Gulf Refining Co. v. Bagby

• Decision Date: 30 March 1942
• Docket Number: 36304.
• Citation: 200 La. 258,7 So.2d 903
• Court: Louisiana Supreme Court
• Parties: GULF REFINING CO. v. BAGBY.

7 So.2d 903

200 La. 258

GULF REFINING CO. v. BAGBY.

No. 36304.

Supreme Court of Louisiana

March 30, 1942

Rehearing Denied April 27, 1942.

J. S. Atkinson, Frederick E. Greer, and Melvin Evans, all of Shreveport (John E. Green, Jr., of Houston Tex., of counsel), for plaintiff and appellant.

Liskow & Lewis and Richard E. Gerard, all of Lake Charles, for defendant and appellee.

O'NIELL Chief Justice.

The Gulf Refining Company, having bought an oil and gas lease on land which afterwards was bought by Logan H. Bagby, Jr., brought this suit against him to obtain a decree that the lease is yet in effect as a valid and subsisting lease and belongs to the plaintiff. The defendant first pleaded that the plaintiff had no right of action, because in the plaintiff's chain of title to the lease one of the acts of assignment does not contain a complete description of the land. The judge after a hearing overruled the exception. The defendant then answered, averring that the rental which came due on March 13, 1940, amounting to $100, was not paid within the time or in the way stipulated to prevent a forfeiture of the lease. The judge after hearing the evidence gave judgment for the defendant, maintaining that the lease was forfeited, and rejecting the plaintiff's demand. The plaintiff is appealing from the decision.

The lease was made originally to D. E. Moore, on March 13, 1933, by W. F Campbell, who then owned the land, and who resided in or near Lathrop, Missouri. The lease was on 202 acres of land in Beauregard Parish, and was made for the primary term of 10 years, with the following stipulation for delaying the commencembent of drilling operations by paying an annual rental:

'If no well be commenced on said land on or before the 13th day of March 1934 this lease shall terminate as to both parties, unless the lessee on or before that date shall pay or tender to the lessor, or to the lessor's credit in The Lathrop Bank at Lathrop, Missouri, which bank and its successors are the lessor's agent and which shall continue as the depository regardless of changes in the ownership of said land, the sum of One Hundred Dollars, which shall operate as a rental and cover the privilege of deferring the commencement of a well for twelve months from said date. In like manner and upon like payments or tenders the commencement of a well may be further deferred for like periods of the same number of months successively. And it is understood and agreed that the consideration first recited herein, the down payment, covers not only the privileges granted to the date when said first rental is payable as aforesaid, but also the lessee's option of extending that period as aforesaid, and any and all other rights conferred.'

D. E. Moore assigned a half interest in the lease to Alexander F. Manitzas on March 23, 1933; Moore and Manitzas assigned the lease to Burton Hartley on July 15, 1933; Hartley assigned it to the Gulf Refining Company of Louisiana on July 27, 1933; and the Gulf Refining Company of Louisiana assigned it on February 1, 1936, to the Gulf Refining Company, a Delaware corporation, plaintiff in this suit. The original act of lease and all of the assignments were promptly recorded in the conveyance records in the Parish of Beauregard, where the land is situated.

The defendant's exception of no right of action is founded upon the fact that the act of assignment by Burton Hartley to the Gulf Refining Company of Louisiana, dated July 27, 1933, does not contain a complete description of the 202 acres of land. The lease itself was sufficiently described, by giving the name of the lessor, the name of the lessee, the date of the lease, the area of the land and the fact that it was in Beauregard Parish, and that the lease was recorded in the conveyance records of that parish; but there was no further description of the land than the statement that it had an area of 202 acres and was in the Parish of Beauregard. We concur in the opinion of the district judge that the description of the lease itself, in the assignment from Hartley to the Gulf Refining Company of Louisiana, being sufficient to identify the lease, gave validity to the transfer of the lease. The important fact is that the land was described definitely and completely in the act of lease from Campbell to Moore, and that the act was duly recorded in the conveyance record in the parish in which the land is situated. It is described definitely and completely also in the assignment from Moore to Manitzas, and in the assignment from Moore and Manitzas to Burton Hartley. These assignments also were duly recorded in the conveyance records in the parish in which the land is situated. Therefore, if it should be held that the description of the land in the assignment from Hartley to the Gulf Refining Company of Louisiana was not sufficient to give third parties notice of the assignment of the lease, the consequence would be that the title to the lease would stand recorded yet in the name of Burton Hartley; and anyone who might have dealt with him on the faith of his recorded title to the lease might complain of the want of a complete description of the land in the assignment by Hartley to the Gulf Refining Company of Louisiana. But the defendant in this suit is not concerned with the question of sufficiency of the description of the land in the assignment by Hartley to the Gulf Refining Company of Louisiana, except so far as the Gulf Refining Cimpany, as assignee of the Gulf Refining Company of Louisiana, had the right to prevent a forfeiture of the lease by paying the delay rental which fell due on March 13, 1940--and except so far as an insufficiency in the description of the land in the assignment of the lease from Hartley to the Gulf Refining Company of Louisiana might affect the right of action of the Gulf Refining Company as plaintiff in this suit. The record discloses that the defendant, Bagby, recognized, from the beginning of his negotiations for the purchase of the land, that the Gulf Refining Company had a recorded transfer of the lease on the land. Bagby bought the land from the guardian of W. F. Campbell, on September 21, 1939. Campbell was adjudged insane and his wife was appointed as his guardian by a probate court in Plattsburg, Missouri, on May 4, 1939. Bagby, in his negotiations in Missouri for the purchase of the land recognized the lease by stipulating with the representatives of W. F. Campbell that he, Bagby, should receive the $100 rental due on March 13, 1940. Mrs. Campbell, as guardian, reserved a royalty interest of 1/16 of the oil, gas and other minerals in the land; and, on November 24, 1939, Bagby sold to Lloyd H. Smith 1/32 interest in the oil, gas and other minerals in the land, and declared in the deed that the sale was made subject to an oil and gas lease affecting the land, and that the 1/32 royalty should be paid to Smith out of the royalty reserved to the lessor in the act of lease. The record discloses that there was never any other lease on this 202 acres of land except the lease which was granted by W. F. Campbell to D. E. Moore on March 13, 1933, and which belonged to the Gulf Refining Company at the time when Bagby sold the 1/32 royalty interest to Lloyd H. Smith.

The defendant's exception is referred to as an exception of nocause or right of action. It was disposed of on the face of the petition and of the deeds which formed part of the petition. The exception of no right of action challenged the right of the plaintiff to prevent a forfeiture of the lease by paying the delay rental of $100 which came due on March 13, 1940. The only issue that was tendered by the defendant's answer to the suit was whether that delay rental of $100 was paid within the time and in the manner stipulated to prevent a forfeiture of the lease. The testimony heard on the trial of the case showed that the exception to the right of action of the Gulf Refining Company--and hence to the right of the company to prevent a forfeiture of the lease by paying the delay rental which came due on March 13, 1940--was not well founded. The main office of the company was in Houston, Texas, and so was the office of the defendant, Bagby. On December 11, 1939, a clerk in the land-records department in the Gulf Refining Company's office having learned that Bagby had bought the W. F Campbell land, telephoned to him and, referring to the fact that the Gulf Refining Company held the lease on the land, requested him to lend the company his abstract of title, so that the company might complete its record on the subject. In response to the request, Bagby's attorneys mailed the abstract to the Gulf Refining Company from Lake Charles. Again, in February, the chief clerk in the landrecords department of the Gulf Refining Company's office in Houston called Bagby on the telephone and, referring to the delay rental which would come due on the 13th day of the next month, suggested amending the lease so as to make the rentals payable at the bank with which Bagby did business in Houston, instead of the bank in Lathrop, Missouri. Bagby replied that he would prefer to have the rentals paid through the Second National Bank in Houston; and it was then agreed between the chief clerk and Bagby that the chief clerk would prepare the amendment of the lease and send it to Bagby's office for his signature. Accordingly, the proposed amendment was sent to Bagby's office, with a letter requesting him to sign the instrument in the presence of a notary public and two witnesses. Thereafter, another clerk in the land-records department in the Gulf Refining Company's office in Houston called Bagby's office by telephone, on two occasions, to request him to sign and return the proposed amendment of the lease, but he was...