Berman v. Brown

70 So. 2d 433, 224 La. 619
CourtSupreme Court of Louisiana
DecidedNovember 12, 1953
Docket40567
StatusPublished
Cited by15 cases

This text of 70 So. 2d 433 (Berman v. Brown) 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
Berman v. Brown, 70 So. 2d 433, 224 La. 619 (La. 1953).

Opinions

HAWTHORNE, Justice.

In this court appellants, Mary Jane Berman, Robert J. Chauvin, Henry P. Mirandona, P. & J. Realty Company, and James F. Turnbull, are seeking a reversal of a judgment of the lower court which rejected their demand to be recognized as owners in indivisión of a Jis of % of the oil, gas, and other minerals produced under a mineral lease granted by D. V. Doussan Oil & Planting Company of Lafourche, Inc., to defendant-appellee Joe W. Brown on June 26, 1944, and which rejected also their demand for an accounting of all the oil, gas, and other minerals produced under the lease from the leased property.

This lease of June 26, 1944, will hereafter be referred to as the “second lease”. Approximately eight years before the execution of the second lease, the fee owner, D. V. Doussan Oil & Planting Company, executed an oil, gas, and mineral lease covering the same property to Allan B. Crowder, and by mesne conveyances appellants Mirandona and Chauvin became the owners of this lease, which will be designated hereafter as the “first lease”. These appellants subleased the entire tract, reserving to themselves a Vie part of % of all the oil, gas, and other minerals that might be produced under the lease. This sublease provided:

“The one-sixteenth (Vis) part of the eight-eighths (¥s) of all the oil, gas and other minerals excepted and reserved by assignors herein shall apply and be a part of all future renewals, extensions and nevo leases made by assignee on the lands covered by the herein described lease or leases for a period of one year from the date of the expiration of said lease or leases.” (All italics ours.)

This is the clause on which appellants rely in this appeal for recognition of a royalty interest in the second lease. The legality of this clause is conceded by the appellee and is not an issue on this appeal.

The sublease from Mirandona and Chauvin further provided that all conditions between the parties thereto should extend to their heirs, executors, administrators, successors, and' assigns. Subsequently Mohawk Corporation acquired the lease subject to these provisions and in turn conveyed it to defendant-appellee Joe W. Brown. In the transfer from Mohawk to Brown, Mohawk reserved a ¥& overriding royalty, and this act of transfer provided that it was made subject to the royalty interest of appellants Henry P. Mirandona and Robert J. Chauvin. Thus Brown acquired the first lease with a working interest of only Wi.6 of % of all the oil and gas that might be produced under it, because Ys (or ¥is) had been reserved by the fee owner, Vie by Mirandona and Chauvin, and y& (or %o) by Mohawk; that is, he acquired this lease subject to 5As outstanding royalty interests. On the same day he acquired this lease, Brown assigned it to Mabro Oil [624]*624Company, Inc., a corporation which had been formed by him, his brother, and two associates for the purpose of developing the lease.

About three years later, the fee owner, D. V. Doussan Oil & Planting Company of Lafourche, Inc., instituted suit against Mirandona, Chauvin, Mohawk, Brown, and Mabro -to cancel the oil and gas lease for nondevelopment and failure to pay delay rentals, and judgment was rendered 'as prayed for in favor of the -fee owner on May 12, 1944. Less than two-months after the rendition of this judgment, Joe W. Brown acquired the second lease on the same property from Doussan. Production was obtained by Brown from the property under this second lease, and plaintiffs-appellants instituted this suit.

Both Mohawk and Mabro drilled wells on the property when they had the first lease, and some oil was produced from the leased premises as a result of their drilling operations, but the return from the wells was so small that the fee owner became dissatisfied and instituted suit for cancellation of the lease, as hereinabove set out. The defendants in that suit appeared and filed answers of general denial. During the pendency of the suit, D. V. Doussan Oil & Planting Company, plaintiff, and defendants Mirandona and Chauvin entered into a compromise agreement in which Mirandona and Chauvin agreed that a judgment be entered by the court cancelling the primary lease and the various assignments thereof, and plaintiff, the fee owner, agreed to waive and abandon all claims which it had against Mirandona and Chauvin, whether for back rents, current rents, or future-rents, or for damages or attorney’s fees. Joe W. Brown and the other defendants, were not parties to this agreement. Their attorney addressed a letter to the district judge informing him that they had made no-appearance on the date the case was fixed for trial because they had.no defense'to-urge and had no objection to the rendition of judgment.

The court rendered a judgment of cancellation which provided that the cancellation of the lease should be “ * * * without prejudice to said defendants’ rights in -and to what is known as the Doussan No. 3 Well and the twenty-five (25) acres which surround it”, and this provision was made pursuant to the terms of the lease itself that, “In case of cancellation or termination of the lease for any cause, Lessee shall have the right to retain under the terms hereof twenty-five acres of land around each well producing * * * ”,

During the time the landowner’s suit for cancellation of the first lease was pending, a meeting of the board of directors of the Mohawk Corporation was held in the office of Miss Emily Ashmore, a notary public, in the City of New Orleans. The appellee Joe W. Brown as a director of the corporation was at this meeting, and, according to Miss Ashmore, “one of the Mirandonas” was also present, but she could not identify the one [626]*626present as the appellant, and the record does not disclose whether this was the appellant Henry P. Mirandona or his brother Albert. At this meeting Brown stated that he was interested in acquiring a new lease on the property and offered to convey a interest in a new lease, if acquired, to Mohawk Corporation and also to Mirandona for consideration of $3,000. This proposition was accepted by Mohawk.

The object and purpose of the stipulation that the reservation by Mirandona and Chauvin under the first lease of Via part of the % of all the oil, gas, and other minerals “shall apply and be a part of all future renewals, extensions and new leases made by assignee on the lands covered by the herein described lease or leases for a period •of one year from the date of the expiration of said lease or leases” was to prevent the surrender of the lease by the sublessee and its subsequent reacquisition by the sublessee ■or his assigns free of appellants’ interest, or to protect the sublessors from what is commonly known in the oil fraternity as a “washout”, or to insure what we may ■simply term “fair play”.

The evidenqe in this record convinces us that Brown was most anxious to circumvent this stipulation and to be able to develop this property without the encumbrance of the overriding royalties. Albert Bendernagel, the president of D. V.

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Berman v. Brown
70 So. 2d 433 (Supreme Court of Louisiana, 1953)

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Bluebook (online)
70 So. 2d 433, 224 La. 619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berman-v-brown-la-1953.