Embree Uranium Co. v. Liebel

• Court: California Court of Appeals
• Writing for the Court: MUSSELL; BARNARD, P. J., and GRIFFIN
• Citation: Embree Uranium Co. v. Liebel, 325 P.2d 516, 160 Cal.App.2d 827 (Cal. App. 1958)
• Decision Date: 26 May 1958
• Parties: EMBREE URANIUM COMPANY, a limited partnership, Plaintiff and Respondent, v. Frank LIEBEL, Virgil Liebel, Everet Beatty, Alberta Beatty, Louis Mannatt and Bonnie Mannatt, Defendants and Appellants, John C. Reaves, Intervener and Respondent. Civ. 5668.

Page 516

325 P.2d 516

160 Cal.App.2d 827

EMBREE URANIUM COMPANY, a limited partnership, Plaintiff and Respondent, v. Frank LIEBEL, Virgil Liebel, Everet Beatty, Alberta Beatty, Louis Mannatt and Bonnie Mannatt, Defendants and Appellants John C. Reaves, Intervener and Respondent.

Civ. 5668.

District Court of Appeal, Fourth District, California.

May 26, 1958.

Mack, Bianco, King & Eyherabide, Bakersfield, for appellants.

Di Giorgio & Davis, Bakersfield, for plaintiff and respondent.

Philip M. Wagy, Bakersfield, for intervener and respondent.

MUSSELL, Justice.

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 Nos. 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 Nos. 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 December 17, 1954, in which, after reciting that she owned the surface rights, she agreed to execute a lease to plaintiff on approximately ten acres for a period of five years, at a total rental of $500, the land to be used for a millsite and mining operations. This agreement further provides as follows:

'The lease will provide for additional five year extensions as long as the lessees require the property at same rental. In addition the lessees are to be given an option to purchase the said land at an agreed price in the event I sell the remaining land adjacent to the land covered by the lease.'

After securing this agreement, plaintiff partnership commenced mining operations on the Unip claims and continued their operations until about August 10, 1955, when they 'ran out of money' and 'production was not paying.' During this period plaintiff spent approximately $100,000 in mining and developing the claim, installing equipment thereon consisting in part of a hoist, a mill, balance mill, screens, crusher, concentrating tables, power plant and compressor. Plaintiff shipped and sold approximately $29,000 worth of ore from the Unip mine without any objection from the Floods and no demand for payment of royalties was made by them.

In late August or early September, 1955, the attorney for Mrs. Flood orally informed plaintiff's attorney that plaintiff was trespassing on her land and on September 7, 1955, she gave plaintiff a written one-month's notice to quit in which she stated that defendants were occupying the property without authority of the owner; that they entered the property under a so-called option dated December 17, 1954; that said option was without consideration and was terminated May 5, 1955, and that defendants have since occupied the premises under a tenancy at will.

On or about October 10, 1955, plaintiff entered into negotiations for a sale of the mine and an agreement of sale and purchase was obtained. However, plaintiff was informed by a title company that it did not own the mine and the sale was never accomplished. In this connection a land title examiner testified that he examined the title to the Unip claim...