Hebert v. Sun Oil Co.

• Decision Date: 12 June 1969
• Docket Number: No. 2722,2722
• Citation: 223 So.2d 897
• Parties: Azema LeBlanc HEBERT et al., Plaintiffs-Appellants, v. SUN OIL COMPANY et al., Defendants-Appellees.
• Court: Court of Appeal of Louisiana — District of US

Page 897

223 So.2d 897

Azema LeBlanc HEBERT et al., Plaintiffs-Appellants, v. SUN OIL COMPANY et al., Defendants-Appellees.

No. 2722.

Court of Appeal of Louisiana, Third Circuit.

June 12, 1969.

Rehearing Denied July 7, 1969.

Mouton, Beard, Plaisance & Franques, by Caliste Beard, Jr., Lafayette, for plaintiffs-appellants.

Liskow & Lewis, by Austin W. Lewis, New Orleans, for defendants-appellees.

Before SAVOY, CULPEPPER and MILLER, JJ.

SAVOY, Judge.

Mrs. Azema LeBlanc Hebert filed suit to cancel an existing oil, gas and mineral lease on producing property in Lafayette Parish, Louisiana, said lease consisting of 22.86 acres, for non-payment of royalties on certain gas production and certain plant products. Her husband, Eddie J. Hebert, was subsequently made a party plaintiff by order of the district court. Defendants answered contending that no putting in default had occurred and alleging that a clerical error had been made erroneously deleting plaintiffs' tract from a revised unit. They further answered saying that as soon as the non-payment was made known, a check for the five months past due was immediately tendered plaintiffs but was refused. After a trial on the merits, the district judge rejected plaintiffs' demands and dismissed the suit at their costs. Plaintiffs have appealed to this Court.

The parties entered into some twenty-five stipulations, one of which revealed that plaintiffs were entitled to be paid for (1) gas production, (2) distillate, and (3) plant products in three different sands, namely, the Camerina Sand, the Marginulina Sand, and the Miogypsinoides Sand. The stipulations further revealed all three sands were unitized at various months during 1964, but were all revised by Conservation Department Orders effective January 1, 1966.

Additional stipulations entered into between the parties, insofar as pertinent provided, in effect, that:

(1) All royalties due under the terms of the lease were timely paid on all production obtained from the leased premises from date of first production through royalties due on production obtained from said premises to January 1, 1966, the effective date of the revision of the units;

(2) The revision of Miogypsinoides Sand Unit A by Order No. 366--F--2, effective January 1, 1966, reduced the interest of the Azema Hebert tract in unit production from 8.64% To 6.3695%. However, Sunray DX Oil Company continued to pay royalties to plaintiff on the basis of her interest in the original unit for the period from January 1, 1966, to June 1, 1966, resulting in an overpayment to Mrs. Hebert of $37.48 which had not been recouped by defendants:

(3) After receipt on May 18, 1966, of notice of the revision of Miogypsinoides Sand Unit A, the Controllers Department of Sunray DX Oil Company changed its master allocation sheet for the distribution of royalties. The tract number covered by the Azema LeBlanc Hebert lease had been changed from Tract No. 8 to Tract No. 7, and the old Tract No. 7 was deleted; however, the clerk in changing the master allocation sheet deleted Tract No. 8, but did not delete from Tract No. 7 the lease payment number assigned to that tract prior to the revision of the unit, nor did he assign the lease payment number of the deleted Tract No. 8 to the revised Tract No. 7. Thus, payments were made to the original participants in Tract No. 7 instead of the participants in the revised Tract No. 7. As a result payments were made to Harris S. Baudoin totalling $1,093.04 for the production months of July, 1966, through November, 1966, at Baudoin's royalty rate of 1/6th whereas the 1/8th royalty interest of Mrs. Hebert for the same period would have been $819.77, which amount was tendered to her on March 14, 1967, but was refused;

(4) For the period June 1, 1966, through March 1, 1967, plaintiff timely received all royalty payments due her on production from the revised Marginulina 7 Sand Unit A and the revised Camerina Sand Unit A, and on distillate produced from the revised Miogypsinoides Sand Unit A;

(5) By letter dated December 6, 1966, General American Oil Company of Texas advised Sunray DX Oil Company that it questioned the basis for a payment made to it on production of gas from the Miogypsinoides Sand Unit A;

(6) As a result of the letter in (5) above, the clerical error concerning the tract designation was discovered, and the correction of said error resulted in commencement of royalty payments to plaintiff for gas production allocable to Tract 7 of the Miogypsinoides Sand Unit A, but only as to such production obtained from the land during and subsequent to the month of December, 1966;

(7) Prior to March 3, 1967, plaintiffs made no demand upon defendants for payment of royalties nor gave notice that they considered royalty payments to be delinquent. On March 3, 1967, plaintiffs' attorney made written demand to defendants for cancellation of the lease for failure to timely pay royalties;

(8) Royalties attributable to plaintiff on plant products processed from gas production from the units were paid on February 15, 1967, for the period March through September, 1966; on March 17, 1967, for October, 1966; and on April 18, 1967, for the months of November and December, 1966; the...