Exchange Nat. Bank v. Head

99 So. 272, 155 La. 309, 1924 La. LEXIS 1946
CourtSupreme Court of Louisiana
DecidedJanuary 28, 1924
DocketNo. 26193
StatusPublished
Cited by18 cases

This text of 99 So. 272 (Exchange Nat. Bank v. Head) 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
Exchange Nat. Bank v. Head, 99 So. 272, 155 La. 309, 1924 La. LEXIS 1946 (La. 1924).

Opinion

THOMPSON, J.

On May 12, 1921, George S. Shields executed a mortgage on the land described in plaintiff’s petition with other property, in plaintiff’s fhvor, to secure a note for some twenty-odd thousand dollars. The act was authentic in form, contained the usual nonalienation clause, and was seasonably recorded in the mortgage records. Shields had, prior to said mortgage, granted an oil and gas lease on the land in favor of the defendant Head. The oil lease, however, was not recorded until long after the execution and registry of plaintiff’s mortgage.

At the maturity of the mortgage debt the plaintiff proceeded via ordinaria' to foreclose its mortgage. After pleading unsuccessfully various exceptions and defenses, Shields finally went into voluntary bankruptcy, and, through counsel on motion in the state court, 'arrested further proceedings in the foreclosure of the mortgage.

The plaintiff then abandoned its action in the state court and made proof of its debt and mortgage in the bankruptcy proceeding.

On application- of the trustee in bankruptcy and with the unanimous consent of all of the creditors of Shields, a sale of all of the property and assets of the bankrupt was ordered for the purpose of paying the debts. The sale was ordered to be made for cash to the last and highest bidder, and free of all liens and incumbrances whatsoever. The order was signed March 28, 1922, and directed the sale to be made on Saturday, April 8, 1922.

At this sale the plaintiff became the purchaser of the land, and the sale was confirmed by the federal court in the bankruptcy proceeding.

The plaintiff thereupon instituted the present suit, the purpose of which is to haVe the oil and gas lease made by Shields to Head canceled and erased from the public records. The suit was met by an exception of no cause of action founded upon five specifications, as follows:

(1) That it is not alleged that either the plaintiff or defendant is in possession of the property so as to place this suit in the class of any real action known to the law of Louisiana.

(2) That tlie petition affirmatively shows that George S. Shields sold the oil, gas, and minerals in and under the land long prior to the mortgage of plaintiff and the adjudication in bankruptcy, and that the sale was recorded prior to the adjudication in bankruptcy; and under the law only such title as Shields had to the property passed to the trustee and could be legally sold by him without first having had said sale set aside as being in fraud" of creditors.

(3) That the trustee in bankruptcy has no legal right to sell, in any manner, or to recover in a suit at law or in equity, any property sold by the bankrupt and in the hands of a bona fide purchaser for value prior to the adjudication.

(4) That the petition shows that the property was sold to plaintiff without 30 days’ advertisement as required by the laws of the United States and the laws of this state; that said sale is nothing more than a private sale, and is an absolute nullity in so far as it may attempt to convey the oil, gas, and minerals previously sold, or affect the title of, defendants, acquired from the bankrupt prior to the adjudication.

(5) Plaintiff does not allege that it has not been paid or has not received its debt in full from the proceeds of thp estate of the bankrupt, and alleges no injury because of the prior sale of the property by the bankrupt! to the defendant.

The exception of no cause of action was [314]*314sustained, the plaintiff’s suit dismissed, and it has appealed.

Opinion.

1. In answer to this contention, it may be said that the plaintiff’s suit is neither petitory nor possessory. Nor is it an action in jactitation nor an action to try title under Act 30 of 1908. But because the action does not fall under either class designated, it does not follow that the petition fails to disclose a cause of action for want of an allegation in regard to possession. It is true the petition alleges that defendants are slandering plaintiff’s title by claiming an oil lease on the plaintiff’s land; but the facts as set out in detail and the prayer of the petition do not make the action one of jactitation, strictly speaking.

The relief sought is, not that the defendants be ordered to disclaim title or to make good the asserted title — the peculiar characteristic of an action in slander of title—but the prayer of the petition, responsive to the allegations of the petition, is that the alleged oil and gas lease be ordered canceled and erased from the public records.

Por the purpose of this phase of the exception, the plaintiff must be regarded as the owner and .possessor of the land, and there could be no possession of the land in the defendant under the oil lease separate and distinct from and to the exclusion of the owner of the land.

But even where. the plaintiff, claiming ownership, is not in actual possession of the property, he may yet have his action against a party out of possession for the cancellation of a recorded deed and to remove a cloud on his title.,

In Atchafalaya Land Co. v. Brownell-Drews Lumber Co., 130 La. 657, 58 South. 500, Ann. Cas. 19130, 1358, the defendant interposed the special defense that; plaintiff had not corporeal possession and therefore could not maintain the action of slander of title, and the court held:

“No doubt, the jactitation action proper which is a suit by which the plaintiff asks that the defendant be compelled to institute the petitory action against him, can be brought only by a party in possession; for the petitory action is that action which is brought against the claimant in possession, and hence a claimant'out of possession cannot require that the action be brought against him, but from this it does.not follow that a party claiming to be owner by title dyly recorded, but who is not in actual possession, may not bring a' suit against another party equally out of possession to procure the cancellation of a title which that other party may have caused to be recorded against the property. If he could not, he would be remediless.”

See also, Lacroix v. Villio, 123 La. 459, 49 South. 20.

2. The second ground of the exception is that the mineral rights formed no part of the assets of the bankrupt’s estate, and were not surrendered into bankruptcy because a sale of such mineral rights had been recorded prior to the adjudication in bankruptcy.

The mineral lease was recorded just two days before the adjudication in bankruptcy, but the record fails to show the date on which the petition was filed and surrender in bankruptcy was made by Shields. But conceding that the surrender and adjudication were made on the same day, the registry of the oil lease quoad the plaintiff’s mortgage was null and void and without effect, and conferred no rights on the lessee to the prejudice of the plaintiff’s mortgage, because of the prior, registry of the plaintiff’s mortgage and because of the nonalienation clause contained in the act of mortgage.

But the fundamental error upon which this contention is predicated is in assuming that there is or can be any title or ownership in or to oil and gas beneath the surface of the soil independent, separate, and distinct [316]*316from the land upon which the oil lease is granted.

In the case of Frost-Johnson Lumber Co. v. Salling’s Heirs, 150 La. 855, 91 South.

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Bluebook (online)
99 So. 272, 155 La. 309, 1924 La. LEXIS 1946, Counsel Stack Legal Research, https://law.counselstack.com/opinion/exchange-nat-bank-v-head-la-1924.