Leiter Minerals, Inc. v. California Co.

• Decision Date: 29 June 1961
• Docket Number: No. 45527,45527
• Citation: 241 La. 915,132 So.2d 845
• Parties: LEITER MINERALS, INC. v. CALIFORNIA CO., Allen L. Lobrano and Mrs. Ethel M. Fontennelle Lobrano, Individually and as Natural Tutrix of Her Minor Children, Robert Leo Lobranoand Karen Katherine Lobrano.
• Court: Louisiana Supreme Court

Page 845

132 So.2d 845

241 La. 915

LEITER MINERALS, INC. v. CALIFORNIA CO., Allen L. Lobrano and Mrs. Ethel M.

Fontennelle Lobrano, Individually and as Natural

Tutrix of Her Minor Children, Robert Leo

Lobranoand Karen Katherine Lobrano.

No. 45527.

Supreme Court of Louisiana.

June 29, 1961.

Rehearing Denied Oct. 4, 1961.

Plauche & Plauche , S. W. Plauche , Jr., Lake Charles, for plaintiff-applicant.

Charles D. Marshall, Eugene D. Saunders, New Orleans, for defendants-respondents.

Tucker, Bronson & Martin, H. M. Holder, Shreveport, as amicus curiae.

HAWTHORNE, Justice.

On December 21, 1938, Thomas Leiter sold to the United States of America a tract of land in Plaquemines Parish, Louisiana, containing 8,711 acres more or less, for a recited consideration of $25,000. ¹ In this act of sale there is the following mineral reservation:

'The Vendor reserves from this sale the right to mine and remove, or to grant to others the right to mine and remove, all oil, gas and other valuable minerals which may be deposited in or under said lands, and to remove any oil, gas or other valuable minerals from the premises; the right to enter upon said lands at any time for the purpose of mining and removing said oil, gas and minerals, said right, subject to the conditions hereinafter set forth, to expire April 1, 1945, it being understood, however, that the vendors will pay to the United States of America, 5% Of the gross proceeds received by them as royalties or otherwise from all oil or minerals so removed from in or under the aforedescribed lands, until such time as the vendors shall have paid to the United States of America, the sum of $25,000, being the purchase price paid by said United States of America for the aforedescribed properties.

'Provided, that if at the termination of the ten (10) year period of reservation, it is found that such minerals, oil and gas are being operated and have been operated for an average of at least 50 days per year during the preceding three (3) year period to commercial advantage, then, in that event, the said right to mine shall be extended for a further period of five (5) years, but that the right so extended shall be limited to an area of twenty-five acres of land around each well or mine producing and each well or mine being drilled or developed at time of first extension, to-wit: April 1, 1945.

'Provided, that this said right to mine as previously stated shall be further extended from time to time for periods of five (5) years whenever operation during the preceding five (5) year period has been for an average of 50 days per year during this period, and

'Provided that at the termination of the ten (10) year period of reservation, if not extended, or at the termination of any extended period in case the operation has not been carried on for the number of days stated, the right to mine shall terminate, and complete fee in the land become vested in the United States.

'The reservation of the oil and mineral rights herein made for the original period of ten (10) years and for any extended period or periods in accordance with the above provisions shall not be affected by any subsequent conveyance of all or any of the aforementioned properties by the United States of America, but said mineral rights shall, subject to the conditions above set forth, remain vested in the vendors.'

Approximately 18 months after the date of the deed containing this mineral reservation, the Louisiana Legislature of 1940 adopted Act 315, now R.S. 9:5806, which reads in part as follows:

'Section 1. Be it enacted by the Legislature of Louisiana, That when land is acquired by conventional deed or contract, condemnation or expropriation proceedings by the United States of America, or any of its subdivisions or agencies, from any person, firm or corporation, and by the act of acquisition, verdict or judgment, oil, gas and/or other minerals or royalties are reserved, or the land so acquired is by the act of acquisition conveyed subject to a prior sale or reservation of oil, gas and/or other minerals or royalties, still in force and effect, said rights so reserved or previously sold shall be imprescriptible.'

Neither Thomas Leiter nor his successors in title have exercised the rights reserved in the 1938 deed to the government. In March, 1949, the United States granted to Frank J. and Allen L. Lobrano oil, gas, and mineral leases covering portions of the property described in its deed of acquisition. Under these leases the California Company has developed the property, and as of February, 1958, there were more than 80 wells on this land producing over 7,500 barrels of oil per day. From this production the United States has been paid royalties of more than $3,500,000.

For an understanding of the problem before us it is necessary to outline the history of the litigation that gave rise to this declaratory judgment suit with which we are here concerned.

In 1953 Leiter Minerals, Inc., instituted a petitory action in the district court for Plaquemines Parish, Louisiana, to have itself declared owner of the mineral rights under the tract of land sold to the United States in 1938 by Thomas Leiter, the corporation's predecessor in title. Named as defendants were the California Company and Lobrano in their capacity as lessees of the United States government; the United States was not a party to the suit. While Leiter's suit was pending in the Louisiana court, the United States instituted an action in the United States District Court for the Eastern District of Louisiana, asserting its title to these mineral rights and seeking an injunction to restrain Leiter Minerals, Inc., plaintiff in the suit in the state court, from litigating its claim in that court. See United States v. Leiter Minerals, Inc. et al., D.C., 127 F.Supp. 439. On appeal the United States Fifth Circuit Court of Appeals concluded that the federal district court was vested with exclusive jurisdiction to determine title to the mineral rights claimed by Leiter, and that the United States district judge was right in causing a preliminary injunction to issue. See 224 F.2d 381.

The United States Supreme Court, having granted certiorari, held that the United States district court properly exercised its jurisdiction to entertain the suit filed there, and that the granting of the preliminary injunction by that court was proper. See Leiter Minerals, Inc., v. United States, 352 U.S. 220, 77 S.Ct. 287, 292, 1 L.Ed.2d 267. The Supreme Court, however, modified the judgment of the Court of Appeals to permit an interpretation of Louisiana Act 315 of 1940 by the state court, saying:

'The Government contends that Act No. 315 of 1940 does not apply when the parties themselves have contracted for a reservation of specific duration and that if the statute is construed to apply to this situation, it would impair the obligation of the Government's contract. Petitioner disagrees. The Supreme Court of Louisiana has never considered the specific issue or even discussed generally the rationale of the statute, especially with reference to problems of constitutionality. The District Court recognized the importance of the statute in deciding this case; it also recognized that a problem of interpretation was involved, that the statute cannot be read by him who runs. What are the situations to which the statute is applicable? Is the statute merely declaratory of prior Louisiana law? What are the problems that it was designed to meet? The answers to these questions are or may be relevant. Before attempting to answer them and to decide their relation to the issue in the case, We think it advisable to have an interpretation, if possible, of the state statute by the only court that can interpret the statute with finality, the Louisiana Supreme Court. The Louisiana declaratory judgment procedure appears available to secure such an interpretation, La.Rev.Stat., 1950, 13:4231 et seq., and the United States of course may appear to urge its interpretation of the statute. See Stanley v. Schwalby, 147 U.S. 508, 512, 513, 13 S.Ct. 418, 419, 420, 37 L.Ed. 259. It need hardly be added that the state courts in such a proceeding can decide definitively only questions of state law that are not subject to overriding federal law.

'We therefore modify the judgment of the Court of Appeals to permit an interpretation of the state statute to be sought with every expedition in the state court in conformity with this opinion.' (Italics ours.)

The proceeding presently before us was instituted by Leiter Minerals, Inc., under the Louisiana Declaratory Judgments Act, Arts. 1871--1883, La.Code Civ.Proc., pursuant to the above quoted directive of the Supreme Court of The United States. Named as defendants are the Lobranos and the California Company; the United States is not a party to this proceeding.

The state district court in which this suit was filed concluded that Act 315 of 1940 applied to the mineral reservation contained in Leiter's deed to the United States, that the mineral rights so reserved were rendered imprescriptible by the act, and that the act was not unconstitutional in any respect. On appeal the Louisiana Fourth Circuit Court of Appeal reversed the state district court and decreed 'that Act 315 of 1940 (LSA-R.S. 9:5806) does not apply in this case since the mineral reservation is of specific ex contractu duration, less than the prevailing statutory period of 10 years for non-user'. See Leiter Minerals, Inc., v. California Co. et al., La.App., 126 So.2d 76, 82. On application of plaintiff Leiter we granted a writ of certiorari.

To us it is evident that in this action, instituted pursuant to the directive of the United States Supreme Court under the Louisiana Declaratory Judgments Act, we are called upon to render only an advisory opinion. As between litigants this court has consistently refused to render advisory opinions under the Declaratory Judgments Act, for even under ...