Oil Drilling in Carbon Canyon's Chino Hills Portion, Part Five

It appears that the earliest oil well drilled on the Chino Hills side of Carbon Canyon took place in 1929 in the vicinity of today's Western Hills Oaks housing tract.  The well, called "Marie #1" was started by the Urmi Oil Company, which incorporated in October that year, though a Los Angeles Times article from late May noted that the firm was preparing to rig up its well, which was a wildcat (in a geologically unproven location) on a lease.  Who owned the land in question, though, was not stated.

The project hadn't progressed very far, however, when a problem ensued.  A Corona Courier article from early August 1929 reported that Urmi Oil filed a complaint in Los Angeles County Superior Court asking for an injunction against five men for "disrupting and damaging" their well.  It was stated in the piece that two of the men, Robert Rankin and Roy Harvey, were "placed in charge of the well without authority" and that damages of $1,000 were done as a result.  There was no explanation of who hired the two men or any other details, but it appears Urmi was in a lull on the project and someone, perhaps the property's owner, went ahead and hired a crew to continue drilling.

A clue to what happened with the project seems to come from a San Bernardino Sun article from April 1931, where it was reported that a San Bernardino County superior court judge issued a ruling concerning "titles of two ranches near Chino, one in Carbon canyon and the other in Soquel canyon." The defendants, who were on the losing end of Judge F.A. Leonard's judgment, were the Urmi Oil Company, General Petroleum Company (a well-known Los Angeles firm that had a project in Soquel Canyon), and George and Anna Marcell, as well as their Marcell Petroleum Company, Ltd.

The transfer of two properties in Carbon and Soquel canyons from George Marcell to John Schuh, as detailed in the San Bernardino Sun, 21 April 1931.  From newspapers.com.

From this article, it looks as if the Marcells were the owners of the two properties and then leased out portions of them to Urmi and General Petroleum.  It may be that the Marcells were the ones who hired the five men, against whom Urmi sought that injunction on the Marie #1, to further work on that well, perhaps because Urmi was lacking funding to continue with that work.  This seems borne out by the fact that later references to the well indicate that it was Marcell who drilled the well.

In another interesting sidelight, the Sun reported in June 1932 that Frank Creasey was arrested on a complaint filed by Urmi Oil Company, which charged that he stole over $7,000 worth of material from the Marie #1 well site.  Creasey answered that he had a signed order from George Marcell "authorizing him to take the oil well equipment from the Marcell company's leased property that was occupied by the Urmi Oil Co. He said Marcell owned the material in question."  Given that there was no further reporting on this incident, it can be assumed that the case was dropped and that Marcell had the legal right to remove the well equipment.

George Marcell, born in 1887, was a native of Brooklyn, New York (it was still an independent city when he was born, but became a borough of New York City when he was a small child) and remained there until his late twenties, working as a fruit company clerk and bank teller.  By the early 1920s, however, George and his family relocated to Los Angeles, settling in Hollywood, where he was a bonds dealer and banker.  Before the decade ended, Marcell became an oil operator, establishing the Marcell Petroleum Company.  The small firm had at lease one other oil project besides that Carbon Canyon well, this being out in the Playa del Rey area on the coast near Los Angeles International Airport (then called Mines Field.)  After losing his property in Carbon and Soquel canyons, Marcell continued in oil, as will be seen below, and also was the Vice-President of the Los Angeles Board of Public Utilities and Transportation in 1937 and resided in Beverly Hills before retiring to Pasadena.  Marcell died in 1978 at age 91.

The main owner of the two ranches became John E. Schuh, who was born in Hotzhausen, Bavaria, Germany in 1883.  Somehow, though, he migrated to Shanghai, China where he worked as a confectionery [cake] baker before taking a ship to San Francisco in 1915 and working in a German-owned bakery in the city before he moved to Palo Alto.  By 1923, Schuh had relocated to Long Beach, where he opened his own bakery in the city's downtown.  By the end of the Twenties, he expanded his business to include a cafe and it looks as if he operated his business there through the 1930s. In the early Forties he worked at the famed Ambassador Hotel on Wilshire Boulevard in Los Angeles.  Schuh, who married later in life, lived for a time in Chatsworth in the San Fernando Valley and for a longer stint in west Los Angeles, when he worked at the Ambassador, but returned to Long Beach for his remaining years and died after 1962.

Schuh owned his ranches for several years before arranging for a lease with the Carbon Canyon Oil Corporation.  In October 1938, the Los Angeles Times reported that the derrick was built and equipment being installed for a test well on the Schuh ranch, which was described as being 448 acres.  The site was said to have been "less than a mile north of a wildcat drilled by Marcell Petroleum nine years ago."  In addition, the article continued, "The Marcell hole was reported to have picked up sands at 1200 and 1600 feet, with oil and gas showings," this evidently providing enough encouragement and incentive to Schuh and Carbon Canyon Oil Corporation to give the area another shot.  Consequently, the new attempt was anticipated to hit commercial product between 1400 and 1600 feet down.

By early November, a date of the 15th had been selected to "spud in" the well, meaning to start actual drilling.  However, there were delays, and in late January 1939, the Times reported that Carbon Canyon Oil Corp. was readying the well, now called "Mills #1", and that the projected depth of hitting oil was now 1600 to 2000 feet.

In early April, the Times noted that John Hokom, whose efforts were detailed on this blog last year, began his work on 167 acres adjoining the lease of Carbon Canyon Oil Corp.  Meantime, the latter company was still trying to get its test well started and another delay pushed back the spudding to the 10th.  Once again, reference to George Marcell's 1929 test was made to show that there was some promise of oil to be located in the Carbon and Soquel canyons area and the paper alluded to the fact that there were four companies planning to drill in the area.

Finally, in early June, the Times noted that Carbon Canyon Oil Corp. finally began its test well drilling, a good eight months after it was supposed to begin work.  The depth was now stated to be 2000 feet.  Meanwhile, Hokom's well was reported to be a half-mile to the south, but twice as deep.

An article from the Santa Ana Register, 24 June 1939, discussing two oil projects on the 448-acre Schuh ranch in Carbon Canyon near where the Western Hills Oaks subdivision is now located.  From newspapers.com.

Then, a 24 June 1939 article in the Santa Ana Register revealed details about the Hokom/Schuh endeavors that the Times did not discuss.  Namely, even though Schuh foreclosed for his 448-acre ranch in the early Thirties against George Marcell and others, it turned out that the owner of the Carbon Canyon Oil Corporation was none other than Marcell.  Moreover, the Hokom well was on the Schuh ranch and the Los Angeles plumbing contractor spent $12,000 to acquire a 2 1/2% royalty interest from Schuh.  The article went on to state that Marcell had drilled a well nearby in 1929 and his newest effort "was started a month ago and a depth of 200 feet reached when [a] decision was reached to drill a deep test."

As was the case with the Urmi/Marcell well, however, John Schuh ran into financial problems quickly after starting his test well.  In December 1939, a foreclosure action was instituted against him by Oil Tool Exchange, Inc. on an October 1937 mortgage for a little over $15,000 payable over two years.  When only $2,500 of the borrowed sum was repaid, Oil Tool Exchange filed its foreclosure action.

Nearly two years later, in November 1941, the Schuhs filed their response and cross-complaint, acknowledging the note and the mortgage, but denying that they ever received the notice of the execution of those documents or that they got the money.

Instead, Schuh claimed that he had made an arrangement in June 1937 with the Louis C. Simmel Organization to extend up to $6,000 as a line of credit from an oil drilling project Simmel was engaged in at Kern County.  Then, Schuh maintained, Oil Tool Exchange made a secret arrangement with Simmel about its appropriating Schuh's debt to Simmel in lieu of monies owed to the company by Simmel and which the company sought to make good on in a September 1937 court filing!  

Further, Schuh argued that he "was in such financial difficulty that in order to protect his entire holdings from threatened involuntary bankruptcy proceedings" brought forth by Oil Tool Exchange, he and his wife agreed to execute the mortgage and note and paid $2,500 towards satisfying the terms.  The Schuhs prayed that the court would not only return the note and mortgage to them, allow the return of the $2,500 and give Oil Tool Exchange nothing, but asked for $15,000 in damages.

Finally, Schuh alleged that two documents involving a transfer of interests in the Kern County property to his wife and a quitclaim involving the property from the Schus' trust to themselves individually were, in the first case, a forgery and, in the second, a misrepresentation of what he thought was a lease, not a deed.  Schuh, however, could not prove the forgery allegation and the court found his argument on the quitclaim unfounded.

The trial court, in hearing the evidence, found that the situation was far more complex than argued by the Schuhs.  For example, the agreement with Simmel was unconditional and unlimited.  Moreover, the Simmels made arrangements to pay the Schuhs a 2 1/2% royalty for whatever was produced by the Kern County oil well and gave them a 20% interest in additional property for future development.

Moreover, it turned out that Oil Tool Exchange, Simmel and Schuh all worked with the same attorney, so that any claim by Schuh of trickery or malfeasance on the part of his partners was not demonstrated to the court, which also ruled that any allegations against the attorney were not relevant as points of law to the case.

After the trial court ruled against Schuh, he filed an appeal, but the appellate court upheld the lower court's determination in 1944, ending the matter.  The convoluted circumstances shown in the case revealing Schuh's financial distress probably explained how he lost his Long Beach bakery and cafe and took a job at the Ambassador Hotel.

The drilling of the Schuh well was clearly beyond his means, which is not an uncommon problem for would-be oil tycoons chasing black gold, especially in unproven areas like the Chino Hills portion of Carbon Canyon.  Its proximity to the mighty Olinda field convinced him, Marcell, Urmi Oil, Shelly Stoody, Homer May and others mentioned in this blog that there might be fortunes to be made, but they proved ultimately elusive.