A. Veeder Co. v. Pan American Production Co.

17 So. 2d 891, 205 La. 599, 1944 La. LEXIS 699
CourtSupreme Court of Louisiana
DecidedMarch 13, 1944
DocketNo. 37034.
StatusPublished
Cited by11 cases

This text of 17 So. 2d 891 (A. Veeder Co. v. Pan American Production Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A. Veeder Co. v. Pan American Production Co., 17 So. 2d 891, 205 La. 599, 1944 La. LEXIS 699 (La. 1944).

Opinion

ODOM, Justice.

This is a suit to have cancelled and erased from the records of St. Mary Parish a certain mineral lease, in so far as it affects or covers the lands belonging to plaintiff, on the ground that there was no production of oil, gas, or other minerals from plaintiff’s land and no drilling operations begun within the primary term of the lease, which was five years from January 2, 1933. Defendants admit that there were no drilling operations begun on plaintiff’s land within the primary term of the lease, and admit further that plaintiff’s land had not been explored for the production of minerals therefrom up to the time the present suit was filed, although approximately eight years had elapsed between the date of the lease and the filing of the present suit. Defendants alleged — and this is admitted— that, whereas no drilling operations were begun on the lands owned by the plaintiff, such operations had been begun and the production of oil had been obtained on other lands covered by the lease within the five-year primary term; and alleged further — and this is the defense set up in opposition to plaintiff’s demands — that under the terms of the lease production of minerals from any of the lands covered by the lease prevented a forfeiture of the lease on the other lands described in the lease contract, including those of plaintiff.

The sole question presented is whether, under the terms of the original lease as subsequently amended, the production of minerals from any portion of the land covered by the lease kept the lease alive as to those portions of the land not developed.

There was judgment in the trial court ordering the lease cancelled in so far,as it affected the lands belonging to plaintiff. From this judgment the defendants appealed.

The lease contract here involved is dated July 7, 1932. The primary term of the lease was five years from January 2, 1933, during which term it could' be kept alive by the payment of delay rentals. If minerals were produced within the prescribed time, the lease was to remain in full force and effect as long as minerals were produced in paying quantities. According to its recitals, it was executed by the A. Veeder Company, Inc., a corporation organized and existing under the laws of this state, the corporation being the plaintiff in this suit, and by the heirs of John W. Veeder, deceased, namely, Mrs. A. Veeder, widow of Alcide Veeder; George T. Veeder, Winifred Veeder Cocke, wife of E. N. Cocke; Ida M. Veeder, a single woman; Ella Veeder Delahaye, wife of L. H. Delahaye; Aimee Veeder Fusilier, wife of J. O. Fusilier; Lena Veeder Gardner, wife of C. E. Gardner; and J. Earl Veeder, and by George T. Veeder individually, all acting together, “hereinafter called ‘Grantor’ (whether one or more)”. The lease was granted in favor of Roy B. Siler, “hereinafter called ‘Grantee’ ”. The lease conferred upon the grantee “the exclusive right to _ explore the land hereinafter described, for miner'al indications, to drill and mine thereon for oil, gas, sulphur and *603 other minerals, and to produce and appropriate any or all of the same therefrom”. (Italics here and elsewhere are the writer’s.)

We quote the following recital from the lease:

“The land is in St. Mary Parish, Louisiana, and is described as follows:
“Thirteen Hundred Thirty Six and 29/100 (1336.29) acres more or less of land out of Township 13, South, Ranges 9-and 10 East, Southeastern Land District, St. Mary Parish, Louisiana in Ten (10) tracts, more fully described as follows, to-wit”.

Then follows a minute and specific description of 12 (not 10) smaller tracts of land, all included in, and comprising in the aggregate the whole of, the larger tract of 1336.29 acres in St. Mary Parish.

The fact that the lease was granted, as we have said, by the A. Veeder Company, Inc., by the heirs of John W. Veeder, deceased, and by George T. Veeder, individually, as “ ‘Grantor’ (whether one or more)” gives rise to the inference that the entire tract leased was owned by them jointly and in indivisión. However, the original lease dated July 7, 1932, was amended as to description on January 17, 1935. The various smaller tracts described in the original lease were redescribed in the amendment as 15 tracts instead of 12, and it was stated that the A. Veeder Company owned individually 12 of these 15 tracts of land, and that the heirs of John W. Veeder and George T. Veeder owned the other three tracts. We shall discuss this amendment of the lease in detail later in this opinion.

The original lease provides that:

“For the purpose of calculating the payments hereinafter provided for, the land is estimated to comprise 1336.29 acres, whether it actually comprises more or less. All land owned by the Grantor in the above mentioned surveys or sections is included herein, whether properly described above or not.”

It provides that the grant shall terminate on January 2, 1933, unless on or before that date the grantee elects, by notice in writing delivered to the grantor, “to either drill a well on some part of the land embraced herein or to pay to the grantor Two and No/100 ($2.00) Dollars per acre for all of the land hereunder”. It is admitted that the grantee paid to the landowners $2. per acre, or the sum of $2,672.58, and that this payment would have kept the lease alive to the end of the primary term, or to January 2, 1933. The lease contains the provision that, if the grantee elects to drill a well, the grantee shall begin operations for such drilling within 60 days from the date of the lease and shall prosecute such drilling with reasonable diligence to completion or abandonment, in an honest and bona fide effort to “find minerals in paying quantities in the land”. It further provides that if, prior to discovery “of oil on the land”, a well producing as much as 200 barrels of oil per day for 30 consecutive days is brought in on adjacent land and within 200 feet “of any line of the land, then held hereunder”, the grantee shall with reasonable promptness begin, and with reasonable diligence prosecute, the drilling of “a well [an off-set well] on the land, *605 then held hereunder, in an honest effort to discover oil in paying quantities”.

The lease further provides that, after beginning operations “on the land and prior to discovering any mineral in paying quantities thereon”, the grantee may maintain its rights in effect so long as it pleases by continuing such operations without lapse of more than 60 days between the cessation of operations on one well and the beginning of operations for drilling another. The lease further provides that:

“After the discovery of any mineral in paying quantities on the land, Grantee’s rights shall remain in effect so long as any of such minerals are produced in paying quantities from the land"

And it provides further that:

“* * * jf the grantee fails to reasonably develop the land after the discovery of mineral, such failure shall entitle the

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Bluebook (online)
17 So. 2d 891, 205 La. 599, 1944 La. LEXIS 699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/a-veeder-co-v-pan-american-production-co-la-1944.