Hartley v. Weller

HANSON, J. pro tem. The question presented is whether the second amended complaint stated a sufficient cause of action in damages for the breach of an oral agreement to form a limited partnership to conduct an oil-well drilling business. The trial court sustained a general and special demurrer to [119]the second amended complaint, but gave plaintiff leave to amend. The plaintiff elected not to do so and appeals.

The complaint avers an oral agreement under the terms of which the parties agreed to enter into a limited partnership with their rights and liabilities to be governed by the terms of an unsigned written partnership agreement which is set forth as an exhibit. That document discloses that the defendant was to be a limited partner and the plaintiff a general partner.

The complaint does not allege the existence of a partnership between the parties but merely an agreement to form a partnership. The complaint goes on to aver that the defendant refused to execute the written partnership agreement (which would have created a partnership), and as a consequence the plaintiff was damaged in that he expended, in anticipation of the execution of the document, for gas, oil, hotel accommodations and attorney’s fees the sum of $227.46 and was caused to lose three weeks of his time of the reasonable value of $325. Additionally he avers that he had procured prior to the oral agreement a contract with a drilling company to assign contracts it had to drill wells which at the time of the oral agreement the parties had orally agreed should be assigned to the proposed partnership. It is then averred that due to the refusal of the defendant to enter into the partnership agreement, the drilling contract was lost to the damage of plaintiff in the sum of $4,100 being one half of the net profit the drilling company derived from its contracts for the drilling of the wells, the total profit of $8,200 being what the partnership would have received.

Under the substantive law which is here controlling, it is plain, that the only damages the plaintiff was entitled to recover, and as to which he could state a good cause of action, were such as were proximately caused by the breach, or which, in the ordinary course of things, would be likely to result from such a breach. (Civ. Code, § 3300.) The profits which might or might not ensue from the drilling contract could not be recovered as they were too speculative. The profits the drilling company actually received from drilling the wells are no criterion as to the profits the proposed partnership could have derived from the drilling contract had it been assigned to the proposed partnership. The ability of the drilling company to make profits in the drilling of these or any other wells, has no tendency to show that the members of the proposed partnership had any such ability. Had it been launched it