Isom v. Rex Crude Oil Co.

HENSHAW, J.

Plaintiff, the owner of a certain piece of land in the city of Los Angeles, sued defendant as assignee of her lessee to have canceled and annulled a lease under which it was holding, and for damages for its unlawful extraction

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of oil from her land. She alleged that she was in an eastern state, and in ignorance of the condition of her property and of the surrounding property, and in ignorance of the fact that the land lay in an oil belt or district within the city of Los Angeles; that Book, her lessee, by letter represented to her that he wished to lease the premises for the purpose of erecting a tenement building thereon, and concealed from her the fact that oil existed upon the premises; that in fact Book had already entered upon the land, and was at that time, by a well, extracting oil therefrom; that she executed to Book a lease for the term of three years, with the privilege of a renewal of five years, for the annual rental of one hundred dollars, payable quarterly in advance, with permission to the lessee to remove, at the termination of the lease, such buildings as he might have erected. It is then alleged that the defendant took an assignment of this lease from Book and entered into possession of the property under the lease “with knowledge of the terms thereof.’’ Then follow allegations of the discovery of the true condition, and of the fraud of Book after two years had expired and two years’ rent had been paid, the service of notice upon Book and upon the defendant receiver, the. rescission of the lease because of its fraudulent procurement, and the continued pumping of oil by the defendant after such notice.

Trial was had before the court without a jury. The court found in accordance with the allegations of the complaint, decreed a cancellation and annulment of the lease, gave damages to plaintiff in the sum of $4,070, and enjoined defendant from operating the oil well and removing therefrom any of the tubing, machinery, tanks, and other appliances.

Treating that phase of the action which deals with the rescission and cancellation of the lease for the fraud of Book, the complaint is radically defective in failing to allege that the defendant took with knowledge or notice of the fraud. It is not sufficient, as respondent argues upon this point, that the evidence in the case shows constructive knowledge on the part of defendant through notice and knowledge of facts sufficient to put a prudent person upon inquiry. The difficulty is in the complaint itself, which nowhere avers such notice or knowledge. So far as the pleadings go, plaintiff by her absence of averment has placed the defendant in the