Clement v. Sneed Bros.

121 So. 2d 235, 240 La. 48, 13 Oil & Gas Rep. 968, 1960 La. LEXIS 1005
CourtSupreme Court of Louisiana
DecidedMay 31, 1960
DocketNos. 44222, 45040
StatusPublished
Cited by1 cases

This text of 121 So. 2d 235 (Clement v. Sneed Bros.) 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
Clement v. Sneed Bros., 121 So. 2d 235, 240 La. 48, 13 Oil & Gas Rep. 968, 1960 La. LEXIS 1005 (La. 1960).

Opinions

HAMITER, Justice.

Mrs. Ella Townsen Clement instituted this suit against the partnership of Sneed Brothers and the individual members thereof, namely, S. T. Sneed, Jr., W. J. Sneed, M. H. Sneed and Hugh M. Sneed, to obtain the annulment of an oil, gas and mineral lease which she executed in favor of such defendants, it bearing date of February 2, 1954 and affecting some 150 acres of her lands located in Webster Parish. Additionally, she demanded an award of damages in the sum of $84,735, allegedly the cost of drilling a well on her property, she claiming that the defendants breached a Side Letter of Agreement (quoted in full hereinafter) which she entered into with them in contemplation of and as a prerequisite for the execution of the aforementioned lease.

After trial, and following the death of Mrs. Clement, the district court rendered a judgment decreeing the lease to be null and void and condemning the defendants in solido to pay to C. B. Townsen, administrator of the succession of Ella Townsen Clement, the sum of $60,000 and all costs of this suit.

The defendants appealed suspensively and devolutively from the judgment.

Pending the appeal there were substituted for Mrs.' Ella Townsen Clement (although having died, she is hereinafter sometimes termed the plaintiff), as well as for the administrator of decedent’s succession, her four heirs at law, namely, Mrs. Lela Townsen Bade, Mrs. Clyde Townsen Patterson, Columbus B. Townsen and R. L. Townsen. Later, however, the interests in this cause of the last two named heirs were acquired by the defendants (see Number 45,040 on the docket of this court) ; hence, they are no longer parties litigant.

The lease in question, for which defendants paid in cash the sum of $5,250, is the [236]*236usual commercial lease and provides for a primary term of five years. Among other things, it recites: “If operations for drilling are not commenced on said land on or before one year from this date, the lease shall then terminate as to both parties unless on or before such anniversary date lessee shall pay or tender to lessor * * * the sum of One Hundred Fifty and no/100 Dollars ($150.00), (herein called rental) which shall cover the privilege of deferring commencement of drilling operations for a period of twelve (12) months. In like manner and upon like payments or tenders annually the commencement of drilling operations may be further deferred for successive periods of twelve (12) months each ■during the primary term. * * * ”

The Side Letter of Agreement, which all parties concede is an integral part of the lease and must be considered with it, reads in full as follows:

“Mrs. Ella Clement Agreement with Sneed Bros.
“Side Letter of Agreement.
“On the 22nd day of July, 1954, a verbal agreement was entered into by and between Mrs. Ella Clement and Sneed Brothers represented by S. T. Sneed, Jr., and W. J. Sneed. At this time an agreement was entered into in which the Sneed Brothers would pay to Mrs. Ella Clement and others of the Clement Heirs $35.00 per acre for their mineral lease on properties located in the East Half of Section 34, and the West Half of Section 35, Township 22 North, Range 9 West, Webster Parish, La. and in parts of the North East Quarter of Section 3, and the Northwest Quarter of Section 2, Township 21 North, Range 9 West, Webster Parish, La.
“It was at this time a decision to use the same leases that were used in a former agreement, and the dates of the said leases in this agreement would be dated February 2nd, 1954. These leases were in the hands of Attorneys Campbell and Campbell of Minden, La. Upon contacting Mr. John T. Campbell, he advised that new leases must be prepared and it was then agreed by all parties that new leases would be prepared but the original date of Feb. 2nd would be placed in the new leases.
“On Monday, July 26th, Cashiers checks were delivered by Sneed Brothers to Mr. John T. Campbell for the full bonus on the purchase price of the above stated leases. The Cashiers checks were attached to the newly made out leases and each of the said lessors was to sign the leases. Supplemental abstracts were ordered as ■of that date by Mr. Campbell and Mr. S. T. Sneed, Jr., and said monies were to be released to the lessors upon the release of the leases to the lessee with a satisfactory full title opinion as per Mr. Campbell who is the acting attorney for the lessors.
“The said Sneed Brothers further agreed with Mrs. Ella Clement that within one year from the date of July 22nd, 1954 that they would drill or cause to be drilled a well on her land or on lands that would be pooled therewith.
“It was further agreed and understood that there being lands already leased that at one time was a part of the Clement Estate that Mrs. Ella Clement in co-operation with the Sneed Brothers, agreed to a letter form of agreement for the drilling commitiment within the said lease in order that Sneed Brothers would have time to attempt to obtain farm-out agreement from parties who owned this outstanding acreage. This farm-out agreement is now in a trading stage and upon the completion of said agreement there shall be enough acreage for the driving of a well on the lease of Mrs. Ella Clement or the lands that shall have to be pooled therewith.
[237]*237“If this letter is in accord with the aforesaid verbal agreement, then the parties of the said agreement will sign in the place allotted for their signature below.”

It is the contention of plaintiff that the Side Letter of Agreement contains an unconditional and compulsory obligation on the part of the defendants to drill a well on her lands within a year from July 22, 1954; and that since such obligation was not discharged she is entitled not only to a cancellation of the lease but also to damages (for which she prayed) amounting to the cost of drilling and completing the well.

The defendants, on the other hand, contend that the drilling provision in the Side Letter of Agreement was not unqualified; that it, by its very language, was conditioned on plaintiff’s promise to voluntarily nnitize her lands with those of others; and that her later arbitrary refusal to sign tendered voluntary unitization contracts made it impossible for them to comply ■with the drilling commitment.

By giving consideration only to the language within the four corners of the Side Letter of Agreement we cannot reach a •conclusion favorable either to the contention of plaintiff or to that of the defendants. Certainly an intention to create a drilling obligation affecting solely Mrs. -Clement’s lands, such as plaintiff contends •for, is not indicated by the provision that -the defendants would “drill or cause to be ■ drilled a well on her land or on lands that would he pooled therewith” and by the further recitation that “there shall be •enough acreage for the drilling of a well on -the lease of Mrs. Ella Clement or the lands .that shall have to be pooled therewith.” Nor is there verbiage in the contract showing, as defendants urge, that Mrs. Clement • obligated herself to voluntarily unitize her ’lands with those of others.

Moreover, treating the Side Letter of Agreement as being ambiguous as we do, the extrinsic evidence adduced at the trial • of the cause does not satisfactorily disclose a single mutual intention of the contracting parties.

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Bluebook (online)
121 So. 2d 235, 240 La. 48, 13 Oil & Gas Rep. 968, 1960 La. LEXIS 1005, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clement-v-sneed-bros-la-1960.