Source: https://supreme.justia.com/cases/federal/us/304/197/
Timestamp: 2019-04-23 15:56:06+00:00

Document:
1. A statute of Louisiana provides that a person who has produced oil under a lease granted by the last record owner holding under a deed sufficient in terms to transfer title shall, in the absence of a suit to test title, be presumed to be the true owner of the oil; that it shall be unlawful for a purchaser of oil from such a person to withhold payment therefor, and that a purchaser making payment to such a person shall be fully protected against all other claimants. Held that, upon the facts of this case, a purchaser thus required to make payment was not deprived of any rights under the Constitution of the United States. P. 304 U. S. 198.
Though the purchaser here claimed that it would be left liable to the "true owner," it appeared that there had elapsed nearly eleven years since the deed was made to the last record owner, and four years since the oil was purchased and delivered; it did not appear that there was any other claimant, nor that the purchaser had tendered payment into court for the benefit of the "true owner," as it might have done under the state law.
2. A constitutional question will not be decided unless its decision be necessary on the record before the Court. P. 304 U. S. 202.
Appeal from the affirmance of a judgment sustaining a judgment in favor of the relator in an action to recover the value of oil sold and delivered.
. . . in the manner relied upon . . . , would require . . . [appellant] to pay to . . . [appellee] the value of property which did not belong and never has belonged to . . . [appellee], thereby leaving [appellant] responsible and liable to the true owner of such property for the value thereof, and in that manner depriving . . . [appellant] of its property without due process of law, and denying to it the equal protection of the laws contrary to the provisions and requirements in the Constitution of the United States and of the Louisiana."
of conveyance is sufficient to pass title in Louisiana, and in the absence of any suit filed to test the title of the land or oil or due notice by registered mail of the filing of such suit. Section 3 authorized purchasers to delay payment for purchases previously made until a lapse of 60 days after effective date of the act (August 1, 1934), and denied protection to purchasers who paid the "last record" owner before the expiration of that period. The Louisiana Court of Appeal decided this 60-day period was, in effect, a short statute of limitations as against any possible owners not shown of record.
The district court of Caddo parish rendered judgment for appellee. The Louisiana Court of Appeal, Second Circuit, sustained, [Footnote 2] and the Supreme Court of Louisiana denied certiorari. The presiding judge of the Louisiana Court of Appeal granted an appeal to this Court under authority of 28 U.S.C. § 344(a).
". . . the said lands, having been forfeited to the Louisiana for nonpayment of taxes on July 31, 1915, as appears from the forfeiture . . . are the property of the State of Louisiana."
"We experience little difficulty in determining the legislative intent in adopting this act. It supplied a long felt need, and in its operative effect will serve to prevent imposition upon and unjust discrimination against those whom it was intended to protect. The act establishes a rule of conduct for the protection of lessors and their assigns under oil and gas leases, and also a rule of security and safety for lessees and those holding under or purchasing from them. . . . The act was designed also to protect those persons whose rights arose from or are based upon contracts with the last record owner of the lands covered thereby, and to those who deal with or acquire from such persons."
"Over eight years had elapsed when this suit was filed, and the company [transferor in the deed of record], the only person to complain, had not raised its voice in protest of its officers' action."
"protects the purchaser in paying the price to the one from whom the oil has been purchased, and, under the express declarations of the Act, no recourse may thereafter be had by any third person or adverse claimant against such buyer."
Muslow in 1933 and 1934 will not deprive appellant of any rights under the Federal Constitution.
"It is matter of common occurrence -- indeed, it is almost the undeviating rule of the courts, both state and Federal -- not to decide constitutional questions [of the validity of a State Act] until the necessity for such decision arises in the record before the court."
Baker v. Grice, 169 U. S. 284, 169 U. S. 292. We see no such necessity here. The judgment appealed from is affirmed.
"Any person, firm or corporation that has actually drilled or opened on any land in this State, under a mineral lease granted by the last record owner, as aforesaid, of such land or of the minerals therein or thereunder if the mineral rights in and to said land have been alienated, who holds under an instrument sufficient in terms to transfer the title to such real property, any well or mine producing oil, gas or other minerals shall be presumed to be holding under lease from the true owner of such land or mineral rights and the lessor, royalty owner, lessee or producer, or persons holding from them, shall be entitled to all oil, gas or other minerals so produced, or to the revenues or proceeds derived therefrom, unless and until a suit testing the title of the land or mineral rights embraced in said lease is filed in the district court of the parish wherein is located said real property. A duly recorded mineral lease from such last record owner shall be full and sufficient authority for any purchaser of oil, gas or other minerals produced by the well or mine aforesaid to make payment of the price of said products to any party in interest under said mineral lease, in the absence of the aforementioned suit to test title or of receipt, by such purchaser, of due notification by registered mail of its filing, and any payment so made shall fully protect the purchaser making the same, and so far as said purchaser is concerned as against all other parties, the producer of such oil, gas or other minerals shall be conclusively presumed to be the true and lawful owner thereof."
State v. Louisiana Oil Rfg. Co., 176 So. 686.
The Louisiana Oil Refining Corporation went through reorganization proceedings under § 77B of the Bankruptcy Act after suit was originally filed against it by Muslow. The Arkansas Fuel Oil Co. succeeded to its asserts and liabilities, and was substituted as defendant.
State ex rel. Boykin v. Hope Producing Co., 167 So. 506, 510.
Acts of La. No. 123 of 1922, La.Gen.Stat. (Dart) §§ 1556-1563; cf. Shell Petroleum Corp. v. Carter, 187 La. 382, 175 So. 1; see Cassard v. Woolworth, 165 La. 571, 575, 115 So. 755.

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