Frost-Johnson Lumber Co. v. Salling's Heirs

• Citation: 150 La. 756,91 So. 207
• Decision Date: 17 February 1922
• Docket Number: 22916
• Parties: FROST-JOHNSON LUMBER CO. v. SALLING'S HEIRS et al
• Court: Supreme Court of Louisiana

91 So. 207

150 La. 756

FROST-JOHNSON LUMBER CO. v. SALLING'S HEIRS et al

No. 22916

Supreme Court of Louisiana

February 17, 1922

On Rehearing, May 2, 1921

Original Opinion of January 5, 1920, Reported at 150 La. 756.

ST. PAUL, J. PROVOSTY, C. J., LAND, and BAKER, JJ., dissent.

OPINION

On Second Rehearing.

ST. PAUL, J.

The issues involved herein have been fully stated in the several opinions heretofore filed herein, and need not be restated.

I.

When the original opinion was handed down by Mr. Justice O'NIELL on January 5, 1920, this court then held for the ninth time that oil and gas in place are not subject to absolute ownership as specific things apart from the soil of which they form part, and that a grant or reservation of such oil and gas carried only the right to extract such minerals from the soil.

It would serve no useful purpose to analyze the eight decisions which preceded; they have been gone into, first in that original opinion, and still more fully in the dissenting opinion handed down by the same justice on the first rehearing. Those eight cases are the following: (1) Wadkins v. Atlanta & Shreveport Oil Co., 1913, not reported; (2) Rives v. Gulf Refining Co., 133 La 178, 62 So. 623; (3) Cooke v. Gulf Refining Co., 135 La. 609, 65 So. 758; (4) Elder v. Ellerbe, 135 La 990, 66 So. 337; (5) Strother v. Mangham, 138 La. 437, 70 So. 426; (6) Saunders v. Busch-Everett Co., 138 La. 1049, 71 So. 153; (7) Hanby v. Texas Co., 140 La. 189, 72 So. 933; (8) Higgins Oil & Fuel Co. v. Guaranty Oil Co., 145 La. 233, 82 So. 206, 5 A. L. R. 411.

It would therefore seem that, if a rule of property is ever to be established on that subject, those decisions should stand as law in this state.

II.

It is said that this court has held otherwise in De Moss v. Sample, 143 La. 243, 78 So. 482, and Calhoun v. Ardis, 144 La. 311, 80 So. 548. But we do not find it so; for an opinion is authority only in so far as the ratio dicendi is necessary for a decision of the precise issue involved in the case.

In the De Moss Case the vendors had reserved "the oil, gas and mineral rights in and to the property sold." The vendee contended that the deed conveyed the property in its entirety, because:

"The so-called reservation of mineral rights was of an uncertain thing, which could not be sold, and, if passed, was passed without consideration on the part of the defendants [vendors]."

The issues as stated above are taken from the opinion of the court (143 La. 245, 78 So. 482), and the only parts of the whole opinion which are at all pertinent to those issues are the following two paragraphs:

143 La. 243, 78 So. 482:

"The agreement entered into between the parties is clear and unambiguous in its terms. It therefore has the effect of a law upon them, and its terms must be performed in good faith, unless the agreement is in violation of law. As the law does not forbid the owner of land to reserve to himself the minerals lying under the surface thereof, or the right to thereafter enter upon said lands for the purpose of exploring for those minerals, such reservation properly became the subject, or motive, of the contract between the parties."

143 La. 243, 78 So. 482:

"A sale or reservation of the mineral rights on property, of course, does not constitute a sale or reservation of so many tons of coal, iron ore, barrels of oil, or feet of gas; nevertheless such a contract may convey or reserve the exclusive right to exploit the property for any of the minerals designated in the act of conveyance or reservation; and to say that such a contract is void for lack of certainty as to the thing sold, or reserved, or contrary to any principle of public policy of the state, would, in a way, relegate the most valuable property in the state to the category of property de hors commerce."

As to the alleged want of consideration, that received no notice whatever from the court, and deserved none.

All the rest of the opinion has nothing whatever to do with the case; and of course the parties to the suit were so little interested in the academic part of the opinion that they did not even apply for a rehearing.

In the Calhoun Case the vendor had retained "all the mineral rights under said property"; but the vendee claimed all the oil mined by the vendor on the ground:

That "no consideration passed from Ardis [the vendor] to plaintiff [the vendee] for said mineral rights; * * * that it is not legally possible to sell land separate from the oil and gas that might be beneath it, that the oil and gas attempted to be reserved cannot be identified and are not susceptible of private ownership until reduced to possession.'

To the first proposition the court answered:

"This reservation being of a thing that formed part of the estate, such part was excluded from the sale, and there could be no consideration due by Ardis * * * for that which, having never belonged to plaintiff, remained under the ownership of Ardis."

To the second proposition the court answered that the point had been set at rest in De Moss v. Sample, supra.

Neither of those cases called for any decision upon the question whether or not a sale of mineral rights (or, if gentlemen please, a sale of the minerals themselves) conveyed a corporeal thing or an incorporeal right; for in the De Moss Case the question raised was whether the thing reserved was certain and alienable; and we see how the court answered that. And in the Calhoun Case there was not the slightest suggestion that the defendant claimed title to anything but an incorporeal right, to wit -- "all the mineral rights under said property," as stipulated in the deed.

These cases cannot therefore be considered as authority upon the point now before the court.

III.

We therefore hold that it is the settled jurisprudence of this state that oil and gas in place are not subject to absolute ownership as specific things apart from the soil of which they form part; and a grant or reservation of such oil and gas carries only the right to extract such minerals from the soil.

And we find with much satisfaction that our jurisprudence is in complete harmony with that which prevails throughout the land.

The Supreme Court of the United States has so held at least four times: Brown v. Spilman, 155 U.S. 665, 15 S.Ct. 245, 39 L.Ed. 304; Ohio Oil Co. v. Indiana, 177 U.S. 190, 20 S.Ct. 576, 44 L.Ed. 729; Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 31 S.Ct. 337, 55 L.Ed. 369, Ann. Cas. 1912C, 160; Walls v. Midland Carbon Co., 254 U.S. 300, 41 S.Ct. 118, 65 L.Ed. 276 (1920).

In Warvelle on the Law of Real Property, a book of elementary principles for students, we find:

"Section 32. Oils and Gases. -- Earth oils and volatile gases occupy much the same position in the law of real property as water, and, like water, are not the subjects of property except while in actual occupancy. They are usually classed as minerals, possessing in some degree a kindred nature, and so long as they remain in place, are fully included in the comprehensive term 'land.' Unlike other minerals, however, they have the power as well as the tendency to escape without the volition of the owner, and in this respect they possess substantially the same attributes as water. Hence ownership therein partakes very much of the nature of an incorporeal interest, and a grant of oils or gases is practically no more than a mere license to sink shafts and extract same, and is governed by the general rules which apply to licenses" -- citing Williams v. Gibson, 84 Ala. 228, 4 So. 350, 5 Am. St. Rep. 368; Stoughton's Appeal, 88 Pa. 198; Murray v. Allard, 100 Tenn. 100, 43 S.W. 355, 39 L. R. A. 249, 66 Am. St. Rep. 740; Westmoreland Gas Co. v. De Witt, 130 Pa. 235, 18 A. 724, 5 L. R. A. 731; People's Gas Co. v. Tyner, 131 Ind. 277, 31 N.E. 59, 16 L. R. A. 443, 31 Am. St. Rep. 433; Williamson v. Jones, 43 W.Va. 562, 27 S.E. 411, 38 L. R. A. 694, 64 Am. St. Rep. 891; Gerkins v. Kentucky Salt Co., 100 Ky. 734, 39 S.W. 444, 66 Am. St. Rep. 370; Kelly v. Ohio Oil Co., 57 Ohio St. 317, 49 N.E. 399, 39 L. R. A. 765, 63 Am. St. Rep. 721; Dark v. Johnston, 55 Pa. 164, 93 Am. Dec. 732.

In American and English Encyclopedia of Law (2d Ed.) vol. 21, p. 417, we find:

"Natural gas is not subject to absolute ownership; it belongs to the owner of the land and forms part of it, so long as it is on the land and subject to his control; but when it escapes and goes into other land, or comes under the control of another, the title of the former owner is lost" -- citing People's Gas Co. v. Tyner, 131 Ind. 277, 31 N.E. 59, 16 L. R. A. 443, 31 Am. St. Rep. 433; Townsend v. State, 147 Ind. 624, 47 N.E. 19, 37 L. R. A. 294, 62 Am. St. Rep. 477; State v. Ohio Oil Co., 150 Ind. 21, 49 N.E. 809, 47 L. R. A. 627 (see 177 U.S. Supra); Westmoreland Nat. Gas Co. v. De Witt, 130 Pa. St. 235, 18 A. 724, 5 L. R. A. 731; Wood County Pet. Co. v. W.Va. Transportation Co., 28 W.Va. 210, 57 Am. Rep. 659.

In Ruling Case Law, vol. 18, p. 1206, verbo "Mining," § 110, we find:

"The owner of land has no specific title to them (oil and gas) until they have been removed from the earth, or reduced to actual possession" -- citing Ohio Oil Co. v. Indiana, 177 U.S. 190, 20 S.Ct. 576, 44 L.Ed. 729; State v. Ohio Oil Co., 150 Ind. 21, 49 N.E. 809, 47 L. R. A. 627; Rupel v. Ohio Oil Co., 176 Ind. 4, 95 N.E. 225, Ann. Cas. 1913E, 836; Dark v. Johnston, 55 Pa. 164, 93 Am. Dec. 732; Bender v. Brooks, 103 Tex. 329, 127 S.W. 168, Ann. Cas. 1913A, 559; Smith v. Root, 66 W.Va. 633, 66 S.E. 1005, 30 L. R. A. (N. S.) 176.

In the very latest work on the subject, "Oil and Gas Rights" by R. S. Morrison and Emilio De Soto, of the Colorado bar, published by the Bender-Moss Company of San Francisco, and copyrighted...