Texas Co. v. Rosenthal-Brown Fur Co., 216.

• Decision Date: 11 December 1925
• Docket Number: No. 216.,216.
• Citation: 12 F.2d 297
• Parties: TEXAS CO. et al. v. ROSENTHAL-BROWN FUR CO., Inc., et al.
• Court: U.S. District Court — Western District of Louisiana

12 F.2d 297 (1925)

TEXAS CO. et al. v. ROSENTHAL-BROWN FUR CO., Inc., et al.

No. 216.

District Court, W. D. Louisiana, Lake Charles Division.

December 11, 1925.

C. H. Blish and Hampden Story, both of Shreveport, La., for complainant Texas Co.

Kennerly, Williams, Lee & Hill, of Houston, Tex., and Pujo & Bell, of Lake Charles, La., for complainant Orange-Cameron Land Co.

Cline & Plauche and Cullen R. Liskow, all of Lake Charles, La., for respondents.

DAWKINS, District Judge.

On the 10th day of July, 1922, J. L. Du Mars, who then appeared as the record owner of some 137,235 acres of marsh lands, situated in Cameron parish, Louisiana, entered into a contract of lease with Charles W. Brown, whereby the latter was given the right, for a period of 10 years, to possess and use said property "exclusively and only for the purpose and none other of trapping, capturing, and securing fur-bearing animals," and in return was required to protect it against trespassers and to pay said owner, for the privilege of trapping, 2½ per cent. of the gross proceeds of the sales of said furs, but with the obligation to pay a minimum consideration of $1,500 per year. Thereafter Du Mars acknowledged that the title to the property had been taken in his name, for the use and benefit of and as the agent of the Texas Company, and conveyed the same to it accordingly. Brown likewise subsequently made a conveyance of his rights under the lease to Rosenthal-Brown Company, a partnership composed of himself and Maurice Rosenthal, and that firm in turn later transferred the lease to the Rosenthal-Brown Fur Company, Inc., a corporation. In the said lease, among other things, it was provided as follows:

"It is further mutually understood and agreed that the party of the first part reserves the right to sell any and all of said property at any time during the ten (10) years of this lease, or to use the same for pasturing and farming purposes, the drilling of wells for oil and gas and other minerals, and to carry operations thereon for the production of oil or gas or other minerals, and to erect storage tanks, buildings, structures, and other works, pipe lines and other things thereon necessary or incidental in the production of such oil, gas, or other minerals. It is provided, however, that, in the event, should said trapping operations interfere with the party of the first part, the party of the first part may, at his option, cancel, annul, and set aside this lease in so far as the properties to be so affected are concerned. * * * It is further understood that these presents are binding upon the successors and assigns of the respective parties hereto."

Subsequently, on September 7, 1923, the Texas Company, having acquired the record title as aforesaid, executed in favor of the Rosenthal-Brown Fur Company, Inc. (hereinafter called the Fur Company), what was termed a "grazing" lease upon the same lands, for a period of three years, in which it was expressly provided that:

"It is distinctly and mutually understood and agreed that the party of the first part reserves the right to sell any or all of said property at any time during the term of this lease, free from its provisions should the purchaser so desire, and to use any part or all of said property for the drilling of wells for oil, gas, or other minerals, and carrying on operations thereon for the production of oil, gas, or other minerals, and for the erection of storage, buildings, structures and other works, pipe lines, and other things thereon necessary or incidental in the production and marketing of such oil, gas, or other minerals, and that, in the event the grazing privileges herein granted interfere with the party of the first part in any of said operations, or in any sale it desires to make, the party of the first part, or its vendee, may, at its option, annul and set aside this lease in so far as the property to be so affected is concerned: Provided that, in case of such cancellation, the party of the second part shall be allowed a proportionate reduction of the rental and consideration herein stipulated, which said reduction shall be in proportion to the lands affected by said annulment or cancellation."

The Texas Company decided early in 1924 to sell the property with reservation of the mineral rights, and accordingly corresponded with the Fur Company with that end in view, but the latter found itself unable to finance the purchase. It then conducted similar negotiations with others, with the result that on November 8, 1924, the Texas Company executed in favor of the Orange-Cameron Land Company (hereinafter called the Land Company) an act by which it "granted, bargained, sold, and conveyed * * * all of the surface of (not to include the minerals and mineral estates hereinafter reserved and excepted), in, and to those certain tracts or parcels of land situated in Cameron parish," embracing the same property previously leased to Brown and the Fur Company.

Thereupon correspondence was exchanged and negotiations had between the Texas Company and the Land Company, on the one part, and the Fur Company, on the other, looking to a surrender of possession of the property. This having been declined, the original bill of complaint herein was filed by the Texas Company and the Land Company jointly, November 28, 1924, seeking to oust the Fur Company from the premises. After setting forth the facts above enumerated, it was alleged that, in the original lease between Du Mars and Brown, the former had been granted "the right to sell any and all land described in said lease at any time during the 10 years after the date thereof, and that said reservation, agreed to by the said Charles W. Brown, vested the Texas Company with power and authority, in the event of sale of the premises, and the desire of the purchaser to rescind and cancel said lease." And in said bill it was further alleged as follows:

"And, alternatively, in the order below set forth, your orator, the Texas Company, shows that, should the court hold, upon a proper interpretation, that the reservation as incorporated in the lease did not import a cancellation and rescission of the lease in case of the sale and demand of the purchaser for cancellation, then and in that event it is averred that the purpose and the mutual understanding and the intention of the parties thereto, and to the knowledge of the Rosenthal-Brown Fur Company, Inc., and those from whom it acquired said lease, though it be not expressly recited in said lease, but omitted through mutual mistake and inadvertence, that the said lease, in the event of a sale of any and all of the lands described therein by J. L. Du Mars, would terminate and thereafter be of no force and effect. And further, alternatively, should the court hold that the reservation incorporated in the lease did not import a rescission and cancellation of the lease in the event of sale and the demand of the purchaser for cancellation, then and in that event, that the purpose, understanding, and intention of your orator, the Texas Company, in reserving the right to sell said property, or any portion thereof, during the life of the lease, was that such sale should, upon demand of the purchaser, operate the cancellation and rescission thereof, and that there was a mistake on the part of J. L. Du Mars, as agent for the Texas Company, in not so expressly providing, and that the conduct of the defendant in refusing to recognize such cancellation is inequitable."

The Texas Company also alleged that it was bound in warranty unto the Land Company to deliver said property "in compliance with the demands of the latter, made for that purpose"; that the "surface of said land has been sold" to the Land Company, and it desired to have the leases canceled "for the reason that the said leases cast, operate, and are a cloud upon the title, and are incumbrances upon the property so conveyed"; that the Fur Company was "still claiming rights to trap and take the fur-bearing animals from said lands under said lease, and is interfering hindering, and molesting the said Orange-Cameron Land Company in the exercise and enjoyment of its rights of possession and ownership of the surface of said property conveyed to it by the Texas Company"; and that said acts were causing great damage and irreparable injury, entitling complainants to the writ of injunction for the protection of said rights.

Complainants prayed that said leases "be rescinded, set aside, annulled, and held for naught," and in the alternative that the trapping lease of July 10, 1922, "be reformed and made to conform to the true intent, purpose, understanding, and agreement of the parties thereto, and those in privity therewith, and, as reformed and recast, that said reservation be held to authorize the rescission and cancellation of said lease of July 10, 1922"; further, in the alternative, that if the court should find that the same did not import a cancellation and rescission, then the Texas Company prayed that the court hold and decide "that the purpose and mutual understanding and the intention of the parties thereto, and to the knowledge of the Rosenthal-Brown Fur Company, Inc., and of those from whom it acquired said lease, though not expressly recited therein, was omitted through mutual mistake and inadvertence, and that said lease, because of the sale of the land therein described, * * * terminated such lease and is null, void, and of no further force and effect"; and further, in the alternative, that if the court should find that the said reservation did not import a rescission and cancellation as aforesaid, "in the event of the sale of the land and demand of the purchaser for cancellation," then the Texas Company prayed that the court decide and hold "that the purpose and understanding of J. L. Du Mars, its agent, acting for it in executing the lease" of July 10, 1922, "in reserving the right to sell said property, or any portion thereof, during...