Coastal Club v. Shell Oil Co.

• Decision Date: 13 September 1944
• Docket Number: Civ. A. No. 632.
• Citation: 56 F. Supp. 641
• Parties: COASTAL CLUB, Inc., v. SHELL OIL CO., Inc.
• Court: U.S. District Court — Western District of Louisiana

56 F. Supp. 641

COASTAL CLUB, Inc., v. SHELL OIL CO., Inc.

Civ. A. No. 632.

District Court, W. D. Louisiana, Lake Charles Division.

July 20, 1944.

On Motion for New Trial September 13, 1944.

LeDoux R. Provosty, of Alexandria, La., for plaintiff.

George C. Schoenberger, Jr. and R. H. Whilden, both of Houston, Tex., for defendant.

PORTERIE, District Judge.

Our opinion in this case at 51 F.Supp. 819, as well as the opinion of the Circuit Court, 5 Cir., at 141 F.2d 382, are made a part of this opinion.

On the motion by plaintiff for a rehearing, 142 F.2d 245, the Circuit Court said:

"Movant is in error in its assumption that the opinion was intended to, or did, have any effect other than an adjudication that the judgment was wrong and ought to be reversed and sent back for further proceedings not inconsistent with it, and when the judgment is entered on the opinion, it will be so ordered. The statement in the opinion * * *:

"`As the matter stands, therefore, * * * the situation is as if no partial releases had been executed and placed of record' had reference to the situation as it existed at the entry of the judgment appealed from. It was not intended to, it did not, prevent the appellee from making the releases effectual by accepting them. The motion is denied."

We quote the full entry of the minutes of May 12, 1944, in this case:

"Hearing was called by the court in this case on the matter of the remand. Mr. Provosty, on behalf of plaintiff, moved the court to file a supplemental petition, which petition he read in court. Objection to the filing of the supplemental petition was made by Mr. Schoenberger, who read a prepared judgment and asked that it be filed.

"The court stated that the filing of the supplemental petition was now at issue before the court as well as the signing of the prepared judgment as read, and arguments were heard.

"The court ordered the filing of the supplemental petition, together with attached letter from Shell Oil Company, Inc., to Coastal Club, Inc., dated May 5, 1944, and photostatic copy of instrument of revocation executed by Shell Oil Company on March 29, 1944, said documents being offered in evidence with the supplemental petition, and order was signed in open court allowing the filing.

"The court further ordered the blank, unsigned judgment as prepared by defendant, filed, and took the case under advisement, briefs to be filed by counsel."

The per curiam is dated May 3, 1944; on May 5, 1944, a letter was sent from the Shell Oil Company, Incorporated, to the plaintiff showing that an instrument of revocation had been executed since March 29, 1944, and that the instrument of revocation had been mailed for recordation in the parish of the situs of the property since March 31, 1944, all of this having been done while this case was extant on rehearing. The case is, we think, extant now; and in the district court, too.

The plaintiff seeks a declaration from this court that the attempted revocation of the surrenders is invalid and violative of the mandate, main and per curiam, of the Circuit Court; and that, additionally, the pleadings and the law entitle it now to a judgment leaving leased to the defendant only 40 acres around each of Coastal Club wells No. 1 and No. 2.

When the legal import of a findings of fact by the appellate court discloses that some of the facts were given a fundamentally different meaning from that which was intended by the court of first instance, because of the poor language of the lower court, it becomes the conscientious duty of the lower court to say so. This obligation is due not only as a matter of justice to the litigants, but, also, in order to preserve the purity of and to make more exact the jurisprudence.

Now, in order to be frank, first of all with the litigants, and secondly, with the members of the appellate court, there are explanations to be made as to what was our mental concept as to some of the language:

In Item 24, we say 51 F.Supp. 824: "Defendant has not abandoned the lease, but is now operating it, producing oil and gas." When we use the word "abandoned" we are not giving it its legal significance as developed by the jurisprudence, but we mean that the Shell Company has not gotten off the premises entirely; that it is "producing oil and gas" at two wells, one of oil, one of gas.

In Item 25 of the finding of facts, we say: "It was not defendant's intention to abandon the lease." We did not mean here that legally defendant had not forfeited the lease. We meant that defendant was physically present, operating two wells, and had not totally abandoned the lease. The next Item, 26, in immediate sequence, shows what we had in mind.

Our judgment was predicated on the fact that we thought the jurisprudence considered the release of acreage in the face of an indivisible contract a forefeiture of the contract, with the consequent result that the defendant company under the contract should retain but five acres at each one of the two wells.

There are two items in the conclusions of law as to which we should plainly and frankly confess what our real meaning was. What did we intend to convey by our words? We shall not do this with the idea of unfavorable criticism, direct or implied, of what the Circuit Court or expert advocates might construe the meaning to be.

In Item 13, we said: "The partial surrenders filed by defendant did not constitute an abandonment of the lease." Our use of the language was to indicate that the defendant company was at the very time of the utterance of the statement and for a long time previously operating the two wells, getting oil out of one, gas out of the other, and though these releases had been filed by it, it had not, in the common acceptance of the term, abandoned the total lease, but was remaining physically on part of the total premises. If the contract were indivisible, the execution of these partial releases was a forfeiture of the contract. That is what we had in mind when we said: "This suit," (the two releases are pleaded formally) "we rule, is a cause for the termination of the lease." 51 F.Supp. 823.

Likewise, in Item 14, when we said: "Even though the lease is indivisible and prohibits partial surrenders, the filing for record by defendant of instruments purporting to surrender a part of the premises did not abandon the lease; the only result being that the partial surrenders were ineffective", we meant that the partial surrenders were not the equivalent of a total surrender, and that the defendant company had the right to remain on the premises with the view of continued operation of the two wells, with five acres around each well.

The thoroughly conversant legal mind imparts to the words a significance that was never in the ill-informed mind of the court of first instance. We never had in mind that the partial surrenders meant nothing, because they were not accepted by the plaintiff, and therefore could not become the cause for forfeiture of the contract.

An immediate sequence comes in Item 15 and reads: "Coastal Club No. 2 must be considered as producing gas and distillate in paying quantities to the time of the trial, plaintiff having received royalties averaging $70.00 per month from these products", confirming by context the meaning in the court's mind of what it had just given to the language in Items 13 and 14 of the conclusions of law.

We were largely borrowing verbatim from the finding of facts prepared by the able counsel for the defendant, but we entertained concepts from the words which were not the concepts given legitimately to them by the counsel of the defendant or by the members of the appellate court.

We engage in concept-creations. The judge of this court, when Attorney General of the state for nearly eight years, received releases of thousands of acres of land from leaseholders of the state against whom complaint had been made that there was want of reasonable development. Never for once was there the thought that the state had to accept or agree to the release. A release of the acreage held is the best proof of no want of exploitation.

It is with this logical concept firmly created in our mind, because of repeated impression and application through the years, that we gave great and controlling weight to the probative force of the releases by the defendant.

In a supplemental answer, just before trial, after having previously released 5760 acres of the total of 6000 acres held, the defendant said:

"Since that time, defendant has drilled a well on land adjacent to plaintiff's land which has been abandoned as a dry hole; and producing wells in the vicinity have begun to make large quantities of salt water, one of such wells having entirely ceased producing oil and having gone to producing 100% salt water; and, as a consequence of said facts, defendant has released and surrendered 160 acres of the above described 240 acres by filing with the Clerk and ex-officio Recorder of Cameron Parish a duly executed recordable surrender, so that defendant now holds under said lease only the northwest quarter of the northwest quarter of Section 27, being the 40-acre tract on which is located Coastal Club well No. 1, and northeast quarter of southeast quarter of Section 28, being the 40-acre tract on which is located Coastal Club well No. 2.

"Wherefore, defendant reiterates the prayer of its original answer and further prays that under no circumstances should its holding under said lease be reduced below the two 40-acre tracts still held thereunder."

There was a supplement to this supplemental answer, and we are quoting the whole paragraph: "In Article II of defendant's supplemental answer, it is averred that since the filing of this suit defendant drilled a well on land adjacent to plaintiff's which was abandoned as a dry hole. This statement is partially erroneous because the well referred to was drilled vertically to its objective sand without production and was,...