Geller v. Smith

California Court of Appeal Mar 21, 1933 No. Docket No. 4744.Published

Before: Plummer

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Holding. The court held that a $2,000 payment made by a lessee to a lessor in consideration for an oil lease constitutes a 'bonus' under the parties' agreement, regardless of how the parties subsequently characterized or allocated that sum.

Issues

Whether a $2,000 payment received for an oil lease constitutes a 'bonus' under the terms of the parties' agreement.
Whether the characterization of a payment as a 'bonus' is altered by the lessor's subsequent allocation of that sum toward commissions.

Disposition. affirmed

Quotations verified verbatim against the opinion

“My opinion is that the term ‘bonus’ as applied to an oil lease has come to have a definite meaning, to-wit: A sum of money paid by a lessee to the lessor in consideration for the execution of a lease”

“In this case, I am satisfied that the $2000.00 was a bonus and that the use to which that bonus was put cannot change its character.”

PLUMMER, J.

The plaintiff recovered judgment in the Superior Court of Los Angeles County for the sum of $1,000, for and on account of one-half of the bonus of $2,000 paid for the lease of certain oil lands situate in said county. The record does not show exactly the character of the- claim, or title or right of the plaintiff in and to the lands hereafter described, but it is admitted in the action that the plaintiff had some claim thereto.

In consideration of the execution of a quitclaim deed by the plaintiff to the properties hereinafter mentioned, the following agreement was entered into:

“Los Angeles, California

“November 16, 1926.

“Witnesseth, that this day, November 16, 1926, an agreement between W. A. Geller, Norman A. Smith and George

[486]

C. Withers for that certain property located in the City of Long Beach, County of Los Angeles, State of California, to-wit: Lots sixteen (16), seventeen (17), eighteen. (18) and nineteen (19), Block four (4), Palm Island Tract. Be it understood that said Norman A. Smith and George C. Withers agree to pay said W. A. Geller one-half (½) of any bonus paid on said property, deal to be consummated by either party with a minimum sum to W. A. Geller of Two Hundred and Fifty Dollars ($250.). Be it understood that said W. A. Geller will deliver quitclaim deed on said property in favor of said lessors on that certain lease in favor of Umpire Petroleum Corporation and by mesne assignment assigned to said W. A. Geller.

“(Signed) Norman A. Smith

“(Signed) George C. Withers

“(Signed) W. A. Geller.”

Thereafter, the defendants, in behalf of certain owners of said property other than the plaintiff, after negotiating with the California Petroleum Corporation, effected a lease of the premises to said corporation, and as found by the trial court obtained from said corporation for said lease a bonus in the sum of $2,000. The testimony in relation to the payment of the $2,000 is as follows:

Geller v. Smith

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PLUMMER, J.

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