McCrae v. Bradley Oil Co.

• Court: Kansas Supreme Court
• Writing for the Court: ALLEN, Justice.
• Citation: McCrae v. Bradley Oil Co., 148 Kan. 911, 84 P.2d 866 (Kan. 1938)
• Decision Date: 10 December 1938
• Docket Number: 34062.
• Parties: McCRAE et al. v. BRADLEY OIL CO. et al.

84 P.2d 866

148 Kan. 911

McCRAE et al. v. BRADLEY OIL CO. et al.

No. 34062.

Supreme Court of Kansas

December 10, 1938

Syllabus by the Court.

An oral agreement between realty broker and oil company whereby oil company was to pay broker $4,000 and 20,000 barrels of oil out of any oil produced from land covered by an oil and gas lease if broker should bring about sale to oil company of a six-sixteenths interest in the lease was not a contract for sale of an "interest in land" within statute of frauds, but was enforceable. Gen.St.1935, 33-106.

Oral agreement to transfer specified portion of oil when produced held not to constitute transfer of an interest in land within the meaning of the statute of frauds.

Appeal from District Court, Sedgwick County, Division No. 2; Robert L. NeSmith, Judge.

Action by Charles E. McCrae and another against the Bradley Oil Company and another to recover under an oral contract for services in procuring and bringing about a sale to defendants of an interest in an oil and gas lease. From an adverse judgment, defendants appeal.

J. B McKay, of El Dorado, and Robert G. Foulston, George Siefkin Sidney L. Foulston, Lester L. Morris, George B. Powers, Carl T. Smith, C. H. Morris, and John F. Eberhardt, all of Wichita, for appellants.

W. D Jochems, J. Wirth Sargent, Emmet A. Blaes, Roetzel Jochems and W. G. Muir, all of Wichita, and Cornelius Roach, of Kansas City, Mo., for appellees.

ALLEN Justice.

This was an action by real estate brokers to recover under an oral contract for services in procuring and bringing about a sale to defendants of an interest in an oil and gas lease. The compensation claimed was $4,000 in cash and 20,000 barrels of oil out of any oil produced from the land described in the lease. Defendants' motion to strike that part of the petition relating to the 20,000 barrels of oil was overruled. A demurrer to the petition was also overruled. From these orders and judgments, defendants appeal.

The petition recites:

"3. That on or about the first day of September, 1935, the defendants orally employed plaintiffs for the purpose of inducing and bringing about the sale to defendants of a six-sixteenths interest in a certain oil and gas lease covering land in Rice County, Kansas, and described as follows, to-wit: (Description of land.)

"4. That for their services in procuring and bringing about such sale and purchase, defendants orally contracted and agreed to pay to plaintiffs the sum of Four Thousand ($4,000.00) Dollars cash, and twenty thousand (20,000) barrels of oil out of any oil produced from said land hereinabove described.

"5. The plaintiffs, in performance of such agreement, brought together the Harburney Oil Company, owner of said six-sixteenths interest in said oil and gas lease, and defendants, and on or about September 14, 1935, defendants and the owner of said six-sixteenths interest in said oil and gas lease entered into a written contract for the sale and purchase of said interest, and said contract of sale and purchase was thereafter fully performed and carried out.

"6. That thereafter said oil and gas lease was fully developed, eight (8) wells having been drilled thereon, and each of said wells then produced, and are now producing, oil in large quantities, said eight (8) wells now having a potential flow in excess of fifteen thousand (15,000) barrels of oil per month.

"7. That pursuant to and in part performance of said agreement between plaintiffs and defendants, defendants paid to plaintiffs for their said services rendered to defendants, the sum of Two Thousand ($2,000.00) Dollars cash, but although demand has been made upon defendants the defendants have wholly failed, neglected and refused to pay to plaintiffs the balance of Two Thousand ($2,000.00) Dollars cash, and twenty thousand (20,000) barrels of oil due and owing plaintiffs under the terms and conditions of said contract of employment between plaintiffs and defendants, and there is now justly due and owing to plaintiffs from defendants the sum of Two Thousand ($2,000.00) Dollars cash, and twenty thousand (20,000) barrels of oil.

"8. That twenty thousand (20,000) barrels of oil from the production of oil from said oil and gas lease hereinabove described is of the reasonable market value of Twenty-six Thousand ($26,000.00) Dollars.

"Wherefore, plaintiffs pray judgment against defendant in the sum of Twenty-eight Thousand (28,000.00) Dollars, with interest thereon at the rate of six (6) percent per annum from January 1, 1937, and all costs in this action accrued."

The question presented is whether the oral agreement, so far as it relates to the 20,000 barrels of oil, is within the statute of frauds.

Our statute, G.S.1935, 33-106, so far as presently material, provides:

"No action shall be brought whereby to charge a party *** upon any contract for the sale of lands, tenements, or hereditaments, or any interest in or concerning them; *** unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, ***."

In 2 Williston on Contracts, Rev.Ed., Sec. 493, it is stated:

"It is only contracts for the sale of any interest in land which are affected by the statute. Accordingly, contracts which relate to land but do not involve agreement for its sale are not within the statute."

Not every contract that touches or concerns land is within the statute. Thus a contract to settle a disputed boundary, if the line agreed upon is not the true line, would seem necessarily to involve a contract to convey land--yet such contracts, though not in writing, are upheld. Edwards v. Fleming, 83 Kan. 653, 112 P. 836, 33 L.R.A.,N.S., 923; Steinhilber v. Holmes, 68 Kan. 607, 75 P. 1019.

An oral contract to partition land would seem to be unenforcible as within the statute of frauds as it involves a conveyance, or promise to convey land, but such contracts are sustained. McCullough v. Finley, 69 Kan. 705, 77 P. 696; McCullough v. McCullough, 109 Kan. 497, 200 P. 298.

We have held an oral agreement to give security on real estate may be enforced. Farmers' State Bank v. St. Aubyn, 120 Kan. 66, 242 P. 466.

Ordinarily a building is a part of the land upon which the building is located, Docking v. Frazell, 34 Kan. 29, 7 P. 618, but a chattel mortgage on a hotel building has been sustained, Docking v. Frazell, 38 Kan. 420, 17 P. 160, and a parol contract for the sale of a dwelling house has been held to be enforcible. Wetkopsky v. New Haven Gas Light Co., 88 Conn. 1, 90 A. 30, Ann.Cas.1916D, 968.

In the Wetkopsky Case, which is a leading case on this subject, the court said [page 31]:

"The plaintiff claims that the sale of a house to be immediately removed from the land on which it stands, and to which it is affixed, is a sale of personal property, and not of an interest in real estate, and so is not within the section of the statute of frauds which prevents the maintenance of an action upon agreements for the sale of real estate, unless the same shall be in writing.

"Brown, in his first edition, after reviewing the early cases relating to this section of the statute as bearing upon sales of fixtures, buildings, standing trees, growing crops, etc., attached to the soil, drew therefrom the general rule that: 'If the contract when executed is to convey to the purchaser a mere chattel, though it may be in the interim a part of the realty, it is not affected by the statute.' Brown, Statute of Frauds (1st Ed.) § 249. Benjamin, after quoting with approval the language of Lord Blackburn, from his work on Sales, lays down the rule that: 'An agreement to transfer the property in anything attached to the soil at the time of the agreement, but which is to be severed from the soil and converted into goods before the property is transferred to the purchaser, is an agreement for the sale of goods, an executory agreement.' Benjamin on Sales, vol. 1, § 133. Williston says: 'If the contract is to sell and deliver a house, even though the house is, at the time, affixed to the realty, it is a contract for the sale of goods, for the parties contract to buy and sell a house separated from the realty and moved from its foundations. On the other hand, if the parties attempt to make a present transfer of a building or materials fixed in a building, it is evident that they are attempting to make a sale of realty, even though it is also agreed that the subject-matter of the sale shall be severed in a short time.' Williston on Sales, § 66. The Supreme Court of Massachusetts, speaking in a case where the contract related to growing trees, said: 'It may be difficult in many cases to determine, from the terms of the contract, whether the parties intend to grant a present estate in the trees while growing, or only a right, either definite or unlimited as to time, to enter and cut with title to the property when it becomes a chattel. If the former be the true construction, then it comes within the statute, and must be in writing; if the latter, then, though wholly oral, it may be enforced.' White v. Foster, 102 Mass. 375, 378."

In Maguire v. Kiesel, 86 Conn. 453, 85 A. 689, the plaintiff and defendant entered into an oral agreement to share equally from the profits that should be made from the purchase and sale of land. The court said [page 691]:

"The agreement was not within the operation of the statute. The statute 'contemplates only a transfer of lands or some interest in them.' Bostwick v. Leach, 3 Day 476, 484; Hall v. Solomon, 61 Conn. 476, 483, 23 A. 876, 29 Am.St.Rep. 218. The subject-matter of the agreement was not land or any interest therein. It was a fund of money representing profits from a joint enterprise

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