Cochran v. Gulf Refining Co. of Louisiana

• Decision Date: 30 June 1916
• Docket Number: 20416
• Citation: 139 La. 1010,72 So. 718
• Court: Louisiana Supreme Court
• Parties: COCHRAN et al. v. GULF REFINING CO. OF LOUISIANA

72 So. 718

139 La. 1010

COCHRAN et al. v. GULF REFINING CO. OF LOUISIANA

No. 20416

Supreme Court of Louisiana

June 30, 1916

Rehearing Denied October 16, 1916

SYLLABUS

(Syllabus by the Court.)

The grantor of a mineral lease died, leaving a widow in community and four daughters of age. The widow, being the owner of one half and usufructuary of the other half of the land subject to the lease, signed an instrument, purporting to extend the term of the lease, for which she received a cash consideration from the grantee. She died soon after, and her four daughters accepted her succession unconditionally and without the benefit of inventory. They made an extrajudicial partition of the land subject to the lease, whereby each heir became the sole owner of a fourth in area of the land; and they permitted the grantee to drill three producing wells within the extended term of the lease. Thereafter two of the heirs, one of whom had sold to a third party a portion of the land allotted to her in the partition, sued the grantee to annul the lease in so far as it affected the lands owned by them. Held: (1) That the plaintiffs, by accepting the succession of their mother unconditionally and without the benefit of inventory, assumed her obligation to respect the extension of the term of the lease. (2) That, as the lease was indivisible, the plaintiffs alone could not maintain the action of nullity after disposing of a part of the land subject to the lease.

A contract, granting the right to drill for minerals within a limited period of time, for an adequate consideration paid by the grantee, is not null merely because the grantee is not obliged to do anything more.

When the grantee of a mineral lease for a limited term has paid an adequate consideration in cash and has complied with all of the obligations expressly imposed upon him, the grantor is not entitled to a cancellation of the lease for the failure of the grantee to do more than the contract expressly required of him.

G. H Holder, of Shreveport, for appellants.

D. Edward Greer, of Houston, Tex., and Thigpen & Herold, of Shreveport (F. C. Proctor, of Houston, Tex., of counsel), for appellee.

OPINION

O'NIELL, J.

This is an action to annul a mineral lease and for $ 10,000, damages for the alleged failure on the part of the lessee to develop the land.

The lease was made on the 22d of December, 1906, by the plaintiffs' father, John H. Harris, to the J. M. Guffy Petroleum Company of Louisiana. The grant was made of all the oil, gas, and other minerals in and under a certain tract of land containing 376.50 acres, and the exclusive right to drill and operate thereon for oil or gas, together with the right of way to lay pipe lines, to convey water, oil, or gas from the premises, with the right to operate any wells the grantee might bore, and to have such other privileges as were reasonably requisite for conducting the operations. The grantee was given the right to remove from the premises at any time any and all property that might be placed thereon by the grantee; was to begin drilling a well for oil or gas on the premises within six months from the date of the contract, but had the right to extend the time in which to begin drilling for successive periods of six months each, dating from the expiration of the first six months from the date of the contract, by depositing to the credit of the grantor in a designated bank the sum of $ 188.25; that is, 50 cents an acre for each delay of six months. It was stipulated that if the grantee should fail to make the deposit on or before the first day of any of the six-month terms of extension, the lease would thereby terminate; and that the successive periods of six months in which the right to begin drilling a well for oil or gas might be extended should not exceed two years from the date of the contract, and that if the grantee should not begin drilling within two years from the date of the contract, the lease would terminate. It was also stipulated that the grantee would not be required to make any further payment of money if the grantee should begin drilling a well on the premises within the time stipulated and prosecute the work with reasonable diligence; and that, if the grantee commenced the drilling of a well within the time stipulated, it should have the right to make as many successive attempts to find oil as it might desire. As a consideration for the grant, the grantor was to receive a royalty of one-eighth of all the oil saved from that produced, and $ 100 a year for each gas well, the product of which should be marketed or used off of the premises. The first payment of royalty was to mature 60 days after the well should be turned into a pipe line, and subsequent payments were to be made annually thereafter. It was also stipulated that the grantee should pay the grantor a reasonable royalty for any other minerals than oil or gas that might be found in paying quantities by the grantee; that if oil or gas or other minerals should be found in paying quantities, the grantee would have the right to hold the lease as long as such oil or gas or other minerals might be produced in paying quantities; and, in this event, the grantee had the right to surrender the lease, and to remove from the premises any material placed thereon by the grantee, on paying to the grantor $ 100. All of the terms and conditions of the grant were to extend to the heirs, executors, legal representatives, successors, and assigns of the respective parties thereto. The grantee paid $ 188.25 as a cash consideration for the lease, the receipt of which was acknowledged in the contract, with the declaration that the payment was received in full satisfaction of any and every right thereby granted, including the right to extend the privilege of exploring the land.

Within the six months ending on the 22d of June, 1907, the grantee, not having commenced to drill a well, paid the grantor $ 188.25, and the latter extended the lease six months from that date; within which time, not having commenced operations, the grantee made another payment of $ 188.25, and the lease was extended for another term of six months; within which time, that is, before the 22d of June, 1908, not having commenced operations, the grantee again paid $ 188.25 to the grantor, and the latter extended the term within which the grantee might begin drilling a well to the 22d of December, 1908. On the 21st of December, 1908, that is, the day before the lease would have expired, the grantor signed an authentic act, extending the lease six months longer; that is, to the 21st of June, 1909, for which extension the grantee paid $ 500 in cash.

John H. Harris died before the 21st of June, 1909, leaving a widow in community, Mrs. Lou Harris, and four daughters, the only issue of their marriage. The land subject to the lease, being community property, at the death of John H. Harris, his widow, Mrs. Lou Harris, owned one undivided half of it, and possessed the other undivided half in usufruct, all subject to the lease.

In consideration of the payment to her of $ 300 in cash by the grantee, on the 16th of July, 1909, Mrs. Lou Harris, being the owner of an undivided half of the land and possessing the other undivided half in usufruct, signed an instrument, purporting to extend the delay within which the grantee might begin the drilling of a well to the 21st of June, 1910. And, in consideration of a second payment to her of $ 300 in cash by the grantee, on the 5th of August, 1910, Mrs. Harris signed an instrument purporting to extend the delay within which the grantee might begin drilling a well to the 21st of June, 1911; and on that date, in consideration of the payment to her of $ 500 in cash by the grantee, she signed an instrument, purporting to extend the delay within which the grantee might begin drilling a well an additional term of one year; that is, to the 21st of June, 1912.

The grantee commenced drilling two wells before the 21st of June, 1912, both of which produced gas in paying quantities. In the meantime, that is, within a month after the last extension of the lease was signed by Mrs. Harris, she died. The two plaintiffs are daughters of Mrs. Lou Harris, issue of her marriage to John H. Harris. They and their two sisters, heirs of Mrs. Lou Harris, accepted her succession unconditionally and without the benefit of inventory, and made an extrajudicial partition of the land affected by this mineral lease, whereby each of the plaintiffs became the sole owner of a tract of 75 acres. It appears that all but 300 acres of the land had been disposed of by John H. Harris. Mrs. Parrott, one of the plaintiffs, sold to one William Claiborne a tract of 6 acres of the 75 acres allotted to her in the partition.

One of the producing gas wells that the grantee commenced drilling before the extended lease expired was drilled on the tract allotted to the plaintiff Mrs. Lillie B. Cochran in the act of partition, and the other was drilled on the tract allotted to Mrs. Minnie Barr, a sister of the plaintiffs. It appears...