Rodgers v. CNG Producing Co.

528 So. 2d 786, 99 Oil & Gas Rep. 306, 1988 La. App. LEXIS 1476, 1988 WL 70585
CourtLouisiana Court of Appeal
DecidedJuly 7, 1988
Docket87-394
StatusPublished
Cited by3 cases

This text of 528 So. 2d 786 (Rodgers v. CNG Producing Co.) 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
Rodgers v. CNG Producing Co., 528 So. 2d 786, 99 Oil & Gas Rep. 306, 1988 La. App. LEXIS 1476, 1988 WL 70585 (La. Ct. App. 1988).

Opinion

528 So.2d 786 (1988)

Coy RODGERS, et al., Plaintiffs-Appellees,
v.
CNG PRODUCING CO., et al., Defendants-Appellants.

No. 87-394.

Court of Appeal of Louisiana, Third Circuit.

July 7, 1988.

*787 Joseph Wilson, Jena, for defendants-appellants.

Marc Dupuy, Jr., Edwin L. Lafargue, Marksville, and J.W. Seibert, Vidalia, for plaintiffs-appellees.

Before LABORDE, YELVERTON and KNOLL, JJ.

KNOLL, Judge.

CNG Producing Company (hereafter CNG) and Pennco Energy, Inc. (hereafter Pennco) appeal the judgment of the trial court which declared their predecessor's deed of mineral acquisition a nullity.

Coy Rodgers and his wife, Mary Lou Bennett Rodgers, (hereafter Rodgers) together with their mineral lessee, Big-Joe Oil Company (hereafter Big-Joe), sued James W. Thompson, Jr., John A. Daye, Faye Thompson Daye, Don Lewis Thompson, Mark Kelly Thompson, and Marie Scallon Thompson Broadnax (hereafter Thompson) and their mineral lessee, Sun Belt Energy, Ltd. (hereafter Sun Belt), and its assigns, CNG and Pennco, seeking recognition that they (Rodgers) were the owners of the mineral rights, and entitled to damages on an alleged trespass by CNG in 1985 when CNG, acting pursuant to its rights derived from a purported mineral lease in 1983 from Thompson, drilled a dry hole on Rodgers' property.[1] The facts of the case were stipulated, and the parties agreed to bifurcate the trial, trying the issue of mineral ownership first.

The trial court held that the questioned sale of minerals from Rodgers to Thompson was an indirect reservation by Thompson of a reversionary interest in violation of Article 76 of the Mineral Code, and as such, was a nullity. CNG and Pennco contend on appeal that the trial court erred: (1) in failing to apply Article 77 of the Louisiana Mineral Code; and (2) in improperly admitting into evidence an unrecorded buy-sale agreement executed between Rodgers and Thompson. We affirm.

FACTS

The learned trial judge set forth the stipulated facts in chronological order which we incorporate herein:

"(1) October 22, 1968—Ethel M. Kelly, Et Al sold to James W. Thompson, Jr., Et Al (the Thompsons) a tract of land containing 1580 acres, more or less, located in Concordia Parish. The vendors reserved all mineral rights.
(2) February 5, 1975—The Thompsons executed a `Buy-Sale Agreement' with Coy Rodgers, Et Ux. In this agreement the Thompsons agreed to sell and the Rodgers agreed to buy, the 1580 acre tract for a consideration of $376,000.00. Ten Thousand ($10,000.00) was paid by Rodgers on this date and he agreed to pay the balance in ten equal annual installments. The agreement was subject to `reservation of a mineral servitude contained in the deed of acquisition of *788 vendor' and contained the following provisions:
`4. As further consideration and as an integral part of this sale, vendee grants to vendor the right to purchase for the sum of one thousand and no/100 ($1000.00), all oil, gas and other mineral rights in, on and under the above described property at the time of the execution of this sale.' (Emphasis Supplied [by the trial court].)
(3) April 4, 1975—The Thompsons executed a `Sale and Mortgage' to Rodgers, conveying to him the 1580 acre tract with warranty of title and subject to prior reservation of the mineral servitude contained in the Thompsons' deed of acquisition. The consideration was $376,000.00, of which vendors acknowledge $41,000.00 was paid in cash, and Rodgers executed a promissory note in the amount of $355,000.00 payable in ten equal annual installments secured by the usual vendor lien and mortgage. Rodgers actually paid the Thompsons $30,000.00 cash, which added to the $10,000.00 paid on February 5, totalled $40,000.00 even though the Thompsons gave him credit for $41,000.00 in the credit deed.
(4) April 4, 1975—On the same day as execution for the aforesaid credit deed, but immediately thereafter, Rodgers executed a `Cash Deed' in favor of the Thompsons conveying to them `all of the oil, gas and other minerals' underlying the 1580 acre tract of land. The sale was made without warranty of title, but with full subrogation to actions of warranty against all prior vendors.
The consideration recited in this deed was $1000.00 cash, but the Thompsons made no separate payment to Rodgers.
(5) October 22, 1978—The mineral servitudes reserved by Ethel M. Kelly, Et Al in the Thompsons' deed of acquisition prescribed by reason of liberative prescription of ten years nonusage of the servitudes.
The parties stipulated, and the testimony at trial of Malcolm Barlow, Registered Land Surveyor, confirms, that the 1580 acre tract of land sold by Mrs. Kelly to the Thompsons actually consisted of five non-contiguous tracts. Accordingly, five separate mineral servitudes were created on October 22, 1968. The record further indicates that there was no drilling, utilization [sic] or any other activities which would constitute user [sic] of the servitudes on any of the five non-contiguous tracts. Liberative prescription was not interrupted and, accordingly, all five servitudes prescribed on October 22, 1978.
(6) October 4, 1984—The Thompsons executed a mineral lease covering one thousand (1000) acres of the tract to Sun Belt Energy, Ltd. Sun Belt assigned the lease to CNG Producing Company who conveyed an undivided interest to Pennco Energy, Inc. Certain overriding royalty interests were also created in favor of other Defendants named in the lawsuit.
(7) November 20, 1984—Rodgers executed a mineral lease in favor of Big-Joe Oil Company covering some of the same property as covered by the Sun Belt lease from the Thompsons.
(8) March 29, 1985—CNG Producing Company and Pennco Energy, Inc. spudded a well in the northeast quarter of the southeast quarter, Section 15, Township 1 North, Range 8 East, which was abandoned as a dry hole on April 18, 1985 at a drilled depth of 10,005 feet."

ARTICLES 76 AND 77 OF THE MINERAL CODE

The redactors of the Mineral Code declared in Article 76 that the reversionary interest may not be an article of commerce. In Hicks v. Clark, 225 La. 133, 72 So.2d 322 (1954), the Louisiana Supreme Court held that while the mineral rights of the landowner were outstanding, the landowner could neither sell nor reserve a servitude to take effect upon the prescription of the outstanding one. This holding became a matter of public policy and was codified in Article 76 which provides:

"The expectancy of a landowner in the extinction of an outstanding mineral servitude cannot be conveyed or reserved directly or indirectly." *789 Furthermore, Article 24 of the Mineral Code specifically provides that a mineral servitude may be created only by a landowner who owns the right to explore for and produce minerals when the servitude is created.

In the case sub judice, when Thompson sold the land to Rodgers, Thompson did not own the minerals. Likewise, when Rodgers purported to sell the minerals to Thompson, Rodgers did not own the minerals either. In both instances the mineral rights were subject to an outstanding mineral servitude in favor of the Kellys, who had reserved the mineral rights in their deed to Thompson in 1968.

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Bluebook (online)
528 So. 2d 786, 99 Oil & Gas Rep. 306, 1988 La. App. LEXIS 1476, 1988 WL 70585, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rodgers-v-cng-producing-co-lactapp-1988.