Bayside Land Co. v. Dabney

California Court of Appeal Mar 14, 1928 No. Docket No. 6118.Published

Before: Nourse

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Holding. The court held that the original lessor under an oil-drilling lease could unilaterally enforce a forfeiture provision against the lessee, as the subsequent joinder of other parties for royalty-sharing purposes did not create a joint tenancy or require their participation in the notice of forfeiture.

Issues

Whether the original lessor was required to join subsequent royalty-sharing lessors in a notice of forfeiture under an oil-drilling lease.
Whether the subsequent royalty-sharing agreements altered the contractual rights of the original lessor to enforce lease conditions.

Disposition. reversed

Quotations verified verbatim against the opinion

“The contract does not permit it to be done by less than all the lessors.”

“When, therefore, the original lessor reserved to itself the right to claim a forfeiture under the terms of section 13 of its lease this right was not lessened or defeated by the subsequent joinder of other parties”

“The error lies in the conclusion of the trial court that the notice given was insufficient as a matter of law.”

NOURSE, J.

This is an appeal from a judgment adverse to plaintiff in an action to quiet title to certain lands situated in Orange County which were held by the defendant under an oil-drilling lease.

The lots owned by this company were leased to the defendant Dabney by written lease dated October 24, 1921, for a term of twenty years. In this lease the company was designated as the “lessors” and the “parties” of the first part. By the terms of the lease these lessors gave permission to

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the lessee to enter into subsequent leases with the owners of other lots which were separately described in the original lease and these lessors covenanted that in the event such subsequent leases were made they would agree to share the royalties to be paid under their lease with any or all lots included in the subsequent leases in the proportion which such lots bear to the total number of lots included in the original lease. Subsequent leases were made with the owners of 13 lots and in each of said leases the owners of these lots were described as the lessors thereof and they separately agreed to be bound by the terms of the original lease executed by the Bayside Land Company.

The trial court found that the lease was executed between the company and the defendant Dabney as alleged and required the lessee to drill a well to a depth of 4,000 feet unless oil in paying quantities was obtained before reaching that depth; that defendant had drilled only one well to a depth of 3,050 feet which had not produced any oil or other kindred substances; that he thereupon completely suspended all drilling operations and had failed for a period of more than three months prior to the commencement of the action to do any drilling. Upon these grounds the court held that the defendant had breached the terms and conditions of his lease but that the notice required by section 13 thereof was insufficient because the lessors who executed the three subsequent leases had not joined with the plaintiff therein.

On this appeal the whole case is submitted upon the authority of

Jameson

Chanslor-Canfield Midway Oil Co.,

Bayside Land Co. v. Dabney

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NOURSE, J.

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