Barnwell, Inc. v. Carter

220 So. 2d 741, 33 Oil & Gas Rep. 247, 1969 La. App. LEXIS 5187
CourtLouisiana Court of Appeal
DecidedMarch 3, 1969
DocketNo. 11166
StatusPublished
Cited by2 cases

This text of 220 So. 2d 741 (Barnwell, Inc. v. Carter) 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
Barnwell, Inc. v. Carter, 220 So. 2d 741, 33 Oil & Gas Rep. 247, 1969 La. App. LEXIS 5187 (La. Ct. App. 1969).

Opinion

PRICE, Judge.

This concursus proceeding was brought by Barnwell, Inc. to obtain judicial determination of the ownership of a one-half of one-eighth mineral royalty interest under 20 acres of land described as the East Half of the Northeast Quarter of the Northeast Quarter (E 14 of NE '}4 of NE J4) of Section 24, Township 19 North, Range 9 West, Webster Parish, Louisiana. This 20 acre tract comprises a part of an 80 acre drilling unit known as the Barnwell Drilling Company James LU-B. Floy #1 established by Order 457-A-4 of the Louisiana Department of Conservation, applicable to the James Lime Formation of the Minden Field. The concursus petition alleges that there are adverse claims being asserted to the ownership of this mineral royalty interest by defendants, Marjorie F. Peterson, as widow and legatee of her deceased husband, P. E. Peterson; Mrs. Floy Fordham Morton, individually and as Executrix of the last will of her deceased husband, J. E. Morton; and Sam E. Carter.

Mrs. Morton and Mr. Carter each filed answers to the concursus proceeding, contending that they are entitled to the royalties accruing to the disputed interests as the result of a servitude created by the sale on May 27, 1954, of the 20 acre tract by J. E. Morton to P. E. Peterson with a reservation unto the vendor of one-half of all of the oil, gas and other royalties underlying the property. Mrs. Peterson, in answer to the proceeding, contends that the mineral servitude created in the sale on May 27, 1954, has prescribed by the prescription of ten years liberandi causa.

The pertinent facts that were stipulated by the parties at the time of the trial are as follows:

1. On May 27, 1954, J. E. Morton conveyed to P. E. Peterson the E 54 of NE 54 of NE 54 Section 24, Township 19 North, Range 9 West, Webster Parish, Louisiana, reserving for himself, his heirs and assigns one-half of the oil, gas and other minerals underlying said lands.
2. On March 27, 1959, Morton conveyed to Sam E. Carter royalty interests of one-fortieth of all the oil, gas and other minerals produced from the 20 acre tract.
3. During the year 1961 Morton and Peterson granted oil, gas and mineral leases to V. S. Parham covering the 20 acre tract. Parham assigned these oil and gas leases to Monsanto Chemical Company.
4. On May 8, 1961, the Department of Conservation of the State of Louisiana issued its Order 457-A-2, creating drilling and production units for the James Lime formation in the [743]*743Minden field. One of the drilling and production units created by the Department of Conservation Order 457-A-2 was an 80 acre tract described as the N J4 °f NE 14, Section 24, Township 19 North, Range 9 West. All separately owned tracts, mineral leases and other property interests within the 80 acre unit were pooled and consolidated.
5. On May 27, 1962, the Department of Conservation of the State of Louisiana issued its Order 457-A-4, dissolving the unit above referred to, and in lieu thereof created a drilling and production unit composed of the N j4 of NE J4 except the N 14 of NE 14 of NW 14 of NE 54; N 14 of NW 14 of NE 14 of NE ■14, Section 24, together with S 14 of SW 14 of SW 14 of SE 14 and S }4 of SE 54 of SE 14 of SE 14, Section 13, all in Township 19 North, Range 9 West, and the separately owned tracts within the unit created were pooled and consolidated to be operated as one lease and one property for the production of oil and hydrocarbons from the James Lime.
6. During the months of October, November and December, 1962, Monsanto Chemical Company, the owner of oil, and gas leases covering the Peterson-Morton minerals drilled a well on the unit created by Department of Conservation Order 457-A-4. The well wás drilled in good faith to the James Lime formation. It was abandoned as “dry” on December 13, 1962. The well was not located on the 20 acre Peterson tract, but was drilled on adjacent lands with which the Peterson 20 acre tract had been pooled and unitized by the Department of Conservation.
7. During the year 1966 Barnwell Oil Company, the owner of oil and gas leases covering the Peterson-Morton minerals drilled a well on the unit created by Department of Conservation Order 457-A-4. This well was completed as a “producer” during January, 1967, and is located on the 20 acre tract above described which forms a part of the unit created by Department of Conservation Order 457-A-4.

The case was tried by the district court on the stipulation of facts and the sole question presented to the court for decision was whether or not the drilling of a dry hole, in good faith, on a portion of a drilling unit created by a compulsory order of the Louisiana Department of Conservation, interrupted the running of prescription liberandi causa on the Morton-Peterson servitude, on which no drilling was conducted, although it was included in the compulsory drilling unit.

The district court in its written reasons for judgment relied on the case of Mire v. Hawkins, 249 La. 278, 186 So.2d 591 (1966), and held that the prescription liberandi causa had been interrupted by the drilling of the dry hole in the year 1962, which was within ten years of the creation of the servitude.

The judgment of the court therefore recognized the ownership of the mineral interest in question to be vested in the defendant, Mrs. Floy Fordham Morton, subject to the royalty interest conveyed to defendant, Sam E. Carter. The adverse claimant, Mrs. Marjorie Peterson, perfected this suspensive appeal, assigning as error the finding of the district judge that the drilling of a dry well in a compulsory drilling unit, but not on the property burdened with the servitude, had the effect of interrupting the running of prescription, or constituted user, of the servitude located within the unit.

The matter before the court presents solely a question of law and it is apparent to us that the district court has followed the [744]*744latest expression of the Supreme Court of this State in resolving this question.

For a period of approximately ten years the case of Boddie v. Drewett, 229 La. 1017, 87 So.2d 516 (1956), was the law of this State on this question. The Supreme Court in that case found that the district court erred in holding that the drilling of a dry hole in a compulsory drilling unit, created by the Department of Conservation, would interrupt the running of prescription on all lands burdened with a mineral servitude within the unit, even though the drilling operation was not actually on the servient lands.

The court in the Boddie case set forth the requirements necessary to constitute user of a mineral servitude in the nondrill-ing area of a drilling unit as follows:

“ * * * To use a servitude so as to effect an interruption of prescription is to exercise the right in the manner contemplated by the grant or reservation. Louisiana Petroleum Co. v. Broussard, 172 La. 613, 135 So. 1. With respect to a mineral servitude, it is essential that there be exploitation of the land, either by good faith drilling operations thereon, albeit unsuccessful, or by the extraction of the minerals lying under the land by draining or otherwise removing them through operations conducted from outside of the land.

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Related

Reeves v. Reeves
607 So. 2d 626 (Louisiana Court of Appeal, 1992)
Barnwell, Inc. v. Carter
222 So. 2d 885 (Supreme Court of Louisiana, 1969)

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Bluebook (online)
220 So. 2d 741, 33 Oil & Gas Rep. 247, 1969 La. App. LEXIS 5187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barnwell-inc-v-carter-lactapp-1969.