Reynolds v. York Syndicate Oil Co.

[798]

ALLEN, P. J.

The action was one to foreclose a lien upon certain mining property. The answer, in addition to denials with reference to ownership and the facts upon which the right to a lien depended, set up an agreement between plaintiff and defendant corporation, bearing date of March 10, 1904, through which the defendant leased to plaintiff the mining ground described in the complaint for the period of one year, upon a royalty of ten cents per barrel for all oil produced on said premises during the period of the lease; and, in addition, the plaintiff agreed to make certain collections on account of oil previously sold by defendant to third persons, the amount of which collections when made to be applied to an indebtedness of $3,625 agreed to exist against defendant in plaintiff’s favor; and further, to sell certain oil in sump holes at a price of twenty-five cents per barrel, or as near that price as possible, the proceeds to be credited upon such indebtedness. And it was further agreed that the defendant should pay plaintiff “as much money ($2,700 at least) on account of its indebtedness to him and as soon as possible, the total indebtedness to him being at this date $3,625.” Other covenants contained in the agreement are of no moment in considering this appeal.

The court found in favor of plaintiff upon all the issues relating to the character of the property, the amount of the indebtedness, the right of plaintiff to a lien therefor, and the filing of such lien. The court, in addition, found that the agreement above referred to had been entered into after the maturity of the indebtedness and preceding the filing of the lien; and as a conclusion of law determined that such agreement constituted a novation and amounted to a waiver on plaintiff’s part of his right to a lien on account of the indebtedness. Judgment was accordingly entered in defendants’ favor, from which judgment plaintiff appeals upon the judgment-roll.

Whether the findings of novation and waiver are those of fact or law, the findings or conclusions are shown by the judgment-roll to have been based solely upon the terms of the agreement, and the construction which should be placed upon the agreement is determinative of all matters presented upon this appeal. We are of opinion that such agreement cannot be construed as the substitution of a new obligation