Smith v. United Crude Oil Co.

■ WILBUR, J.

Plaintiff and defendant are the successors of the lessor and lessee, respectively, in a twenty-year lease executed November 27, 1900, of twenty acres of land for the development of oil, reserving a royalty therefrom. On May 6. 1910, defendant sublet for five years two pieces of land, 150 by 250 feet each, in the northwest and northeast corners, respectively, of said twenty acres, to the Associated Supply Company, for the erection of the necessary buildings and the carrying on of an oil well supply business thereon, reserving a rental of one hundred dollars per month. Plaintiff brought this action, alleging that his predecessors were the owners of “the north half of the southeast quarter of the northeast quarter of section 2, township 11 north, range 24 west, S. B. B. & M. in Kern county, California,” and that “said owners as lessors executed to A. C. Leibdedofer and E. H. Loveland, as lessees,

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that certain indenture of lease bearing date on said day, wherein and whereby said lessors leased, let and demised to the said lessees the said land for the term of twenty years from and after said day, for the purposes in said lease set forth, and thereupon said lessees entered into and upon said land and took possession thereof under said lease”; and set forth a copy of said lease and made the same a part of his complaint. Plaintiff alleged the subletting to the Associated Supply Company “-for a purpose not contemplated” by the provisions of the lease, claiming that the execution of the sublease created an encumbrance upon the land, in violation of a covenant of the lease, and, because of said encumbrance, demanded a decree forfeiting said lease, an accounting for royalties, and “for all funds . . . received from the Associated Supply Company, . . . for the use of any surface rights of said premises,” and for “judgment for all sums found due him by said accounting.” The defendant did not deny the collection of the one hundred dollars per month rental, but in answer to the claim of forfeiture alleged facts showing that plaintiff was estopped from claiming a forfeiture, by reason of his own delay in bringing the proceedings after knowledge of the contract between the defendant and the Associated Supply Company, during which time defendant had spent more than fifteen thousand dollars in further development of the property, plaintiff having during that period received the rental reserved by him. At the trial plaintiff abandoned his claim for an accounting for royalty, and merely proved the existence of the sublease. The court rendered judgment for plaintiff for the full amount of the rents ($5,843.20) collected by the defendant from the Associated Supply Company, and refused to declare a forfeiture of defendant’s lease on the ground of estoppel by reason of plaintiff’s acquiescence in the contract of the Associated Supply Company. Defendant appeals.