Majority
These two actions were consolidated for trial: Plaintiff Brooks commenced the first action above mentioned and sought to obtain a judgment that he is entitled to possession of 1 % acres of land, as lessee under an oil lease, and to oil produced from an oil well thereon. Thereafter plaintiff Davis joined as a party plaintiff in that action and alleged that she is the owner of and entitled to the mineral rights in said land, subject to said oil lease held by Brooks as lessee.
In the second action above mentioned, plaintiffs Davis, Wood, Jackson, Miller, Wolver, Marks and Brooks sought to compel the trustee, under a trust deed, to execute partial reconveyances of mineral rights in four l^-acre parcels of land. (One of these parcels is the parcel referred to in the first action.) In both actions, the plaintiffs sought a declaration by the court as to whether there had been a legal substitution of trustee under the trust deed.
Judgment in the first action was that neither plaintiff had any interest in said 1% acres of land; and that defendants Independent Exploration Company and Rothschild Oil Company are the owners of the exclusive right to remove oil from said land. Judgment in the second action was that none of the plaintiffs is entitled to any reconveyance of any part of said four parcels of land; that none of the plaintiffs has any interest in said land; and that defendants Moore are owners of and entitled to possession of all said four parcels of land, subject to the exclusive right of defendants Independent Exploration Company and Rothschild Oil Company to remove oil therefrom. Plaintiffs appeal from the judgments.
' In 1938 Mr. and Mrs. T. M. Frew, Jr., conveyed by grant deed about 211 acres of land to LeRoy Harrod for the agreed price of $3,000. At the time of said transaction, and as security for the payment of $2,900, the unpaid balance of the purchase price, Mr. Harrod and his wife executed a trust deed covering said land, which deed was recorded on August 31,1938. Under that trust deed, the Harrods were the trustors, T. M. Frew, Jr., was the beneficiary, and the Citizens Title Company was the trustee. The land was community property of the Harrods.
The trust deed, above referred to, provided in part as follows: “It is expressly agreed that Citizens Title Company, Trustee, herein, shall be and is hereby authorized at any time during the life of this Deed of Trust, provided no default shall have been declared thereunder, to execute and deliver to the parties entitled thereto, Partial Eeconveyance of the property hereinabove described in parcels of five (5) or more acres, the same to be reconveyed upon payment of $17.50 per acre.” In February, May, June and August, 1939, the trustee executed partial reconveyances of the land described in the trust deed.
On November 4, 1939, Mr. Frew, the beneficiary under the trust deed, signed a document which is as follows:
“Substitution op Trustee
“Whereas, A Trust Deed was executed on August 25,1938, naming the Citizens Title Company, a California Corporation, as Trustee, and LeEoy Harrod and Euth H. Harrod, husband and wife, as Trustors, and T. M. Frew, Jr., as Beneficiary, which Trust Deed was recorded in Book 16033 at Page 105 of Official Eecords of Los Angeles County;
“Now Therefore, A. J. Bankin, is hereby substituted for said Citizens Title Company, a California Corporation, as Trustee in said Trust Deed.
“This substitution is made pursuant to the provisions of Section 2934A of the Civil Code.
“In Witness Whereof the said T. M. Frew, Jr., the Beneficiary under said Trust Deed has caused his name to be affixed hereto this 4th day of November, 1939.
T. M. Frew Jr.
T. M. Frew, Jr.”
On said November 4th Mr. Frew acknowledged before a notary public that he executed said document. Mr. Frew •testified that after he signed the document he apparently handed it back to Harrod; before he signed the document Harrod had called him and said that they would have to make a substitution of trustee, that it would be to their benefit to do it, that something was wrong in the trustee company; and he (Frew) agreed that they “would make A. J. Rankin— that it would be in his name.” Harrod testified that on December 13, 1939, he took said document to the Citizens Title Company, the trustee named in the trust deed; that when he requested the trustee to sign the substitution he delivered to the trustee a letter, signed by him, which was was as follows (Exhibit F) :
“December 13, 1939
“Citizens Title Company,
354 South 'Spring Street,
Los Angeles, California.
‘ ‘ Gentlemen:
“We enclose herewith Substitution of Trustee in duplicate in the Frew matter, which please have the proper officers of your company sign on the page marked, ‘receipt,’ and return one copy to us.
“Thank you.
Very truly yours,
LeRoy Harrod ’ ’
He testified further that after the trustee had.signed the substitution he took the original document to "his (Harrod’s) office and delivered it to Rankin; that on December 18, 1939, he sent the said document, by mail, to the county recorder for recording. Attached to said document, entitled “Substitution of Trustee,” there is another document entitled
“Receipt
Receipt of a copy of the attached Substitution of Trustee is hereby acknowledged and we hereby consent thereto.
Dated: Dec. 13th, 1939.
Citizens Title Company By L. A. Troutman
Secretary.
(Seal of Citizens-
Title Company) ’ ’
The “Substitution of Trustee,” with the trustee’s receipt attached, was recorded on December 27, 1939, in the office of the Recorder of Los Angeles County. Harrod testified that he asked Frew if he would agree to substitute a trustee in place of the Citizens Title Company; he (Harrod) suggested that A. J. Rankin be made the trustee; Frew said that was agreeable to him; he (Harrod) then prepared said document herein referred to as a substitution of trustee; he took it to Frew, who was at Newhall, and Frew signed it; then Frew handed it to him and asked that he follow the necessary procedure to complete the substitution.
A. J. Rankin, who was named in the substitution of trustee, testified that in 1939 he was general manager of Harrod’s real estate office; he was requested by Harrod to ’ act as substituted trustee under the trust deed; on December 13 or 14, 1939, he (Rankin) mailed, by registered mail, copies of the substitution of trustee to Mr. and Mrs. Harrod; on March 26, 1941, in compliance with a written request by Mr. and Mrs. Frew, he executed a reconveyance of approximately 35 acres of land.
The court found that between November 4th and December 27, 1939, A. J. Rankin was duly substituted as trustee under the deed of trust.
Mr. Frew testified that in April, 1948, when he heard that oil had been discovered in Placerita, he notified Harrod that he wanted his money on the note and trust deed. Harrod then told Rankin that he was trying to obtain money with which to buy the trust deed. Rankin told Harrod that he would speak to Bishop Moore about the matter.
On May 26, 1948, Mr. and Mrs. Frew transferred the
On June 23, 1948, Mr. and Mrs. Moore, as lessors, and Independent Exploration Company, as lessee, entered into an oil lease covering about 158 acres of the land described in the trust deed. The land so leased included the four parcels of land involved herein. (On June 29, 1948, Mr. and Mrs. Moore acknowledged before a notary public that they executed the oil lease. On December 28, 1948, the vice-president and the assistant secretary of the Independent Exploration Company acknowledged before a notary public that said corporation executed the oil lease.)
On June 28, 1948, a notice of default and election to sell under the trust deed, signed by Moore, was recorded at his request. On November 6, 1948, Rankin, as trustee, sold the property to Moore, and on November 9, 1948, the said trustee delivered his trustee’s deed to Moore. Said deed was recorded on January 11, 1949. On May 16, 1949, the Independent Exploration Company started to drill the first oil well on the leased property. The well, which was completed on May 30, 1949, produced 660 barrels of oil per day. Thereafter said company drilled other oil producing wells on the property. On September 15, 1949, the Independent Exploration Company assigned an undivided 40 per cent of its interest in the oil lease to the Rothschild Oil Company. On September 25, 1949, those companies started to drill an oil well on the 114-aere parcel of land as to which a mineral deed had been executed in favor of Fordahl.
Fordahl died, and his interest in said parcel of land was. distributed by a decree of distribution to plaintiff Davis. The decree was recorded on September 28, 1949. On October 14, 1949, plaintiff Davis, as lessor, and plaintiff Miller, as lessee, entered into an oil lease covering the parcel of land to which plaintiff Davis held a mineral deed. On October 17, 1949,. plaintiff Miller assigned a one-third interest in said oil lease to plaintiff Marks and a one-third interest to plaintiff Wolver. On October 20, 1949, plaintiff Wood, as lessor, and plaintiffs Miller, Wolver and Marks, as lesse'es, entered into an oil lease covering the two parcels of land to which plaintiff Wood held a mineral deed. On September 27, 1949, plaintiffs Jackson, as lessors, and plaintiff Marks, as lessee, entered
Lessee Brooks, preparatory to drilling for oil upon the land to which Davis held a mineral deed, caused a survey to be made of that land on the morning of said October 22d, and at that time he placed a stake thereon indicating the location of the proposed well. In the afternoon on said day, it appears that some of the defendants erected a gate across the road which Brooks had used in going to said parcel of land. On October 25, 1949, Brooks, with drilling equipment, sought to enter upon said land by using that road, but a guard refused to open the gate. Thereafter Brooks made demands upon defendants that he be permitted to use said road and to go upon the land, but the demands were refused. The Brooks action herein was commenced on November 1,1949, and the Davis action was commenced the following day.
Appellants contend that the statute (Civ. Code, § 2934a) authorizing the substitution of a trustee is not applicable to the trust deed involved herein; that the purported substitution of A. J. Rankin as trustee was not made in compliance with the provisions of the statute; and that the sale to Bishop Moore by said purported trustee was void. That section provides in part: “The trustee under a trust deed upon real property given to secure an obligation to pay money and conferring no other duties upon the trustee than those which are incidental to the exercise of the power of sale therein conferred, may be substituted by the recording in the county in which the property is located of a substitution executed and acknowledged by all of the beneficiaries under such trust deed, or their successors in interest.” Appellants argue that the trust deed herein confers a duty upon the trustee which is not incidental to the exercise of the power of sale conferred therein, in that, the trustee is authorized to make partial reconveyances of the property in parcels of five or more acres upon the payment of a certain amount of money. They also argue that the purported substitution of
The substitution of trustee was made about 9 years before the land was sold by the substituted trustee. (The substitution was made in December, 1939, and the sale made in November, 1948.) About a year after the trustee’s sale, and about five months after oil had been discovered by the defendant oil companies on the 158 acres of land described in the trust deed, the appellants Miller, Wolver, Marks and Brooks entered into oil leases with appellants Davis, Wood and Jackson (who held mineral deeds), or became assignees of oil leases made by them, covering the five acres of land involved herein. Within a few weeks after becoming such - lessees, the appellants commenced these actions alleging invalidity of the substitution of the trustee. The evidence shows that the new trustee accepted the substitution; that the original trustee consented in writing to the substitution; that the beneficiary stated in writing that he substituted a new trustee; that LeRoy Harrod, one of the trustors and the husband of the other trustor, prepared the document referred to as the substitution of trustee, personally presented it to the beneficiary for
Appellants also assert that the Harrods were obligated to deliver a marketable title to. the mineral rights. The agreements to sell mineral rights were made after the trust deed was recorded on August 31, 1938, and they recited that they were subject to conditions, restrictions, rights, and rights-of-way of record. Also, as above shown, the statement by the real estate commissioner on the reverse side of the agreements recited that the land was encumbered by the trust deed. The mineral deeds recited that they were subject to “Eights and/or Eights-of-way of record. ’ ’ The evidence was sufficient to support the finding that none of the appellants had any interest in the land. The court also found that there was no collusive agreement by Harrod, Rankin, or Moore for the purpose or with the intent of depriving any of the appellants of his interest in the land. It appears that the evidence was sufficient to support that finding.
Appellants also contend that the defendant oil companies were not bona fide purchasers of the oil lease from the Moores without notice of the rights of the purchasers of the mineral rights. The court found, upon sufficient evidence, that the oil companies purchased the oil lease without notice of any equity claimed by any of the appellants.
By reason of the above conclusions, it is not necessary to discuss the other contentions of appellants.
The judgments are affirmed.
Vallée, J., and Vickers, J. pro tem., concurred.
A petition for a rehearing was denied March 18, 1952, and appellants’ petition for a hearing by the Supreme Court was denied April 24, 1952.
Cases cited
- Pacific States Savings & Loan Co. v. North American Bond & Mortgage Co. 37 Cal.App.2d 307 p. 482, p. 485