Danker v. Lee

Decision Date15 December 1955
Citation137 Cal.App.2d 797,291 P.2d 73
CourtCalifornia Court of Appeals
PartiesErnest L. DANKER and Gertrude Danker, Plaintiffs and Respondents, v. William Y. LEE et al., Defendants and Appellants. Civ. 5097.

Jesse Bach Porter, Los Angeles, for appellants.

Roy J. Brown, Long Beach, for respondents.

GRIFFIN, Justice.

On March 26, 1952, plaintiffs and respondents entered into a conventional form of oil and gas lease of a 2-plus acre parcel of property with defendant and appellant William Y. Lee. The lease, by its terms, in paragraph 3 required lessee to '* * * start the drilling of a well for oil within 90 days from the date of this agreement, and to continue the work of drilling such well, after commencing the same with due diligence until a depth of 6,000 feet has been reached, unless oil is discovered in paying quantities at a lesser depth, or unless such formations are encountered at a lesser depth as will indicate to the geologist of the Lessee that further drilling would be unsuccessful.'

Paragraph 19 thereof provides that 'Upon the violation of any of the terms or conditions of this lease by the Lessee and failure to remedy the same within ninety (90) days (except as to commencement of operations for the drilling of the first well and as to the payment of royalties, in each of which cases the period shall be ten days) after written notice from Lessors so to do then at the option of the Lessors this lease shall forthwith cease and terminate and all rights of said Lessee in and to said land shall be at an end.'

By August of 1952, defendants drilled the well to a depth of 4,758 feet. At that depth the well having penetrated formations which appeared to the defendants to have been potentially producible, the defendants caused casing to be set and cemented in the hole and the well was equipped with pumping equipment perparatory to an attempt to produce oil from it. From that time until about the middle of January, 1953, the defendants worked sporadically on the well in an effort to seal off the entry of water into the bore hole. During the intervals in which remedial operations were not in process, attempts were made to produce the well by means of conventional pumping equipment. Although the well produced a considerable volume of fluid, the salable oil extracted was practically nill. Only $7.94 was received by the defendants for oil sold during the month of October, $155.73 for oil sold in November, and nothing in December. The fluid from which the oil was extracted was hauled from the well by trucks. The cost of hauling alone was in excess of the value of the oil by $92.25 in October, $118.85 in November, and $37.63 in December. In addition to the moneys received from salvaged oil, as set forth above, the defendants also received a credit of $40 for oil salvaged by a vacuum truck firm, which had been engaged by the defendants to remove waste, mud and oil. The above figures represent all of the moneys received from the oil produced from the well.

About the 1st of February, 1953, the engine of the pumping unit, which had previously broken down on several occasions, finally was not repaired and was hauled away. Efforts to produce the well were not resumed after this breakdown except for some effort to seek another engine and to make certain tests, and the well stood idle from that time until the date of the trial on March 31, 1954.

On April 17, 1953, plaintiffs served upon the lessee a written notice of default reciting:

'* * * that you are in default in the performance of the terms and conditions of the Oil and Gas Lease executed by the undersigned, as lessors, and yourself, as lessee, * * *. Your default, among other things, consists of the following: * * *

'2. You have failed to continue, as required in paragraph 3 of said Oil and Gas Lease, the drilling of the well heretofore commenced on the leased premises until said well should be drilled to a depth of 6,000 feet (oil in paying quantities not having been discovered in the drilling of said well to its present depth.)

'3. You have suspended, and continue to suspend, drilling and producing operations on the leased premises, although no good cause therefor exists, as defined in paragraph 7 of said Oil and Gas lease * * *.

'You will please take further notice that the undersigned hereby demand: * * *

'2. That within ninety days from the receipt by you hereof, you recommence operations for the drilling of a well on said leased premises for the production of oil and/or gas therefrom, and that you thereafter diligently prosecute said operations until a well is drilled to a depth of 6,000 feet or oil in paying quantities is discovered at a lesser depth.

'The undersigned hereby elect, unless you comply with each of their demands as above set forth, to forfeit said Oil and Gas Lease and all of your right, title, and interest in and to said leased premises thereunder.

'Dated this 8th day of April, 1953.

(Signed) Ernest L. Danker

Gertrude Danker'.

Apparently the defendants did nothing about the well or on the lease following the service of said notice, except to occasionally check to see if gas was present in the casing, and in one instance to have a test made to determine the level of the fluid in the well hole. On August 27, 1953, plaintiffs filed this action to quiet title.

The complaint alleged, in addition to other claims, that under the terms of the lease, defendants agreed that within thirty days after the termination of the lease, they would remove all rigs and machinery, 'and so far as possible to fill and sump holes and other excavations' etc. The prayer of the complaint was that plaintiffs' title be quieted, for damages, and that an injunction issue against defendants from entering upon said lands for any purpose.

Plaintiffs secured an ex parte order, without the requirement of bond, restraining defendants from so entering upon said lands for any purpose, during the pendency of the action and requiring them to appear and show cause why an injunction should not issue accordingly.

By their separate answers, defendants denied generally the allegations of the complaint and alleged that they did commence drilling, and drilled, as alleged, to a...

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2 cases
  • May v. Shields
    • United States
    • Wyoming Supreme Court
    • June 24, 1964
    ...910; Hoover v. General Crude Oil Co., 147 Tex. 89, 212 S.W.2d 140, 142-143; Neff v. Jones, Okl., 288 P.2d 712, 716; Danker v. Lee, 137 Cal.App.2d 797, 291 P.2d 73, 76; and Hermon Hanson Oil Syndicate v. Bentz, 77 N.Dak. 20, 40 N.W.2d 304, In order to deal with all the defaults claimed by th......
  • Palladino v. South Coast Oil Corporation, G030939 (Cal. App. 11/3/2003)
    • United States
    • California Court of Appeals
    • November 3, 2003
    ...not forfeitures on account of the failure to pay royalties. (See e.g., Baldwin v. Kubetz (1957) 148 Cal.App.2d 937; Danker v. Lee (1955) 137 Cal.App.2d 797; Taylor v. Hamilton (1924) 194 Cal. 768.) This does not mean that an oil and gas lease cannot be forfeited for other reasons as In Mart......
1 books & journal articles
  • CHAPTER 9 DEFINING THE LESSEE'S COVENANTS TO DRILL AND DEVELOP A LEASE
    • United States
    • FNREL - Special Institute Drafting and Negotiating the Modern Oil and Gas Lease (FNREL)
    • Invalid date
    ...M. Kramer, Williams & Meyers Oil and Gas Law § 681.1. [193] Melancon v. Texas Co., 89 So. 2d 135 (La. 1956). [194] Danker v. Lee, 137 Cal. App. 2d 797, 291 P.2d 73, 5 O.&G.R. 313 (1955). [195] See Patrick H. Martin and Bruce M. Kramer, Williams & Meyers Oil and Gas Law § 681.3. [196] Id. [1......

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