Whitehall Oil Co. v. Boagni

• Decision Date: 05 December 1968
• Docket Number: No. 2454,2454
• Citation: 217 So.2d 707
• Parties: WHITEHALL OIL COMPANY, Inc., Plaintiff and Appellant, v. Mrs. Marie Celeste Delaureal BOAGNI et al., Defendants and Appellees.
• Court: Court of Appeal of Louisiana — District of US

Page 707

217 So.2d 707

WHITEHALL OIL COMPANY, Inc., Plaintiff and Appellant, v. Mrs. Marie Celeste Delaureal BOAGNI et al., Defendants and Appellees.

No. 2454.

Court of Appeal of Louisiana, Third Circuit.

Dec. 5, 1968.

Rehearing Denied Jan. 10, 1969.

Writ Granted March 13, 1969.

Chaffe, McCall, Phillips, Burke, Toler & Hopkins, by C. Manly Horton, Jr. and Charles Richard, Jr., New Orleans, for plaintiff-appellant.

Kantrow, Spaht, Weaver & Walter, by Carlos G. Spaht, Baton Rouge, Voorhies, Labbe , Fontenot, Leonard & McGlasson, by David S. Foster, Lafayette, Charles F. Boagni, III, Morgan J. Goudeau, III, Andrus & Pavy, by Alex L. Andrus, Jr., Opelousas, for defendants-appellees.

Before TATE, HOOD and CULPEPPER, JJ.

CULPEPPER, Judge.

This case is consolidated for trial and appeal with Whitehall Oil Company, Inc. v. Heard et al., 217 So.2d 717, in which a separate decision is being rendered by us this date. The plaintiff seeks to recover from the defendants certain overpayments of gas royalties not due under the respective leases. From an adverse judgment in both cases, the plaintiff has appealed.

There is no dispute as to the facts. They are set forth in a joint stipulation by the parties. The defendants are lessors in two oil, gas and mineral leases covering certain lands in St. Landry Parish, Louisiana. The lease in the present case is dated December 13, 1959 and the one in the companion case December 7, 1959. There is also an assignment of overriding royalty, pertaining to the lease of December 1, 1959, to certain of the defendants. These leases were acquired by plaintiff by assignment on April 4, 1960.

On September 13, 1961, the Federal Power Commission granted plaintiff temporary authority to sell the gas produced from the two leases at a price of 23.25cents per m.c.f. However, this temporary authority was conditioned on plaintiff's agreement to restore to the pipeline purchasers any difference between the price temporarily authorized and the price finally approved by the Federal Power Commission.

On July 23, 1964, the Federal Power Commission established the final authorized price at 20cents per m.c.f. pursuant to the terms of the temporary authority, plaintiff then refunded to the pipeline purchasers the difference between the price temporarily authorized and the final price established.

Plaintiff actually paid royalties to the defendants, based on the temporary price of 23.25cents per m.c.f., until the final price of 20cents was established on July 23, 1964. However, the joint stipulation of the parties states: 'The defendants were not notified in any way prior to July 23, 1964, that they could be subjected to a retroactive demand for excess royalty payments in the event the gas sales price was reduced.' Early in 1965 plaintiff demanded reimbursement from the royalty owners for their respective portions of the overpayments which plaintiff had refunded to the pipeline purchasers. Defendants refused and this suit followed.¹

Plaintiff argues first that under the very language of the two leases, and the overriding royalty assignment, the defendants are entitled only to their proportionate parts of the amount 'realized' by the plaintiff from the sale of the gas.² And, since it finally Realized only 20cents per m.c.f., there was an overpayment of royalty not due which must be refunded. Plaintiff relies on the general equitable principles of unjust enrichment, LSA-C.C. Articles 21 and 1965, and particularly the articles of our Civil Code dealing with 'Payment Of A Thing Not Due'.³

These latter articles are found in Title V, Chapter I of our Civil Code entitled 'Of Quasi Contracts'. The rationale of the articles is that, even without an express agreement to that effect, every payment presupposes a debt. Consequently, if a thing has been paid without it being due, it can be recovered.⁴

In construing these articles, the first question is the requirement of error. Article 2301 provides that, as to the person who receives the payment, it is immaterial whether he had knowledge the payment was made through error. In the present case, the defendants had no knowledge whatever that the alleged overpayments were made subject to a condition that they might have to refund them . In any event, this is immaterial, for even if they had known the payments were not due, this would not affect their obligation to refund them.

Article 2302 states that 'he who has paid through mistake, believing himself a debtor may reclaim what he has paid.' Thus, our Civil Code allows recovery of payment through error of a thing not due.⁵ In the present case, the alleged overpayments were not made through error on the part of the plaintiff. It knew that under the terms of the leases it was obligated to pay royalty on the basis of the price for which it sold the gas to the pipeline purchasers. The lease provisions to this effect are clear and were so understood by the plaintiff. At the time these payments were made, they were actually due. Hence, there can be no contention that they were paid through error.

Since the payer was not in error, defendants make a strong argument that the above quoted codal articles, regarding payment of a thing not due, can have no application. However, this is not the end of our inquiry of the statutory materials. In discussing 'repetition', the French action to recover payment of a thing not due, Planiol, Civil Law Treatise, an English Translation by the Louisiana State Law Institute, Vol. 2, Part I, pg. 449, Sec. 837 states:

'Repetition always presupposes that what was paid was not due, but in order to determine precisely the conditions under which repetition can be exercised, it is necessary to distinguish between three different situations: (1) where there was no obligation whatever between the payer and the payee; (2) where the payment was made in view of an actual obligation which has since ceased to exist; and (3) where the obligation paid had an illicit or an immoral cause.'

Planiol takes the position that error by the payer is required in situation (1) listed above, but not in situations (2) and (3). The present case falls within situation (2), of which Planiol says in Vol. 2, Part I, pg. 452, Sec. 843:

'It is required that there be something not due: the plaintiff in repetition must prove that his debt was resolved or annulled, or that the future debt did not arise; But the condition of error is not required, and it cannot be exacted. There is an act other than payment, and that is the annulment, the resolution or failure of a condition, which renders necessary the re-establishment of things in the state they would have been in if the agreement had not been made .' (Emphasis added)

We note that Planiol's discussion concerns Code Napoleon Article 1376, which is almost identical to our own LSA-C.C. Article 2301. These two articles do not attempt a further definition of 'a thing not due', nor do they expressly provide for recovery of a payment made through error. Our own Louisiana Civil Code has added Articles 2302 through 2309, which have no corresponding source articles in the Code Napoleon. The purpose of these additional articles is to expressly allow recovery where there is error on the part of the person making the payment and to further define 'a thing not due'.

LSA-C.C. Article 2304 is particularly applicable to the present situation. It provides that 'a thing not due is that which is paid on the supposition of an obligation which did not exist, or from which a person has been released.' The first part of the article pertains to the situation where a person pays through error a debt which actually does not exist at the time of the payment. (This is in effect the same as Article 2302.) However, the latter part of the article applies to the situation where an actual obligation exists at the time of the payment, but the debt is later released. Although Article 2304 does not expressly stated that in this latter situation error on the part of the payer is not required, we think this is necessarily implied. For, if there is an actual legal obligation at the time of the payment, it cannot be made through mistake. As Planiol says, in Vol. 2, Part I, Sec. 843, quoted above, there is an act which takes the place of the payment through error, and that is the subsequent resolution or failure of the contract. Under our Code, this would be a resolutory condition.⁶

From the statutory materials, it is our conclusion that in the present case, error on the part of the plaintiff at the time of the payment is not required. Plaintiff need only show that subsequent to the payment the debt was released by the occurrence of a resolutory condition. The Code, Article 2304, provides no further limitation or condition. However, our courts have applied equitable considerations in many cases for recovery of payment of a debt not due.

For instance, the courts have considered the following equity factors in suits to recover payment of a thing not due: (1) Was the payer guilty of fault such as fraud or duress, or of negligence in failing to protect his own interests or in failing to treat fairly the interests of the payee, Pennsylvania Casualty Co. v. Brooks, La.App., 24 So.2d 262; Metropolitan Life Ins. Co. v. Mundy, La.App., 167 So. 894; New Orleans & N.E.R.R. Co. v. La. Construction & Improvement Co., 109 La. 13, 33 So. 51; Rivers v. New Orleans Waterworks Co., 35 La.Ann. 822; Ducros v. Missouri State Life Ins. Co., Orl.App. No. 7996. (2) Would recovery result in injury to the party to whom the payment was made, Continental Oil Co. v. Jones, La .App., 191 So.2d 895; Central Surety & Ins. Corp. v. Corbello, La.App., 74 So.2d 341. (3) Would the party who made the payment receive some benefit from the payment by error, Morse v. Oates, 11 La.App. 462, 123 So. 439.

Jurisprudence in common law jurisdictions has developed many other equitable factors to be considered in a suit for recovery of payment of a...