Nabors v. Producers' Oil Co

• Decision Date: 12 February 1917
• Docket Number: 21639
• Citation: 140 La. 985,74 So. 527
• Parties: NABORS et al. v. PRODUCERS' OIL CO
• Court: Louisiana Supreme Court

74 So. 527

140 La. 985

NABORS et al. v. PRODUCERS' OIL CO

No. 21639

Supreme Court of Louisiana

February 12, 1917

Rehearing Denied March 12, 1917

SYLLABUS

(Syllabus by the Court.)

A contract by which several persons obligate themselves to do the same thing creates a joint obligation on their part; and a contract whereby something is to be done for the common benefit of several persons creates an obligation that is joint and inseverable as to the obligees.

Whether a contract is joint or severable depends upon the intention of the contracting parties, as revealed by the language of their contract, and the subject-matter to which it refers.

A mining lease whereby several lessors or grantors dispose of the mineral rights on several tracts of land, for a gross price, without stating the amount paid to each grantor and without stating or designating the area of land belonging to each grantor, creates a joint obligation on the part of the lessors or grantors, because it is impossible to affirm that the lessee would have paid a proportionate consideration for the lease or mineral rights on only a portion of the land. In such a contract, a stipulation that operations for the drilling of a well for oil or gas shall be commenced by the lessee within one year, cannot be construed to mean that operations for the drilling of a well shall be commenced on each tract of land belonging to the different lessors or grantors.

In a lease of land for the production of oil and gas, in which the lessee expressly obligates himself to commence the drilling of a well within one year or forfeit the contract, there is no implied obligation on his part to drill as many wells as may be reasonably necessary to secure the oil or gas for the common advantage of the lessor and lessee within the year when oil or gas has not been found in paying quantities.

When the lessee of a tract of land for the production of oil and gas has paid an adequate consideration in cash, and has complied with the only obligation expressly required of him during the first year after the signing of the contract, by the drilling of one test well, and has not found oil or gas in paying quantities, the grantor is not entitled to a cancellation of the lease on the ground that the lessee failed to perform an implied obligation to drill more than one well for the common advantage of the lessor and lessee.

A lease of land for the production of oil and gas, for which the lessee has paid an adequate consideration in cash, and in which he obligates himself to pay a stipulated royalty for all the oil or gas that may be produced, and containing the provision that, under penalty of forfeiture, the lessee shall commence the drilling of a well within one year from the signing of the contract or pay a stipulated consideration each year for an extension of the time, not exceeding a period of three years in all, and containing the provision that, if the lessee discovers oil or gas within the time limit or within the extension of the time limit provided in the contract, the conveyance shall be in full force and effect for 20 years from the discovery of oil or gas and as much longer as such minerals are produced in paying quantities, is a conveyance of a real right, and cannot be construed as the sale of a mere hope of producing oil or gas within one year from the signing of the contract. If the lessee, in such case, has complied with his obligation by commencing the drilling of a well within one year from the signing of the contract and is prosecuting the work with due diligence, the lessor is not entitled to a cancellation of the lease at the expiration of the year on the ground that he has discharged his obligation by permitting the lessee to attempt to realize his hope within the year.

Hampden Story, of Shreveport, for appellant.

Blanchard & Smith, of Shreveport, for appellees.

OPINION

O'NIELL, J.

The defendant appeals from a judgment annulling a contract purporting to be a mining lease of certain lands to the defendant. The plaintiffs, who were the grantors, have answered the appeal and pray that the judgment be amended by allowing their demand for damages for the alleged violation of the contract, on which demand for damages the district court rendered a judgment of nonsuit.

The following is a copy of the contract, viz.:

'This oil and mineral lease and contract, between J. M. Nabors (a married man, whose wife is Mary Lee), W. A. Nabors (a married man, whose wife is Robena Fuqua), J. B. Nabors, a single man, Mrs. Sallie Mag Nabors, widow of E. A. Nabors, individually and as tutrix for the minors, Sarah, Susan, Eugene, Louise, Margaret and Wilfred A., heirs of E. A. Nabors, deceased, all residents of De Soto parish, Louisiana, and Grand Bayou Planting Company, a corporation organized under the laws of Louisiana, with its domicile at Mansfield, La., herein represented by its president, J. M. Nabors, duly authorized by its board of directors (hereinafter styled grantor, whether one or more), and Producers' Oil Company, a corporation organized under the laws of Texas, and domiciled at Houston, Harris county, Texas (hereinafter styled grantee),

'Witnesseth: That said grantor does hereby grant, bargain, sell and convey unto the said grantee all of the oil, gas, coal and other minerals in and under the lands herein described, together with the exclusive right of ingress and egress at all times for the purpose of drilling, mining, and operating for oil, gas, coal and other minerals, and for conducting all operations and the erection of appliances and structures in regard thereto, and for laying all pipe lines necessary for the production, mining, storing and transportation of oil, gas and other minerals, with privilege of renewing and removing all such structures at will, reserving and securing to the grantor, however, the royalties, payments and other benefits and advantages hereinafter provided for.

'It is agreed that the grantee shall have free use of oil, gas, water and wood from said lands for all developments and operations thereon; said lands being described as follows:

'In De Soto and Red River parishes, state of Louisiana, and being Frac. S. E. 1/4 of S. E. 1/4; Frac. S.W. 1/4 of S. E. 1/4; Frac. N. E. 1/4 of S. E. 1/4; Frac. N.W. 1/4 of S. E. 1/4; Frac. S. 1/2 of N. E. 1/4; Frac. E. 1/2 of N.W. 1/4 and Frac. N.W. 1/4 of N.W. 1/4; Frac. N.W. 1/4 of N. E. 1/4 and Frac. S.W. 1/4 of N.W. 1/4 of Sec. 29, Frac. N. E. 1/4 of N. E. 1/4 of Sec. 30, containing 231.33 acres of land, more or less, and being land patented from the state of Louisiana, and lying east of Bayou Pierre, all in T. 13 R. 11, Red River parish, Louisiana. Also Lots 1, 2, 3, and 4 in section 25, T. 13 R. 12 containing 416.5 acres of land more or less and being patented from the state of Louisiana, being in De Soto parish. Also west half of S.W. 1/4 of S. E. 1/4, Sec. 11 and S.W. 1/4 of N. E. 1/4, Sec. 15, and N. E. 1/4 of N.W. 1/4 of Sec. 26, and the S. E. 1/4 of Sec. 26, being 260 acres of land all in T. 12 R. 12 De Soto parish, Louisiana. Making a grand total of 907.83 acres of land, more or less in De Soto and Red River parish, state of Louisiana.

'Grantor here warrants and defends the title to the above-described lands unto the said grantee and the successors and assigns of such, and obligate themselves to hold said grantee harmless from all damages by reason of any defect in title.

'To have and to hold all and singular the above-described premises, rights, properties and privileges, and all such as are hereinafter specified, unto the said grantee, and the heirs, successors and assigns of such, forever, upon the following terms:

'1. The considerations of this contract are as follows: (a) The sum of twenty-two thousand six hundred and ninety-four and 75/100 dollars, payment whereof by the grantor is hereby acknowledged; (b) such other payments by the grantee, if any, as may be hereinafter provided for; (c) the royalties hereinafter specified; and (d) the expenditure by the grantee of such sums of money as may have been or may hereafter be made upon the above premises or upon neighboring lands, for the development of mineral resources in such locality; and the payment and expenditures made or that may be made by grantor are considerations, not only for the minerals in the lands aforesaid, but for all the other privileges granted herein.

'2. The royalty above mentioned as to oil shall be a quantity equal to one-eighth (1/8) of all produced and saved upon the premises, the same to be delivered at the well, free of charge to the grantor, or to his credit, in the pipe line to which such wells may be connected.

'3. The royalty for coal shall be four cents for every ton of same that is mined and marketed, payable monthly.

'4. The royalty for gas shall be $ 300 per annum for each well from which gas is used off the premises, the grantor to have the privilege at his own risk and cost to make connections and use gas free of charge for one dwelling on the premises.

'5. The royalty for any other minerals discovered shall be one-tenth of the net proceeds arising therefrom while the same are being used off the premises.

'6. Under penalty of forfeiture of the rights and estate hereby granted, operations for the drilling of a well for oil or gas shall be begun within one year from the time of final execution and delivery of this contract, and if so forfeited the rights and liabilities of both parties shall thereupon be ended. Forfeiture may, however, be saved by the grantee, and the vitality hereof be continued and maintained, notwithstanding operations be not begun within the proper time limit, provided only that, for the privilege of delay in such beginning, from time to time, the grantee may pay, as...