Prentice v. Amax Petroleum Corporation

220 So. 2d 783, 33 Oil & Gas Rep. 632, 1969 La. App. LEXIS 5309
CourtLouisiana Court of Appeal
DecidedMarch 13, 1969
Docket7549
StatusPublished
Cited by5 cases

This text of 220 So. 2d 783 (Prentice v. Amax Petroleum Corporation) 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
Prentice v. Amax Petroleum Corporation, 220 So. 2d 783, 33 Oil & Gas Rep. 632, 1969 La. App. LEXIS 5309 (La. Ct. App. 1969).

Opinion

220 So.2d 783 (1969)

Robert B. PRENTICE et al., Plaintiffs-Appellees,
v.
AMAX PETROLEUM CORPORATION et al., Defendants-Appellants.

No. 7549.

Court of Appeal of Louisiana, First Circuit.

March 13, 1969.
Rehearing Denied April 14, 1969.

H. H. Hillyer, Jr., New Orleans, for defendants.

Triche & Sternfels, Napoleonville, Amicus Curiae.

Claude B. Duval, Houma, for plaintiffs.

Before LOTTINGER, ELLIS and BAILES, JJ.

BAILES, Judge.

This is a suit for declaratory judgment in which plaintiffs, Robert B. Prentice and *784 M. H. Marr (Prentice-Marr), seek to be recognized as owners of a certain oil, gas and mineral lease as against the ownership claim of defendants, Amax Petroleum Corporation and R. B. Mitchell (hereinafter collectively referred to as Amax). The lease was granted in 1960 by Mrs. Octavia Robertson Landry, et al. (the Landrys) to Leo J. Caballero and subsequently assigned to plaintiffs. Incidental to this main demand against Amax are demands for an accounting of the proceeds of oil production attributable to the lease and other appropriate relief. Named as additional defendants are Callery Properties, Inc. (Callery) and Pan American Petroleum Corporation (Pan Am), operators of conservation units which include portions of the leased property who hold some of the production proceeds from the oil wells on the property. The plaintiffs' demands against these defendants are for judgment declaring the defendants without authority to withhold payment of the proceeds from them and for an accounting of the proceeds and costs attributable to the leased property.

This matter was before us previously on appeal from a judgment granting a motion for summary judgment. Prentice v. Amax Petroleum Corporation, La.App., 187 So.2d 752. Inasmuch as the pleadings of the parties are detailed in that decision we will not burden this opinion with a complete recital of them. Suffice it to say that plaintiffs, Prentice-Marr, claim ownership of a mineral lease dated January 29, 1960, from the Landrys to Caballero, as it affects the south 50 acres of the western most 100 acres of the Viorion Plantation in Assumption Parish by reason of an assignment from Caballero to them, February 17, 1964, and the expiration and cancellation by judgment of the Supreme Court. Landry v. Flaitz, 245 La. 223, 157 So.2d 892, of a 1957 three year lease on the same property granted by the Landrys to the assignor of Amax. Plaintiffs seek declaratory judgment recognizing their ownership of the lease and ordering an accounting for the production proceeds attributable to the lease. Amax admits the execution and recordation of the 1960 Landry lease but denies plaintiffs' ownership therein. Amax claims that due to certain operating agreements existing between itself, plaintiffs and others a joint adventure and fiducial relationship was created and that plaintiffs' acquisition of the 1960 Landry lease inured to their benefit.

We found on the appeal from the summary judgment that a genuine issue of material fact existed and remanded the matter for trial on the merits. The trial was held and the trial court rendered judgment in favor of the plaintiffs and against the defendants declaring that plaintiffs were the true and lawful owners of the 1960 Landry mineral lease by assignment from Caballero, ordering the defendants to render an accounting and pay to plaintiffs the proceeds of production attributable to the lease in accord with the operating agreements and, finally, directing that a notice of lis pendens filed by Amax be cancelled. Callery and Pan Am stipulated at the trial that they would render an accounting and pay any proceeds due in accordance with the final judgment rendered herein. Therefore, only Amax, Amax Petroleum Corporation and R. B. Mitchell, appealed. Plaintiffs neither appealed nor answered the appeal thereby abandoning all demands except those recognized in the judgment appealed.

The factual background of this matter is complex but the material facts may be outlined as follows. On March 29, 1957, the Landrys granted a three year mineral lease to J. M. Flaitz on the western most 100 acres of the Viorion Plantation (the 1957 Landry lease). This lease was subsequently assigned to Amax and thereafter the northern 50 acres were released. Later, on April 15, 1957, Prentice-Marr, Amax (actually the predecessors of the Amax Petroleum-Mitchell combine) and others entered an oil and gas lease operating agreement, pooling leases owned by the parties and creating a 160 acre operating area.

*785 The Landry property was not included, its southern boundary being the northern line of the operating area. Under this agreement, on January 25, 1960, an oil well was completed in the operating area, the Hebert No. 1 well. On January 29, 1960, Caballero, secured a top lease from the Landrys (the 1960 Landry lease). It included a clause that it was not to be in conflict with any lease then in existence but was to take effect immediately upon expiration of any such prior lease. It was not recorded until December 23, 1963. An assignment of the lease to plaintiffs was recorded February 18, 1964, effective as of the original date of the lease. In March, 1960, a portion of the Landry property, covered by both the 1957 Landry lease and the 1960 Landry top lease, was force pooled by order of the Commissioner of Conservation with lands covered by the 1957 operating agreement. The order created two units affecting the area in question; one, designated Unit #9, around the Hebert No. 1 well, and the other, Unit # 10, on property immediately adjacent on the east. Callery and Pan Am were designated operators of Units #9 and #10 respectively. A productive well, Simoneaux No. 1, was drilled in Unit #10 thereafter. During this period operating agreements were executed by the parties involved in these conservation units. On October 6, 1960, such an agreement was confected between plaintiffs, Amax, Callery and others for the operation of the Hebert No. 1 well in Unit # 9. The agreement for the operation of Unit # 10 between plaintiffs, Amax, Pan Am and others had been executed March 15, 1960.

In the meantime, pursuant to an agreement between Caballero and the Landrys, suit was instituted July 27, 1960, seeking cancellation of the 1957 Landry lease due to expiration of its three year primary term, the Hebert No. 1 well not having been put into production until April 1, 1960. On November 12, 1963, the Supreme Court of Louisiana rendered judgment ordering cancellation of the 1957 Landry lease claimed by Amax. Landry v. Flaitz, supra.

Proceeds of production from the Hebert No. 1 well attributable to the Landry property for the account of the lessor(s) were paid to Amax until October 1963, and proceeds subsequent thereto were retained by Callery. A similar situation exists with respect to the proceeds of the Simoneaux No. 1 well, payment of proceeds realized prior to March, 1964, having been paid to Amax and proceeds accruing thereafter having been retained by Pan Am.

Plaintiffs contend that the 1960 Landry lease is owned by them and that they are therefore entitled to the production proceeds and an accounting. Amax takes the position that the operating agreements recognized Amax's ownership of the production attributable to the Landry lease; that these agreements establish a joint relationship creating mutual fiduciary obligations and that plaintiffs' top lease was taken in violation of such obligations and as such inures to their benefit.

At the trial of this matter no witnesses were called to testify.

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Bluebook (online)
220 So. 2d 783, 33 Oil & Gas Rep. 632, 1969 La. App. LEXIS 5309, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prentice-v-amax-petroleum-corporation-lactapp-1969.