Whitehall Oil Co. v. Boagni

229 So. 2d 702, 255 La. 67, 35 Oil & Gas Rep. 39, 1969 La. LEXIS 3280
Supreme Court of Louisiana·Decided December 15, 1969·No. 49657·Published·Cited by 15 cases

Opinion

HAMITER, Justice.

‘ In these cases, consolidated in the district .court, the. Whitehall Oil Company, Inc., sought to recover from its lessors under separate oil, gas and mineral leases certain alleged overpayments of gas royalties which it made to the latter. That court rendered judgments for the defendants and dismissed plaintiff’s actions.

The Court of Appeal reversed the single judgment rendered and ordered reimbursement of the amounts claimed by plaintiff at defendants’ costs; but it disallowed interest, except from date of judicial demand. 217 So.2d 707.

We granted certiorari at the instance-of the defendants in the suit entitled Whitehall Oil Company, Inc. v. Boagni et al., 253 La. 731, 219 So.2d 512. The defendants in the other case did not apply for a rehearing in the Court of Appeal or for certiorari here.

The facts are not in dispute and are, .for the most part, contained in a “Joint Stipulations of Fact” which was filed in the record during the trial. These are that on December 13, 1959 the defendants, as lessors, executed an oil, gas and mineral lease in favor of Craft Thompson covering certain lands in St. Landry Parish. It was later acquired by the plaintiff. Following production of gas on the leased property, the Federal Power Commission, on September •13, 1961, granted to plaintiff temporary authority to sell to pipeline customers the .product at a price of 23.25 cents per Mcf. The temporary permit was conditioned on .plaintiff’s being obligated to repay to its *72 vendees any difference between the price so authorized and the final price established (plus 7% interest) in the event the latter was fixed lower than the temporary rate.

Plaintiff commenced to sell gas under the Commission’s temporary authority, and it continued to do so until January 23, 1964, at which time a final and permanent authorized price at 20 cents per Mcf was fixed. Thereupon, pursuant to the terms of the initial order, plaintiff refunded to its pipeline purchasers the difference between the temporarily authorized price and that finally established.

During the time that it was selling the gas under the temporary authorization plaintiff paid royalties to the defendants based on the price of 23.25 cents per Mcf. However, they were not notified by plaintiff, and they did not have actual notice, of the refunding provision of such authority until July 23, 1964, at which time the permanent price was established.

Thereafter, demand was made by plaintiff on the defendant royalty owners for their respective portions of the overpayments which plaintiff had refunded to the gas purchasers. The defendants refused to comply, and the instant suit ensued. (Certain of the royalty owners voluntarily remitted the amounts claimed from them.)

Plaintiff asserts herein that under the terms of the leasing agreement it is entitled to the refund, it relying on general equitable principles and particularly on our doctrine of unjust enrichment. Louisiana Revised Civil Code Articles 21, 1964 and 1965. Also cited are the provisions of our Code dealing with “Payment of a Thing Not Due”. Articles 2301 et seq.

In connection with the latter group of provisions plaintiff argues that when an obligation is paid which is due at the time, but which is subject to a resolutory condition, reimbursement may be had on its ex-tinguishment by the happening of such condition. And it urges that the payments to the defendants were made subject thereto, that is, a refund if the price was reduced.

The defendants rely primarily on the general principle said to exist in our law that voluntary payments (not made by mistake or under duress) by a payor who has full and exclusive knowledge of all of the facts surrounding them may not be subsequently recovered even though the amounts so paid are not actually owed. Further, they deny the applicability of the articles cited by plaintiff under the section of our Code dealing with “Payment of A Thing Not Due”. They argue that Articles 2301 and 2302 are not applicable for the reason that the payments were not made to them by mistake (or under duress) ; that, to the contrary, the plaintiff knew all of the facts and circumstances surrounding them; and that, moreover, the payments were due to *74 the defendants when delivered by virtue of the contractual lease provisions.

Also, defendants contend that Article 2304 is inapplicable, because the payments were not made upon a “supposed” obligation but on one actually existing at the time. And they insist that the latter portion of such article refers to a release before the payments are made, not thereafter.

Defendants likewise argue that even supposing that the happening of a resolutory condition affecting the obligation after payments have been made might form the basis for claiming a refund it must he known to both parties. And they point out that in the instant case they were unaware of the condition.

Counsel on both sides of this litigation have evidenced much diligence and ingenuity in impressing on the court their respective views concerning the applicability of the mentioned Revised Civil Code Articles 2301 et seq. But we do not believe that we need resolve them. Because, even assuming the view most favorable to the defendants, and the one asserted by them (that is, that those articles do not apply), we think that, nevertheless, for the reasons hereafter given plaintiff must prevail herein.

The lease contract, although executed in much detail in many respects, is silent as to the obligations of the parties under the situation here presented. If, then, Revised Civil Code Articles 2301 et seq. relied on by plaintiff, do not apply we are called upon to determine conflicting claims under a contract where there is neither express law nor contractual provisions governing a determination of them. Consequently, in deciding the controversy we must resort to other provisions of our Revised Civil Code, namely: “21 [21]. Equity — Civil matters — No express law.— In all civil matters, where there is no express law, the judge is bound to proceed and decide according to equity. To decide equitably, an appeal is to be made to natural law and reason, or received usages, where positive law is silent.

“1964 [1959]. Incidents supplied by equity, usage, and law.- — -Equity, usage and law supply such incidents only as the parties may reasonably be supposed to have been silent upon from a knowledge that they would be supplied from one of these sources.

“1965 [I960]. Principles of equity stated —Application.—The equity intended by this rule is founded in the Christian principle not to do unto others that which we would not wish others should do unto us; and on the moral maxim of the law that no one ought to enrich himself at the expense of another. When the law of the land, and that which the parties have made for themselves by their contract, are silent, courts must apply these prin *76 ciples to determine what ought to he incidents to a contract, which are required by equity.”

Section 8 of the lease agreement, which was introduced into evidence, provides (among other things) that royalties paid to the lessors shall be “ * * * the market value free of cost of production and delivery of Yz of the gas so sold or used; * * *#

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Whitehall Oil Co. v. Boagni, 229 So. 2d 702, 255 La. 67, 35 Oil & Gas Rep. 39, 1969 La. LEXIS 3280 (La. 1969).

229 So. 2d 702 (Whitehall Oil Co. v. Boagni) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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