows:

"I inclose you two notes for $1,000 each which you can sign as the first payment on the 70-acre Chaney lease on Buck creek. The other owner with me is very impatient about our delay in this matter and it is necessary for us to do something. Sign these notes by United Star Oil Company and you indorse the notes...