Connette v. Wright

98 So. 674, 154 La. 1081, 1923 La. LEXIS 2087
CourtSupreme Court of Louisiana
DecidedOctober 22, 1923
DocketNo. 25573
StatusPublished
Cited by20 cases

This text of 98 So. 674 (Connette v. Wright) 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
Connette v. Wright, 98 So. 674, 154 La. 1081, 1923 La. LEXIS 2087 (La. 1923).

Opinion

ROGERS, J.

In this suit, plaintiff seeks to recover one-tenth of the expenses incurred in developing certain mineral leases affecting lands in the parish of Claiborne.

Defendant being a nonresident, suit was instituted by attachment. Thereafter, by answer filed through his attorneys, defendant subjected himself personally to the jurisdiction of the court.

Subsequent to the submission of the case in the lower court defendant died, and his widow and executrix was made party defendant.

Rlaintiff’s claim as finally presented to the court amounted to $77,580.46.

The judgment of the district court condemned defendant to pay plaintiff $44,098.47, with legal interest thereon, sustained the writ of attachment, and nonsuited plaintiff’s demand for supervisory charges.

Plaintiff has appealed, and defendant has answered the appeal, praying for the reversal of the judgment and the rejection of plaintiff’s demands.

The leases were owned jointly by plaintiff and defendant in the proportion of nine-tenths to the former and one-tenth to the latter. They were acquired on March 30, 1919, by one act of assignment from the Atlas Oil Company.

The leases were in the form of optional contracts; that is to say, they ran for limited periods conditioned upon the payment of rentals, the full term of the leases to expire, even with the payment of the rentals, on March 27, 1921, unless prior to said date actual drilling was begun under each of them.

The leases are identical in terms with those passed upon by this court in Wilder v. Norman, 147 La. 414, 85 South. 59, except that, differently from that case, the contracts had been kept alive by the payment of rentals before the first day of January, 1919.

The act of assignment, in addition to a cash consideration, stipulates, as a further consideration, the assumption by the assignees “of all the obligations of said original leases, in so far as they do apply to and affect the lands” therein described.

All of these leases lay, at the date of the assignment, on the edge of the Homer oil field, the field being gradually extended for some time thereafter. ,The Arkansas Natural Gas Company having drilled a well offsetting one of the tracts covered by the assignment and known as the Shaw A lease, plaintiff, on January 21, 1920, wrote defendant advising that a location was being made in the northwest corner of the tract offsetting the well of the Arkansas Natural Gas Company and furnishing him with an estimate of the cost, the letter concluding:

“We believe that our chances of production on this acreage is extremely favorable and that in order to get our share of the flush production we must commence operation at once. We will bill you for your 10 per cent, of the expenses of drilling this well as same is incurred.”

To this letter defendant replied that ho did not desire to drill, and that any drilling operations carried on the property would be entirely at the plaintiff’s risk and expense. Plaintiff, however, proceeded to drill the offset well, completing it as a producing well. Upon completion of the well, in order to sell the oil, a division order was signed by all the interested parties, including defendant, the division order reciting:

“The undersigned certify and guarantee that they are the legal owners of wells Nos. 1 and up on the United Oklahoma Oil & Gas Corporation, Inc., Shaw A, farm, located S. W. 4 of N. W. 4, section 31, township 21, range 7, parish of Claiborne, state of Louisiana,”

—and authorizing the Standard Oil Company of Louisiana to receive oil from said wells by purchase from the parties in the proportions named, the proportion to defendant being one-tenth of the working interest.

[1085]*1085It is -undisputed that the Standard Oil Company received the oil under this division order, and settled with the various parties, including defendant, whose signatures are attached thereto.

On March 3, 1920, plaintiff notified defendant that a location had been made, and a well, to be known as “Hardy No. 1,” .would be drilled on another of the tracts covered by the lease. At this date there was a producing well within 600 feet of the lease. No reply was made to the letter. However, defendant signed a division order on the Hardy lease similar to that on the Shaw A lease.

Elaintiff, likewise, without the approval and consent of defendant, drilled a number of wells on still another of the tracts affected by the lease, known as Shaw B lease. While a few of these wells proved to be nonproducers, the lease, as a whole, yielded more than one million barrels of oil, defendant’s proportion of which he sold to the Standard Oil Company under a division order, and for which he was paid.

Defendant’s contention, raised by way of answer to plaintiff’s supplemental petition, is that, having never agreed to the drilling Of any of the wells, he could not be held for the cost of dry holes and other wells not accepted by him, for locations without development and other expenses which did not inure to his benefit; although, as a matter of equity, he stood ready and willing to pay his pro rata share of a reasonable amount expended in dialling such wells as produced oil, of which he accepted his proportion; and he accordingly admitted an indebtedness to plaintiff of $41,877.73.

The contention is at variance with the averments of the original answer, in effect, admitting liability for the drilling of the wells by expressing a willingness to pay whatever amount he legally owed to plaintiff, and assigning as the sole reason for its nonpayment the excessive amount charged for producing the oil.

The contention is, also, contrary to the allegations of defendant’s answer in resisting a demand for a partition by licitation of the leases in question in the case of Connette v. Wright, 149 La. 479, 89 South. 626, the record in which is in evidence herein. In his answer in that case, defendant alleged, among other things:

“It was contemplated that the oil produced from the property should be divided by delivery or selling same to a pipe line, and payments made to plaintiff and defendant in accordance with their ownership in said leases; that in accordance with this idea, division orders have been signed under which * * * the companies to whom oil has been sold have been paying direct to plaintiff nine-tenths of the proceeds of the oil produced, and to your defendant one-tenth; * * * that to attempt to effect a partition by licitation will operate a great hardship upon your defendant, * * * and will violate the purpose and object for which plaintiff and defendant acquired said oil and gas leases; * * * that the partition should be held in suspense until plaintiff and defendant have divided the oil in conformity with the object and purpose of the acquisition of the said leases.”

It would therefore appear that by reason of his several judicial admissions defendant cannot now be heard to deny liability for his proportion of the reasonable costs actually incurred by plaintiff in drilling upon the lease, whether or not the wells so drilled were profitable'.

But however that may be, it is shown that defendant received the full benefit of the development of the property by plaintiff. The oil produced reached a total valuation of $3,049,850.79. Under the execution of division orders, declaring his ownership therein, ^defendant received one-tenth of this amount.

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Bluebook (online)
98 So. 674, 154 La. 1081, 1923 La. LEXIS 2087, Counsel Stack Legal Research, https://law.counselstack.com/opinion/connette-v-wright-la-1923.