Bacon v. Bacon

194 P.2d 697, 32 Cal. 2d 131, 1948 Cal. LEXIS 207
CourtCalifornia Supreme Court
DecidedJune 25, 1948
DocketL. A. 20053
StatusPublished
Cited by2 cases

This text of 194 P.2d 697 (Bacon v. Bacon) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bacon v. Bacon, 194 P.2d 697, 32 Cal. 2d 131, 1948 Cal. LEXIS 207 (Cal. 1948).

Opinion

SCHAUER, J.

Plaintiffs, Joseph C. Bacon and Robert H. Bacon, seek declaratory relief, an accounting, and reconveyance of certain real property from defendants, who are plaintiffs’ brother Thomas P. Bacon and an attorney, Jos. Wahrhaftig, employed by Thomas. The trial court rendered judgment in favor of defendants and plaintiffs have appealed. Upon the record presented, and for reasons hereinafter set forth, we have concluded that the judgment should be affirmed.

For brevity and clarity plaintiffs are hereinafter sometimes referred to as Joseph and Robert, and defendants as Thomas and the attorney. Because plaintiffs contend that the evidence fails in some respects to support the trial court’s findings and its construction of the contractual relations and obligations of the parties, it is necessary to relate with some detail the evidence pertinent to the disputed matters.

Robert, Joseph, Thomas and ten others owned various undivided fractional interests in approximately 1,920 acres of prospective oil bearing land in Kern County, California. The percentages of ownership are stated as follows: Joseph, 13.96; Robert, 28.04; Thomas, 23.12; divided among ten persons or entities not parties to this suit, 34.88. Title to this land was clouded by various leases and other instruments. Prospective new lessees, R. E. Bering and T. E. Adams, wished to drill for oil on the land, but first required a title which would be insured by a responsible title company. For *133 the purpose of meeting that requirement most of the owners, including Joseph and Robert, conveyed their titles to Thomas, who was to bring a suit to partition and quiet title to the land and upon its successful culmination was to enter into an oil lease for the benefit of himself and of the other co-owners who had conveyed to him. Controversy over the nature and extent of his authority and of the performance by Thomas under the various powers of attorney, deeds, and so-called “trust agreements” under which he dealt with and held title to the interests of Joseph and Robert in the land, has resulted in the instant suit.

The record discloses the following undisputed events: Bering and Adams, who were associates in the acquiring and developing of oil properties, had spent time and money in unsuccessful efforts to clear title to the Kern County land and to secure an oil and gas lease on it. As a further step toward their goal they entered into a written contract with Thomas, under date of February 20, 1942, by which Thomas “warranted” that he was then the owner of not less than “an undivided 66.43% of all of” the Kern County land, and by which it was agreed, so far as here material, that:

“1. Contemporaneously with the execution of this agreement Bering [and Adams] shall pay [Thomas] Bacon the sum of $5,000.00, and by execution of this agreement Bacon acknowledges receipt of said sum.
“2. Contemporaneously with the execution of this agreement Bacon shall execute and deliver to Bering [and Adams] an oil and gas lease covering all of the right, title, and interest in the [Kern County] real property . . . which Bacon now has or may hereafter acquire, whether undivided, partitioned, or otherwise divided; such . . . lease to be upon the terms and conditions and substantially in the form hereto annexed. ... If, in Bering’s [and Adams’] opinion, other or further leases or agreements upon the same terms and conditions are later necessary to fully evidence . . . [their] interest as such lessee, Bacon agrees to execute and deliver the same.
“3. Bacon shall forthwith, at Bacon’s sole cost and expense, institute or take such legal proceedings as may be necessary to:
“(a) Fully and finally partition and divide said real property so that the interest and ownership of Bacon therein shall not be undivided, and so that Bacon shall thenceforth own in fee not less than 66.43% of said real property; and
*134 “(b) Fully and finally quiet title to all of said real property so partitioned or divided to Bacon in fee, or thereafter acquired by Bacon, so that Bacon’s said title thereto in fee shall be insurable by a responsible title company . . .; provided, however, that if Bacon can secure the execution of the lease herein referred to by the owners of all of the undivided interests in the said property then the completion to judgment of proceedings to partition the same shall not be required. ...”

Bering and Adams paid to Thomas the $5,000 mentioned in paragraph 1 of the above agreement, and Thomas executed the lease provided for in paragraph 2, employed attorneys, including defendant Wahrhaftig, and commenced preparation for the partition and quiet-title suit (hereinafter sometimes referred to as the suit).

Others of the co-owners in the Kern County land also conveyed their interests to Thomas in trust, and Thomas successfully prosecuted the suit to a court decree, entered December 23, 1943, by which title was quieted in Thomas to an undivided 91.66 per cent ownership in the land. Meanwhile, apparently in anticipation of such decree, Bering and Adams, on December 2, 1943, entered into a written agreement with Thomas for a second oil lease, which the parties agreed was to be a continuation of the lease of February 20, 1942; and which provided for a one-sixth royalty, to be paid, so far as concerned the 91.66 per cent of the land to which Thomas held title, to defendant Wahrhaftig for the credit of Thomas. Bering and Adams went into possession, and in May, 1944, commenced drilling for oil. At an expense of some $500,000 they drilled to a depth of approximately 11,000 feet and entered oil-bearing sand; but because of a “water problem” then encountered they had not at the date of trial herein (March 25, 1946) “raised or produced” oil and had made no payments of any kind to or for the account of Thomas except the $5,000 initially paid under the agreement of February 20, 1942.

On January 25, 1944 (approximately four months prior to commencement of the drilling), Thomas entered into a written “Operating Agreement” with defendant Wahrhaftig. The agreement recites, among other things, that Thomas “is the owner and/or has under his control under trust agreements wherein he is authorized -to lease for development for oil and enter into agreements for the operation of *135 91.66% of” the Kern County land, that Wahrhaftig had negotiated the oil and gas lease between Thomas and Adams, and that “the operation of said property under said lease, and the collection of royalties which are payable . . . for distribution to the various fee and trust interests under said lease will require the continuing attention of” Wahrhaftig. The agreement then provides as follows: “ [Thomas] hereby authorizes [Wahrhaftig] ... to deduct from all royalties he receives, 5% of such gross amount, if paid in cash, or 5% of the gross amount resulting from the sale of oil and/or gas if paid in kind as full compensation for his services in supervising the operation under the terms of said lease for the collection and distribution of royalties in cash or in kind.

“ [Wahrhaftig] . . . agrees to devote the necessary time and effort to the best of his ability, supervise the operation under the terms of said lease and to collect and distribute the royalties therefrom for the benefit of [Thomas] . . .

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Cite This Page — Counsel Stack

Bluebook (online)
194 P.2d 697, 32 Cal. 2d 131, 1948 Cal. LEXIS 207, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bacon-v-bacon-cal-1948.