Embree Uranium Co. v. Liebel

MUSSELL, J. This is an action to recover the purchase price paid by plaintiff partnership for mining property in Kern County. Plaintiff alleged a common count for money had and received in the sum of $40,000 and the case was tried on that cause of action. Defendants appeal from the judgment rendered in favor of plaintiff and contend that plaintiff failed to comply with the applicable rules of law relating to rescission so as to furnish the foundation for the common count of moneys had and received.

In the summer of 1950 the defendants asked for and obtained permission from Mr. and Mrs. Flood to prospect on real property owned by the Floods in Kern County. Defendants then commenced prospecting, drilling, blasting and mining on the property, and on July 2, 1951, filed a notice of location of the “Unip Mine,” most of which was located on the Flood property. Defendants shipped ore from the premises with the knowledge and consent of the Floods and without any claim being made by them for royalties or to any of the proceeds received by the defendants for such ore.

In July, 1954, L. G. Embree, one of the members of plaintiff partnership, became interested in the mine and commenced negotiations for its purchase. These negotiations resulted in an assignment by defendants to plaintiff of the Unip mine and four other adjacent claims, on November 29, 1954, for a total consideration of $40,000. Upon defendants’ instruction and pursuant to prior negotiations all of the $40,000 consideration was paid for the Unip mine and no, or nominal, consideration was paid for the other claims, Unip Numbers 2, 3, 4 and 5, which were not on the Flood property and were located on or about August 10, 1954. There was testimony to the effect that these other claims were “thrown in for good measure” and that no development work was performed on them.

Two separate assignments were executed by defendants on November 29, 1954, one describing the Unip mine and the other Unip mining claims Numbers 2, 3, 4 and 5. Each assignment contains, in part, the following language:

“Assignors hereby covenant with Assignee that said mining claim is free from all encumbrances, and do hereby agree to warrant and defend the same to said Assignee against the claims and demands of all persons whomsoever.”

Immediately after having purchased and paid for the Unip mine, members of plaintiff partnership went to see Mrs. Flood and obtained from her a written agreement, dated [829]