Norton v. United Gas Corp.

1 F.R.D. 155, 1940 U.S. Dist. LEXIS 1874
CourtDistrict Court, W.D. Louisiana
DecidedFebruary 7, 1940
DocketNo. 52
StatusPublished
Cited by3 cases

This text of 1 F.R.D. 155 (Norton v. United Gas Corp.) is published on Counsel Stack Legal Research, covering District Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norton v. United Gas Corp., 1 F.R.D. 155, 1940 U.S. Dist. LEXIS 1874 (W.D. La. 1940).

Opinion

DAWKINS, District Judge.

Plaintiffs brought this suit for a declaratory judgment “declaring and decreeing the rights and obligations of the parties * * * in respect of * * *” certain agreements and contracts alleged to have been previously entered into. The terms of these contracts and agreements are set forth at length in some twenty articles in the petition, with attached exhibits, and the prayer contains thirteen separately numbered demands for specific relief, with the last further subdivided into paragraphs (a) to (f), inclusive.

In substance, the petition alleges that on or about September 3, 1930, a contract was made between plaintiff, Norton, individually, and a corporate subsidiary of the United Gas Company, a predecessor of one or more of the present defendants, with respect to certain mineral leases then owned by Norton in what has subsequently become the [156]*156Rodessa oil and gas field in the northwest corner of Louisiana, northeast corner of Texas and southwest corner of Arkansas.

Plaintiffs attached to their petition certain documents and exhibits numbered and identified as follows:

1. “Schedules A and B”, being a list of leases covering some “4,500 acres in a block * * * together with the Commercial Gas well completed on one of said leases * * t- ” ■

2. “A schedule of leases upon which are situated the forty-four (44) natural gas wells, hereinafter referred to, which are being operated by defendants upon tracts which aggregate approximately 5,006 acres, situated on what is known as the gas cap * * * ” in said field, marked “Exhibit 1”;

3. A contract, dated September 3, 1930, between Norton and the Texas-Louisiana Production Corporation, (predecessor of some of the defendants) under which he “assigned and subleased * * * all his rights, title and interest and liability in, to and under the two oil and gas leases”, described in “Schedule A”, annexed to said contract, and also all of said rights and obligations under oil and gas leases, described in “Schedule B”, likewise annexed to said contract, in so far only, however, as said leases described in said “Schedule B” cover the gas rights described as “Exhibit 2” in said petition.

4. An amendment of said contract of date, September 3, 1930 (Exhibit 2) under date of August 21, 1934, marked, “Exhibit 3”;

5. A “supplemental agreement”, dated May 14, 1936, between the plaintiffs and United Gas Public Service Company and United Production Corporation “ratifying, confirming and adopting said agreement of date September 3, 1930” and acknowledging that the first of these two companies had acquired “all the rights and liabilities of the Texas-Louisiana Production Corporation * * * in so far as the same covered and affected the mineral rights and leases on property situated in Caddo Parish, Louisiana and that the United Production Corporation had acquired * * * ” all of the rights and obligations as to lands situated in Cass County, Texas, said document being annexed to the petition and referred to as “Exhibit 4”.

Plaintiffs further alleged that on June 3, 1935, Norton and his wife had executed a deed of trust to himself, as trustee for the benefit of their minor son, Richard W. Norton, Jr., covering “all of the rights, title and interest in” the agreement of September 3, 1930 (Exhibit 2), in so far as concerned mineral rights in leases on certain lands situated in Cass County, Texas, and which is the interest represented by Norton, as trustee in the present suit.

The petition further alleged that in the contract of September 3, 1930, the “gas rights in all of said oil and gas leases” had been assigned in consideration of “payments * * * to be made out of gas produced therefrom, as hereinafter set forth.” That subsequently, to September 3, 1930, plaintiffs had acquired additional oil and gas leases in the same vicinity, located in said Rodessa oil field, and the said defendants had also “acquired others in the same vicinity”, and that defendants had “become the owners of the gas rights in all said additional oil and gas leases”, subject to all of the terms of the said agreement of September 3, 1930, and the amendments thereto, and which covered “practically all of the oil and gas leases owned by defendants in the Rodessa field of Louisiana and Texas.”

The petition then proceeds to recite at length the duties and obligations assumed by the defendants, both under the individual leases and the agreement of September 3, 1930, with subsequent amendments, such as, that they were required to reasonably develop the properties, protect them against drainage, etc; that the principal consideration for the agreements and assignments was the promise to produce gas upon which plaintiffs’ royalties, etc., would bring in the “maximum revenues”; to use the gasoline extraction plant “to its fullest capacity” so as to reduce to a minimum the amount to be paid by plaintiffs as their part of said expense in the agreed division by which they would receive one-fourth (%) of the net proceeds. •

Plaintiffs also alleged numerous breaches of the said obligations by the defendants, in that they had failed to use due diligence in the development and to protect the said leases against drainage, but on the contrary had “actively participated in causing the drainage of natural gas” therefrom; and that they had failed to give notice to plaintiffs or to deliver oil produced from gas wells, as required by the contracts, or to account for casinghead gas produced from gas wells. Generally speak[157]*157ing, the details recited in support of these charges include the statement that there are three producing sands in the Rodessa field, to-wit, the Hill, the least prolific, the Floyd or Caddo Levee Board sand and the Dees-Young sand, the latter being the most prolific and in the deepest horizon; that each of said sands in its particular horizon, consists of a "common reservoir” and production “from any well in either” drains the whole and affects every other weir in the field which produces from anyone of the horizons. Further, that there had been completed on the “Norton leases” under the agreements affecting the same, forty-four (44) producing wells “situated on an aggregate of approximately 5,006 acres located on the structure of all three of said sands, thirty (30) of said wells being in Caddo Parish, Louisiana, and fourteen (14) in Cass County, Texas, and all of which were drilled and owned by the defendants”; that after drilling said wells, “and until the execution of the agreements on and subsequent to May 28, 1936, as hereinafter set forth” the defendants complied with their obligations and devoted all of their facilities to production from the “Norton leases”, which had been “provided solely for such purpose and part of the construction thereof charged” against the amounts due to plaintiffs. That, subsequent to said date, “in total disregard” of their said obligations, defendants “entered into contracts for the purchase of gas from others’.’, in the Rodessa field from leases in which “neither plaintiffs nor defendants had an interest * * *”; that the exact amount of gas so contracted for is unknown to plaintiffs, but well known to defendants, and from information received plaintiffs alleged that it amounts to “more than 40,000,000 cubic feet of gas per day”; that defendants were “actually purchasing more than 30,000,000 feet per day” thereof “and the daily amount of gas heretofore produced from the ‘Norton leases’ * * * has been and is now being reduced by the amount of said purchases”.

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Bluebook (online)
1 F.R.D. 155, 1940 U.S. Dist. LEXIS 1874, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norton-v-united-gas-corp-lawd-1940.