Phillips Petroleum Company v. Richard

127 So. 2d 816, 15 Oil & Gas Rep. 770, 1961 La. App. LEXIS 1851
CourtLouisiana Court of Appeal
DecidedMarch 6, 1961
Docket59
StatusPublished
Cited by1 cases

This text of 127 So. 2d 816 (Phillips Petroleum Company v. Richard) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phillips Petroleum Company v. Richard, 127 So. 2d 816, 15 Oil & Gas Rep. 770, 1961 La. App. LEXIS 1851 (La. Ct. App. 1961).

Opinion

127 So.2d 816 (1961)

PHILLIPS PETROLEUM COMPANY, Plaintiff and Appellee,
v.
Emily Beaugh RICHARD et al., Defendants.

No. 59.

Court of Appeal of Louisiana, Third Circuit.

March 6, 1961.
Rehearing Denied March 29, 1961.
Certiorari Denied May 12, 1961.

*817 Charles F. Boagni, Jr., Opelousas, for defendants-appellants.

Bailey & Mouton, Charles F. Bailey, Lafayette, Liskow & Lewis, A. J. Shepard, Jr., Lake Charles, Charles T. Everett, Crowley, Alfred Veazie Pavy, by Albert J. Boudreaux, Opelousas, Phillip J. Chappuis, Crowley, for plaintiff-appellee.

Before SAVOY, HOOD and CULPEPPER, JJ.

CULPEPPER, Judge.

Phillips Petroleum Company, as the owner of an Oil, Gas and Mineral Lease under which production has been obtained, has instituted this concursus proceedings, praying that the Court pass upon conflicting claims which have arisen because the petitioner is unable to determine whether the interests reserved by the Vendor in certain sales of land are reservations of royalty or of mineral interests and because further uncertainty exists as to whether said interests have prescribed. Plaintiff deposited $5,807.08 in the Registry of the Court as being the net amount accruing to the combined interests in dispute and obtained an order of court allowing it to deposit from month to month the additional sums accruing to said disputed interests.

The lower court found that the interests reserved by the vendor in said deeds were mineral interests as distinguished from royalty and that said mineral interests had not prescribed. From this judgment those of the defendants who contend that the reservations were of royalty, rather than mineral interests, have appealed.

The evidence which was filed in the record by stipulation of counsel shows that on November 30, 1939 one Edmond Richard sold by separate deeds to Hebrard Duplechain 68 acres of land, more or less, to Mrs. Sylvanie Duplechain Henry 25 acres more or less, and to Mrs. Ernestine Duplechain Green 25 acres, more or less. In these three sales made by Edmond Richard to the purchasers named above the following identical reservations were made in favor of the vendor:

"The tract of land herein conveyed is a portion of the land included in the Oil, Gas and Mineral Lease granted by present vendor to I. N. Pharris, April 5, 1938, recorded under Entry No. 142305, Con. Bk. R-6, page 114, and now assigned by said Pharris to the Atlantic Refining Company under instrument recorded April 26, 1938, under Entry No. 142306, in Con. Bk. E-6, page 455, and vendor reserves for himself, his heirs and assigns, an undivided one-fourth of the oil, gas and other minerals under and produced and saved from said land, which reservation is equal to a one-thirty-second royalty interest under the said existing lease and as well a like royalty interest under future mineral leases in the event of the lapse or forfeiture of said existing lease, it being agreed and understood that this reservation is made and granted subject to the right of the purchaser and heirs and assigns to grant and execute such future oil, gas and mineral leases affecting the whole or any portion of the land conveyed hereunder, and this without the consent or joinder therein of the vendor or his heirs or assigns, provided there shall always be included in such leases for the benefit of the vendor or his heirs or assigns, the royalty *818 rights reserved and retained hereunder and all down payments paid to obtain such future leases, as well as all money, rental and/or bonuses received under such future leases shall be the exclusive property of the purchaser and shall be paid to him. Vendor, Edmond Richard, reserves delay rental due under the existing lease on April 5, 1940, but all subsequent delay rentals paid under said existing lease are assigned and transferred to the purchaser."

Within the ten year period following the date of the three sales described above Edmond Richard sold certain royalty interests to various parties and on his death the remaining interest owned by him passed to his widow and heirs. The defendant-appellees in these proceedings are the widow and heirs of Edmond Richard and the present owners of these various royalty interests which were sold off by Edmond Richard during his life time, one of whom is Delta Gulf Drilling Company. For purposes of brevity this group of defendants who base their claim on the "Richard Reservation" will hereinafter be referred to as the "Delta Group" this being the appellation used in the pleadings and in the opinion of the lower court and by counsel in their briefs.

The remaining defendants in these proceedings will be hereinafter referred to as the "Duplechain Group" who are the vendees in the three deeds in question and certain parties who have purchased royalty interests from them. The Delta Group contends that the Richard Reservation is a mineral interest and therefore not prescribed. The Duplechain Group contend that the Richard Reservation is a royalty interest and has prescribed because production was not obtained within ten years from the date of the reservations.

Counsel for the Duplechain Group has called to our attention the following language from the landmark case of Vincent v. Bullock, 192 La. 1, 187 So. 35, 39, decided by our Supreme Court in 1939, in which the Court defines royalty and distinguishes it from a mineral interest:

"`Royalty in itself cannot be used to designate the fundamental right which is being dealt with but only to indicate the percentage, the price, the rent, the consideration attached to or proceeding out of the right or that may proceed from it during its existence. The royalty depends upon the continued existence of the right to which it is an appendage. It cannot have a life of its own any more than could interest exist apart from the note or debt to which it is attached. If a party to a contract sells royalty under an existent lease, he is selling a part or the whole of his rent due from the * * * use of that servitude and the royalty sale is dependent upon the life and use of the servitude. If a landowner sells royalty he is selling the proceeds that may issue from his right to explore for minerals on his own land, which is an inherent part of his ownership, of the land. If a landowner sells his land and the right to explore inherent in the land and reserves royalty, he is reserving a share in the anticipated production to result if and when successful exploration ensues upon the land sold in full ownership.'

* * * * * *

"`The legal nature of royalty must be grounded upon the contract in which it appears. If it be used within the understanding of the parties to indicate a sale or reservation of the right to extract oil and gas, then it is a servitude by whatever name it may be called, and the established rules connected with this type of servitude will apply. If it is used in a lease contract to indicate a proportionate share of the production going to the landowner or the lessor of the servitude or to his lessee, the law of lease and sublease will be applied. If the word is used in the contract *819 to indicate a passive interest in possible production, without the leasing or production privilege usually inherent in the right, then a new and as yet, uninterpreted situation appears, upon which the court has not declared itself fully.'"

Counsel for the Duplechain Group argues that under the language quoted from Vincent v.

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Bluebook (online)
127 So. 2d 816, 15 Oil & Gas Rep. 770, 1961 La. App. LEXIS 1851, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-petroleum-company-v-richard-lactapp-1961.