Salvex, Inc. v. Lewis

• Decision Date: 28 June 1989
• Docket Number: No. 88-383,88-383
• Citation: 546 So.2d 1309
• Parties: SALVEX, INC., Plaintiff-Appellee, v. Dolores Hackett LEWIS, et al., Defendants-Appellants. 546 So.2d 1309
• Court: Court of Appeal of Louisiana — District of US

Page 1309

546 So.2d 1309

SALVEX, INC., Plaintiff-Appellee, v. Dolores Hackett LEWIS, et al., Defendants-Appellants.

No. 88-383.

546 So.2d 1309

Court of Appeal of Louisiana Third Circuit.

June 28, 1989.

Rehearing Denied Aug. 1, 1989.

Ingram & Baker, Stephen D. Baker, Lafayette, Jones, Jones & Alexander and Jerry Jones, Cameron, for plaintiff/appellee.

Camp, Carmouche, Barsh, Gray, Hoffman & Gill, W. Joe Mize, Lake Charles, for defendants/appellants Delores Hackett Lewis, et al.

Brezeale, Sachse & Wilson, Frank S. Craig, III, and Robert L. Atkinson, Baton Rouge, for third party defendants/appellees Standard Oil Production Co. and Sun Exploration and Production Co.

Before DOMENGEAUX, LABORDE and KING, JJ.

LABORDE, Judge.

Plaintiff, Salvex, Inc., (Salvex), a mineral lessee, brought this action seeking a declaration of a right of passage for pipeline purposes over defendants' property to the nearest oil sales line. In the alternative, plaintiff demands a right of passage to the nearest public road. Defendants, trustees of the Rutherford Estate Trust and various other individuals (Rutherfords), answered the suit and filed a reconventional demand against Salvex for trespass and a third party demand against Standard Oil Production Company (Standard), formerly Sohio Petroleum Company, and Sun Exploration and Production Company (Sun) also for trespass. Both plaintiff and third party defendants filed exceptions of prescription. The trial court sustained the third party defendants' exceptions of prescription in the pretrial order. It also granted the plaintiff's exception of prescription, dismissing the reconventional demand. At trial on the merits, the trial court found for the plaintiff. Defendants appeal that decision and also bring a supplemental appeal on the granting of the exception of prescription as to the third party demand and a second supplemental appeal on the granting of the exception of prescription as to the reconventional demand. Third party defendants filed a motion to dismiss the supplemental appeal which was denied by this court.

FACTS

In 1943, the defendants' ancestor in title, Edward B. Rutherford, granted a mineral lease to Sun, which applied to all of Section 21, Township 15 South, Range 6 West, Cameron Parish, Louisiana (Section 21). In turn, Sun assigned part of its interest in the mineral lease to Standard. Standard proceeded to drill several wells on the property, establishing its production and storage facilities on the east half of the leased acreage. Standard sold its oil to the Permian Corporation (Permian) at a sales point located on the east half of the property. Although it is unclear exactly who constructed the pipeline, defendants allege that Standard constructed and buried a three inch pipeline in order to transport its oil and gas from the western half of the property to the eastern half. The pipeline traverses the east half of the property and is approximately 550 feet in length.

In 1974, all production ceased from the east half of the property and Standard and Sun released all of their right, title and interest in and to the leased acreage, less and except the west half. Defendants allege that from 1974 to 1985, Standard continued to use its production and storage facilities on the released property (the east half) and failed to remove the oil pipeline.

In February of 1985, Standard and Sun assigned their interest in the mineral lease to Salvex, which, of course, was limited to the west half of the property. Subsequently, the defendants filed an action for injunctive relief against Standard, Sun and Salvex, requiring that the production and storage facilities be removed and use of the pipeline cease. The trial court entered an order that the defendants remove the equipment from the property. The pipeline was not removed and the Rutherfords sought to have Salvex held in contempt.

At the contempt hearing, Salvex contended that since the west half of Section 21 is not traversed or abutted by any public roads, it is an enclosed estate, and thus, Salvex is entitled to a right of passage across the east half of the property to the Permian sales line. Salvex further argued that for this reason it was not required to remove the pipeline. The trial court ruled that Salvex would not be held in contempt if it brought suit to have the right of passage recognized. Salvex filed suit within the applicable delays, asking the court to recognize a servitude of passage via the pipeline or, in the alternative, a right of passage to the nearest public road.

The trial court held that the west half of Section 21 was an enclosed estate and that Salvex, as mineral lessee, had the right to demand passage. Having determined that Salvex was entitled to a servitude of passage, the trial court decided that the 550 feet of pipeline, crossing the east half of Section 21 and leading to the Permian sales line, was the appropriate passageway for the servitude. Finally, the Court awarded the defendants $121.22 as compensation for the taking.

MINERAL LEASES AND ARTICLE 689 OF THE CIVIL CODE

The threshold determination we must make in this case is whether the plaintiff, as a mineral lessee, has standing to bring suit under Article 689 of the Louisiana Civil Code, to seek a right of passage from an enclosed estate. The trial court found that the plaintiff did have standing pursuant to Article 16 of the Louisiana Mineral Code. Although defendants did not specifically brief this issue, it is mentioned in a footnote in their brief, and we find its resolution to be crucial to the determination of this case.

The issue of whether or not a mineral lessee has the right to seek a servitude of passage under Article 689 of the Civil Code was addressed by the Louisiana Supreme Court in Harwood Oil & Mining Co. v. Black, 240 La. 641, 124 So.2d 764 (1960). In Harwood, the plaintiff, a mineral lessee, sought to obtain passageway over its neighbor's estate. The Court held that since a mineral lease does not confer a real right in the land, the plaintiff is without right of action to claim a servitude of passage, it being a predial or real servitude. In reaching its decision, the Court in Harwood relied heavily on a long-standing line of jurisprudence holding that mineral leases do not create or impart real rights. Thus, to fully comprehend Harwood it is necessary to examine this long-standing line of jurisprudence and the legislative response to it.

Seeking to clear up the prevailing confusion generated by earlier cases, the Louisiana Supreme Court in Gulf Refining Co. of Louisiana v. Glassell, 186 La. 190, 171 So. 846 (1936) held that a mineral lease does not create a real right in favor of the lessee; it merely produces personal rights and obligations between the parties. Two years later, in 1938, the Legislature enacted Act 205 which classified oil and gas leases as real rights and provided that they may be asserted, protected and defended in the same manner as the ownership or possession of other immovable property. Notwithstanding this pronouncement, the Louisiana Supreme Court continued to assert that mineral leases did not create real rights, finding the Act to be merely procedural in character and not designed to alter the substantive nature of mineral leases. Arnold v. Sun Oil Co., 218 La. 50, 48 So.2d 369 (1949); Tyson v. Surf Oil Co., 195 La. 248, 196 So. 336 (1940). In 1950, presumably in response to the Arnold decision, the Legislature amended the 1938 statute and incorporated it into LSA-R.S. 9-1105 (now repealed). This statute read as follows:

"Oil, gas, and other mineral leases, and contracts applying to and affecting these leases or the right to reduce oil, gas, or other minerals to possession, together with the rights, privileges, and obligations resulting therefrom, are classified as real rights and incorporeal immovable property. They may be asserted, protected, and defended in the same manner as may be the ownership or possession of other immovable property by the holder of these rights, without the concurrence, joinder, or consent of the landowner, and without impairment of rights of warranty, in any action or by any procedure available to the owner of immovable property or land. This Section shall be considered as substantive as well as procedural so that the owners of oil, gas and other mineral leases and contracts within the purpose of this Section shall have the benefit of all laws relating to the owners of real rights in immovable property or real estate." [Emphasis Added]

The Legislature's declaration that the act was to apply substantively as well as procedurally seemed to put that matter to rest.

The Court's reaction to the 1950 amendment came in Reagan v. Murphy, 235 La. 529, 105 So.2d 210 (1958). In that case, the Court refused to adopt the position that the amendment to LSA-R.S. 9:1105 had the effect of changing the nature and purpose of the mineral lease contract. It stated:

"This proposition cannot be sustained as there is nothing contained in the amendatory section to indicate such an aim. It is to be noted, imprimis, that the original law does not say that mineral leases are real rights. It declares, in substance, that they are to be classified as real rights and 'may be asserted, protected, and defended in the same manner' as may be the ownership or possession of other immovable property. And the amendment does not say that the statute created substantive real rights. It merely provides that the law shall be considered as substantive, in order that the owners of mineral leases 'shall have the benefit' of real property laws.

Indeed, it is perfectly evident from even a casual reading of the amendment that the Legislature did not intend to change the essence of the contractual rights and obligations between mineral lessees and lessors but only that it sought to place mineral lessees on the same level as landowners by conferring on them 'benefits' of the laws relating to...