Differding

This is an action instituted to establish the claim of appellant to a five per cent “over-riding royalty” clear of operating and maintenance expenses, in the oil, gas or other hydrocarbon substances produced from 120 acres of land described in a government oil lease in Kern County, California. The terms of the lease are similar to those usually found in government oil leases executed at about the same time. Counsel have assumed that the term “over-riding royalty” means a certain percentage of the gross production of an oil or gas producing property, payable to some person other than the lessor or those claiming under him. Respondent is the receiver in charge of the real property from which appellant claims her royalty.

The Gross Drilling Company was, in its inception, an organization possessing the characteristics of a “Massachusetts Trust”. The declaration of trust under which it was organized was apparently executed in December, 1923, and provided for the issuance of 1,000 shares or certificates of beneficial interest of the par value of $100 each. Its trustees were Rudolph Grossenbacher, Charles A. Differding, husband of appellant, and Harry E. Shepherd. In the minutes of the…