H. R. Hayes Lumber Co. v. H. M. Jones Drilling Co.

148 So. 899, 177 La. 626, 1933 La. LEXIS 1730
CourtSupreme Court of Louisiana
DecidedMay 1, 1933
DocketNo. 31812.
StatusPublished
Cited by10 cases

This text of 148 So. 899 (H. R. Hayes Lumber Co. v. H. M. Jones Drilling Co.) 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
H. R. Hayes Lumber Co. v. H. M. Jones Drilling Co., 148 So. 899, 177 La. 626, 1933 La. LEXIS 1730 (La. 1933).

Opinion

OVEBTON, Justice.

This appeal presents two distinct proceedings, growing out of the execution of a judgment, rendered in the cause, constituting the title of this ease. One of these is a third opposition, filed by the Louisiana Oil Befining Corporation, asserting a mortgage against a mineral lease and its equipment, granted by the Bateman Oil Corporation, a former owner of the lease and its equipment, recorded in the mortgage records on April 15, 1930. Thereafter the lease and its equipment were sold to the 'Jones Drilling Company, Inc., and the Lyons Gas Company, Inc., defendants in the ease, who expressly assumed payment of the foregoing mortgage debt and the payment of an account due by the Bateman Oil Corporation to the Hayes Lumber Company.

In executing the judgment obtained against the defendants in the case, the lease and its equipment were sold at sheriff’s sale on March 7, 1931. The amount, brought by the property, was insufficient to satisfy the claims of both plaintiff and the Louisiana Oil Corporation, and, since these companies entertained different views as to which was entitled to preference, the Louisiana Oil Corporation filed the third opposition referred to, claiming the right to prior payment over plaintiff. This proceeding, involved in the appeal, we shall dispose of first.

The other proceeding involved in the appeal is a proceeding by rule, filed by the sheriff against the Louisiana Oil Befining Corporation to compel that corporation to show cause why it should not pay to the sheriff the proceeds of certain oil shipped to it from the wells on the lease, while, it is asserted, the oil was under seizure. This proceeding we shall dispose of last.

The third opposition of the Louisiana Oil Befining Corporation involves the consideration of the judgment from which execution issued to determine whether that corporation’s claim or the claim of plaintiff is entitled to payment by preference. The judgment from which execution issued recognizes the lien and privilege, claimed by plaintiff, as -a furnisher of materials, and sustains a writ of provisional seizure that issued upon the ground of the existence of this privilege.

The foregoing judgment is not binding on the Louisiana Oil Corporation, for that company, although served with notice of seizure, made under the writ of provisional seizure, was not a party to the suit.

At the outset, it may be observed that Act No. 232 of 1916, relative to the drilling of wells for oil, gas, or water, and relating to the granting of privileges to the furnishers of material and others, has no bearing on this case, because the act relates solely to the furnishing of material where the *631 drilling of wells is let by contract, and here the drilling of the wells was not so let, bnt the work was done by the owner of the lease. Likewise Act No. 171 of 1928 does not affect this case, for that act relates to privileges in favor of laborers only for services rendered in the operation of oil and gas wells, and not to privileges in favor of the furnishers of material. Act No. 172 of 1928 is likewise not pertinent here, for that act also relates to privileges in favor of laborers only, and does not include furnishers of material. The only act pertinent to the privilege, asserted by plaintiff, is Act No. 29S of 1926, pertaining to the construction, repair, and improvement of buildings and .works on immovable property. There are even items in plaintiff’s account to which the act of 1926 has no application, for the act relates only to constructions on top of the ground, whether upon land leased or not leased, and does not, therefore, relate to the drilling of oil and gas wells, which, by their nature, are constructions made underground. Calatex Oil & Gas Co. v. Smith, 175 La. 678, 144 So. 243.

As to whether all of plaintiff’s claim is or is not secured by the privilege of the furnisher of material is not important under our view of the case. The mortgage of the Louisiana Oil Refining Corporation was recorded in the mortgage records, as stated, on April 15, 1930, and the lien, asserted by plaintiff, was registered on June 5, 1930. Although the mortgage was recorded prior to plaintiff’s lien, it does not follow that the mortgage primes the lien. The mortgage, when the lien of the furnisher of material is timely recorded, is primed by the lien, if the mortgage is not registered until after the construction or repairs has begun, although the mortgage be recorded prior to the lien. Section 12 of Act No. 298 of 1926; Hortman-Salmen Co. v. White, 168 La. 1049, 123 So. 709; Hortman-Salmen Co. v. White, 168 La. 1057, 123 So. 711. It is not questioned that the mortgage, in this instance, was not recorded until after the work and labor had begun — in fact, the record leaves no doubt that it was not. Therefore it is necessary to determine whether plaintiff’s asserted lien was timely recorded. If it were not, then the mortgage, which was the first recorded, primes the lien under the laws of registry.

The mortgage, as we have said, was recorded on April 15, 1930, and the lien on June 5, 1930. The lien, to be timely recorded, must be registered within sixty days after the completion of the work or construction, or within that time after the work is treated as finished, where the construction of the improvement or the work of repair has not been let by contract, as is the case here, or the contract, if one has been executed, has not been recorded. Section 12 of Act No. 298 of 1926; Hortman-Salmen Co. v. White, 168 La. 1067, 123 So. 715; National Homestead Association v. Warren C. Graham, 176 La. 1062, 147 So. 348, handed down on Feb. 27, 1933.

The work was completed, and the lease was in full operation as an oil producing field by March 23, 1930. This appears from the evidence of the witness Daugherty, who fixes the date by the date of his return to the field from a hospital after an accident had befallen him. He testifies, in part, as follows: *633 “Q. The three wells upon that lease you state were fully completed? A. Yes, sir. Q. Prior to March 23, 1930? A. Yes, sir. Q. And all other constructions on the lease were completed at that time? A. Yes, sir. * * *” He says that there was some work done in May, 1930, consisting of the putting in of “targets” to treat the oil and pump it away, hut explains that the lessees treated and pumped oil before they put in the “targets,” using a drilling rig “pot,” that is, boiler, belonging to H. M. Jones, which they replaced with another. So far as appears, it may be observed, at this point, that this act, to the extent it may affect the issue, was merely the replacement of work which had been completed. Daugherty’s evidence, as to the completion of the work on or before March 23, 1930, is supported by the evidence of Elliot, an employee of the Louisiana Oil Refining Corporation. He says that the work was fully completed in March, 1930, that the loading rack was completed at that time, and that oil was then being shipped from the field.

To overcome the effect of this evidence, plaintiff has endeavored to show that the work undertaken was not completed until May 24, 1930, by offering evidence of the purchase for the field, under date of May 3, 1930, of one piece of oak lumber and of one piece of screen wire' for $4.05, and, under date of May 14, 1930, of 155 sacks of cement for $139.05, and, under date of May 24, 1930, of 30 fire brick for $3. These articles were purchased some forty-three days after the preceding item on the account was purchased.

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Bluebook (online)
148 So. 899, 177 La. 626, 1933 La. LEXIS 1730, Counsel Stack Legal Research, https://law.counselstack.com/opinion/h-r-hayes-lumber-co-v-h-m-jones-drilling-co-la-1933.