Hibbert v. Mudd
| Decision Date | 29 April 1974 |
| Docket Number | No. 53271,53271 |
| Citation | 294 So.2d 518 |
| Parties | R. E. HIBBERT v. William MUDD et al. |
| Court | Louisiana Supreme Court |
W. C. Hollier, Bailey & Hollier, Lafayette, for plaintiff-applicant.
James Domengeaux, Domengeaux & Wright, Lafayette, for defendants-respondents.
Lawrence K. Benson, Charles A. Snyder, Milling, Benson, Woodward, Hillyer & Pierson, New Orleans, William M. Hall, Jr., Liskow & Lewis; Lawrence E. Donohoe, Jr., Davidson, Meaux, Onebane & Donohoe, Lafayette, for amici curiae.
In this concursus proceeding, R. E. Hibbert sought to determine the ownership of certain accrued production royalties under an oil and gas lease which had been executed in 1959 between Edna Mudd Anderson, as lessor, and himself, as lessee. The said royalties were deposited in the registry of the court at the time the concursus was filed. Edna Mudd Anderson died intestate on September 20, 1961 without legitimate ascendants, descendants or collaterals. Production under the aforesaid lease commenced on December 9, 1961. A dispute arose as to the title to these royalties between lessor's collaterals. One group was allegedly from a miscegenous union (Mudd-Sinclair), and the other group from an adulterous union (Sinclair-Birrat). The latter groups, as well as the State of Louisiana, were impleaded in the concursus proceeding.
The State of Louisiana filed an answer claiming the property by escheat for want of any heirs. The Mudd-Sinclair claimants averred they were owners of record of the property by virtue of a judgment of possession dated December 5, 1961 and a transfer from the Sinclair-Birrat claimants. Coupled to that answer was a reconventional demand for cancellation of the Anderson lease because of Hibbert's failure to pay royalties to the reconvenors or to the estate of Edna Mudd Anderson during a nineteen-month period from commencement of production to the filing of the concursus.
In due course, Hibbert filed answer setting up as defenses that reconvenors had no standing or capacity to seek cancellation because they had never been recognized as lessor's irregular heirs by a contradictory proceeding in the form and manner provided by the codal articles dealing with irregular successions; that no demand for payment had been made on him nor had he been placed in default, which action was a condition precedent to an action to cancel under the unusual circumstances presented; and that the delay in payment was legally justified by a bona fide and unresolved dispute as to the ownership of the said royalties between the State of Louisiana and lessor's miscegenous and adulterous collaterals. In the alternative, if cancellation was decreed, Hibbert sought to invoke paragraph 3 of the lease providing that, in the event the forfeiture or cancellation for any cause, lessee would be entitled to retain unit acreage from the effects of cancellation.
Initially, the district court maintained a motion for summary judgment filed by the Mudd-Sinclair claimants as against the claims of the State of Louisiana. The matter was appealed, and the Court of Appeal reversed, holding there was a genuine issue of fact as to whether the Mudd-Sinclair unit was miscegenous. The cause was remanded for trial. 187 So.2d 503 (La.App.).
Following this remand, the district court rendered judgment in favor of the Mudd-Sinclair claimants as against the claims of the State. The demand for cancellation was granted on the finding that Hibbert would have been protected had he paid royalties to lessor's 'estate' and that his failure to do so was in violation of R.S. 30:105 and was thus an active breach of the lease contract sufficient in law to serve as a basis for cancellation. The effect of cancellation was, however, limited to the non-unitized areas of the leased premises pursuant to the 'forfeiture' provision incorporated as paragraph 3 of the lease, permitting lessee's retention of all that portion of the acreage included in units.
Hibbert appealed. The Mudd-Sinclair claimants answered the appeal, praying for amendment of the judgment so as to order cancellation of the Anderson lease in its entirety. The State and the Sinclair-Birrat claimants neither appealed nor answered the appeal. The Court of Appeal reversed the district court insofar as its decree permitted Hibbert to retain unitized acreage from the effects of cancellation, and, in all other respects, the judgment was affirmed. 272 So.2d 697 (La.App.). We granted certiorari. 274 So.2d 390 (La.).
As previously indicated, Edna Mudd Anderson died intestate on September 20, 1961, leaving no legitimate ascendants, descendants or collaterals. Hibbert completed a shut-in gas well on the Anderson lease on or about September 18, 1961. He testified that he learned of the lessor's death two days after completion of said well. The succession of Edna Mudd Anderson was opened in the 15th Judicial District Court for the Parish of Lafayette, and, on December 5, 1961, the Mudd-Sinclair and Sinclair-Birrat claimants were recognized as the irregular heirs of the decedent and sent into possession of her property. No administrator was appointed or qualified. Under the terms of the ex parte judgment of possession, all monies and funds owed to the succession were ordered delivered to the attorney for the Mudd-Sinclair and Sinclair-Birrat claimants. The gas well completed on September 18, 1961 was placed on production on December 9, 1961, some four days after the ex parte judgment was signed.
After learning of the death of Mrs. Anderson as aforesaid, Hibbert testified that he telephoned the office of the law firm which had originally secured the Anderson lease for him and had rendered him a title opinion in connection therewith. Hibbert further stated that counsel was out of the office at the time and, after identifying himself, informed the lady who answered the phone that he desired the names of the heirs, if any, of Mrs. Anderson and requested a copy of the judgment of possession. Hibbert testified, and it was stipulated that he was never furnished with a copy of the judgment of possession.
Hibbert's testimony is that, since this same law firm had previously performed legal services for him in connection with this lease, it was his feeling that he was 'in friendly hands' and that a copy of the judgment of possession would be furnished him in due course. While the record indicates that Hibbert did not know that this law firm represented the claimants in the succession proceedings, it does show he knew that they had represented the lessor at the time the lease was confected. The record also shows that this same law firm did in fact handle the succession proceedings and also represents the Mudd-Sinclair and Sinclair-Birrat claimants in this matter.
No demand for payment was made on Hibbert. However, on September 10, 1962, Hibbert received written demand for cancellation of the mineral lease involved in this suit. This was some eight or nine months after production. Thereafter, the parties entered into negotiations and exchanged correspondence over a period of the next ten months in an attempt to settle the title dispute to the royalties. Also, no demand for payment was made during this latter period. Ultimately, a compromise offer was made on July 9, 1963 which was rejected on July 19, 1963. On that date, Hibbert filed the concursus petition.
The alleged heirs claim that, despite the fact that production was established under the lease as of December 9, 1961, no payment of royalties was made or tendered prior to the institution of the concursus proceeding some nineteen months later. 1 Hibbert contends that the royalties in question were not paid because the lessor, Edna Mudd Anderson, died intestate in September of 1961, creating a title dispute between her alleged natural brothers and sisters and/or their descendants and the State of Louisiana.
Cancellation of the lease is sought for failure to pay production royalties for nineteen months without justification. It is contended that the failure in the instant case amounted to an active breach of the lease warranting the cancellation thereof without the necessity of placing lessee in default under the holdings in Melancon v. Texas Company, 230 La. 593, 89 So.2d 135 (1956); Bollinger v. Texas Company, 232 La. 637, 95 So.2d 132 (1957); Bailey v. Meadows, 130 So.2d 501 (La.App.1961); and Pierce v. Atlantic Refining Company, 140 So.2d 19 (La.App.1962). The Court of Appeal so held. We reverse.
Very recently, we summarized the present jurisprudence in Wilson v. Sun Oil Company, 290 So.2d 844 (La.), Docket No. 52,764 on original hearing, handed down August 20, 1973, affirmed on rehearing, 262 La. 1164, 266 So.2d 446, February 18, 1974, as follows:
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