Texas Co. v. Leach

53 So. 2d 786, 219 La. 613, 1951 La. LEXIS 907
CourtSupreme Court of Louisiana
DecidedJune 29, 1951
Docket39682
StatusPublished
Cited by11 cases

This text of 53 So. 2d 786 (Texas Co. v. Leach) 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
Texas Co. v. Leach, 53 So. 2d 786, 219 La. 613, 1951 La. LEXIS 907 (La. 1951).

Opinion

LE BLANC, Justice.

This is a concursus proceeding filed by plaintiff, on August 28, 1948, under the provisions of Act 123 of 1922 which is now incorporated in the Revised Statutes of 1950, as LSA-R.S. 13:4811.

Plaintiff avers that it is now, and has been since July 26, 1916, producing oil in paying quantities from lands described as Lot 4 of Section 25, Township 13 North, Range 12 West, situated in the Parish of De Soto, Louisiana, under and by virtue of an oil, gas and mineral lease dated May 16, 1913, granted by the then record owners of said property, the said lease having been transferred to it by the Producers Oil Corm pany, the original lessee, on November 13, 1918.

Plaintiff next avers that on September 5, 1945, Eugene A. Nabors, Mrs. Sarah Nabors Mullins, Mrs. Margaret Nabors Peck-ham, Miss Birdie Louise Nabors and Wilfred A. Nabors, hereafter referred to as Eugene A. Nabors, et als., as First Party, and William C. Nabors, as Second Party, entered into an agreement whereby and whereunder the title of the First Party to fee and minerals of Lot 4 of Section 25, Township 13 North, Range 12 West, was recognized by Second Party, and in return, the First Party recognized the one-sixteenth (1/16) royalty interest of Second Party in production from said Lot 4.

Plaintiff then alleges that on July 12, 1948, it was notified that Eugene A. Nabors, et als. were claiming the one-sixteenth royalty interest of William C. Nabors under the aforementioned agreement of September 5, 1945, and that said claimants were *617 thereby demanding that the said one-sixteenth royalty be paid to them; that William C. Nabors on July 30, 1948, denied there was a loss of such royalty interest by him or his transferee, Mrs. Parie N. Leach, and demanded that the payment of such royalty be paid to his said transferee.

Plaintiff finally avers that it desires to deposit into the registry of the court the amount now accrued from such one-sixteenth royalty interest, in the sum of $107.-20, and the amounts hereafter to be continuously accruing, until such time as the ownership of such amounts shall be determined, under the provisions of Act 123 of. 1922. 1

The prayer of plaintiff’s petition is that it be permitted to deposit the sum of $107.20 and such additional funds as will accrue from month to month as royalties from production of oil from the lease, into the registry of the court, and that all adverse claimants be cited to appear and make their respective claims thereto. The order for deposit was granted, all parties were properly cited and filed answers. Eugene A. Nabors, et als., filed their answer on March 24, 1949 in which they allege that the original oil, gas and mineral lease of 1913 was amended by the parties on January 20, 1941 by a compromise agreement which provided for the termination of the lease Upon failure to commence re-working operations within 60 days after cessation of production and that because of plaintiff’s failure to comply with the terms of this agreement, the lease terminated during the latter part of August, 1947.

They further allege that even if the court should hold against them on this point, they nevertheless, are entitled to- the whole of the one-eighth' royalty (which includes the one-sixteenth deposited in the registry of the court) because under the partition agreement between W. C. Nabors and Eugene A. Nabors, et ais., W. C. Nabors’ interest was to last only so long as “such production, continues” and they allege that such production did not continue during the period of the shutdown of the well for re-working operations.

On April 4, 1949, W. C. Nabors filed an answer in which he alleged that he was not seeking any part of the royalty deposited in the court; that he disclaimed any right or interest in the same and prayed that he be discharged from further answering.

On the same day, April 4, 1949, Mrs. Parie N. Leach, wife of George T. Leach, the other party cited, filed her answer in which she alleged that she was the transferee of W. C. Nabors and that she owned all interest formerly held by him; that such interest was conveyed to her on July 12, 1948; that she is entitled to one-half of *619 the royalty due from the production of the' wells in question and prayed for judgment accordingly. .

On April 23, 1949, Eugene A. Nabors, et als. filed a motion for a writ of subpoena duces tecum in which they requested that the Texas Company produce certain corr respondence, papers and records relating to the dates of the cessation of production from well No. 12 and also relating to the date of the pulling .of tubing from said well and to the date of entry of the Hollands-worth Drilling Company upon the said Lot 4 for the re-working operations. The writ was complied with by the Texas Company, on May 3, 1949.

On the same day, May '3, 1949,' plaintiff filed a plea of estoppel, in which it alleged that defendants, Eugene A. Nabors, et als. are estopped from contending that the lease was terminated because after its alleged termination in August 1947, they remained silent and never declared the lease to be terminated, but rather had allowed plaintiff to equip, drill and re-work two oil wells on the property, known as Grand Bayou Planting Company wells No. 6 and 12, at a cost to plaintiff in excess of $35,000.00; that defendant had full knowledge of such operations being conducted, but nevertheless gave no notice of default until long after both wells were completed and producing; that defendants received and accepted monthly royalty checks for the months of February 1948 through September 1948, without protest or notice of default and retained said checks until October 8, 1948; that the above silence and failure to protest on the part of the defendants caused plaintiff to pursue a course of action to its detriment that it ■would not have followed otherwise if said defendants had given notice of default, or otherwise protested the said operations, when same were being conducted.

At the same time, plaintiff filed an alternative plea in which it averred that if' the Court should find that the lease has. terminated then plaintiff should be entitled, to recover from defendants, Eugene A. Nabors, et als., the full cost of equipping, drilling, re-working, and any other operating- or production costs incurred in connection with the drilling or re-working or operation-of the wells after the termination of said' lease, inasmuch as plaintiff entered the property covered by said lease in good faith and' in the belief that the lease was in full force- and effect, and equipped, drilled, re-worked, and operated said wells at a cost as of' March 31, 1949 of $53,511.13 which is subject to the credit of $21,969.82 to be applied out of the value of production saved by plaintiff.

On the pleadings as thus presented and' after trial on the merits, judgment was. rendered in the lower court in favor of the-plaintiff, rejecting the demands of the defendants, Eugene A. Nabors, et als., and decreeing that the deposit had been validly-made by plaintiff, relieving it from all liability in connection therewith and relieving ■ it from all costs. The judgment further *621 ■decreed that Mrs. Leach was entitled to receive the fund deposited in the registry of the court, after paying the costs involved in the suit.

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Bluebook (online)
53 So. 2d 786, 219 La. 613, 1951 La. LEXIS 907, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-co-v-leach-la-1951.