Jones v. Pier

WOOD, J.

A community oil lease was executed on October 10, 1922, by W. F. Garrison and his then wife and W. F. Pier and his wife, as lessors, and Cal-Mex Oil & Refining Company, as lessees, covering twenty lots in the North Long Beach tract. The Garrisons were the owners of ten of the lots and the Piers, were the owners of the other ten. By the terms of the lease, which was made for the term of twenty years, the lessors were to receive one-fourth of all oil, gas and other hydrocarbon substances to be produced from the leased premises. The lease set forth certain conditions the failure to perform which would be grounds for forfeiture at the option of the lessors. After the execution of the lease Mr. and Mrs. Pier assigned to C. A. Jones, the plaintiff, one per cent of the total production extracted from the premises. The assignment is as follows: “Know all men by these presents: That we, W. F. Pier and Agnes Pier, his wife, owners by virtue of a community lease dated October 10, 1922, of twelve and one-half per cent (12½%) of the total production of oil, gas and other hydrocarbon substances extracted 'and saved from (the lots above mentioned) ... do hereby sell, assign, transfer and set over unto C. A. Jones, of Long Beach, California, one per cent (1%) of said total production; this assignment to remain effective so long as the assignee, or his successors in interest, contributes one per cent (1%) of the increase of taxes upon said land resulting from the discovery of oil or gas thereon; To have and to hold the same to the said assignee, his heirs and assigns forever.”

[284]

The present action was commenced on May 31, 1928, to quiet plaintiff’s title as against the Piers and Garrisons to “one per cent (1%) of the total production of oil, 'gas and other hydrocarbon substances extracted and saved”, from the twenty lots referred to in the lease. Judgment was rendered in favor of the defendants and on appeal the judgment was reversed.

(Jones

v.

Pier,

124 Cal. App. 444 [12 Pac. (2d) 646].) The reversal was necessary for the reason that the trial court had based its judgment upon a deerefe in another action in which the Garrisons as owners of ten of the lots covered by the lease had recovered judgment by default against the Cal-Mex Oil & Refining Company and in which the court found that the said company was guilty of'breaching the covenants of the oil lease and decreed the cancellation of the lease. The Piers had not been made parties:to that litigation and therefore the decree referred to did not terminate the lease-. Upon the second trial of the action the trial court permitted defendants to file a supplemental answer in which allegations were made, and -found by the couft to be true, that with regard to all but four of the lots covered by the lease the assignees of the original lessees had forfeited the lease and with the consent of the Piers and Garrisons had surrendered the premises to the original lessors.