Nourse v. Kovacevich

KLETTE, J., pro tem

On October 4, 1930, plaintiffs and respondents, entered into a contract to sell to John J. Kovaeevich and David Freedman, certain real property in Kern County. On October 29, 1937, in accordance with said contract, plaintiffs and respondents, deeded said real property to John J. Kovacevich, who had acquired the interest of David Freedman. Title to the real property later passed to Ellen Kovacevich, defendant and appellant. Both the contract and deed contained the following reservations as to oil royalties:

“It is understood and agreed that the sellers do hereby reserve from the land herein mentioned an equal one-eighth of any royalty of all oil, gas, gasoline or other hydrocarbon substances developed on or received from said land, together with one-eighth of any cash bonus received from said land, and that said property is sold subject thereto, and second party shall have the right to lease said land for oil development without signature or authorization of first party, ... ”.

On January 3, 1935, about four years and three months after the contract of sale was made, but before the deed was executed, an oil and gas lease was placed on the real property, by the parties, which provided for a one-eighth royalty.

This action was instituted by plaintiffs and respondents, against defendant and appellant, for declaratory relief under section 1060 of the Code of Civil Procedure. The complaint alleges that an actual controversy has arisen, between plaintiffs and defendant, relative to said reservation of oil and gas royalties, plaintiffs claiming they are entitled to one-half

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thereof, and that defendant claimed that plaintiffs were only entitled to one-eighth thereof, and that she, the defendant, was entitled to seven-eighths thereof.

After answer was filed, a trial was had before the court, without a jury, and evidence was received as to the surrounding circumstances, conversations, and understanding of the parties, at the time the contract was made. The court found for plaintiffs and respondents, and against defendant and appellant, on all of the issues, and entered its judgment in accordance therewith, that plaintiffs and respondents were to receive one-half of all royalties from said land, and that defendant and appellant was to receive one-half of said royalties. Appeal was taken by defendant from this judgment.