Recovery Oil Co. v. Van Acker

BARNARD, P. J.

This is an appeal from a judgment in a quiet title action.

The land involved consists of 160 acres which belongs to the United States. In 1923, a permit to prospect for oil and gas was issued to M. A. Knapp covering the property in question and other lands. In May, 1928, Knapp entered into an operating agreement with A. Bruce Frame under which Frame was to drill on the property and under which he acquired an interest in the production. In November, 1928, Frame executed a written assignment by which he assigned to N. E. Grable the “proceeds of Fifteen per cent (15%) of the oil” (saved and sold from the premises covered by this operating agreement) “until such time as said assignee shall have received the sum of Twenty Thousand Dollars ($20,000.00) and no more; and upon the full payment of said sum this assignment shall terminate and be at an end.” In 1929, Grable assigned to Ada M. Crawford one half of the interest he had acquired under the assignment given to him by Frame. These assignments were duly recorded prior to the time the plaintiff acquired any interest in the property. In 1930, a lease was issued to Knapp by the Secretary of the Interior covering all the property described in the original prospecting permit. Various partial assignments of said lease were made to others and, in 1938, the plaintiff became the owner of Knapp’s remaining interest in this lease insofar as it pertained to the land here involved.

This action was filed on August 13, 1945. By his complaint, which was in the usual form, the plaintiff sought to quiet his title as the sole and exclusive owner of this lease with all rights arising thereunder, and to bar the defendants from asserting any claims in relation thereto. By her answer, the

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defendant Crawford alleged that the plaintiff’s right and title under this lease is subject to her right, by assignment, to the sum of $10,000 payable out of the proceeds from 15 per cent of the oil etc. produced, saved and sold from the premises. A judgment in favor of the plaintiff was reversed on appeal

(Recovery Oil Co.

v.

Van Acker,

79 Cal.App.2d 639 [180 P.2d 436]) for reasons not involved here. After a retrial the court found, so far as material here, that the oil and gas lease given to Knapp in 1930 was subject to the operating agreement between Knapp and Frame, and to the assignments above referred to from Frame to Grable and from Grable to Ada M. Crawford; that the plaintiff became the owner of so much of Knapp’s interest in the property as remained after these transfers and assignments; that each of these transfers and assignments were duly recorded and plaintiff had constructive notice thereof; and as a conclusion of law, that the plaintiff’s lease, insofar as this property is concerned, is subject to a valid assignment now held and owned by Ada M. Crawford whereby she is the owner of 15 per cent of the proceeds of the oil etc. saved and sold from the premises until such time as she shall have received $10,000, whereupon her interest shall terminate and be at an end. Judgment was entered accordingly. The plaintiff appealed from the entire judgment, but prosecutes this appeal only from that portion thereof which sustains the claim of Ada M. Crawford.