Richfield Oil Corp. v. Bloomfield

MOORE, P. J.

Defendants appeal from a decree quieting title, adjudging respondent Mary J. Connor to be the owner in fee simple of the acres described in the complaint, situate in Santa Barbara County, and Richfield Oil Corporation to

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be the owner of “the sole and exclusive estate in and to said real property ... to explore for and extract therefrom oil, gas and other hydrocarbon substances”-; and appellants to have no right or interest whatsoever in the land.

In January, 1948, Mrs. Connor executed and delivered to Richfield the oil and gas lease which has not been cancelled but still subsists. Appellants’ claim of an interest in the property arises from a previous 20-year lease executed by Mrs. Connor and her husband in 1937 to one Miggins, assignor of appellants. The Miggins lease contained two provisions which are important to an understanding of the issues. Paragraph 5 provided as follows:

“If operations for the drilling of a well for oil or gas be not commenced on said land on or before one year from this date, this lease shall terminate as to both parties, unless the Lessee shall, on or before one year from this date, pay or tender to the Lessor . . . the sum of Ten Cents per acre per year, which shall operate as rental and cover the privilege of deferring the commencement of drilling operations for a period of twelve months.”

Paragraph 18 is as follows:

“Upon the violation of any of the terms or conditions of this lease by the lessee and the failure to remedy the same within sixty days after written notice from the lessor so to do, then at the option of the lessor this lease shall forthwith cease and terminate.”

Appellants never commenced drilling operations; neither had they paid or tendered any rentals prior to the commencement of this action. The lessor has never given appellants any notice of default under the lease.

The question thus presented for decision is whether appellants’ failure to commence drilling operations within one year or to pay the rentals provided for has resulted in an automatic termination of the Miggins lease, or whether, as appellants contend, no termination resulted by reason of the lessor’s having failed to serve notice of default.