Kejr v. Natural Resources, Inc.

VAN DYKE, P. J. —Plaintiff-respondent brought this action against defendant-appellant Mendocino Logging Company and defendant-appellant Construction Engineers, In[573]corporated, to quiet title to 40 acres of timber land in Mendocino County. The appeal is from a judgment decreeing that plaintiff is the owner of the property and quieting his title thereto. The complaint is in the usual brief form of an action to quiet title. Appellants’ answers denied the allegations of plaintiff’s ownership and affirmatively pleaded that they owned the timber on the land.

On September 27, 1948, six people, four of whom bore the name “Hopkins” and two of whom bore the name “Raderchak,” and all of whom were related, were the owners of the subject property. We shall refer to this group as “Hopkins.” On that day, and simultaneously, they executed two documents with 0. 0. Barker. One was a quitclaim deed and the other was a document called a holding agreement. The deed contained a statement that the interest thereby conveyed was subject to the holding agreement. The deed was recorded. The holding agreement was not. The trial court found on sufficient evidence that appellant Construction Engineers, Inc., had both actual and constructive notice of the existence and contents of the holding agreement at the time it now claims to have acquired title to the timber on the property by a contract of sale from Barker. Construction Engineers, Inc., later assigned its interest in the timber to appellant Mendocino Logging Company which, as the court found, also took with notice of the holding agreement.

The holding agreement begins by reciting that the parties have a mutual interest in the 40 acres described therein, and then continues to state the following: That it is desirable ‘ ‘ that no transfer of any interest which each of us may hold in the property be transferred or assigned without the mutual consent of all, ’ ’ including Barker; that Barker is to act as the representative of Hopkins in the performance of certain things which by the agreement he agrees to perform; that Barker is to accept a transfer of the property to him by deed and is to hold the transfer and deed for the following uses and purposes: (a) In his discretion to bring a suit to quiet title if needed, (b) If necessary, to engage the services of a surveyor to survey and cruise the land in order that he may be “in a position to effectively negotiate either resale of the premises, or if he deems it more desirable, agreements for sale of timber only without conveying the lands,” (c) To advance necessary expenses for surveys, quiet title actions or in any other manner other than by action, and to prorate to each of the owners the