Gerhard v. Stephens
| Decision Date | 12 July 1966 |
| Docket Number | KENNEDY-WEBER |
| Court | California Court of Appeals Court of Appeals |
| Parties | Joseph M. GERHARD, Plaintiff and Appellant, v. Mary STEPHENS et al., Defendants and Respondents.OIL COMPANY, Inc., a corporation, Plaintiff and Appellant, Joseph M. Gerhard, Defendant, Respondent and Appellant, v. Mary STEPHENS et al., Defendants and Respondents. Ira S. SOLOMON, Administrator with the Will Annexed of the Estate of Daisy Liederman, deceased, and Josephine C. Dannebaum, Plaintiffs and Appellants, v. Mary STEPHENS et al., Defendants and Respondents. Herbert METTLER, Executor of the Estate of Charles H.W. Brandt, Deceased, Plaintiff and Appellant, v. Mary STEPHENS et al., Defendants and Respondents. Civ. 22281-22284. |
David B. Fyfe, San Rafael, for appellant in Civ. 22281.
Sullivan, Roche, Johnson & Farraher, Vincent J. Mullins, Daniel H. Dibert, San
Francisco, for appellants in Civ. 22282-22284.
Philip T. Boyle, Bruce A. Richardson, Wyckoff, Parker, Boyle & Pope, Watsonville, for Mary Stephens and others.
C. Ray Robinson, Merced, Duane W. Dresser, San Francisco, for George Frusetta and others.
J.T. Harrington, Salinas, for James G. Irvine and others.
Arthur R. Albrecht, San Francisco, J. Carter Perkins, Washington, D.C., Michale Klynn, McCutchen, Doyle, Brown, Trautman & Enersen, San Francisco, for Shell Canadian Exploration Co.
Richard J. Archer, Robert D. Raven, William R. Berkman, Morrison, Foerster, Holloway, Clinton & Clark, San Francisco, Stefan A. Riesenfeld Berkeley, of counsel, for Shell Oil Co.
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Appeals from judgments in favor of defendants in four quiet title actions consolidated for trial. Identical findings of fact, conclusions of law and judgments were entered in each action. 1
1. Were the interests claimed by plaintiffs in section 31 abandoned?
2. Did defendants gain title by adverse possession?
3. Effect of action 1870.
4. Effect of actions 5362 and 5591.
5. Is action 6021 a "Class Action"?
6. Laches, statutes of limitation and estoppel.
7. Alleged bad faith of Shell Oil Company.
8. The mortgages.
History of the Title of the Mineral Estate Underlying Section 31
Plaintiffs claim to own certain fractional undivided mineral interests in section 31, township 16 south, range 11 east, Mount Diablo base and meridian in San Benito County as successors to certain stockholders of The Ashurst Oil and Land and Development Company (Ashurst) and the California Oil Products Company (COP). Defendants (other than Joseph Gerhard) claim title as successors in interest of Antonio Frusetta (Frusetta) and Warren Cornwell (Cornwell) and through adverse possession and certain decrees and judgments hereinafter discussed.
The history commences with the ownership of the entire Syncline Ranch by Robert, Mark and Mary Ashurst. On November 22, 1905 they conveyed it to L.J. Abrams (Abrams) and C.H.W. Brandt (Brandt). These two men with Charles M. Weber II (Weber) formed the two corporations above mentioned. Abrams and Brandt conveyed the mineral estate under one portion of section 31 to Ashurst and the balance of the mineral estate under that section to COP. Ashurst drilled three unproductive wells on section 31 and then did no more drilling. COP did no drilling.
On November 30, 1912 COP and on February 27, 1915 Ashurst forfeited their charters for nonpayment of taxes. Thereby the stockholders of the respective companies succeeded to the legal title of their corporations in the corporate property. (See Capuccio v. Caire (1922) 189 Cal. 514, 518, 209 P. 367.) The court found that by these forfeitures the respective stockholders became the owners of undivided fractional shares in the mineral estates underlying section 31 in proportion to the shares of stock which they owned. Abrams and Brandt as a partnership, and Abrams and Brandt individually were stockholders in the corporations. Thus, when the charters were forfeited the situation of Abrams and Brandt was as follows: As a partnership they owned the surface estate of Syncline Ranch and a fractional interest in the mineral estate, and as individuals they owned separate fractional interests in the mineral estate.
In 1917 Brandt brought a quiet title action in San Benito County (No. 1870) in which the judgment quieted the title of Abrams and Brandt as a partnership in the surface rights of the Syncline Ranch and in the fractional interests in the mineral estate to which the partnership had succeeded as stockholders, and decreed the fractional interests of Abrams and Brandt individually in the corporate property to which they had succeeded respectively as stockholders by the corporate forfeitures. It then stated that subject to the trusteeship for liquidation of the directors-trustees of the corporations and the lien of certain mortgages the named shareholders became on the dates of dissolution the "coowners" of the indicated fractional shares of the corporations' titles to the real property. Plaintiffs are successors in interest of some of the stockholders found to be such in that action.
On August 8, 1919 Brandt filed an action (No. 13948) in San Joaquin County for a partnership accounting. It was there determined that the partnership interest in section 31 and the other lands of the Syncline Ranch including an undivided 114,811/366,201 3/4ths of the property granted to Ashurst and an undivided 199,500/503,000ths of the property granted to COP be sold. The court included in its decree a copy of the "Decree of Foreclosure of Mortgage" in Hollister Savings Bk. v. Brandt, Abrams, Weber, Helen M. Kennedy and certain named others in which latter decree the court foreclosed the mortgage given by Abrams and Brandt to the Hollister Bank prior to the conveyances to Ashurst and COP, and order the whole of the Syncline Ranch sold to pay the amounts found due under the mortgage. In the foreclosure action the court found that the interests of Weber, Helen M. Kennedy and the other defendants therein were subordinate to the lien of the mortgage. The decree in action 13948 then stated that Brandt paid the bank the amounts due on the mortgage, and an assignment of the note, mortgage and judgment was made to J.H. Mettler "merely a name for Brandt, whose son-in-law he was and is." The commissioner in action 13948 sold and conveyed the partnership interest in the ranch, the mineral rights, and the purchase mortgage and debt, to Brandt's nephew, Gerald C. Halsey. Halsey then, in 1924, conveyed to Frusetta and Cornwell, the "whole" of section 31 and also the Abrams and Brandt partnership interest in Ashurst and COP, subject to the 1910 deeds to Ashurst and COP. From the purchase price of the Halsey deed the purchase money mortgage held by Brandt was paid off.
On November 5, 1938 a decree of distribution in the Frusetta Estate distributed a one-half interest in section 31 to George Frusetta and Frank E. Frusetta. No mention was made of the mineral interests as such. On June 14, 1947, a decree of distribution in the Cornwell Estate distributed to his heirs, defendants Mary Stephens, Maida DiFiore, Katheryn O'Donnell and Jessie Lee Irvine, the other undivided one-half interest in section 31. The grant was limited to a life estate only, with remainder over to their surviving issue. The mineral interests as such were not described in the decree of distribution.
At the time of the sale in action 13948 Frusetta was a lessee of the Syncline Ranch. Then and at all times thereafter the predecessors of defendants occupied the ranch as a cattle ranch. Certain oil and gas leases were entered into. These will be hereinafter discussed. No wells were sunk until 1956. In July of that year the Shell Oil Company struck oil on the Ashurst portion and in March 1957 on the COP portion. The discovery of oil caused Gerhard to investigate titles. He and one Fyfe then contacted such heirs of the original stockholders as they could find and either obtained assignments of their rights from them or joined them as plaintiffs in these actions.
Plaintiffs concede that the surface estate and 114,811/366,201 3/4ths interests in the mineral rights originally owned by Ashurst and the 199,500/503,000ths interest in the mineral rights originally owned by COP (all of which interests were originally owned by the Abrams and Brandt partnership), which are not involved in this litigation, belong as follows: Frank and George Frusetta, an undivided one-half interest; Maida DiFiore, Katheryn O'Donnell, Mary Stephens and Jessie Lee Irvine, an undivided one-eighth life estate each in the other one-half and the remainder in that one-half, upon their respective deaths, in their respective child or children, the unknown remainderman defendants. 2 , 3
The court found in pertinent part: That section 31 is a part of the Syncline Ranch in San Benito County, consisting of approximately 4,600 acres; that when Robert, Mary and Mark Ashurst conveyed the ranch to Brandt and Abrams, the purchase price was $27,500 of which $10,000 was paid in cash and the balance of $17,500 was secured by a purchase money mortgage; that on March 24, 1910, Abrams and Brandt conveyed to Ashurst "All petroleum, coal oil, naptha, asphalt, maltha, brea, bitumen, natural gas and other kindred substances and deposits and rocks, gravels or other formations containing or yielding any of said substances in, upon or "under" lot No. 8 and the west one-half of the southeast one-quarter of section 31, township 16 south, range 11 east, Mount Diablo Base and Meridian, "together with the full, free and perpetual right and privilege to enter in and upon said parcel of land"; and that on October 28, 1910, Abrams and Brandt conveyed to COP the same type of mineral interests as described in the conveyance to Ashurst "under all of Section Thirty-one * * * save and except Lot...
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