Beam v. Dugan

NOURSE, P. J. Plaintiffs sued to quiet title and for an accounting, claiming under a sale and two assignments of portions of a landowner’s royalty in oil and gas aggregating one per cent of the total royalty payable to their grantors. Defendants had judgment, and the plaintiffs appeal.

At the time of the conveyances to plaintiffs there was an outstanding oil and gas lease on the property, which had nineteen years yet to run, and which is referred to herein as the Dumas community lease. This lease was later surrendered when the oil well had proved dry,.and a new lease [493]was executed under which a new well was sunk a short distance from the other and oil was discovered in paying quantities. Plaintiffs claim, as grantees of the landowner, a share in the profits of the land, while the defendants claim that their rights were limited to a share of any proceeds which might have been received under the Dumas community lease only.

The pertinent portions of the conveyances, or assignments, under which the plaintiffs claim read: “And whereas, S. K. Beam and Nora B. Beam, husband and wife, desires to purchase, and does hereby purchase a % of 1 per cent (1%) landowner’s royalty in said above described property.

“Now, therefore, we ... do hereby sell, transfer, convey, assign and set over to the said S. K. Beam and Nora B. Beam . . . out of our landowner’s royalty, an undivided % of 1 per cent (1%) in and to any and all oil, gas or other hydrocarbon substances produced or saved from any wells to be drilled upon any of the land described in the lease heretofore mentioned ... it being particularly understood and agreed that the royalty interest, herein assigned, affects all the land mentioned in said lease and is not limited to the land of said Dugans.” (Emphasis ours.)

The cause was before this court on a former appeal. (132 Cal. App. 546 [23 Pac. (2d) 58].) It was then determined that plaintiffs’ interest was not confined to the Dumas lease, but that they had secured from the landowner “such an interest in the royalties paid under the second lease as would entitle them to an accounting and an adjustment of their rights.” When the cause was heard for the second time the trial court declined to follow this direction and found that plaintiffs had no interest whatever in the proceeds paid under the second lease, and were not entitled to an accounting. On this appeal we will disregard all the points raised by appellants except that of the “law of the case”.