Smith v. West Virginia Oil & Gas Co.

• Decision Date: 25 June 1979
• Docket Number: No. 63766,63766
• Citation: 373 So.2d 488
• Court: Louisiana Supreme Court
• Parties: William A. SMITH et al., Plaintiffs-Appellants-Respondents, v. WEST VIRGINIA OIL & GAS CO. et al., Defendants-Appellees-Relators.

Page 488

373 So.2d 488

William A. SMITH et al., Plaintiffs-Appellants-Respondents, v. WEST VIRGINIA OIL & GAS CO. et al., Defendants-Appellees-Relators.

No. 63766.

Supreme Court of Louisiana.

June 25, 1979.

C. McVea Oliver, Oliver & Wilson, George M. Wear, Sr., Monroe, for defendants-appellees-relators.

William A. Hargiss, Monroe, for plaintiffs-appellants-respondents.

TATE, Justice.

The plaintiff landowners sue to enjoin the defendants, primarily the lessee of mineral rights on the plaintiffs' property granted by plaintiffs' ancestors in title, from constructing a gas pipeline across their property or from removing any gas existing under it.

The trial court denied the plaintiffs' rule for a preliminary injunction, holding that the plaintiffs had failed to establish irreparable injury. See La.C.Civ.P. art. 3601.

The court of appeal reversed, holding that the plaintiffs, as owners of the land, were entitled to a preliminary injunction, La.C.Civ.P. art. 3663, even absent a showing of irreparable injury, upon a finding that the lease had expired due to the failure to produce minerals in paying quantities. 365 So.2d 269 (La.App. 2d Cir., 1978).

We granted certiorari, 367 So.2d 391 (La.1979), to determine whether a mineral lessor-landowner or his successor in title is entitled to a preliminary injunction, absent a showing of irreparable injury, to prevent his mineral lessee from developing or alienating minerals covered by the lease, based simply on the lessor's assertion that the lease has expired due to failure to produce minerals in paying quantities.

I

Because the procedural posture of this case is crucial to our holding, we will set out in some detail the pleadings and actions in the courts below.

Prior to the present rule for an injunction proceeding, the plaintiffs filed an ordinary action on March 1, 1978 for a judgment declaring that a mineral lease between the defendants and the plaintiffs' predecessors in title had terminated due to expiration of its term through cessation of production in paying quantities by the lessees or, alternatively, due to the defendants failure to protect the plaintiffs from drainage. ¹

On the same day, a sublessee of the defendants notified plaintiffs of his intention to construct a gas line on the property in question so that gas could be taken and sold from certain completed but non-producing wells on plaintiffs' property.

On March 2, 1978, by a separate rule to show cause, alleging the invalidity of the lease and alleging that irreparable loss, injury, or damage would otherwise result, the plaintiffs sought preliminary and permanent injunctions and a temporary restraining order to prevent defendants from constructing any pipeline on their property for the delivery of gas from wells on the plaintiffs' property and from disposing of, alienating, or encumbering any gas produced from wells on the petitioner's property.

Upon the plaintiffs providing bond, the trial court granted the temporary restraining order on March 2, 1978, and ordered the defendants to show cause on March 9, 1978 why a preliminary injunction should not issue.

The defendants filed an opposition to the application for preliminary injunction and a motion to dissolve the temporary restraining order and for damages, alleging that the lease was valid and extant and that failure to grant the preliminary injunction would not cause the plaintiffs irreparable injury since the gas line was to be located in an area of unimproved woodlands and since any gas removed would be measured by a meter so that plaintiffs could be compensated for its value.

The plaintiffs' rule for the preliminary injunction and the defendants' motion to dissolve the restraining order were tried on March 13, 1978, to which date it had been continued for trial when the rule came up for hearing on the date set four days earlier. The district court rendered judgment in favor of the defendants dissolving the temporary restraining order and denying the preliminary injunction. The trial court held that the plaintiffs had not met their burden of showing that irreparable injury would occur if the preliminary injunction were not issued, since the land was unimproved and the gas removed could be measured and paid for.

The trial court declined to rule on whether the lease had expired due to the failure to produce minerals in paying quantities. It stated: "The court notes there is a genuine issue as to the validity of the lease involved. On the trial of the matter, there was certain evidence presented which showed that the lease had expired, and there was certain evidence presented by the defendants which showed that the lease was still in existence." ²

The trial court therefore held that the plaintiff landowners had not sufficiently proved at the hearing of the rule for a preliminary injunction that the lease had expired or was non-existent. The trial court further expressly noted that this issue could be determined at the trial on the merits of the principal demand (i. e., for declaratory judgment that the mineral lease had expired or, alternatively, for cancellation of the lease due to the defendants' failure to protect from drainage), to which the rule for a preliminary injunction was merely ancillary. ³

Instead of fixing the principal demand for trial on the merits, the plaintiff landowners appealed the denial of the preliminary injunction sought by them.

II

On appeal, the court of appeal reversed.

Reviewing the showing made by the plaintiffs (but see footnote 2 above), the intermediate court determined that the lease had expired for failure to produce in paying quantities. It further held that, since the plaintiffs were the owners and entitled to possession and enjoyment of their land, they were entitled to injunctive relief under the provisions of La.C.Civ.P. art. 3663, without showing irreparable injury, Poole v. Guste, 261 La. 1110, 262 So.2d 339, 344-45 (1972).

For reasons explained below, the court of appeal was in error in holding that the validity of the mineral lease was at issue in the trial of the rule for a preliminary injunction, so that the mineral lessor was entitled to a preliminary injunction under La.C.Civ.P. art. 3663, without showing irreparable injury, if he proved that the lease had expired due to failure to maintain production in paying quantities.

III

Except as otherwise provided by law (such as by La.C.Civ.P. art. 3663), injunctive relief may be granted only "where irreparable injury, loss, or damage may otherwise result to the applicant." La.C.Civ.P. art. 3601. ⁴ In the instant case, the trial court denied the preliminary injunction on the basis that irreparable injury was not shown.

The court of appeal reversed. It reasoned that, by reason of La.C.Civ.P. art. 3663(2) (to be quoted below), no irreparable injury need be shown, since (accepting the (truncated, see footnote 2) showing educed at the trial of the rule, the lease under which the defendants claimed the right to the minerals had expired) the defendants were likened to trespassers on the land against whom, without any showing of irreparable injury, an injunction may issue to protect ownership and possession. Moorhead v. State, Department of Highways, 322 So.2d 330 (La.App. 2d Cir. 1975); Bagents v. Crowell Long Leaf Lumber Co., 20 So.2d 641 (La.App. 1st Cir. 1945).

In our view, the intermediate court erred in reversing for this reason the trial court's denial of a preliminary injunction.

La.C.Civ.P. art. 3663(2), the enactment relied upon by the court of appeal, provides that injunctive relief "to protect or restore possession of immovable property or of a real right, is available to: * * * (2) A person who is disturbed in the possession which he and his ancestors in title have had for more than a year of immovable property or of a real right of which he claims the ownership, the possession, or the enjoyment."

This code provision does not authorize injunctive relief to a mineral lessor against a mineral lessee of himself or his ancestor in title, where sought solely on the basis that the lessee's use or exercise of rights on the property are no longer authorized since the lease has terminated. In the light of applicable provisions of the Mineral Code and of the Code of Civil Procedure, neither the mineral lessor nor the mineral lessee are regarded as in possession adverse to the other for purposes of the real actions or of affording injunctive relief under La.C.Civ.P. art. 3663 to the lessor-owner of the land against his lessee's use or exercise of rights granted by the mineral lease:

La.C.Civ.P. art. 3670 (1974) provides that the owner of land subject to a mineral lease cannot assert a real action "against the lessee on account of the termination of the lease by running of the term or occurrence of an express resolutory condition." ⁵ This is the procedural corollary of Article 154 of the Mineral Code, La.R.S. 31:154, which indicates that the possession of land as its owner does not constitute possession of the mineral rights inherent in such ownership, insofar as concerns "a mineral lessee of the possessor or any of his ancestors." ⁶

The Official Comment to this latter article expressly notes its intent that the lessor-owner of the surface is not in possession adverse to his lessee. It further notes that the lessor-owner cannot obtain relief against his mineral lessee by a real action, but is instead relegated to an action to declare the expiration of the lease. ⁷

Therefore, the present landowner-lessors are not entitled to injunctive relief against their mineral lessee under La.C.Civ.P. art. 3663(2), which permits the issuance thereof, even without irreparable injury, in order to protect ownership or possession. Simply stated, under the articles of the mineral code and the code of civil procedure previously cited, the mineral lessor is not considered in possession vis a vis his mineral lessee, since the lessor cannot possess...