Butler v. Bazemore

• Decision Date: 09 May 1962
• Docket Number: No. 18732.,18732.
• Parties: J. R. BUTLER, Appellant, v. Garvis I. BAZEMORE, C. T. Ruffin and Goodwyn H. Harris, Jr., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

303 F.2d 188 (1962)

J. R. BUTLER, Appellant, v. Garvis I. BAZEMORE, C. T. Ruffin and Goodwyn H. Harris, Jr., Appellees.

No. 18732.

United States Court of Appeals Fifth Circuit.

May 9, 1962.

COPYRIGHT MATERIAL OMITTED

Marlin Risinger, Jr., Shreveport, La., for appellant.

Gordon B. Golsam, Jr., Howard E. Spann, Mansfield, La., for appellees.

Before TUTTLE, Chief Judge, and HUTCHESON, RIVES, CAMERON, JONES, BROWN, WISDOM, GEWIN, and BELL, Circuit Judges, en Banc.

WISDOM, Circuit Judge.

This action, as the court below observed, "is the inevitable result" of Bazemore v. Whittington, 5 Cir., 1957, 245 F. 2d 943.

A Louisiana landowner executed a lease purporting to cover the full mineral interest. At the time, the land was burdened with a mineral servitude covering one-half of the oil and gas interest. During the term of the lease and while the lessor owned the land, the servitude was extinguished by liberative prescription. The question at issue, here and in Bazemore v. Whittington, is whether the interest represented by the prescribed servitude inures to the benefit of the lessee and his assigns. We hold that it does. Unless a seller or assignor expressly reserves warranty (or reserves it by casting the instrument in the form of a quitclaim deed, in accordance with the intention of the parties that the deed take effect only as a quitclaim) every sale or lease in Louisiana carries an implied warranty. The key instrument here carried an implied warranty. Because of this warranty and the doctrine of after-acquired title, we hold that the interest represented by the prescribed mineral servitude returned to the lessor-landowner but inured to the benefit of the lessee and his assigns by perfecting the lessee's title to the full oil and gas interest described in the original lease.

At stake in this litigation is an undivided one-half mineral interest in 127 acres of land in De Soto Parish, Louisiana, the same interest at stake in Bazemore v. Whittington. That decision was based partly on a misunderstanding of the important principle of implied warranty under Louisiana law.¹ Unless the effect of that misunderstanding is corrected, our earlier holding may unsettle innumerable titles in Louisiana. After restudying the questions of law these two inextricably entangled suits raise, the Court en banc feels compelled to overrule Bazemore v. Whittington to the extent that it conflicts with this decision.

I.

There is no disagreement over the facts. Originally, Keatchie Investment Corporation owned the land and the minerals. October 27, 1941, Keatchie sold the land to Garvis I. Bazemore, reserving an undivided one-half interest in the minerals. This reservation created a mineral servitude. Under the doctrine of liberative prescription, a servitude prescribes in ten years for non-use, the mineral interest reverting to whoever owns the land; more correctly, the land is freed from the burden of the servitude.²

May 1, 1947, Bazemore executed a ten-year oil and gas lease to T. E. Robertson (for the benefit of Robertson Stores) covering the entire mineral interest. The lease did not mention the outstanding undivided half-interest in the minerals Keatchie had reserved nor did it refer to the possibility of that interest inuring to the benefit of the lessee through liberative prescription of Keatchie's servitude. There was no reason why it should, however, for Robertson Stores, two months before, on March 11, 1947, had taken a lease from Keatchie covering the reserved one-half mineral interest. Both leases were on an identical standard form (Bath's Spec. 14-BR-1) in common use in north Louisiana. The form contains an express warranty of title by the lessor, which is a special warranty in addition to the usual warranty of possession.³ The form also stipulates that without impairment of rights under the warranty, the lessee may reduce delay rentals ($127, a dollar an acre) proportionately, if the lessor should own less than the full fee simple title. On May 1, 1947, because of having these two leases, Robertson Stores owned the entire mineral interest, one-half of which was subject to divestiture by liberative prescription in favor of Bazemore, the landowner.

April 16, 1951, after a series of assignments,⁴ the Bazemore-Robertson lease was assigned to Robertson Oil Company. On the same date Robertson Oil Company assigned the lease to Edman, Whittington, and Reed, doing business as the Mid-Century Oil and Gas Company, and Dow. (These assignees are referred to collectively as Edman).

October 27, 1951, the Keatchie servitude prescribed for non-use. Anticipating that the Keatchie interest would return to Bazemore and inure to him as lessee, on May 1, 1951, Edman increased the delay rental payments from $63.50, which he had been paying, to the full $127 annual rental.⁵ Bazemore accepted these payments for four years. Notwithstanding, February 5, 1955, Bazemore executed an oil and gas lease in favor of C. T. Ruffin and Goodwyn H. Harris, purporting to cover an undivided one-half mineral interest (Keatchie's prescribed interest). Within a month Edman filed suit against Bazemore, Ruffin, and Harris, contending that the return of mineral interest to Bazemore, through the doctrine of after-acquired title,⁶ perfected his title to a lease of entire mineral interest.

II.

The key instrument is the Robertson Oil Company's assignment of the Bazemore-Robertson lease to Edman. This assignment, without express warranty, conveyed:

"All of its right, title and interest in and to all of the following described oil, gas and mineral leases covering lands situated in DeSoto Parish, Louisiana, to-wit: * * *" There follows a description carefully limiting the description to the Bazemore-Robertson Stores lease "10. Lease executed by Garvis I. Bazemore in favor of Robertson Stores, Inc., dated May 1st, 1947, recorded under Registry Number 186618, conveyance Records of DeSoto Parish, Louisiana, which covers and affects an undivided one-half interest in metes and bounds enumerated the 127 acres involved."⁷

The district court held that when Keatchie's servitude prescribed, the lessee, or its assigns, had a perfected lease for the entire mineral interest in the property. The holding rests on two grounds: (1) the implied warranty of title, carrying with it any after-acquired title, and (2) Edman's subrogation to this warranty through his chain of title. This holding was reversed on appeal. The Court agreed with the district judge that the doctrine of after-acquired title applied, and that therefore the first lessee, Robertson received the Keatchie mineral interest when it returned to the landowner, but we held that the assignment by Robertson to Edman was a mere quitclaim deed (not carrying a warranty) which, under Louisiana law, will not support an after-acquired title.⁸

Apparently, Robertson Oil Company interpreted the opinion as holding that the original lease covered the prescribed Keatchie mineral interest and that this half interest passed to Robertson but was not included in the "quit-claim" assignment from Robertson Oil Company to Edman. November 6, 1957, Robertson Oil Company assigned the interest to the present plaintiff, J. R. Butler, with full warranty. Previously, on July 10, 1956, Edman completed a producing well on a unit including the land covered by the Bazemore-Robertson lease. After obtaining his assignment from Robertson, Butler managed to obtain, for curative purposes, declarations from all of the assignees in his chain of title that in each instance they intended to convey all their rights and actions of warranty against all former owners, including all rights in any reversion of the mineral interest to the lessor.

December 2, 1957, Butler filed suit against Bazemore, Ruffin, and Harris, asking to be declared owner of the lease covering the one-half mineral interest formerly owned by Keatchie and asking also that the Ruffin and Harris oil and gas lease be declared null and void. The trial judge, Judge Ben C. Dawkins, was also the trial judge in Bazemore v. Whittington. He was fully aware of this Court's holding that the original lease covered the outstanding Keatchie one-half mineral estate and that Robertson Oil Company had executed only a quitclaim assignment to Edman. He construed our opinion as not holding that Robertson Oil had any interest in the lease. Accordingly, Judge Dawkins ruled that Robertson Oil, having assigned all of its interests in the lease to Edman, had no interest left to assign to Butler; Edman, as assignee, was entitled to assert whatever right his assignor had to the full mineral interest under the lease containing the original warranty. This opinion is consistent with Louisiana holdings that a quitclaim may be effective as a conveyance of a present interest.⁹ The district court found that Butler's attempts to cure his title defects were ineffective; that the curative instruments were not admissible¹⁰ and, in any event, were executed after the rights vested in Edman. Butler had interposed pleas of estoppel. Judge Dawkins properly dismissed this plea on the ground that Butler was not misled to his prejudice by any act of the lessor's; he simply took a gamble on the chance that Bazemore v. Whittington had the effect of recognizing Robertson Oil's ownership of the disputed interest.

III.

In the earlier decision, Bazemore v. Whittington, this Court followed Louisiana law in holding that a quitclaim deed will not support after-acquired title to a reversion of a mineral interest to the lessor-landowner.¹¹ Waterman v. Tidewater Associated Oil Co., 1948, 213 La. 588, 35 So.2d 225. The error in Bazemore v. Whittington lies in a misreading of certain language in Waterman, as a result of which this Court held that the assignment from Robertson to Edman of "all the assignor's right, title and interest", without express warranty, constituted a quitclaim deed.¹²

One of the important distinctions between the civil...