Lopes v. Capital Co.

WARNE, J. pro tem.

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Appellants have appealed from a summary judgment in favor of the respondent, Capital Company, a corporation, and also from a summary judgment in favor of the respondent, Honolulu Oil Corporation.

Appellants, as plaintiffs, brought this action against the respondents and others for a declaration of rights and obligations under a deed to farm lands owned by them that reserved all oil, gas and mineral rights in the grantor, respondent Capital Company, and which rights were under lease to the respondent Honolulu Oil Corporation.

The complaint alleged four causes of action. The first cause of action, in substance, alleges that on January 7, 1954, the Capital Company was the owner in fee simple of certain farm lands; that on said date for a valuable consideration it deeded the lands to the appellants, excepting and reserving to itself from the grant the oil, gas and other hydrocarbons and mineral rights, together with incidental easements and rights necessary for the production and transportation of such oil and gas, all upon the condition that the Capital Company should compensate appellants for (1) damage done in the exercise of the reservation to the surface of the lands and .improvements; (2) the value of the lands taken; and (3) any injuries suffered through prevention of farming. It was alleged that Honolulu Oil Corporation was the lessee of the oil, gas and mineral rights from Capital Company. The first cause of action then alleged as follows: a series of entries and takings by the lessee under the gas and oil rights reservation and its interference with appellants’ farming operations; that there had been no compensation paid the appellants except for crop losses which occurred prior to October 1956; that the respondents have repudiated the conditions the deed placed upon the gas, oil and mineral rights reservation; that an actual controversy existed between the appellants and the respondents as to the meaning of the terms and provisions of the grant deed, to wit: appellants claimed that the reservation of the respondent Capital Company automatically .terminated upon its failure to compensate appellants and that they are the owners in fee simple absolute of the real property involved, including the oil, gas and mineral rights, and are

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therefore entitled to any and all rents and royalties from the lessee. Whereas, on the other hand, respondents contend that the reserved remainder of the oil, gas and mineral rights continued to exist until terminated by judgment and that respondent Capital Company is entitled to any rents and royalties for oil and gas extracted from the lands. Declaratory relief is requested defining the rights of the parties and declaring that appellants as owners of the fee are entitled to all rents and royalties from the Honolulu Oil Corporation.