Taylor v. Dunn

97 So. 2d 415, 233 La. 617, 8 Oil & Gas Rep. 210, 1957 La. LEXIS 1327
CourtSupreme Court of Louisiana
DecidedJune 28, 1957
Docket43166
StatusPublished
Cited by13 cases

This text of 97 So. 2d 415 (Taylor v. Dunn) 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
Taylor v. Dunn, 97 So. 2d 415, 233 La. 617, 8 Oil & Gas Rep. 210, 1957 La. LEXIS 1327 (La. 1957).

Opinion

FOURNET, Chief Justice.

The plaintiffs, 1 alleging that on October 31, 1936, W. F. Taylor Company, Inc., a Louisiana corporation domiciled at Shreveport and owner of Cedar Croft Plantation consisting of some 1,500 acres of land in Caddo Parish, sold the plantation to Clyde R. Minor, reserving in the sale an undivided half mineral interest, and that they, *623 the plaintiffs, as successors in title of W. F. Taylor Company, Inc., 2 on October 1, 1946, granted an oil, gas and mineral lease covering their said half interest in favor of Atlas Oil and Refining Corporation, which commenced drilling operations on Cedar Croft Plantation on October 19, 1946, drilled with due diligence to a depth of approximately 3,000 feet and finally abandoned the well as a dry hole on November 4, 1946, and that said lease was still a valid and existing lease upon the property, filed two petitory actions against the present owners of Cedar Croft 3 who, it is said, deny the existence and validity of petitioners’ mineral servitude. They prayed to be recognized the true and lawful owners of a mineral servitude affecting half of the minerals in and under and upon Cedar Croft Plantation, and for judgment quieting them in their possession and enjoyment of same.

For answer, similar in the two cases, the defendants averred that the drilling operations did not constitute a bona fide attempt to obtain production of minerals in paying quantities, but were merely an attempt to-interrupt the running of prescription liberandi causa — which ten year prescription under provisions of the Civil Code of Louisiana was specially pleaded by the defendants. The Minors, further answering in the alternative, averred that a road which divides the plantation into two sections was the result of two dedications made by the W. F. Taylor Co., Inc. before the sale to Minor; 4 that said dedications, to public use “constituted transfers in fee-simple to the strips of land described,”' *625 thus having the effect of dividing the servitude retained by W. F. Taylor Co., Inc., into two separate and distinct mineral servitudes, so that the drilling of the well on one portion of Cedar Croft did not have the effect of interrupting the ten year liberative prescription running against the mineral servitude affecting the other. Defendants in both cases prayed for trial by jury on the issues, and on joint motion of all parties the cases were ordered consolidated for purposes of trial and were set for June 7, 1956. On that date, when the cases were called, exception of non-joinder of indispensable parties was filed by each defendant group, as well as motions for a continuance; and these having been argued, submitted and overruled, trial on the merits was had, resulting in the jury’s verdict "for the plaintiffs and against the defendants, as prayed for.” Separate judgments were rendered in which the trial judge adopted the jury’s verdict, and accordingly the plaintiffs were recognized to be the true and lawful owners of half of the minerals in, under and to be produced from the therein described property, with the right of ingress and egress for proper development of same. The defendants have appealed, specifying as error the trial court’s (a) holding that drilling was conducted in good faith; (b) failure to recognize that two separate servitudes resulted from the reservation by W. F. Taylor Co.; (c) overruling of defendants’ Exceptions of Nonjoinder of Indispensable Parties; (d) failure to grant their Motion for a Continuance; and (e) exclusion of certain testimony offered by defendants.

The appellants, in support of their contention that the drilling operations were not conducted in good faith, argue that those operations were carried on under the direction of a Special Committee which had been set up by Atlas Oil and Refining Corporation solely for the purpose of spending some three-quarters of a million dollars to avoid the payment of excess profits taxes, and were undertaken without regard to the prospects of discovering minerals in paying quantities; as proof thereof, defendants claim that the record shows the only lease acquired by Atlas Oil and Refining Corporation in the area around the plantation, although supposedly an area approved by the Committee as suitable for development purposes, was the lease of Cedar Croft itself- — covering, however, only an undivided half interest in the minerals; the drill site, although first located on the west side of the highway, on the smaller portion of the plantation, was moved, without explanation, over to the very much larger east side, and located on the extreme northern edge of the property, offset on three sides by unleased acreage; that drilling operations were begun nineteen days after execution of the lease, and only twelve days before the servitude would have expired; that numerous wells had *627 previously been drilled in the surrounding area to a depth sufficient to test the horizon to which this well was completed, and Atlas-Minor No. 1 well was surrounded by numerous dry holes, nothing having been found in any of those wells which would give hope or encouragement in the selection of that location.

Defendants’ argument that “drilling operations under a lease covering only an undivided mineral interest do not constitute sufficient use of the servitude to interrupt prescription” is clearly without merit. Huckabay v. Texas Company, 227 La. 191, 78 So.2d 829. In that case we held that the lessee of fractional mineral rights had an absolute right to go upon and develop the property, independent of the holder of the remaining fractional mineral interest, “the only limitation being that if minerals are found, the finder is entitled to take only his share; * * 227 La. at page 197, 78 So.2d at page 831.

We think a fair appraisal of the evidence does not support appellants’ contention of lack of good faith on the part of Atlas Oil & Refining Corporation in the drilling of the well; on the contrary, we think the evidence is most convincing that these operations were conducted in good faith, and fully warranted the jury’s verdict for the plaintiffs. It is shown that it was common practice among oil companies, when they had enjoyed a profitable and successful year, to undertake a search for oil reserves, devoting to the project money which would otherwise have to be paid to the government as excess profits taxes; that in the year 1946 Atlas Oil and Refining Corporation, having profits of some three quarters of a million dollars, decided to spend the amount in developing fields for oil and gas. The so-called Paluxy sands occur in the general area of North Louisiana with which we are here concerned, being found at a depth of from 2,500 to 3,000 feet, and Paluxy was a known producing horizon, so an exploratory program to discover reserves of oil and gas in the Paluxy sands was started by Atlas. To implement the program it secured the services of several men respected and experienced in the oil business, men outstanding in their professions of geologist or independent oil producer.

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Bluebook (online)
97 So. 2d 415, 233 La. 617, 8 Oil & Gas Rep. 210, 1957 La. LEXIS 1327, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taylor-v-dunn-la-1957.