Lieberman v. Superior Court

236 P. 570, 72 Cal. App. 18, 1925 Cal. App. LEXIS 400
CourtCalifornia Court of Appeal
DecidedMarch 26, 1925
DocketDocket No. 4944.
StatusPublished
Cited by17 cases

This text of 236 P. 570 (Lieberman v. Superior Court) 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
Lieberman v. Superior Court, 236 P. 570, 72 Cal. App. 18, 1925 Cal. App. LEXIS 400 (Cal. Ct. App. 1925).

Opinion

WORKS, J.

A. J. Charle, one of the respondents in this proceeding, and others who are also among the respondents, commenced an action in the Superior Court for Orange County, also one of the respondents. In that cause, which will henceforth be called the Charle action, the defendants were a corporation named the Pacific Corporation, its directors, and various other natural persons, including Muriel Strode Lieberman. It was alleged in the complaint in the Charle action that the plaintiffs and a large number of others, about 150 in all, “have purchased an interest in a certain lease and an interest in the production of a certain oil and gas well located on the premises described in said lease, known as Pacific Corporation Oil Well No. 16,” which will hereafter be termed the oil well; that the plaintiffs sue for themselves and the others making up the 150 individuals ; that certain named defendants, who will henceforth be called the directors, are the directors of Pacific Corporation, which will hereafter be called the corporation; that the corporation “has ceased to function as a corporation, and that” the directors were “its last named officers and directors and by reason thereof and as provided by law became the trustees for” the corporation; that prior to the time the corporation ceased to exist it was the owner and holder of certain oil and mining leases on certain particularly described lands and had drilled thereon the oil well to an approximate depth of 4,000 feet; that thereafter the corporation divided the production of all gas, oil, and other hydrocarbon substances saved or produced from the oil well into small parts or units, each of which represented a l/2160th interest in and to the production of the well; that these interests were by the corporation and directors sold to plaintiffs at the rate of $100 each; and that prior to the time the corporation ceased to do business it entered into a written contract with the plaintiff Charle for the consideration of $1,000, whereby it agreed to sell to Charle *22 10/2160th parts of the gross production of all oil, gas, and other hydrocarbon substances produced and saved from the well. A copy of this contract is attached to the complaint as an exhibit. The agreement recites that the corporation owns a certain lease on the real property above mentioned; that the corporation has started the drilling of the oil well on the property, the same having been drilled approximately 4,000 feet and into the oil sand approximately 150 feet; and that it is the desire of the corporation to sell to Charle the 10/2160th parts above mentioned at the rate of $100 for each l/2160th interest and that Charle desires to purchase the same. After these recitals it is provided in the contract that the corporation does sell to Charle for the $1,000, the receipt of which is acknowledged, the 10/2160th parts mentioned. It is further provided in the contract that the corporation “will continue drilling and such other operations as may be necessary to he done and diligently prosecute the same until the said well is put on production, and producing oil in commercial quantities, or until it is determined by the party of the first part that no oil could be obtained by further drilling on said well.” There are other provisions of the contract which need not be stated, as they are not material to a determination of the present appeal. The complaint further alleges that the corporation entered into a contract identical in form with that above mentioned with each of the plaintiffs, whereby they each purchased from the corporation certain of the units above specified and of an identical character with those purchased by Charle, each purchase being for a cash consideration, the amount of which is set forth in the pleading. It is also alleged that like units were sold for similar considerations to the other persons making up the 150 individuals, along with plaintiffs, in whose behalf the action is prosecuted. It is further alleged that the corporation and the directors sold in all approximately 800 of the units. It is averred, also, that the corporation “further agreed to sell and market all oil, gas and other hydrocarbon substances as so produced from said well as aforesaid and after the sale thereof and the deduction of the chargeable proportionate share of each unit or interest in the cost of maintenance, operation, selling and marketing of all oil and gas therefrom, to pay unto each unit holder the balance to which he was entitled as evidenced *23 by said written agreement”; that the corporation did continue the drilling of the oil well “until oil and gas were found and discovered in paying quantities, and that said well as aforesaid was properly put upon production for the benefit of unit holders and said corporation as aforesaid”; that the corporation “failed to carry out the terms of its said contract with these plaintiffs, in that it failed to sell, market and dispose of the oil and gas produced therefrom for the benefit of plaintiffs and other unit holders as provided in said contracts”; that the corporation, the directors, and certain other named defendants “collogued, confederated, and designedly entered into a conspiracy and did conspire to cheat, wrong, and defraud the plaintiff and said unit holders out of their just rights of and from participating in the returns from the sale of the production” of the oil well as provided in the contracts already mentioned; that in furtherance of the conspiracy the corporation, the directors, and the other defendants last mentioned turned over unto a certain one of those defendants the management of the oil well and the sale of all oil and gas therefrom ; that the defendant last mentioned “collected large sums of money from sales of oil and gas from said well as aforesaid; that the exact amount to these plaintiffs at this time is unknown”; that the defendant last mentioned “claims to have disbursed and paid out for the benefit of said unit holders large sums of money, all of which these plaintiffs are without knowledge, information, and belief, and therefore allege that said sums so paid out were not just and correct sums and not claims legally due or owing from” the oil well, but that those sums were due, if at all, from other wells of the corporation and were debts, if any, of the corporation and not of the plaintiffs or of the oil well; that thereafter and in furtherance of the conspiracy, the defendants who are alleged to have been parties to it turned over the management of the oil well and the proceeds of sales of oil and gas therefrom to two of the conspirators, “who took charge of the operations of said well and the production thereof and who sold the oil and other products therefrom and received large sums of money from such sales,” and that during a certain month the two defendants last mentioned collected and received approximately the sum of $24,000, all of which belonged to the unit holders of the oil well; that thereafter *24

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Bluebook (online)
236 P. 570, 72 Cal. App. 18, 1925 Cal. App. LEXIS 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lieberman-v-superior-court-calctapp-1925.