Gibbs v. Seeger

BARNARD, P. J.

The defendants have appealed from a judgment foreclosing a mortgage given by them to Wm. G. McAdoo and R. T. Colter, and assigned to the plaintiff. This mortgage was given as a part of the transaction described in the case of

Wooten

v.

McAdoo,

110 Cal. App. 48 [293 Pac. 694]. The appellants owned a small lot (25x50 feet) in Huntington Beach, which they leased to McAdoo and Colter in connection with a similar lease of another lot of the same size owned by other parties, for the purpose of drilling for oil on the two lots thus leased, by means of power furnished and brought from a plant used in drilling and operating another well, which throughout the proceedings-is called the “first well”, which was located across the street from the property owned by appellants and which was controlled by the lessees. At the time these leases were made, the lot owned by the appellants was encumbered by a mortgage for $2,500, and, by agreement of the parties, Mc-Adoo and Colter paid off this ’$2,500 and in lieu thereof the appellants executed and delivered to them the mortgage here in question. Under the lease referred to, as a part of the rental, the appellants were to have one per cent of the proceeds of the oil produced from the above-mentioned first well, located across the street. Up to the time that lease was canceled by a quitclaim deed, as provided for therein, a part of the proceeds of this one per cent of the production referred to was paid on this mortgage, reducing the principal to $1194.47. After the lease was canceled this one per

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cent of the proceeds from the oil produced ’ from the first well was no longer paid to the appellants, the appellants made no further payments upon this mortgage, and this foreclosure action followed.

The appellants state that there were but two issues before the trial court and raise the same two points on this appeal. Appellants thus state these two issues: “One was whether the question of fraud was res

judicata

by reason of the decision concerning, the lease. The other was whether the language and facts surrounding the one per cent clause constituted a transfer of a perpetual interest in the first well, or whether it was a mere temporary privilege that terminated with the quitclaim deed covering appellants’ land.”