Standard Oil Co. of New Jersey v. Evans

50 So. 2d 203, 218 La. 590, 1950 La. LEXIS 1105
CourtSupreme Court of Louisiana
DecidedDecember 11, 1950
Docket39305
StatusPublished
Cited by10 cases

This text of 50 So. 2d 203 (Standard Oil Co. of New Jersey v. Evans) 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
Standard Oil Co. of New Jersey v. Evans, 50 So. 2d 203, 218 La. 590, 1950 La. LEXIS 1105 (La. 1950).

Opinion

HAWTHORNE, Justice.

The Standard Oil Company of New Jersey, acting pursuant to the authority of Act No. 123 of 1922, as amended, has deposited in the registry of the court the proceeds from 1/2 of a 1/8 royalty from an oil well located on the SW 1/4 of the SW 1/4 of Section 26, Township 17 North, Range 8 East, Richland Parish, Louisiana, and has cited the claimants thereto to appear and assert their respective rights, as well as their rights to all sums which might accrue in the future. The claimants to the entire fund are, on the one part, The Mengel Company, a corporation, and, on the other part, George W. Evans and Reagan J. Caraway. There is no controversy between Evans and Caraway, as it is conceded that Caraway’s claim is based on mesne conveyances from Evans.

The district court rendered judgment recognizing The- Mengel Company to be entitled to the fund so deposited in the registry of the court as well as to all other funds that might accrue and become due under the disputed royalty interest. An appeal was taken from this judgment by Evans and Caraway to the Court of Appeal, Second Circuit, and that court ordered the appeal transferred to this court after finding that the amount in dispute in this interpleader proceeding was in excess of $2000.00. See Standard Oil Co. of New Jersey v. Evans et al., La.App., 37 So.2d 604.

By deed dated May 10, 1939, duly filed in the conveyance and mortgage records of Richland Parish, The Mengel Company conveyed the property on which the well is located to George W. Evans, and a mortgage was executed on the property to secure the payment of the purchase price. In this act of sale the vendor reserved unto itself all minerals lying in, under, and upon said property. This deed after the clause in which this reservation was made then provided:

“It Is Further understood and agreed by the parties hereto that in the event the vendor, its assigns, successors or Lessees should recover any mineral property of any kind, and there should be any mineral development or production on said property, then and in that event the vendee, his successors or assigns shall receive one half of *596 whatever royalty that may be stipulated in favor of or received by the said The Men-gel Company,, or its successors or assigns, on account of mineral development, or the production of said mineral or minerals, provided that the royalty to be received by the said vendee, his heirs or assigns, shall never exceed what is commonly known as a 1/16 royalty, that is, one-sixteenth of the total production; it being further and fully understood that the said royalty to be received by the said vendee, his heirs or assigns is to be paid as liquidated damages for any and all injury that may be done to the surface of said lands, to any crops growing thereon, or to1 any improvements that may be on the said premises, by the vendor, its successors or assigns, in the ■production, handling or marketing of any minerals under the rights herein reserved -* *

On November 20,1943, The Mengel Company, represented by H. C. Watson as its special agent and attorney in fact, conveyed by warranty deed to Evans an undivided 1/2 of the oil, gas, and other minerals which it had previously reserved in the deed to Evans of May 10, 1939. The deed in which 1/2 of the minerals was conveyed provided that H. C. Watson, its special agent and attorney in fact, was appearing therein for and in behalf of The Mengel Company, as per resolution of said corporation on file and of record in Notarial Book 74, page 168, of the records of Richland Parish. On the date this mineral deed was executed the mortgage securing the purchase price of the land was still outstanding and unpaid.

The recorded resolution of the board of directors of The Mengel Company, by authority of which Watson appeared for and in behalf of the corporation, recited that the corporation had sold to various purchasers sundry tracts of land in Richland Parish on terms of credit, the purchase price being secured by vendor’s lien and special mortgage on the property so sold, and that in these sales - The Mengel Company had “reserved the minerals under the land sold save and except that the purchaser, in the event of production of oil or gas or other minerals from the said tract, shall receive one-sixteenth royalty out of the said production”, and that many of the purchasers had not paid the purchase price and were making applications to the Federal Land Bank o:f New Orleans for loans in order to liquidate their indebtedness to The Mengel Company. The resolution then stipulated:

" * * * Whereas, it appears that the Federal Land Bank of New Orleans and the Commissioner in direct loans require the borrower to be seized of a certain proportion of the said minerals, and

“Whereas, The Mengel Company is anxious to co-operate with its debtors for lands purchased from it in Richland Parish, Louisiana, * *

The resolution of the board of directors then named H. C. Watson as special agent *598 and attorney in fact to the corporation, with full authority for and in the name of the corporation to do and perform the following acts:

“ * * * Second: To release or quit claim, transfer, sell or assign over to any person who has purchased lands from The Mengel Company in Richland Parish, Louisiana, in which the said The M-engel Company has retained the mineral rights thereunder, a sufficient amount of the said mineral rights so retained to make the ownership of the said mineral rights equal in the said ptirchaser and The Mengel Company. * * *" (All italics ours.)

The loan from the Federal Land Bank to Evans was consummated, and the proceeds thereof were paid to The Mengel Company in order to extinguish the mortgage indebtedness to that company by Evans.

It is not disputed that the ownership of a 1/2 interest in the minerals is vested in Evans and his transferees. The entire issue is whether they are entitled in addition thereto to a 1/16 royalty which they claim is due as liquidated damages under the deed of May 10, 1939, by which Evans acquired the land. In other words, if these claimants are correct in this contention, they and their transferees are entitled, in addition to the 1/2 of the usual 1/8 royalty (or a 1/16 royalty) flowing from Evans’ purchase of an undivided 1/2 of the minerals, to an additional 1/16 royalty, or all of the usual 1/8 royalty, so that The Mengel Company would not receive any portion of the usual 1/8 royalty reserved in oil and gas leases.

In our opinion, the authority of the agent given in the power of attorney- or resolution adopted by The Mengel Company, under which he. acted, is decisive of the issue here presented. The appellants take the position that we cannot consider the resolution or its contents to determine what was conveyed to- Evans by the Men-gel mineral deed, urging in support thereof the well established principle of law that, in the absence of any ambiguity, the intent of the parties must be gathered from the instrument itself without the aid of extrinsic evidence. This rule of law, however, has no application here, for the Mengel mineral deed sets forth that The Mengel Company

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Bluebook (online)
50 So. 2d 203, 218 La. 590, 1950 La. LEXIS 1105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standard-oil-co-of-new-jersey-v-evans-la-1950.