United States v. Nebo Oil Co., Inc

190 F.2d 1003, 1951 U.S. App. LEXIS 3778
CourtCourt of Appeals for the Fifth Circuit
DecidedAugust 4, 1951
Docket13460
StatusPublished
Cited by47 cases

This text of 190 F.2d 1003 (United States v. Nebo Oil Co., Inc) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Nebo Oil Co., Inc, 190 F.2d 1003, 1951 U.S. App. LEXIS 3778 (5th Cir. 1951).

Opinion

BORAH, Circuit Judge.

This suit was brought by the appellant, United States of America, against the ap-pellee, Nebo Oil Company, Inc., for a judgment declaring that appellant is the owner of the minerals, including oil, gas and sul-phur, underlying approximately eight hundred acres of land located in the Parish of Natchitoches, State of Louisiana. A trial was had by the court without a jury and judgment was entered dismissing the complaint. This appeal followed.

The undisputed facts are these: In the year 1932 five lumber companies decided to pool the mineral rights in their lands in order to secure more favorable exploration and development thereof, it being agreed by the parties that each would share in any production obtained from the pooled acreage in proportion to the acreage which each lumber company contributed to the pool. For that purpose, the Good Pine Oil Company was organized and the lumber companies individually conveyed to it all of the oil, gas and sulphur underlying their lands.

One of these conveyances to Good Pine Oil was by recorded deed from the Bodcaw Lumber Company, dated November 12, 1932, covering all of the oil, gas and sul-phur underlying a tract of land containing 37,532.13 acres of which the 800 acres of land here involved was a part. This deed recited that the minerals were conveyed to Good Pine Oil, its successors and assigns, forever; and that it was intended to confer upon the vendee absolutely and without limit for time of their enjoyment any and every right, title and interest which the vendor had in the minerals conveyed. 1

Prior to the year 1936 the United States was interested in purchasing lands in Louisiana for national forest purposes and had found that owners of large tracts of land were unwilling to sell their lands because of court decisions holding that the sale or reservation of mineral rights in Louisiana created only a right in the nature of a servitude which was subject to prescription by ten years nonuser. However, the United States Department of Agriculture, Forest Service, was not in accord with this view and on May 29, 1935, submitted to Bodcaw Lumber Company an opinion of the Assistant Solicitor of the Department of Agriculture to the effect that the prescriptive provisions of the Louisiana Civil Code would not apply to lands sold to the United States for national forest purposes.

Thereafter, on February 11, 1936, Bod-caw sold to the United States a tract of timber land containing 24,943.93 acres, of *1006 which the 800 acre tract whose minerals had previously been conveyed to Good Pine Oil formed a part. These lands were purchased by appellant for inclusion in the ICisatchie National Forest and were specifically conveyed to 'it “subject to the sale of all the oil, gas and sulphur in, on, and under all of the lands conveyed herein, as shown by act of sale dated November 12, 1932, * * * wherein Bodcaw Lumber Company of Louisiana, Incorporated, was the vendor, and Good Pine Oil Company, Incorporated, was the vendee.” This deed recites that “the mention of these mineral sales and of the rights granted therein is made solely for the purpose of limiting, vendor’s warranty to the United States of America in the present sale, and the recital of the said mineral sales shall in no wise extend or enlarge the same in point of time, or limit, control, or otherwise restrict the manner of exercising its rights by the Good Pine Oil Company, Incorporated, its successors and assigns.” 2

At the time the sale was made, the officers and directors of Bodcaw believed that the mineral rights in the lands sold were valuable and the price of $1.75 per acre paid by appellant for the timber lands acquired under the 1936 deed did not reflect the value of any mineral rights. Moreover, the uncontradicted testimony is that Bodcaw would not have sold the timber lands to the United States had its representatives then taken the position, as they do now, that the prescriptive provisions of the Louisiana Civil Code would be applicable to the lands sold.

In December 1941 the Good Pine Oil Company was dissolved and the mineral interests which it had acquired were transferred to its stockholders in indivisión. Thereafter the appellee, Nebo Oil Company, was organized and by mesne conveyances acquired all of the mineral rights formerly held by Good Pine Oil.

It was stipulated by and between the parties that no drilling operations have been conducted on the 800 acres of land here involved or on lands contiguous thereto. However, it appears that the mineral rights acquired by Good Pine Oil by virtue of the 1932 deed from Bodcaw were exercised by the drilling of five separate wells between October 1941 and October 1948, three of which were located on lands conveyed to the United States under the 1936 deed from Bodcaw. It further appears that there has been considerable drilling activity on other portions of the pooled acreage and substantial production has been developed and oil and gas is now being obtained therefrom. Additionally, each of the five lumber companies, in accordance with the pooling agreement, has shared in this production obtained from the pooled acreage in proportion to the acreage which each contributed to the pool.

The gravamen of the complaint is that no drilling operations were conducted on the lands in suit during the ten year period beginning November 12, 1932; and that consequently any mineral rights owned by Good Pine Oil or its successor, Nebo Oil, had prescribed by ten years of nonuser of the servitude. For answer, Nebo Oil denied that the mineral rights had prescribed and set up the defenses, among others, that there had been an interruption of the ten year prescriptive period for the reason that the minerals underlying the 800 acre tract were pooled with other minerals which had been developed, and exercise of the servitude on any part of the pooled' acreage interrupted prescription with respect to all of the minerals included in the pool; and that the mineral rights were imprescrip-tible by virtue of Act 315 of the Louisiana Legislature of 1940. The trial judge sustained these defenses and this appeal followed.

Insisting that the judgment should be reversed, appellant contends that the court erred: (1) in holding that the mineral rights in question were included in a pooling agreement which was binding on the appellant though unrecorded, and that production under that agreement interrupted prescription; and (2) in concluding that Louisiana Act 315 of 1940 is valid and *1007 constitutional as applied to lands conveyed to the United States prior to the effective date of its enactment.

In Louisiana there is no land tenure other than perfect ownership and imperfect ownership and there is no separate corporeal mineral estate in oil and gas as such. The Louisiana courts have adhered to the principle that a reservation or sale of oil and gas creates only a right to go upon the land to search for and capture minerals. This right to reduce the substance to possession, although not fitting perfectly into any civil code category, is in the nature of a servitude on land in favor of a person, to be governed by the laws of Louisiana pertaining to servitudes. Frost-Johnson Lumber Co. v. Sailing’s Heirs, 150 La. 756, 91 So. 207.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Petro-Hunt, L.L.C. v. United States
862 F.3d 1370 (Federal Circuit, 2017)
Petro-Hunt LLC v. USA
Fifth Circuit, 2007
Central Pines Land Co. v. United States
61 Fed. Cl. 527 (Federal Claims, 2004)
Petro-Hunt, L.L.C. v. United States
365 F.3d 385 (Fifth Circuit, 2004)
Petro-Hunt L.L.C. v. United States
179 F. Supp. 2d 669 (W.D. Louisiana, 2001)
Central Pines Land Co. v. United States
274 F.3d 881 (Fifth Circuit, 2001)
Reilly v. State
533 So. 2d 1341 (Louisiana Court of Appeal, 1988)
Economic Development & Industrial Corp. v. United States
11 Cl. Ct. 682 (Court of Claims, 1987)
Anadarko Production Co. v. Caddo Parish Sch. Bd.
455 So. 2d 699 (Louisiana Court of Appeal, 1984)
United States v. Little Lake Misere Land Co.
412 U.S. 580 (Supreme Court, 1973)
Joseph P. Lucia v. United States of America
447 F.2d 912 (Fifth Circuit, 1971)
Reynolds v. Louisiana Board of Alcoholic Beverage Control
185 So. 2d 794 (Supreme Court of Louisiana, 1966)
United States v. Biloxi Municipal School District
219 F. Supp. 691 (S.D. Mississippi, 1963)
United States v. City of Jackson, Mississippi
206 F. Supp. 45 (S.D. Mississippi, 1962)
United States v. Leiter Minerals, Inc.
204 F. Supp. 560 (E.D. Louisiana, 1962)

Cite This Page — Counsel Stack

Bluebook (online)
190 F.2d 1003, 1951 U.S. App. LEXIS 3778, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-nebo-oil-co-inc-ca5-1951.