Sun Exploration & Production Co. v. Rogers

451 So. 2d 587, 81 Oil & Gas Rep. 535, 1984 La. App. LEXIS 8686
CourtLouisiana Court of Appeal
DecidedApril 30, 1984
DocketNo. 16191-CA
StatusPublished

This text of 451 So. 2d 587 (Sun Exploration & Production Co. v. Rogers) 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
Sun Exploration & Production Co. v. Rogers, 451 So. 2d 587, 81 Oil & Gas Rep. 535, 1984 La. App. LEXIS 8686 (La. Ct. App. 1984).

Opinion

MARVIN, Judge.

This concursus was instituted to resolve a contest over production royalty accruing under an oil and gas lease on 235 acres that was executed by a predecessor in title common to the defendants-contestants, Wilburn and Rogers. Wilburn appeals a judgment decreeing that the royalty should be paid 155/235ths to Rogers and 80/235ths to Wilburn.

Wilburn contends that he should receive the entire royalty because the producing well is located on the 80 acre tract he acquired from the common predecessor in title and not on the 155 acre tract that was acquired by Rogers. The record does not reveal that a drilling and production unit was established for the producing well. See LRS 30:9. The issues concern the effect and applicability of what is called the “entirety clause” of the lease.1 We affirm the judgment.

[589]*589FACTS

On September 5, 1972, Buckley, the common predecessor in title, executed the lease which was later assigned to plaintiff, Sun Exploration. The 235 acres were contiguous but were acquired by Buckley in different tracts at different times. The Buckleys were Mississippi residents. The northernmost 90 acres was community property while the remaining 145 acres was Buckley’s separate property which he had inherited. The lease, for a five year term, was a Bath’s Form Louisiana Spec. 14-BR1-2A-PX 10-65 Oil, Gas and Mineral Lease which covered the 235 acres. Production was obtained in 1977 from the Paluxy sand at a depth of about 2980 feet.

Buckley’s wife died in 1978 before royalty payments began. Buckley’s son, Tyrie Buckley, was recognized in a judgment of possession in his mother’s succession as the owner of an undivided ⅛ interest in the northernmost 90 acres. Sun Exploration began paying royalty ⅝ to Buckley and ¾⅛ to his son, Tyrie.

Buckley died testate in 1980. His will directed that the southernmost 145 acre tract be sold to Rogers and that the proceeds be placed in trust for Buckley’s grandchildren. Buckley’s will also bequeathed his ⅝ undivided interest in the northernmost 90 acres to his son, Tyrie. The succession representative consummated the sale of the 145 acres to Rogers on September 18, 1981, as the will directed. Tyrie Buckley was placed in possession of the 90 acres on October 15, 1981. On October 19, 1981, Tyrie Buckley sold the northernmost 80 acres to Wilburn, and on the next day, he sold the remaining or southernmost 10 acres to Rogers. There was no mention or reservation of minerals, royalty or other such rights in any of these transactions which occurred after the lease was executed in 1972. The producing well is in the northwesternmost five acres of the 80 acres acquired by Wilburn.

Wilburn contends that the trial court erred because Buckley “intended” that Tyr-ie Buckley receive the entire royalty from the well. The deposition of Tyrie Buckley and his father’s will are in evidence. The pertinent portion of the will says:

“To my legally adopted foster son, Tyrie Latimer Buckley, I bequeath my portion of the ninety acre tract of land I bought from the heirs of Tom Mustin in the year 1949, my portion being five-sixths of the total ninety acres according to the inheritance laws of the State of Louisiana, where this land is located in the southern portion of DeSoto Parish. This bequest I consider to amount in value to more than a third of all my Louisiana property, first because of the fertility of the land, next because there is at this time a producing oil well on it, but more important because there is a stand of Oak timber on it worth at least $15,000 on the present market.”

Tyrie Buckley testified that his father discussed his intentions with him a few months before his father died. He said that his father explained to him why he wanted the 145 acres sold to Rogers, that his father compared for him the “value” of the 145 acres and the 90 acres and explained that the timber on the 145 acres had been cut and that the 90 acres contained more valuable timber, which had not been cut, and the oil well. The remainder of the evidence was stipulated and consisted of the pleadings and other documentary evidence relating to title and to payment of royalty.

Royalty was paid ⅝ to Buckley and Ve to his son before Buckley’s death. After Buckley’s death, Tyrie Buckley was paid the full royalty, according to Tyrie Buckley’s deposition. For the period between October 22, 1981, and August 11, 1982, the [590]*590royalty was paid to Wilburn. After August 11, 1982, and before the concursus was instituted on December 8, 1982, and retroactively to October 1, 1981, royalty was paid 155/⅛ to Rogers and 8%35 to Wilburn. Sun received a certified copy of Wilburn’s deed to the 80 acres on October 22, 1981. Rogers notified Sun of his acquisition of the 155 acres and of his demands about August 11, 1982.

THE ENTIRETY PROVISION

“[Entirety] clauses are inserted in leases primarily for the benefit of the lessee to make it clear to lessors or subsequent transferees of the lessor or lessors that inside property lines created by later divisions of the fee ownership or by royalty conveyances shall not affect the lessee’s duties of development and operation. (It is clear, however, that even absent such clause, the duties of the lessee may not be increased by virtue of subsequent transfers by the lessor or lessors.) By virtue of an entirety clause in the lease, royalties from production under the lease are usually apportioned among mineral and royalty owners in accordance with their interest, wherever the well or wells may be located on the leased premises. Apparently the fact that a lease covers non-contiguous tracts is of no significance in determining the effect of an entirety clause upon the apportionment of royalties among the owners of mineral interests.” Williams & Meyers, Oil and Gas Law, § 521.3.

Wilburn agrees that the entirety clause in a lease, in the absence of a contrary provision in a conveyance by the lessor dividing the leased premises, requires that royalties be apportioned as the clause directs. Wilburn contends that the provision should not prohibit the lessor, however, from carrying out his intention to divide the leased premises and to apportion the royalty due him as he sees fit to selective transferees. Shell Petroleum Corporation v. Carter, 187 La. 382, 175 So. 1 (1937), lends some support to Wilburn’s argument, but there the lessor expressly conveyed to each of several vendees a specific royalty interest in a separate part of the leased property. The royalty was not apportioned between the several vendees and each vendee of the lessor was limited to the specific royalty under the specific tract which had been conveyed to him. The court concluded that the lessors in Carter “were at liberty to divide the royalties in [that] manner ...” 175 So. at p. 4. See comment at 12 Tulane L.R. 313 (1938).

Wilburn’s argument is succinctly expressed (and answered, in our opinion,) in a quotation he supplies from § 521.3 of Williams and Meyers, Oil and Gas Law, which we reproduce and emphasize in part:

“(1) An appropriate entirety clause in a lease will cause royalties to be apportioned despite subsequent subdivisions of the leased premises in the absence of contrary provision in a conveyance subdividing the leased premises.
“(2)

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Related

Shell Petroleum Corporation v. Carter
175 So. 1 (Supreme Court of Louisiana, 1937)
Robinson v. Horton
2 So. 2d 647 (Supreme Court of Louisiana, 1941)
Shell Petroleum Corp. v. Calcasieu Real Estate & Oil Co.
170 So. 785 (Supreme Court of Louisiana, 1936)
Superior Oil Producing Co. v. Forrestier
168 So. 313 (Supreme Court of Louisiana, 1936)

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Bluebook (online)
451 So. 2d 587, 81 Oil & Gas Rep. 535, 1984 La. App. LEXIS 8686, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-exploration-production-co-v-rogers-lactapp-1984.