Denio v. Brennecke

California Court of Appeal May 10, 1935 No. Civ. 1542Published

Before: Jennings

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Holding. The court held that an oral agreement to assign an interest in oil and gas rights constitutes an interest in real property, rendering it unenforceable under the statute of frauds, and that full performance of services by the promisee does not remove the agreement from the statute's bar.

Issues

Whether an oral agreement to assign a percentage of oil and gas production constitutes an interest in real property under the statute of frauds.
Whether full performance of personal services by the promisee constitutes sufficient part performance to enforce an oral agreement to convey an interest in real property.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The alleged oral agreement of defendants to give to plaintiffs one per cent of all gas, oil and other hydrocarbons produced and saved from the land amounted to a verbal assignment by the land owners of an undivided interest in oil rights”

JENNINGS, J.

Plaintiffs appeal from a judgment rendered in favor of defendants following the entry of an order sustaining demurrers to the complaint without leave to amend.

The complaint contains three counts. In the first count a cause of action for an accounting is attempted to be pleaded. It is therein alleged that in the month of September, 1922, the defendants were the owners of certain real property in the

[679]

county of Los Angeles; that in said month plaintiffs rendered legal services for defendants at their request and that for said services which were fully performed by plaintiffs, “the defendants verbally agreed to and with the plaintiffs, that they would give and yield to the plaintiffs from time to time as and when produced, one per cent or one one-hundredth part of all the oil, gas and hydrocarbons produced and saved” from said real property; that on or before June 1, 1923, wells had been drilled on the land and oil, gas and other hydrocarbons were produced therefrom and such production has been continuous from said date; that during all of the time since said last-mentioned date the defendants received and detained all of the one per cent of the oil and gas produced and sold the same for an amount of money unknown to plaintiffs; that prior to the institution of the action plaintiffs demanded that the defendants render an accounting of the oil and gas produced and that they pay to plaintiffs one per cent thereof but the defendants refused and neglected to render an accounting or to pay the specified one per cent.

The second cause of action incorporates by reference those paragraphs of the first count wherein it is alleged that the defendants verbally agreed to give plaintiffs one per cent of the oil and gas which might be produced on the land, that wells were bored which resulted in the production of oil and gas, and that defendants received all of the proceeds derived from such oil and gas and refused to account to plaintiffs for the one per cent thereof or to pay said one per cent. It is then alleged that the defendants hold the oil and gas produced and the proceeds thereof “as bailees for the plaintiffs and in trust for these plaintiffs and have wrongfully held the same since the 9th day of September, 1932, and since these plaintiffs demanded the same from and of the defendants”.

Denio v. Brennecke

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JENNINGS, J.

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