Hindin v. Caine

GRIFFIN, J.

Plaintiff sought to recover from defendant $1,066.64 on a common count of money had and received. Judgment went for defendant. On May 11, 1945, an oil and gas lease was entered into by plaintiff’s predecessor with the Tide Water Associated Oil Company, hereinafter referred to as “Tide Water,” covering an undivided one-half interest in 320 acres of land in Kern County. The term of the lease was for a period of five years from the 11th day of May, 1945, and provided that during the first three years of the term of said lease, the lessee was not obligated to commence drilling

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operations on said property, but that commencing with the fourth year of the term of the lease lessee should pay or tender to lessor yearly, in advance, as rental, an equal one half of the sum of $10 per acre per year, or the sum of $1,600. (Lessee had not theretofore commenced drilling operations or terminated the lease.)

On November 14, 1948, plaintiff, who was the then owner of the lease, entered into an agreement with the defendant, assigning to defendant, in consideration of the sum of $8,000 in cash and $7,500 each year thereafter during the term thereof, her interest in said oil lease. In accordance with the terms of the assignment defendant was given the right to and did execute a quitclaim deed on September 29, 1949, quit-claiming his interest in the lease back to plaintiff. At that time defendant was not in default under the assignment. The only benefit he received thereunder was the $1,600 received from the Tide Water on May 20,1949.

By this action plaintiff attempted to recover $1,066.64, the proportionate amount of the $1,600 of money paid by the Tide Water for the period from September 29, 1949, to May 10, 1950. The deferred right of Tide Water was for the period from May 11, 1949, to May 10, 1950. The $1,600 paid by the oil company was paid, according to the lease, “yearly in advance as rental,” for the privilege of deferring drilling operations for one year. On May 10, 1949, Tide Water sent to plaintiff its check for $1,600, which was returned by plaintiff to the oil company with instructions to mail it to defendant. This was done on May 20, 1949.

It is plaintiff’s position that defendant was entitled to retain only such income as was produced during the life of the agreement with the plaintiff and was not entitled to retain any income earned or accrued after the termination of the agreement, even though such income might have been collected in advance by the defendant during the term of such agreement; and secondly, that plaintiff was entitled to judgment on the theory of unjust enrichment of defendant.