State ex rel. Superior Oil Co. v. Texas Gas Transmission Corp.

• Decision Date: 11 December 1961
• Docket Number: No. 45684,45684
• Citation: 242 La. 315,136 So.2d 55
• Parties: STATE ex rel. SUPERIOR OIL COMPANY v. TEXAS GAS TRANSMISSION CORPORATION.
• Court: Louisiana Supreme Court

Page 55

136 So.2d 55

242 La. 315

STATE ex rel. SUPERIOR OIL COMPANY v. TEXAS GAS TRANSMISSION CORPORATION.

No. 45684.

Supreme Court of Louisiana.

Dec. 11, 1961.

Rehearing Denied Jan. 15, 1962.

F. P. Jones, Jr., Houston, Tex., Wm. W. Bell, Jr., Lake Charles, Milling, Saal, Saunders, Benson & Woodward, H. H. Hillyer, Jr., New Orleans, for relator.

Jones, Walker, Waechter, Poitevent, Carrere & Denegre, A. J. Waechter, Jr., New Orleans, for defendant.

HAWTHORNE, Justice.

In its petition in this suit relator, the Superior Oil Company, prays that pursuant to R.S. 30:105--107 a writ of mandamus issue herein commanding the respondent, Texas Gas Transmission Corporation, 'to pay forthwith to Relator the purchase price attributable to .164146 of the whole of the gas received from and after May 1, 1957, by the said defendant from well known as Begnaud No. 1 Well situated in the Southeast Quarter of Section 25, Township 8 South, Range 3 East, St. Landry Parish, Louisiana, or to show cause to the contrary * * *'. Respondent filed an exception of no cause or right of action aimed at the form of this action, contending that relator is not entitled to proceed by mandamus because under the facts and circumstances of this case the provisions of R.S. 30:105--107 are not available. With full reservation of its rights under this exception respondent filed an answer alleging that under the Natural Gas Act ¹ the only persons legally entitled to sell gas from Begnaud No. 1 well and receive payment for it were the sellers named in a gas purchase contract. The exception was referred to the merits by the trial judge, and after trial the exception was overruled and judgment was rendered for the relator as prayed for. On appeal the Court of Appeal, Fourth Circuit, reversed the judgment of the lower court, sustained the exception of no cause or right of action, and dismissed the suit. See 128 So.2d 849. On application of relator this court granted a writ.

On lands under lease to them Joseph M. Jones, Texas Gas Exploration Corporation, and others drilled and completed a producing gas well called Begnaud No. 1 well, which is in the Cankton Field of St. Landry Parish. Thereafter, on July 1, 1955, Jones and associates entered into a contract with the respondent, Texas Gas Transmission Corporation, in which Jones and associates agreed to sell, and the respondent agreed to buy for resale in interstate commerce, gas produced from the Begnaud well. This contract, which was to remain in full force and effect for a term of 20 years, fixed the price at a graduated scale, with periodic specific increases. The contract provided for quantity and quality of gas, pressure, point of delivery, demand, statement, bill, and payment notice to the individual designated therein, and contained other provisions which we need not mention here.

Because the sale of the gas to the respondent by Jones and associates was for resale in interstate commerce, Jones and associates filed the gas purchase contract with the Federal Power Commission and obtained a certificate of public convenience and necessity. Subsequently revised rate schedules were filed with the commission in the name of Joseph M. Jones, and pursuant to notice given by Jones he was designated by order of the commission as the operator of the natural gas producing properties covered by the contract with Texas Gas Transmission Corporation. In conformity with the rate schedules filed with the commission and pursuant to the provisions of the contract, the respondent, Texas Gas Transmission Corporation, has paid Joseph M. Jones, operator, through his agent, Texas Gas Exploration Corporation, ² for all gas purchased by it under the gas purchase contract.

Relator is the holder and owner of mineral leases covering lands adjacent to those which are under lease by Jones and associates and from which the gas is being sold to the respondent, Texas Gas Transmission Corporation. After the well on those properties designated as Begnaud No. 1 had been in production for some time, the Conservation Department on application of a third party entered an order effective May 1, 1957, force-pooling the property covered by the gas purchase contract with adjacent property, some of which was subject to mineral leases owned by relator. Pursuant to this order relator became entitled to an undivided .164146 of the production from the Begnaud No. 1 well. The Conservation Commissioner also entered an order fixing the amortized cost of the unit well at $164,453.56 and ordering that this cost be borne pro rata by all owners of working interests in the unit. ³

Although we are not concerned with it in this suit, there is a dispute between relator, Superior Oil Company, and Texas Gas Exploration Corporation with regard to the amount, if any, due by the relator for drilling costs; and the respondent admits that it has received and purchased certain production from the Begnaud No. 1 well, that relator has made amicable written demand for immediate payment for its proportionate share in this production, and that it has not paid relator anything. As stated previously, however, respondent has paid the operator through his agent, Texas Gas Exploration Corporation, for all gas purchased by it under the gas purchase contract.

Relator is undoubtedly entitled to be reimbursed for the value of its share of the gas. But the first questioin here posed for our decision is whether relator is entitled to the benefit of the summary process authorized by R.S. 30:105--107, the pertinent parts of which read:

' § 105. Withholding payment of rentals or royalties, when unlawful

'It shall be unlawful * * * for a person purchasing mineral products to withhold payment of any rentals, royalties or other sums due to a party holding an interest in the minerals, or under the lease.

' § 106. Right to revenues pending test of title; effect of recorded lease

'A. * * * The lessor, royalty owner, lessee or producer or persons holding from them shall be entitled to all minerals produced or to their proceeds, unless and until a suit testing title of the land or mineral rights embraced in the lease is filed in the district court of the parish in which the property is located.

'B. A purchase of minerals produced from a recorded lease granted under these conditions shall be fully protected in making payment to any party in interest under the lease unless nad until the above mentioned suit should be filed and the purchaser receives notification of it by the usual postal registry receipt card. The purchaser shall not be entitled to this protection unless he has recorded in the conveyance records of the parish in which the land is located, notice that the minerals have been and will be bought by him.

' § 107. Mandamus to compel payment

'A writ of mandamus to compel payment of whatever may be due to a party in interest under the circumstances set out in R.S. 30:105--30:106, or under any division order, may be issued by a court of competent jurisdiction against a person liable for the payment claimed. These proceedings shall be tried by preference.'

The source of these sections of the Revised Statutes is Act 64 of 1934, and relator concedes that the act and these sections are substantially the same.

In State ex rel. Brown v. United Gas Public Service Co., 197 La. 616, 2 So.2d 41, 44, this court was called upon to decide whether the relator there was entitled to summary process under the provisions of Act 64 of 1934. In that case relator was seeking to compel the respondent to pay a certain sum for additional royalties under mineral leases which had been granted by him covering two tracts of land and for the refund of payment for severance taxes. One of these leases provided for payment to the lessor of one-eighth of the value of the gas calculated at the prevailing price at the well on two pounds' pressure basis. The other lease provided for payment of one-eighth of the value of the gas calculated at the rate of 3cents per thousand cubic feet, corrected to two pounds above atmospheric pressure. Respondent had paid to relator as royalty for the gas produced from the wells one-eighth of 3cents per thousand cubic feet corrected to the pressure stipulated in the leases. Relator took the position that during the years the gas was produced, the market price of the gas per thousand cubic feet corrected to two pounds above atmospheric pressure was not less than 6cents, and under this contention he sought summary process to compel the respondent to pay him the difference between the 3cents per thousand cubic feet already paid and the 6cents per thousand cubic feet alleged to be the market price.

This court after citing and discussing the case of State ex rel. Boykin v. Hope Producing Co. (La.App.), 167 So. 506, stated that that case correctly held 'that the remedy of mandamus, authorized by the statute, applied only when the demands sought to be enforced thereby are limited to amounts definitely fixed in the lease'. This court then cited other Court of Appeal cases and concluded that the holdings in those cases 'furnished a complete answer to relator's contention that he is entitled to the benefit of the summary process authorized by Act No. 64 of 1934'.

In denying relator the right to mandamus in the Brown case this court was acting in accord with the general principle that due to the drastic and extraordinary character of the writ courts act with caution in respect to it and award it only in cases where it clearly appears that under the law it ought to issue, that the right to such a writ must be clear, and that it will not be granted in doubtful cases. See 34 Am.Jur., Mandamus, sec. 36, p. 831. The Court of Appeal in the Boykin case, supra, observed that mandamus is an extraordinary remedy, that resort to it to compel or enforce unliquidated obligations was never intended or admitted, and that relator in that case was not entitled to it unless this form of...