Allied Chemical Corp. v. Despot

414 So. 2d 1346
CourtLouisiana Court of Appeal
DecidedMay 10, 1982
Docket14876
StatusPublished
Cited by3 cases

This text of 414 So. 2d 1346 (Allied Chemical Corp. v. Despot) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allied Chemical Corp. v. Despot, 414 So. 2d 1346 (La. Ct. App. 1982).

Opinion

414 So.2d 1346 (1982)

ALLIED CHEMICAL CORPORATION, Plaintiff-Appellee,
v.
George J. DESPOT, Individually and As Trustee of the George J. Despot Trusts, et al., Defendants-Appellants.

No. 14876.

Court of Appeal of Louisiana, Second Circuit.

May 10, 1982.

*1347 M. Thomas Arceneaux, Shreveport, for defendant-appellant, George J. Despot.

Liskow & Liskow by James L. Pelletier and George H. Robinson, Jr., Lafayette, for plaintiff-appellee, Allied Chemical Corp.

Goff & Goff by A. K. Goff, Jr., Ruston, for defendants-appellants, Norman Lamar Dowling and Dhu Dowling.

Before PRICE, JASPER E. JONES and SEXTON, JJ.

PRICE, Judge.

This suit presents a dispute between George J. Despot individually and as trustee of the George Despot Trust No. 1 through 11, and Norman Lamar Dowling and Dhu Dowling concerning the ownership of royalty proceeds allocated from unit production to land described as NW ½ of SE ¼ of Section 29, Township 19 North, Range 4 West in Lincoln Parish. Allied Chemical Corporation deposited $21,503.89, which represents a 3/96 royalty interest in the above described land, into the registry of the court. It was stipulated that Allied had previously paid the Dowlings $19,116.27 on production attributable to this interest. After motions for summary judgment were filed by both parties, the trial court granted a summary judgment in favor of the Dowlings. It held that any interest owned by Despot in the disputed tract had been extinguished by 10 years liberative prescription. The judgment provided that Allied was to be paid $19,116.27 from the funds on deposit with the remainder to be distributed between the Dowlings. Despot appeals, and we affirm.

On March 31, 1954, the Dowlings sold to George G. Despot 1/6 of the oil, gas, and other minerals in and under that might be produced from the following described land:

The Southeast Quarter of the Southeast Quarter of Section 20; the Northeast Quarter, the Southeast Quarter of the Northwest Quarter, the South half of the Northeast Quarter of the Northwest Quarter, and the Northwest Quarter of the Southeast Quarter of Section 29; all in Township 19 North, Range 4 West, containing 300 acres more or less, in Lincoln Parish, Louisiana.

In the sale of the mineral interest, the sellers reserved the right to grant future leases.

On September 15, 1955, George G. Despot, the Dowlings, and other mineral and royalty owners entered into a voluntary unitization agreement covering a portion of the tract described above. The voluntary unit did not include the disputed tract. Paragraph three of this agreement provides:

For the purpose of this Agreement, the mineral and royalty interests and the leasehold interests of the parties hereto as to the lands lying within the area above described are hereby pooled, unitized and consolidated. Drilling, mining or reworking of the Dorothy Dowling # 1 Unit, or production of any minerals from any part of the said consolidated area, pooled hereby, shall be treated for all purposes as operations upon or production from each of the above described leases. Lessees shall not be required to offset any well drilled on the Dorothy Dowling # 1 Unit by drilling any other well in said consolidated area.

On May 1, 1957, the Louisiana Commissioner of Conservation issued Conservation Order No. 370 creating drilling and production units for the "D" sand of the Terryville Field. In addition to other units, the order provided a unit containing the same land as the unit described in the voluntary pooling agreement.

A unit well, designated as Dorothy Dowling No. 1, was drilled on property in the S ½ of Section 20, Township 19 North, Range 4 West, but not on any of the tract described *1348 in the act of mineral sale from the Dowlings to Despot. Production from this well was obtained within 10 years from March 31, 1954, and is still producing.

On November 24, 1965, George G. Despot donated all of his mineral interest, including that covering the disputed tract, to George J. Despot, as trustee of the George Despot Trust No. 9. As George G. Despot had previously conveyed a 1/24 mineral interest in the property to Rena Marie Roberts, the donation covered only a 3/24 interest in the minerals. Although made a defendant in this suit, Roberts did not contest the proceedings or appeal the judgment.

On December 7, 1976, the Dowlings granted an oil lease covering the disputed tract and other land to Frank D. Rippey. The lease provided for the payment of 3/16 royalty to the lessors. In February 1979 production was obtained from the well drilled on the disputed tract. It is the royalty due from this well that is involved in this concursus proceeding.

Despot contends that because of the provisions of the voluntary unitization agreement, the production from the Dorothy Dowling No. 1 has interrupted prescription on all servitudes and royalty interests affecting lands located within the unit, and since a mineral servitude or royalty is indivisible this interruption is also effective as to the disputed tract herein which is outside of the drilling unit.

The Dowlings contend that prescription was not interrupted or suspended by the execution of the voluntary pooling agreement, the creation of the compulsory drilling unit or the drilling and production from the Dorothy Dowling No. 1 well.

The trial judge in excellent reasons for judgment, concisely stated the legal positions of both parties and reviewed the applicable law and jurisprudence in concluding that prescription had not been interrupted or suspended on the disputed tract. As we agree with the legal analysis and conclusions reached, we find it appropriate in this instance to quote the pertinent portions of the trial courts' reasons as follows:

"The question presented by this suit is whether liberative prescription has accrued as to the mineral or royalty interest created by the sale on March 31, 1954 by the Dowlings to Despot as relates to NW ½ of the SE ¼ Section 29, Township 19 North, Range 4 West. The question or issue in the suit is easy to identify. However, the correct result is more difficult to formulate from the statutes and the jurisprudence.

"As noted the Dowlings, in the sale to Despot, reserved the right to execute future leases. This reservation makes it a little difficult to identify the interest acquired by Despot as a mineral interest or a royalty interest. Fortunately, all of the parties agree that the same result is reached regardless of the `title' given to the interest created by the sale. The court prefers to refer to the right as a mineral interest with the Dowlings being vested with the executive rights covering the mineral interest. This is apparently the manner in which the parties treated the transfer as it appears to be the sale of a mineral interest.

"Article 37 of the Mineral Code (R.S. 31:37) reads as follows:

`Production from a conventional or compulsory unit embracing all or part of the tract burdened by a mineral servitude interrupts prescription, but if the unit well is on land other than that burdened by the servitude, the interruption extends only to that portion of the servitude tract included in the unit.'

"Learned counsel for the Dowlings contends that the provision of Article 37 relative to interruption of prescription is applicable to this case. Reasons are advanced in the brief and a number of cases cited which deal and relate to matters of prescription as procedural in nature being applied retrospectively.

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