Shell Oil Company, a Corporation v. George Frusetta

In 1951 appellant Shell Oil Co., hereafter Shell, leased from appellees certain lands situate in San Benito County, California, for oil and gas exploration. The leases contain a warranty by appellees that they own the lands in fee simple and will defend the title against any adverse claims and hold Shell harmless therefrom. There is also a provision stating that if appellees own a smaller interest than a fee simple their royalties will be reduced accordingly, and a provision that if any action shall be brought challenging appellees’ interest in the lands appellant may deposit the royalties accruing to the lands so challenged in a special bank account pending the final determination of said action. Shell entered into possession under the leases and was successful in producing oil and gas.

In 1957 a group of people filed six actions in the Superior Court of San Benito County, California, seeking judgments declaring them to be the owners of an interest in part of the leased lands. Shell and appellees were made defendants in the said suits. A dispute then arose between Shell and appellees as to whether the written leases accurately record their oral agreements with respect to the…