Clark v. Richfield Oil Co.

I dissent. As was shown by their amendment to their answer to the complaint, the most important and, in fact, the controlling defense relied upon by the defendants in the action was that the plaintiffs "sold to said William H. Stevely, the said premises described in said lease, and all of the rights of the plaintiffs in and to said land, and in and to said lease, and all of the royalties and proceeds of the sale of gas, oil and gasoline extracted from said premises, and that thereafter said plaintiffs had no right, title or interest in or to said land, or the oil or gas or gasoline to be extracted therefrom, or in or to said lease, but held only the bare legal title to said land. . . ."

In reality, the only consequential and disputed issue of fact in the case was whether, on the sale of the property in question, the rights which had already accrued under the terms of the lease, or which rights might thereafter accrue to the lessor, who then was the owner of the property, were reserved to the plaintiffs; or whether such rights were, by the parties to the agreement, intended to be transferred to the purchaser, who is now one of the defendants.

But, although on the trial of the action much evidence was presented relating thereto, the trial court made no direct, or express, finding of fact on that issue — the one essential, determinative, issue in the case. It is conceded that the nearest approach made by the trial court to a finding of fact thereon was that the assignees of the lease "wrongfully paid" to Stevely (the purchaser) the royalties which should have been paid to plaintiff. The entire finding of fact, in which the words "wrongfully paid" were used, is as follows:

"That as soon as plaintiffs discovered that the royalties were being paid to defendant Wm. H. Stevely by the National Gas Syndicate, a copartnership composed of George D. Nordenholt, H.P. Taylor, E.L. Petitfils, and R.D. Clark, plaintiffs objected and demanded that said royalties be paid to them, but their demands were ignored and said National Gas Syndicate, a copartnership composed of George D. Nordenholt, H.P. Taylor, E.L. Petitfils, and R.D. Clark wrongfully paid, between the dates of October 1st, 1926, and June 1st, 1927, to defendant, Wm. H. Stevely, the sum of Two Thousand, Three Hundred Eighty-one Dollars and Twenty-two Cents ($2,381.22), and said money should have been paid to the plaintiffs."

To my mind, the latter finding is insufficient as a declaration, either expressly or by implication, of the views of the trial court with reference to the vital fact pleaded by the defendants in their answer to the complaint.

In 24 California Jurisprudence, page 940 et seq., where many authorities are cited in support of the rule there stated, it is said that "it has been repeatedly affirmed that where a court renders a judgment without making findings upon all materialissues of fact, the decision is against law, and constitutes ground for granting a new trial in order that the issues of fact may be determined, or for reversal upon appeal, provided it appears that there was evidence introduced as to such issue and the evidence was sufficient to sustain a finding in favor of the party complaining. . . ." No question is here raised as to the sufficiency of the evidence to sustain a finding of fact in the instant case in favor of the appellant.

Nor am I able to accept the case of Warden v. Stoll,210 Cal. 374, 376 [291 P. 835, 836], cited in the prevailing opinion herein, as authority in substance that the finding made by the trial court to the effect that the assignees of the lease "wrongfully" paid the royalties which became due under the lease to the purchaser of the property, constituted an "inferential finding" on the issues of whether the rights and the royalties, which theretofore had been reserved to the lessor, passed to the purchaser of the property on the sale thereof. An examination of the record on appeal in the case to which attention has been directed discloses the fact that the action was one in the ordinary form to quiet title to certain real property; that regarding the tendered issue of ownership thereof, the only allegation of the complaint was that the plaintiff "is now and has been for a long time hitherto the owner in fee simple as her separate property", etc.; and that the answer of the defendants therein consisted of a specific denial of that allegation. Neither in the complaint nor in the answer was any issue raisedregarding the validity of a tax deed, which appears to have constituted the basis of plaintiff's asserted ownership of the property. In such a situation, regarding the point that the trial court had failed to make a finding of fact on a "material" issue, in discussing the question thus raised, the Supreme Court said:

"Appellant contends that the trial court failed to make any finding in reference to the validity of the tax deed presented by her, and contends that this amounts to a failure to find on a material issue. Such a finding, however, is not essential. The finding that plaintiff's claims are without merit is an inferential finding on this point. . . ."

Considering the question of the omission of such an express finding in that case, that is, as to the validity of a tax deed, it is clear that the tax deed in question was merely an item of evidence of the title of the plaintiff, and that as far as the validity of the tax deed was concerned, in that regard it occupied no different position in its right to be made a part of the findings of fact in the case than did any other relevant evidence. For example, supposing that the case of the plaintiff, instead of having depended upon a tax deed, had depended upon a statutory adverse possession of the property: In such circumstances, it is clear that it would not have been necessary that the facts tending to prove the genuineness, or even the existence, of tax receipts going to show the payment of taxes by the plaintiff, or his predecessor in interest, or the possession of the property by the plaintiff, during the statutory period, should appear among the express findings of fact made by the trial court.

In the instant case, this court is confronted with an entirely different situation. The fact omitted from the findings made by the trial court is not only material, but is indispensable as far as forming a basis for the conclusions of law and a judgment founded thereon is concerned. It was the essential and ultimate fact upon which, not only the cause of action of the plaintiff depended, but as well upon which rested the defense of the several defendants.

From a technical standpoint, it is also apparent that a statement that the royalties in question were "wrongfully" paid to the purchaser of the property, is not a finding of fact, but constitutes a conclusion of law. Whether the payment of the royalties to such purchaser was within the rights of the other defendants to the action; or, in other words, whether such a payment was "wrongful", was the ultimate question of law to be determined by the trial court. The placement of such a conclusion of law within the findings of fact could not have the effect of changing its character.

In the prevailing opinion herein, stress is repeatedly laid upon the fact that the purchaser of the property was not placed in possession thereof. How could he be? It was an impossibility. Prior to the sale thereof, the owner of the property had leased it to third persons and had placed them in its possession. At the time the sale was made the lease was still in full force and effect; and consequently the owner himself of the property was neither entitled to its possession, nor able to place his grantor or any other person in possession.

A petition for a rehearing of this cause was denied by the District Court of Appeal on December 12, 1932, and an application by appellants to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on January 12, 1933.