Bollinger v. Republic Petroleum Corporation

194 So. 2d 139
CourtLouisiana Court of Appeal
DecidedMarch 27, 1967
Docket6835
StatusPublished
Cited by12 cases

This text of 194 So. 2d 139 (Bollinger v. Republic Petroleum Corporation) 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
Bollinger v. Republic Petroleum Corporation, 194 So. 2d 139 (La. Ct. App. 1967).

Opinion

194 So.2d 139 (1966)

Donald BOLLINGER, Plaintiff-Appellee,
v.
REPUBLIC PETROLEUM CORPORATION, Defendant-Appellant.

No. 6835.

Court of Appeal of Louisiana, First Circuit.

December 28, 1966.
Rehearing Denied February 6, 1967.
Writ Refused March 27, 1967.

C. Ellis Henican, of Henican, James & Cleveland, Steeg & Shushan, New Orleans, Peltier & Peltier, Thibodaux, Sehrt, Boyle & Wheeler, New Orleans, for appellant.

Victor A. Sachse, of Breazeale, Sachse & Wilson, Paul M. Hebert, Baton Rouge, Johnny X. Allemand, Thibodaux, for appellee.

Before LANDRY, ELLIS and BAILES, JJ.

BAILES, Judge.

This is a suit to cancel an oil, gas and mineral lease granted by plaintiff to Louis J. Roussel and by him assigned to defendant. The property affected by this lease is located on Bayou Lafourche, about 26 miles below the town of Thibodaux. It measures two arpents in width on Bayou Lafourche by a depth of 40 arpents. The date of the lease is April 21, 1954. It was granted as a top lease and became effective and enforceable between the parties upon the cancellation of the lease previously granted by this same plaintiff to The Texas Company. The cancellation of the latter lease was by judgment of the Supreme Court of this State rendered in the case styled Bollinger v. Texas Company et al. (1957) 232 La. 637, 95 So.2d 132.

A companion to the instant suit is that of Melancon v. Republic Petroleum Corporation, La.App., 194 So.2d 144. These *140 two suits were consolidated for trial purposes in the district court and for argument in this court. The issues are identical and the reasons for judgment assigned in the instant case will be controlling and applicable to the companion suit; however, separate judgments will be rendered in each case.

In his original petition which was filed on February 24, 1964, the plaintiff alleged, as a basis for this action that on the property affected by the subject lease either Louis J. Roussel and/or Republic Petroleum Corporation drilled a well designated as Melancon Bollinger Well Unit No. 2; that this well, according to the report of the defendant to the Conservation Commission of this state was logged on December 18, 1959, and completed in due course and that the well was then shut in as a gas well capable of production; that the well is and since June 1, 1963, or earlier, has been capable of producing gas and distillate in paying quantities but has been shut in; and that, while the terms of the lease require the payment by the defendant (the lessees) of shut in royalties, defendant has not paid any shut in gas well royalty; and further plaintiff alleges other royalty is due him on a monthly basis, for oil, gas and other hydrocarbons which have been produced from the said property and from land with which this property is unitized, however, no royalty payment has been made to him since November, 1963.

The plaintiff filed a first and a second supplemental and amending petition which included certain additional persons as party defendants nominally, however, the issue as set forth above was not changed or varied thereby.

The first responsive pleading filed by the defendant was an exception of prematurity based on the failure of the plaintiff to give the defendant notice of an alleged breach of the lease. The notice and the requirement thereof will be discussed infra. Subsequently, defendant filed its original answer wherein it admitted it had paid no shut in royalties, and also pleaded that plaintiff was not entitled to such payments by reason of the legal effect of a certain "Agreement of Compromise and Transaction and Release." Additionally, defendant pleaded the lack of notice by plaintiff to it of an alleged breach of the lease, this being the same ground urged in its exception of prematurity. Further, defendant answered plaintiff's allegation of failure on its part to pay other royalty due on oil produced from plaintiff's land by alleging plaintiff had received certain overpayments of royalty prior to November, 1963, and the payment was suspended in November, 1963, in order for defendant to recoup this overpayment. Defendant filed a supplemental and amended answer wherein, alternatively, it pleaded that if the court should adjudge a cancellation of the lease, then it should be cancelled only on such portion of the subject property not covered by a well or a unit of a well.

After trial in the district court, the trial judge ruled that "defendant was obligated to pay shut-in royalties and, having failed and refused to do so, the lease will be cancelled in entirety." This ruling was made the judgment of the district court. From this adverse judgment, defendant appealed.

For a better understanding of the discussion of the facts, the pleadings and contentions of the parties, we deem it advisable to briefly relate certain background information and facts leading up to the present litigation between the parties hereto. As was stated supra, the lease which forms the basis for this suit was granted by plaintiff to Louis J. Roussel as a top lease. There was at the time a lease in existence on this property in favor of The Texas Company, as lessee. This top lease became operative and effective upon the judicially decreed cancellation of the lease granted The Texas Company. The reasons for this cancellation are set forth in Melancon v. Texas Company et al. infra.

On the basis of certain alleged violations of the mineral lease from plaintiff to *141 Roussel, which had been assigned to defendant, plaintiff instituted, on February 1, 1960, an action to cancel the lease. This action was terminated, effective January 1, 1963, by what was denominated an "Agreement of Compromise and Transaction and Release" and thereunder defendant continued and was maintained in its relationship to plaintiff as the lessee within the same terms and conditions of the said lease as originally confected. Although the parties, in their briefs, have made further reference to this agreement, for the purposes of this opinion no fuller or further reference need be made thereto.

Prior to the time the parties hereto entered into this compromise agreement, defendant logged the gas well, about which the disputed royalty payments are involved, on December 18, 1959. Effective June 1, 1963, as a result of a joint application therefor by defendant and plaintiff, the Louisiana Conservation Commission unitized this gas well under Commission Order 280-J, and designated Texaco, Inc., as operator.

The provisions of the lease entered into between plaintiff and Louis J. Roussel, and assigned to defendant, which we deem pertinent to this discussion and decision are the following:

Paragraph (3)

"The royalties reserved by Lessor, and which shall be paid by Lessee, are, except as otherwise provided herein:

* * * * * *

"(d) On all other minerals mined and marketed, one-eight (1/8) of the current market price at the wells or mine. For any period or periods when, after thirty (30) days following discovery of gas or distillate on the leased premises, such product is not being sold due to lack of a market and is not being used off the leased premises or in the manufacture of gasoline or other product, and for that reason the well or wells are shut in, lessee shall pay as advance royalty for the shut-in well or wells an amount per well as set forth in paragraph 4(e) hereof and pro rata for any lesser period. Said advance royalty shall be payable within thirty (30) days after the shutting-in of the well or wells.

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Related

Republic Petroleum Corporation v. United States
397 F. Supp. 900 (E.D. Louisiana, 1975)
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297 So. 2d 772 (Louisiana Court of Appeal, 1974)
Alvord v. Sun Oil Co.
251 So. 2d 659 (Louisiana Court of Appeal, 1971)
Bouterie v. Kleinpeter
247 So. 2d 548 (Supreme Court of Louisiana, 1971)
Floyd Williams v. Humble Oil & Refining Company
432 F.2d 165 (Fifth Circuit, 1970)
Williams v. Humble Oil & Refining Co.
432 F.2d 165 (Fifth Circuit, 1970)
Bouterie v. Kleinpeter
234 So. 2d 812 (Louisiana Court of Appeal, 1970)
Williams v. Humble Oil & Refining Company
290 F. Supp. 408 (E.D. Louisiana, 1968)
Bollinger v. Republic Petroleum Corp.
196 So. 2d 276 (Supreme Court of Louisiana, 1967)
Melancon v. Republic Petroleum Corp.
194 So. 2d 144 (Louisiana Court of Appeal, 1966)

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Bluebook (online)
194 So. 2d 139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bollinger-v-republic-petroleum-corporation-lactapp-1967.