Continental Oil Co. v. Landry

41 So. 2d 73, 215 La. 518, 1949 La. LEXIS 966
CourtSupreme Court of Louisiana
DecidedApril 25, 1949
DocketNo. 39000.
StatusPublished
Cited by30 cases

This text of 41 So. 2d 73 (Continental Oil Co. v. Landry) 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
Continental Oil Co. v. Landry, 41 So. 2d 73, 215 La. 518, 1949 La. LEXIS 966 (La. 1949).

Opinion

HAWTHORNE, Justice.

This is a concursus proceeding provoked by the Continental Oil Company, an oil purchaser, and involves a 1/32 royalty. The company deposited in the registry of the court funds representing the purchase of the royalty oil in question and cited the adverse claimants thereto to appear and assert their respective ownerships to the royalty and to the funds so deposited.

The pertinent facts necessary for our decision in the instant case are as follows:

On August 21, 1935, Frank Eloi Landry, the then as well as the present owner of *521 three distinct, non-contiguous tracts of land situated in Jefferson Davis Parish, by one act of conveyance sold, conveyed, and transferred to William D. Jaenke and Earl C. Miller “One Thirty-second (l/32nd) of the whole of any oil, gas or other minerals, except sulphur, on and under and to be produced from said lands, delivery of said royalties to be made to the purchaser herein in the same manner as is provided for the delivery of royalties by any present or future mineral lease affecting said lands”. The property is described in this royalty deed as follows:

“Northeast Quarter of Northwest Quarter (NE}4 of NWi/i) of Fractional Section Thirty-six (36), Township Seven (7) South, Range Three (3) West, Louisiana Meridian, containing Forty (40) acres, more or less. Also Lots Six (6), Seven (7), and Ten (10) of East half (E(/^) of Fractional Section Twenty-five (25), Township Seven (7) South, Range Three (3) West, Louisiana Meridian, each of said lots containing Ten (10) acres.”

The three separate, distinct, non-contiguous tracts as described in this instrument are these:

(1) NE)4 of NW14 of Fractional Section 36, Township 7 South, Range 3 West;

(2) Lots 6 and 7 of Ei^ of Fractional Section 25, Township 7 South, Range 3 West, and

(3) Lot 10 of the same section, township, and range.

On May 24, 1943, Frank Eloi Landry, as owner of these tracts, granted a mineral lease on these lands, as well as on other property, to Mordelo L. Vincent, Jr., and L. L. Welch. At the time this lease was granted, appellees, Lloyd Noble, W. A. Grapes, D. R. Snow, Earl C. Miller, and William D. Jaenke, were the owners of a 1/32 mineral royalty interest which had been acquired by them or their authors in title from Frank E. Landry on August 21, 1935.

Barnsdall Oil Company, operating under this lease, obtained the production of oil and gas in paying qitantities prior to August 21, 1945, or within 10 years from the date on which the royalty deed to Miller and Jaenke was executed, by the completion of a producing oil we'1'1 upon one of the non-contiguous tracts, that is, Lot 6 of the EJ/á of Fractional Section 25, Township 7 South, Range 3 West.

Thereafter, in September or October, 1945, more than 10 years after the execution of the royalty deed, Barnsdall Oil Company obtained the production of oil in paying quantities by drilling a well on one of the other non-continguous tracts, described in the royalty deed as the NEJ4 of the NW% of Fractional Section 36, Township 7 South, Range 3 West.

Appellant, the landowner Landry, contends that the 1 /32 mineral royalty, insofar as it relates to and affects the NE% of the NWJ4 of Fractional Section 36, Township 7 South, Range 3 West, one of the non-contiguous tracts described in the royalty deed, *523 on which the second producing well was drilled, expired and terminated on August 21, 1945, as more than 10 years had elapsed since the execution of the royalty deed on August 21, 1935, without any production of oil, gas, or other minerals from this tract, and pleads in bar of all rights, claims, and demands of Earl C. Miller and the other adverse claimants to the 1/32 royalty interest insofar as it relates to this tract, or to the funds produced from said interest, the prescription of 10 years liberandi causa.

Appellees, Earl C. Miller et al., contend that the 1/32 royalty acquired from the landowner, Landry, on August 21, 1935, is still in effect for the reason that “The obligation created 'by the royalty deed in favor of Earl C. Miller, et' al.,- being conditioned upon the production of oil, gas, or other minerals from the lands covered thereby, and such production having been’ obtained from a portion of said lands prior to the expiration of ten (10) years from the date of said deed, the rights created thereby have never been terminated, but on the contrary have become absolute.”

The lower court overruled the plea of prescription of 10 years liberandi causa filed by the landowner Landry, and decreed that ■the funds deposited in the court belonged to Jaenke, Miller, Noble, Grapes, and Snow, and that these parties were the owners of the 1/32 royalty interest in dispute.

From this judgment Frank Eloi Landry has appealed to this court.

The question presented by this appeal, res nova in this state, is a question of law, that is: Under a royalty deed executed by the landowner conveying royalty rights in non-contiguous tracts, does the production of minerals on one of the tracts within 10 years from the date of the deed prevent the running of the liberative prescription of 10 years as to the royalty rights on the other tracts?

In Vincent et al. v. Bullock et al., 192 La. 1, 187 So. 35, this court held that the reservation of a royalty right to the oil, gas, and other minerals in a tract of land imposes upon the property a real obligation and is a species of real right running with the land, subject to the prescription of 10 years liberandi causa.

It is also well settled that this right is merely one to’ share in the production of oil, gas, and other minerals if and when they are produced from the property subject to the right. It is passive in its nature, and there is no obligation on the royalty-owner to develop the property, nor does he have this right. All that he acquires is a right attached to the land, the right to receive his share of the minerals if and when they are produced. St. Martin Land Co. v. Pinckney et al., 212 La. 605, 33 So.2d 169; Union Sulphur Co., Inc., v. Lognion et al., 212 La. 632, 33 So.2d 178; Humble Oil & Refining Co. v. Guillory et al., 212 La. 646, 33 So.2d 182. His share of the minerals when they are produced is royalty. At the moment of the execution of the *525 royalty sale, under our holding in Vincent et al. v. Bullock et al., supra, a species of real right is created, imposing a burden upon the land, which is subject to the prescription of 10 years liberandi causa. It is therefore from the land that the royalty owner receives his royalty, and, if there are several distinct, non-contiguous tracts of land, he receives the royalty separately from each of them. Production from one of the tracts is not production from the other non-contiguous tracts, and by such production the royalty owner would not receive royalty from them. Our conclusion in this case, therefore, is that the event — production— which would prevent the running of prescription under the Bullock case did not happen within 10 years as to the tract in controversy in this case, the NE]4 of the NWji of Fractional Section 36; therefore the royalty right has prescribed as to it.

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41 So. 2d 73, 215 La. 518, 1949 La. LEXIS 966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/continental-oil-co-v-landry-la-1949.