Elkins v. Townsend, 18612.

Citation296 F.2d 172
Decision Date17 November 1961
Docket NumberNo. 18612.,18612.
PartiesJ. B. ELKINS, Appellant, v. Laura Stell TOWNSEND et al., Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Roy M. Fish, Springhill, La., Frank M. Cook and Charles D. Egan, Shreveport, La., for appellant.

John T. Campbell, Campbell, Campbell & Marvin, Minden, La., for appellees.

Before TUTTLE, Chief Judge, and CAMERON and WISDOM, Circuit Judges.

WISDOM, Circuit Judge.

This litigation is over the ownership of an undivided three-sixteenths interest in oil and gas underlying certain land in Louisiana. J. B. Elkins, admitted owner of the land and one-fourth of the minerals, brought an action against Mrs. Laura Stell Townsend, and her two children, Arthur G. Stell, Jr. and Mrs. Lucy Ann Stell Polter, to be declared the owner of the disputed interest.1 The district court held for the defendants. 182 F. Supp. 861. We reverse.

I.

Certain basic principles of Louisiana law must be borne in mind throughout the discussion of this case. First, in Louisiana there is no ownership of oil and gas in place: the landowner's mineral reservation or sale of a mineral interest creates a terminable real right in the nature of a servitude.2 Second, under the doctrine of liberative prescription, since a servitude is imposed only upon the land, its prescription or expiration in ten years for non-use inures to the benefit of the landowner.3 Third, only a landowner may create a mineral servitude and then only to the extent of his mineral interest.4

II.

November 7, 1946, the Stell family conveyed 165 acres of land in Webster Parish, Louisiana, and one-fourth of their interest in the minerals to J. B. Elkins, plaintiff-appellant, "reserving" three-fourths of their mineral interest. The vendors were (1) W. G. Stell, (2) his sister-in-law, Mrs. Nancy Stell, widow of John T. Stell, (3) Mrs. Laura Stell (Townsend), widow of Arthur G. Stell, and (4) her children, Arthur G. Stell, Jr. and Lucy Ann Stell (Polter), grandchildren of John T. and Nancy Stell. Before this conveyance in 1946, W. G. Stell owned half of the land and a fourth of the minerals; Mrs. Nancy Stell owned five-twelfths of the land and minerals. There is no question as to the validity and effect of their reservation. Before the conveyance, Laura had no ownership of the land but, as widow in community, owned half of a one-fourth mineral interest her husband, Arthur, purchased May 16, 1938, from W. G. Stell, or one-eighth. Laura's children, Lucy Ann and Arthur, Jr., minors, together, as their legitime (forced heirship) from their father's succession, owned the other one-half of the one-fourth 1938 mineral interest, or one-eighth; in addition, as their legitime from their grandfather John Stell's succession, the children owned one-third of his community share in the land and minerals he had owned in in division with W. G., or one-twelfth of both the land and minerals, giving them a total of five-twenty-fourths of the mineral interest. The trial judge's detailed summary of the Stells' acquisitions is helpful to an understanding of the division of ownership.5 Elkins v. Townsend, D.C.1960, 182 F.Supp. 861, 863.

The dispute is over the 1946 reservation by Laura and her children of three-fourths of their one-fourth (three-sixteenths) mineral interest derived by them by inheritance of the mineral servitude W. G. sold to Arthur Stell in 1938. This servitude prescribed May 16, 1948 and the mineral interest it represented returned to the owner of the land, Elkins, unless three-fourths of it was, as the defendants-appellees contend, transmuted by renunciation into a new servitude by the 1946 deed. February 10, 1956, several producing wells were drilled on the property, interrupting the running of prescription on any servitude created less than ten years before.

Judge R. D. Watkins, an attorney and city judge in Minden, Louisiana, handled the 1946 conveyance for both Elkins and the Stells. After Arthur's death and the appointment of Laura, a native of Texas, as guardian of her two minor children, Judge Watkins represented Laura in ancillary proceedings in Webster Parish in having her qualified as tutrix for her children. He also represented Nancy and prepared her act of renunciation, in which she renounced her husband's bequest to the extent it impinged on the legitime of the children.6 And, he was the attorney for Elkins, who employed him to examine the title to the property and to see that the transfer was legally accomplished. There is nothing unusual about such representation in a small town, and the only probative inference that can be drawn is that Judge Watkins was not working any more for the Stells than for Elkins in drafting the conveyance and handling the transaction. W. G. Stell, Mrs. Nancy Stell, and Judge Watkins died before this action was brought. Judge Watkins's file, however, was produced in evidence. The first entry in his file reads as follows:

"¾ int to be reserved in minerals by Stells

Stells to get present lease rentals. other words

all J. B. Elkins ................... gets ¼ Stells ¾

taxes prorated as of sale"

In order for the minors' share to be sold, Judge Watkins prepared and filed in the Webster Parish District Court two petitions on behalf of Laura as tutrix: one for the appointment of an undertutor for her minor children, the other seeking the probate (district) court's authority to accept Elkins's offer. These pleadings and the resulting orders must be read into the deed. The petition for authority set out the ownership of the surface and the minerals of all the parties, and then alleged:

"That one J. B. Elkins, a resident of Webster Parish, Louisiana, has offered to purchase the above described property in fee, subject to existing oil and gas mineral leases, for the sum and price of Four Thousand One Hundred Twenty-Five and No/100 ($4,125.00) Dollars in hand, or $343.75 for the interest belonging to the said minors, with a reservation to the vendors of an undivided three-fourths (¾) of the oil, gas and other minerals, the one-fourth (¼) mineral interest to be conveyed in the proposed sale to be made up by taking from each of the owners a fractional part of his mineral interest in the proportion that his interest bears to the whole; and that the minors will therefore convey jointly a 5/96 mineral interest." (Emphasis added.)

The under-tutor, Ardis C. Burns, concurred in Laura's recommendations, and October 9, 1946, the Webster Parish District Court authorized Laura to sell the minors' interest in the property for $343.75, "conveying to the said J. B. Elkins the 1/12 fee interest and 5/96 mineral interest owned by the said minors * * * reserving from the sale to the said minors 5/32nds of the oil, gas and other minerals in, under and that may be produced from said described land, etc."

The crucial provision in the deed of November 6, 1946, is the reservation of ¾ths of the minerals, reading as follows:

"specifically reserving, however, to the vendors herein all delay rentals due or that may become due under existing oil, gas and mineral leases covering said property and further reserving three-fourths (¾) of the oil, gas and other minerals in, on, under or that may be produced from said land, it being understood and agreed that the one-fourth (¼) mineral interest conveyed hereby is conveyed by each vendor in the proportion his or her mineral interest bears to the whole, the share to be conveyed by each vendor being set out as follows:
                  W. Garland Stell ...........  1/16
                  Mrs. Nancy C. Stell ........  5/48
                  Mrs. Laura Stell Townsend ..  1/32
                  Garland Stell and Lucy
                    Ann Stell (jointly) ......  5/96"
                

Elkins paid $4,125 for the property. Laura received no part of the purchase money, and the minors were paid for their "fee" title only, receiving no payment for their mineral interest.

Elkins, the admitted owner of the land, asserts that the one-fourth mineral servitude created by W. G. May 16, 1938, prescribed ten years later for non-use, the disputed three-sixteenths returning to Elkins as the owner of the land. He interprets the deed as meaning that each vendor retained for himself three-fourths of the minerals that he owned before the conveyance, and each vendor conveyed one-fourth of the minerals that he owned before the conveyance. He argues that the reservation "to the vendors" of three-fourths of the minerals could not create a new servitude in the defendants except commensurate with their ownership of the land, and that the old 1938 servitude continued in force until by liberative prescription it expired in 1948.

Laura and her children assert their ownership on the theory that the 1946 deed to Elkins (1) was a tacit renunciation by them of the 1938 servitude, (2) thereby merging their one-fourth mineral interest with the land then owned by W. G. (one-half), Nancy (five-twelfths), and the children (one-twelfth) and (3) creating a new servitude by the joint action of all the vendors, to run ten years from November 7, 1946, (4) prescription of which was interrupted by drilling and production activities in February 1956.

III.

The district court found that the deed in itself was sufficient to establish a new servitude in 1946 in favor of the vendors, but admitted extrinsic evidence to determine the intention of the parties, reserving his ruling on the objection to the evidence. Later, on the basis of this evidence7 and the deed with its supporting documents, the district court found that the understanding of the parties "points unerringly to what was intended and understood to have been accomplished: that there was a renunciation or merger of the old (1938) servitude into the fee ownership, and the creation of a new right to the minerals being reserved, which would remain a burden on the land unless lost by non-user after ten years from the date of the 1946 deed." The appellant contends that the district court erred in admitting the extrinsic evidence to contradict the...

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