Petroleum Midway Co. v. Zahn

FOX, J. pro tem. Plaintiff appeals from a judgment that it “recover nothing from the defendant Petroleum Production Company.”

According to plaintiff’s amended complaint, the defendants had agreed to buy from the plaintiff two producing oil wells, with accompanying lease ánd equipment, for $40,000—one-half to be paid in cash and the other half by the transfer of stock. Only $11,000 had been paid. During the course of their defense the defendants put on four expert witnesses to prove the value of the oil property in question, apparently on the theory that such value was material to a defense of failure of consideration. Generally speaking, the value placed on the property by these four witnesses was something over $13,000. A stipulation was then entered into that the court might appoint “a disinterested person as the court’s appraiser for the purpose of appraising and giving the fair market value of leasehold, the two wells and the equipment in the bill of sale described as of July 18, 1941.” The stipulation provided, in part, “That judgment shall be entered in favor of the plaintiff and against the defendant Petroleum Production Corporation only for any difference that may exist, if any, between the fair market value as determined by the Court upon said appraisal and the sum of $11,000.00 heretofore received by the plaintiff, without interest to date of judgment;

‘‘ That in the event that the fair market value of said property shall be determined to be the sum of $11,000.00 or less as of July 18, 1941, then judgment shall be entered in favor of the defendant Petroleum Production Corporation, that plaintiff takes nothing.” It was also stipulated, “That all attachments heretofore levied against the property of the Petroleum Production Corporation continues to remain in full force and effect until either: (1) Any judgment that may be rendered in favor of the plaintiff is paid and satisfied or (2) Judgment is rendered in favor of the defendant and against the plaintiff as hereinabove set forth. ...” Provision was then made for the dismissal of defendant Zahn’s cross-complaint.

The final paragraph of the stipulation reads as follows: “It is further stipulated that an order may be made forthwith by the Court directing that neither any parties to this action now; any of its attorneys, agents, employees or representatives contact either directly or indirectly said appraiser; that no [853]communications shall be had by any of the parties to this action, their attorneys, agents, or representatives with said appraiser except in the presence of the Court and both parties being represented.” (The entire stipulation is quoted in the opinion on the former appeal of this case, 62 Cal.App.2d 645, at pp. 647-8 [145 P.2d 371].) After the parties had expressed their assent to the terms of the stipulation the court said, “It will be so ordered and judgment will be entered in accordance with the stipulation. ... I want to thank you gentlemen for working this matter out. I assume it is worked out. At least, there will be a judgment entered.”