Title: Jumonville Pipe & MacH. Co. v. Federal Land Bank

State: louisiana

Issuer: Louisiana Supreme Court

Document:

87 So. 2d 721 (1956) 230 La. 41 JUMONVILLE PIPE AND MACHINERY CO., Inc. v. The FEDERAL LAND BANK OF NEW ORLEANS et al. No. 42119. Supreme Court of Louisiana. March 26, 1956. Rehearing Denied May 7, 1956. *722 Harold Moses, Doyle, Smith & Doyle, Donald W. Doyle, New Orleans, for defendants-appellants. Obier & Middleton, Plaquemine, for appellee. MOISE, Justice. This case is on appeal by the mineral and royalty owners from the judgment of the district court cancelling certain instruments from the Conveyance Records of the Parish of Iberville, Louisiana, to the extent that they evidence the right and interest of defendant-appellants in the property in dispute. The case is presented on an agreed statement of facts, supported by exhibits. There is no dispute between plaintiff and defendants as to the facts. The following question is presented to The following question is presented to the Court, to which we must apply the law: A description of the property then follows in the judgment of the trial judge. From that judgment, the Federal Land Bank of New Orleans, I. R. Price, Ford Graham, Geeorge H. Echols, J. B. Ferguson, Jr. and W. V. Conover prosecute to this Court a suspensive appeal. The trial judge has presented an able and well analyzed opinion. His findings correctly portray, in our opinion, the law and the evidence on the subject. In the stipulation agreed upon by the parties, we find the following facts germane to the subject: *723 On January 20, 1938, the Federal Land Bank of New Orleans sold to Jumonville Pipe and Machinery Co., Inc. seven tracts of land located in Iberville Parish, by seven separate deeds. The Bank reserved to itself one-half of the minerals. At the time of suit the property was, after transfer and retransfer, owned by the original vendee. Humble Oil and Refining Company was the assignee of leases executed by the Federal Land Bank. The other defendants were royalty owners. No development had been secured on plaintiff's seven tracts. On January 15, 1944, Humble Oil and Refining Company received a permit to drill in the Laurel Ridge Field. Adam Hymel No. 1 was brought in and has been continuously producing gas and distillate in paying quantities since October 21, 1946. This well was not on plaintiff's property, but it was within the same field. On July 15, 1944, Humble Oil and Refining Company received a second permit to drill. C. G. Robinson No. 1 was brought in and has been producing gas and distillate in paying quantities since November 21, 1946. This well was in the Laurel Ridge Field, but it was not on plaintiff's land. On April 29, 1947, under and in accordance with the authority granted him by Act No. 157 of 1940, LSA-R.S. 30:1 et seq., the Conservation Commissioner issued Orders No. 131-3 and No. 131-5. These were integrating forced pool orders which included Units No. 3 and No. 5 of the Laurel Ridge Field in Iberville Parish. Unit No. 3 contained a portion of each of plaintiff's seven tracts of land, and Adam Hymel No. 1 was located on it. Unit No. 5 contained a portion of six tracts belonging to plaintiff, and C. G. Robinson No. 1 was located on it. Plaintiff contends that there has been a division of the advantages of servitude as it affects his lands, and that while prescription was interrupted on the mineral rights covering the land inside the units prescription was not interrupted as it bore on the land outside of the forced units, ten years having elapsed since the reservation of 1938. Defendants argue that production from a well located in a pooled unit created by an integration order of the Commissioner of Conservation constitutes production from all property within the unit, including property subject to a mineral servitude under the provisions of Act 157 of 1940, LSA-R.S. 30:10, subd. A(1) (b), and constitutes user of the mineral servitude as to the property subject thereto, both inside and outside of the unitized area; and, that this is true whether the well be located on the property subject to said mineral servitude or not. Article 789 of the LSA-Civil Code provides: In Article 657 of the LSA-Civil Code, we find: In Spears v. Nesbitt, 197 La. 931, 2 So. 2d 650, we held that the parties themselves *724 had in effect divided a servitude for the purpose of development. Again, in Ohio Oil Co. v. Ferguson, 213 La. 183, 34 So. 2d 746, we held that there was nothing so sacramental in the doctrine of indivisibility of servitudes as to prevent the division of the advantage of a servitude, if it be susceptible of division, by agreement of the interested parties. We further held that where acreage covered by a servitude is parceled and owned by different parties, each party has the right to explore, but that if any party does not exercise his right on his parcel within ten years, the right is lost to him. Act 157 of 1940 had for its purpose the conservation of the oil and gas resources of the State of Louisiana and the prevention of waste and depletion thereof. In Hunter Co., Inc., v. McHugh, 202 La. 97, 11 So. 2d 495, this act was declared constitutional. To accomplish the purpose of the act, the Commissioner of Conservation is permitted to establish drilling units, unitize acreage, and control and allocate production. These orders become mandatory after notice is given and the necessity thereof is shown. If, as in the present case, the landowner does not consent to the arrangement, there is forced pooling. In the case of Le Blanc v. Danciger Oil & Refining Co., 218 La. 463, 49 So. 2d 855, 857, this Court made the following pronouncement: In the unitization orders herein involved, we find the following stipulation: The above pronouncement is that the provision applied only to those parts of plaintiff's tracts within Unit No. 3 and Unit No. 5. By its wording it cannot apply to plaintiff's acreage outside its area. As stated by the trial judge, the issuance of the orders by the Commissioner of Conservation did not result(1) in the creation of any obstacle which prevented the Federal Land Bank of New Orleans, or any other interested party, from using in the area lying outside the drilling units the servitude in the manner contemplated by the reservation, or (2) have the slightest effect upon their right to do so. Defendants' lessee, Humble Oil and Refining Company, applied to the Commissioner of Conservation for establishment of Units No. 3 and No. 5 (stated in brief). The only objection raised was by the owner of the land, who feared interrupting prescription. There was no objection on the part of the other defendants. Therefore, the orders of the Commissioner of Conservation had the effect of reducing *725 the acreage covered by the original mineral reservation by the Federal Reserve Bank and extending the prescription as to the portions of the seven tracts included within Pooling Units No. 3 and No. 5. However, the prescription provided by the articles of the Revised Civil Code, cited supra, is applicable to the mineral servitude existing on the portions of plaintiff's seven tracts located outside of the pooling units. See, Ohio Oil Co. v. Kennedy, La.App., 28 So. 2d 504, certiorari denied, which held that Act No. 157 of 1940 did not repeal the articles of the Civil Code with respect to prescription. The facts in the case of Childs v. Washington, 229 La. 869, 87 So. 2d 111, are similar to those in the instant matter. In an ably reasoned decision, Chief Justice Fournet stated: In the case of Elson v. Mathewes, 224 La. 417, 69 So. 2d 734, 735, we held: Therefore, it should logically follow that the mineral servitude on the portions of the seven tracts included in Orders Nos. 131-3 and 131-5 has been extended by production and kept alive. The servitude on the portions of the seven tracts not included in the orders have become extinguished because of non-use during ten years. The case of Hunter Co., Inc., v. Shell Oil Co., Inc., 211 La. 893, 31 So. 2d 10, relied on by the defendants, is not applicable. The orders of the Conservation Commissioner were similar to those in the present controversy, but the case involved the indivisibility of the obligation of drilling under a contract of lease, not a reduction of acreage covered by a mineral servitude. For the reasons assigned, the judgment of the trial court is affirmed at defendants' costs. McCALEB, J., concurs for the reasons assigned in Childs v. Washington, 229 La. 869, 87 So. 2d 111.