Home/California Court of Appeal/Franco Western Oil Co. v. Fariss

Franco Western Oil Co. v. Fariss

259 Cal. App. 2d 325, 66 Cal. Rptr. 458, 30 Oil & Gas Rep. 321, 1968 Cal. App. LEXIS 1976
CourtCalifornia Court of Appeal
DecidedFebruary 21, 1968
DocketCiv. 11486
StatusPublished
Cited by12 cases

This text of 259 Cal. App. 2d 325 (Franco Western Oil Co. v. Fariss) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Franco Western Oil Co. v. Fariss, 259 Cal. App. 2d 325, 66 Cal. Rptr. 458, 30 Oil & Gas Rep. 321, 1968 Cal. App. LEXIS 1976 (Cal. Ct. App. 1968).

Opinion

PIERCE, P. J.

On December 22, 1960, plaintiff (hereinafter “Franco Western” † ) sued defendant Cameron, ** doing business as Cameron Oil Company. The controversy relates to the ownership of oil and gas leases in the Meridian area of Sutter County. Franco Western sought to establish ownership of a one-half interest in those leases, a concomitant of a joint venture between the parties. It has appealed from a defense judgment following the motion of defendant Cameron (hereinafter “Cameron”) "under Code of Civil Procedure, section 631.8. That section enacted in 1961 (Stats. 1961, ch. 692, § 2) authorizes, inter alia, a defendant in a trial by the court to move for a judgment upon the close of his opponent’s ease. The judge weighs the evidence. Upon the court’s determination to grant defendant’s motion, findings are made, followed by a judgment—which is on the merits. Such findings and a judgment were made here.

By its findings and judgment the trial court sustained defendant’s position that no joint venture agreement was entered into between the parties covering the leases in controversy and that Franco Western had no interest in those leases. Franco Western’s principal contention, among several on appeal, is that the findings and judgment are not supported by substantial evidence. We hold its argument sound.

Our study of the trial court’s findings makes it clear that it reasoned in the following progressive steps: (1) the parties intended to enter into a joint venture regarding the leases in the area in controversy; but (2) consummation of a written operating agreement was also intended, and (3) the parties did not intend to be bound to any agreement unless a written *328 operating agreement was reached; (4) no written operating agreement was reached. Therefore, no joint venture agreement existed. Our study of the record convinces us that substantial evidence supports steps (1), (2) and (4). We are compelled .to. hold, however, that step (3) was not intended; that the evidence is' without substantial conflict that the parties did intend a joint venture effective January 19, 1960; that .although they looked forward to a written- operating agreement ultimately, it was not a condition to the origin of the joint venture. Other contentions by both parties will be involved in reaching our conclusion but need only be given light-brush treatment.

Before stating facts, we make some observations. First, the record is voluminous. 1 Secondly, this court with its research .staff has had an advantage over the trial judge. We have had months to familiarize ourselves with the record. The trial court had the advantage of observing the demeanor of two witnesses on the stand. That advantage which often looms large on appeal is minimized in this case since, as the discussion to follow and the findings made indicate, the trial judge gave full credence to the testimony of plaintiff’s witnesses. Also, virtually all of the testimony is corroborated by documentary evidence. The validity of those documents is not challenged.

. The next observation preliminary to our statement of facts relates to the rules obligatory upon an appellate court reviewing records and findings upon which a judgment under Code of Civil Procedure, section 631.8 is based.

In Greening v. General Air-Conditioning Corp. (1965) 233 Cal.App.2d 545, at pages 550-551 [43 Cal.Rptr. 662], this court stated the purpose of the “motion for judgment” created by the 1961 .enactment of. Code of Civil Procedure, section 631.8 and. the distinction between a reviewing court’s permissible perspective in considering the evidence on an appeal from such a granted motion and its function when a granted nonsuit is involved. In the latter review the truth of the plaintiff’s evidence must be assumed. “The new motion-for-judgment - procedure requires the trial judge to weigh the evidence . . . [and make findings]-. .-. . If the motion is granted, his findings are entitled to the same respect on appeal as any other findings and are not reversible if sup *329 ported.by substantial."evidence. [Citations.].” 2 (P. 550.) We will apply the ‘"‘substantial evidence rule” in our discussion, of the plaintiff’s evidence Apon which the findings were made and the case decided, and we will give to that evidence all inferences favoring defendant reasonably permissible. We must remember, however, that evidence to be substantial must be evidence which is of ponderable legal significance and reasonably to be believed. (San Bernardino Valley Water Dev. Co. v. San Bernardino Valley Municipal Water Dist. (1965) 236 Cal.App.2d 238 [45 Cal.Rptr. 793] (hearing denied); Estate of Teed (1952) 112 Cal.App.2d 638, 644 [247 P.2d 54] ; see also Fewel & Dawes, Inc. v. Pratt (1941) 17 Cal.2d 85, 89 [109 P.2d 650].) Much of the oral testimony is backed up by confirmatory written instruments. The latter are unambiguous. When the trial court interprets an unambiguous written instrument uncontradicted by parol evidence, that interpretation becomes a matter of law, and a reviewing court is not bound by the trial court’s construction. (Pope v. Allen, 225 Cal.App.2d 358, 365 [37 Cal.Rptr. 371]; cf. Stevenson v. County of San Diego (1945) 26 Cal.2d 842, 844 [161 P.2d 553].) With these rules in mind, we find no real factual dispute in the record.

Statement op Facts

To aid in an understanding of- the facts a reference map is included on the next page. Except that it is uncolored and unmarked, it is a copy of Plaintiff’s Exhibit No. 3.

Prior to October 1959 Franco Western had 36 oil and gas leases in Sutter and Colusa Counties in an area known as the “Grimes Block.” On the map they are entitled “Franco Western Original Grimes -Block. ” The area is represented by parallel diagonal lines slanted downward from left to right. Two dry test wells had been. drilled by Franco Western. Unless someone else could be found as operator to drill another well, it had determined to quitclaim its interests in the area.

The Grimes Farmout Agreement.

On October 13, 1959, Franco Western and Cameron entered into a written agreement. It is in letter form and attached to *330 it is a “model” form of operating agreement. The court’s findings call the instrument as a whole the “Grimes Farmout Agreement.” By its terms Cameron agreed to drill at his expense a 7,500-foot test well in the Grimes Block in consideration for which he was (1) to receive a one-half interest in said leases, and (2) was to operate them. Paragraph 9 of the agreement is set forth in full in the findings.

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Bluebook (online)
259 Cal. App. 2d 325, 66 Cal. Rptr. 458, 30 Oil & Gas Rep. 321, 1968 Cal. App. LEXIS 1976, Counsel Stack Legal Research, https://law.counselstack.com/opinion/franco-western-oil-co-v-fariss-calctapp-1968.