Cox v. Acme Land & Inv. Co., Inc.

• Decision Date: 03 April 1939
• Docket Number: 35117.
• Citation: 192 La. 688,188 So. 742
• Parties: COX v. ACME LAND & INVESTMENT CO., Inc.
• Court: Louisiana Supreme Court

188 So. 742

192 La. 688

COX v. ACME LAND & INVESTMENT CO., Inc.

No. 35117.

Supreme Court of Louisiana.

April 3, 1939

Rehearing Denied May 1, 1939.

Appeal from Twenty-Sixth Judicial District Court, Parish of Webster J. F. McInnis, Judge.

Suit by Levi C. Cox against the Acme Land & Investment Company, Inc. to have declared extinguished by the prescription of ten years' nonuser an undivided one-sixth interest in certain minerals. Judgment for plaintiff, and the defendant appeals.

Judgment affirmed.

Lee & Lee, of Shreveport, for appellant.

Campbell & Campbell, of Minden, for appellee.

ROGERS, Justice.

The plaintiff, Levi C. Cox, is the owner of the S 1/2 of N.W. 1/4 of NE 1/4 and SW 1/4 or NE 1/4 of Section 22, Township 21 North, Range 10 West, in Webster Parish. On September 21, 1922, Cox conveyed to G. E. McFadin, by deed duly recorded, an undivided one-half interest in the oil, gas and other minerals lying in and under the S 1/2 of N.W. 1/4 of NE 1/4 and N 1/2 of SW 1/4 of NE 1/4 of Section 22, hereinafter for convenience designated as Tract ‘ A’ . Cox instituted this suit to have declared extinguished by the prescription of ten years' non-user an undivided one-sixth interest in the McFadin servitude claimed through mesne conveyances by the defendant Acme Land & Investment Company, Inc.

Answering the suit, defendant denied that the servitude had expired because, on November 15, 1926, the plaintiff, in conjunction with R. O. Roy, through whom defendant holds, and other mineral owners executed a mineral lease for five years in favor of Woodley Petroleum Company, covering Tract ‘ A’, and the S 1/2 of SW 1/4 of NE 1/4 of Section 22, hereinafter for convenience designated as Tract ‘ B’, and that, by the execution of this lease, Tracts ‘ A’ and ‘ B’ were integrated and that development of Tract ‘ B’, on which a producing oil and gas well was drilled on April 4, 1927, constituted a development and operation of both tracts sufficient to prevent the running of prescription against the servitude acquired by McFadin on Tract ‘ A’ ; further, on November 2, 1934, plaintiff and others executed an integrated or unitized lease to the Ohio Oil Company covering the north half of Tract ‘ A’, the effect of which was to acknowledge the rights of the defendant and thereby prevent the running of prescription.

On these issues the case went to trial, which resulted in a judgment decreeing that all rights acquired by defendant to any of the minerals lying in or under Tract ‘ A’ had been lost by the prescription of ten years' non-user, and further decreeing that the servitude on said tracts, asserted by defendant, to be no longer in force and effect. From that judgment defendant prosecutes this appeal.

Tract ‘ A’ is composed of 40 acres and Tract ‘ B’ is composed of 20 acres. Plaintiff is in actual, physical possession of both tracts, subject to the claims of the defendant. A written agreement of the parties and the accompanying documents disclose the following facts:

On September 21, 1922, the plaintiff, Levi C. Cox, conveyed to G. E. McFadin, by deed duly recorded, an undivided one-half interest in the minerals under Tract ‘ A’ . The mineral interest thus conveyed is designated herein as the McFadin servitude.

On November 16, 1923, McFadin conveyed to R. O. Roy, by deed duly recorded, an undivided one-sixth interest in the minerals under Tract ‘ A’ .

On February 5, 1924, Levi C. Cox, the plaintiff, conveyed to W. H. Cook, by deed duly recorded, an undivided one-fourth interest in the minerals under Tract ‘ B’ . The mineral interest thus conveyed is designated herein as the Cook servitude.

On February 6, 1924, Cook conveyed to R. O. Roy, by deed duly recorded, an undivided one-sixth interest in the minerals under Tract ‘ B’ .

Thereafter, on November 15, 1926, Levi C. Cox, the plaintiff, R. O. Roy, and six of the ten other mineral owners executed a mineral lease to the Woodley Petroleum Company, which lease was for a primary term of five years and covered the entire sixty acres embraced in Tracts ‘ A’ and ‘ B’ . This lease was not signed by O'Brien Bros., Inc., E. L. Wagner and Harry E. Oliver, owning a 5/24th interest, and the North Central Texas Oil Company owning a 3/24th interest, in the minerals under the 40 acres composing Tract ‘ A’ .

On April 4, 1937, the Woodley Petroleum Company drilled a producing oil and gas well on Tract ‘ B’ . This well has been operated continuously since the date of its completion, and the royalties stipulated in the lease have been paid to the mineral owners in the proportions they own in the mineral acreage under the Tract ‘ B’ .

On January 15, 1929, the Woodley Petroleum Company released from the provisions of its lease the 20 acres composing the north half of Tract ‘ A’ . Thereafter, in November 1934, the plaintiff and two mineral owners executed mineral leases in favor of the Ohio Oil Company covering their interests in the north half of Tract ‘ A’ .

On May 1, 1935, R. O. Roy, by deed duly recorded, conveyed to the Acme Land & Investment Company, Inc., defendant herein, an undivided one-sixth interest in the minerals under the entire 60 acres composing Tracts ‘ A’ and ‘ B’, subject to the lease in favor of the Woodley Petroleum Company.

On August 14, 1937, the Woodley Petroleum Company completed another producing well on the division line of Tracts ‘ A’ and ‘ B’, which well has continued to produce oil and gas in paying quantities, the royalties resulting therefrom being withheld pending the outcome of this suit.

The servitude that plaintiff seeks to have declared extinguished by non-user of ten years is the McFadin servitude covering Tract ‘ A’ in which defendant acquired an undivided one-sixth interest by mesne conveyance. As more than fourteen years has elapsed between the date this servitude was created and the drilling of the well by the Woodley Petroleum Company on Tract ‘ A’, it is clear that the servitude has become extinguished by prescription unless the prescription has been interrupted. Defendant claims that this has occurred a number of times.

Defendant contends that the running of prescription was first interrupted on November 15, 1926, when R. O. Roy, being the owner of an interest in the McFadin servitude embracing Tract ‘ A’, which is the one sought to be cancelled, and being likewise the owner of an interest in the Cook servitude embracing Tract ‘ B’, in conjunction with the plaintiff Cox and others, executed the lease of November 15, 1926, in favor of the Woodley Petroleum Company covering the entire 60 acres owned by plaintiff. Defendant argues that this lease is what is known as a joint lease, that is, joint as to the lessors since, under the contract, the 60 acres covered by the lease is treated as one tract of land and the lease nowhere makes any reference to the individual ownership of the several lessors; that the obligation of the lessee in favor of the lessors was also a joint obligation. And defendant argues that the execution of this lease constituted an acknowledgement of all the rights of the defendant in both Tracts ‘ A’ and ‘ B’ sufficient to interrupt prescription, and that the production thereafter of oil and gas from the 20 acres of land embraced in the Cook servitude constituted a development of both tracts and was the exercise of both the McFadin servitude and the Cook servitude.

The lease to the Woodley Petroleum Company was executed a little over four years after the servitude was created. Its primary term is stated to be five years. The lease contains another clause to the effect that a well must be commenced by February 1, 1927, or the lease would be forfeited unless the lessee on or before that date should pay or tender to the lessor a certain stipulated rental for the privilege of deferring for twelve months the commencement of a well, with the further privilege granted the lessee, upon like payments or tenders, of deferring the commencement of a well for like periods of the same number of months successively. The effect of the five-year primary term was that if the well drilled was dry, the lessee could still retain the lease by paying the agreed rentals therefor. In the absence of production, the term of the lease would expire on November 15, 1931, which was less than ten years after the servitude was created and, under the decision of this court in Bremer v. North Central Texas Oil Company, Inc., 185 La. 917, 171 So. 75, execution of the lease did not of itself interrupt prescription.

Defendant was the owner of an undivided interest in two servitudes on separate tracts of the entire 60 acres owned by the plaintiff. One was for one-sixth of the minerals on Tract ‘ B’ covered by the Cook servitude on which, on April 4, 1927, the lessee drilled a producing well, which was still producing and as to which servitude there is no dispute; the other was for one-sixth of the minerals on the McFadin servitude covering Tract ‘ A’, which is the servitude involved in this suit.

Defendant contends that the lease of the Woodley Petroleum Company, being a joint lease, integrated the two servitudes; that after the execution of the lease there was only one servitude, and that the production of oil and gas on any portion of the 60-acre tract preserved the servitude created by plaintiff on the whole tract.

Defendant, in support of its contention, cites Nabors v. Producers' Oil Company, 140 La. 985, 74 So. 527, L.R.A.1917D, 1115, and Shall Petroleum Corporation v. Calcasieu Real Estate & Oil Co., 185 La. 751, 170 So. 785. The leases reviewed in those cases and the lease under consideration in this case are not the same in all their aspects. The cited cases, however, are authority for the proposition that, whether a contract is...