Gillis v. Royalty Service Corp.

WOOD, J.

Action to quiet title to royalties, and for an accounting, under a community oil lease. Judgment was in favor of defendants, and plaintiff appeals.

Plaintiff’s land, which was included in the community oil lease dated April 10, 1936, was subject to liens of street improvement bonds at the time the lease was made. The liens were foreclosed in 1937, and the owner of the street improvement bonds was the purchaser at the foreclosure sale. During 1937 and 1939, five other parcels of land, which were included in the oil lease, were also sold to satisfy street improvement bond liens. About 1944, the plaintiff acquired quitclaim deeds, and assignments of interest in the community oil lease, from the company that owned those five parcels at the time of the foreclosure sales. In 1944, plaintiff commenced this action.

Many parcels of land, other than the six involved here, were included in the oil lease. The parcel of land which plaintiff owned will be referred to herein as Parcel 1, and the five other parcels involved here will be referred to as Parcels 2, 3, 4, 5, and 6. No well was drilled on any of the six parcels. Prior to 1940, the titles to Parcels 1, 2, 3, 5, and 6 acquired by the purchasers at the foreclosure sales were transferred to defendant Fred Salter, and in 1942 the title to Parcel 4 acquired by the purchaser at the foreclosure sale was transferred to defendant Amanda Salter.

The community oil lease provided that owners of other parcels of land might join in the lease by executing counter

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parts thereof. After defendant Fred Salter had acquired the titles to said five parcels he executed a new counterpart of the community lease covering said five parcels. For a while thereafter the lessee paid royalties to Fred and Amanda Salter as colessors in the proportion which the acreage of said six parcels bore to the total acreage in the lease and then the lessee impounded the royalties, pertaining to those parcels, pending a determination as to whom such royalties should be paid. The lessee, Royalty Service Corporation, filed herein a “Cross-complaint for Interpleader” asking that the plaintiff and defendants Salter interplead their rights to the royalties under the lease.

The trial court found that plaintiff had no right, title or interest in the property, leases, or royalties; that plaintiff and her assignor (the company that owned the five other parcels before foreclosure) failed to perform the conditions of the lease; and that the consideration for the lease failed so far as plaintiff and her assignor were concerned. The trial court also found that defendant Fred Salter was the owner of the royalty interest under said lease, pertaining to the five parcels owned by him; and the court quieted Ms title to that interest.