Case Name: TEXALA OIL & GAS CO. v. CADDO MINERAL LANDS CO. et al.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1922-04-24
Citations: 152 La. 549
Docket Number: No. 24722
Parties: TEXALA OIL & GAS CO. v. CADDO MINERAL LANDS CO. et al.
Judges: By Division A, composed of PROVOSTY, C. J., and OVERTON and LECHE, JJ.
Reporter: Louisiana Reports
Volume: 152
Pages: 549–569

Head Matter:
(93 South. 788)
No. 24722.
TEXALA OIL & GAS CO. v. CADDO MINERAL LANDS CO. et al.
(April 24, 1922.
On Application for Rehéaring, June 1, 1922.
On the Merits, June 29, 1922.
Rehearing Denied by the Whole Court Oct. 19, 1922.)
(Syllabus by Editorial Staff.)
1. Appeal and error &wkey;>657(I) — Case remanded for incorporation in transcript of records omitted by clerk.
Where original .records of other suits were admitted in evidence under Act No. 43 of Extra Sess. 1870, but the clerk failed to include transcripts of such records in the transcript on appeal, case remanded for their incorporation in the transcript or in a supplemental transcript.
On the Merits.
2. Mines and minerals <&wkey;78(4) — Failure to drill well within time stipulated held to dissolve contract without putting lessee or assignee in default.
Under an oil and gas lease, providing‘for the drilling of certain wells, and that within one year one well should be drilled to á deep strata of oil, and that the lessee’s failure to carry out any of the agreements therein should terminate the lease, the lessee’s failure to drill the deep well within the time required dissolved the contract without putting the lessee or his assignee in default for the breach, especially where all operations had ceased for more than 60 days in violation of the agreement.
3. Mines and minerals t&wkey;78(l) — Time for drilling held to be of the essence of oiil and gas lease.
Where an oil and gas lease required the lessee to commence drilling to a certain depth within 60 days, and within one year to drill a well to a deep strata of oil, time was of the essence of the stipulation to drill the deep well and for the development of the property in general.
4. Mines and minerals <&wkey;78(l) — Litigation ' over title to part of land held not to excuse drilling of well within time stated.
Where an oil and gas lease required the drilling of certain wells and provided for the drilling within one year of a well to a deep strata of oil, the drilling of such well was not excused by the pendency of litigation over the title to part of the land, where it did not involve the subdivision selected by the holder of the lease for the deep well, or any subdivision on which it had a well.
5. Mines and minerals <&wkey;78(I) — Failure to drill well not excused’ by inability to obtain casing after time for drilling had expired.
The drilling of a well to a deep strata of oil within one year, as required by an oil and gas’lease, was not excused by the leaseholder’s inability to procure the necessary casing, where this condition arose several months after the time had elapsed for drilling.the well, and it did not appear that casing could not have been procured had the well been drilled within the time stipulated, and the lessor had done nothing to justify the lessee in believing that the time would’ be extended.
6. Mines and minerals i&wkey;>78(l) — That pipe lines would not accept oil held not to excuse drilling of well as agreed.
The drilling of a well to a deep strata of oil within one year, as required by an oil and gas lease, was not excused by the fact that pipe lines would not accept oil for transportation, where by constructing a small pipe line and building a switch the leaseholder could have shipped the oil by rail.
7. Estoppel &wkey;>9 — Admissions of lessor after granting of lease as to prior lease could not bind lessees.
A lessor’s answers in suits in which it was called in warranty and the testimony of its president therein, to the effect that it had given an oil and gas lease, and that the lessee or his assignee was in possession, could not prejudice the rights of one to whom it had given a subsequent lease before the filing of such answers, or the giving of such testimony.
8. Estoppel <8^3 (3), 69 — Pleading and testimony, admitting giving of lease and possession thereunder, held not to estop lessor from asserting forfeiture.
Where the assignee of a lease sued for slander of title, called the original lessee in warranty, and the lessee called the lessor' in warranty, the lessor’s answers admitting that it had given the lease, and that the lessee or his assignee was in possession, and the testimony of its president to the same effect, coupled with the defense that it had a right, as against the party suing, to make such lease, did not estop it from asserting, as against the assignee of the lease, that it had been forfeited for noncompliance with its conditions.
9. Mines and minerals <&wkey;>78(l) — Holder of lease bound to comply therewith without waiting for protest.
Where an oil and gas lease required the drilling of a deep well within one year, the holder of the lease was bound to comply with the contract to keep it in force, and could not wait for a protest before complying.
10. Mines and minerals i&wkey;78(l) — Lessor only bound not to mislead lessee into thinking it need not comply with lease.
Under an oil and gas lease requiring the drilling of a deep well within one year, and providing that failure to carry out any of the agreements thereof should terminate the lease, the only obligation of the lessor was not to mislead the lessee into thinking that it might depart from the contract in any essential particular or fail to comply with it without suffering the consequences, and it was under no obligation to protest against the lessee’s expenditure of large sums of money in developing the property.
11. Mines and minerals <8»78(5) — That lessee failing to comply with lease, spent large sums, of money in developing property, did not es-top lessor from insisting upon forfeiture.
Where the holder of an oil and gas lease, requiring the drilling of a deep well within one year and providing for termination for failure to carry out any of the agreements thereof, failed to drill such well, and the lessor did nothing to mislead it into thinking that it might depart from the contrhct, the. fact that it spent large sums of money to develop the property did not estop the lessor from asserting a forfeiture.
12. Mines and minerals <&wkey;78(7) — Facts terminating contract must be shown, and dissolution of lease obtained by judicial action.
Though an oil and gas lease in terms provided that it should terminate and become null and void upon failure to drill a deep well within one year, or upon suspension of operations for more than 60 days, or upon failure to comply with its, terms in other respects, the facts must be shown, and the dissolution of the contract obtained by judicial action.
13. Mines and minerals <&wkey;>78(7) — Forfeiture of lease could be set up in lessee's suit for possession without restoring possession and suing for dissolution.
Under Oiv. Code, art. 2047, providing that dissolution of a contract may be demanded by suit or by exception, where holder of oil and gas lease, requiring the drilling of deep well within one year, and prohibiting suspension of operations for more than 60 days, and providing for termination upon failure to carry out any of the agreements thereof, did not drill such well, and, though when a subsequent lessee took possession its property used on the lease was still thereon, no one was in charge of the premises, or had been for some months, the subsequent lessee and the lessor could, when sued by the prior lessee for recognition of its ownership of the lease, set up the defense of forfeiture without first restoring the property and then suing to dissolve.
14. Mines, and minerals <&wkey;78(2) — Failure of lessee to drill deep well as provided held to preclude assertion of rights acquired by drilling shallow wells.
Where oil and gas lease required a well to be drilled to a deep strata of oil within one year, and also required two wells to be drilled for every 40 acres, and provided that every two wells so drilled would hold the lease on 40 acres, and that failure to carry out any of the agreements thereof should terminate the lease, the holder of the lease upon failure to drill the deep well could not hold the 40 acres for each two shallow wells drilled. ■
15. Mines and minerals <&wkey;78(l) — Lease held to govern lessee’s rights' in wells drilled under earlier lease when property embraced in lease.
Where, prior to an oil and gas lease requiring the drilling of certain wells, and providing for termination for failure to comply with any of its agreements, the lessee had drilled two wells on the property under a former lease, but the property on which they were located was included, in the lease, it was the evident intention that they, should be governed by the latter lease.
16. Mines and minerals <3=»8I — Judgment rejecting plaintiff’s demand as lessee held to reserve right to sue for property used or destroyed by subsequent lessee.
In suit by holder of oil and gas lease fox recognition of its ownership of the lease and to cancel a subsequent-lease, where it appears that plaintiff’s rights under the lease have been forfeited, but there is evidence that the subsequent lessee used some of plaintiff's property, the right to sue for property so used or destroyed will be reserved by the judgment rejecting plaintiff’s demand.
17. Appeal and error <&wkey;238(4), 878(1) — Judgment so far as it dissolves sequestration not disturbed, when plaintiff has not appealed or moved to amend.
A judgment, so far as it dissolved a sequestration issued on plaintiff’s petition, cannot be disturbed on appeal, when plaintiff has not appealed, nor filed a prayer for the amendment of the judgment.
Appeal from First Judicial District Court, Parish of Caddo; John R. Land, Judge.
Suit by the Texala Oil & Gas Company against the Caddo Mineral Lands Company and others. From a judgment for plaintiff, the named certain defendants appeal.
Affirmed in part, and annulled and' set aside in part, and plaintiff’s demand rejected.
Wilkinson, Lewis & Wilkinson and J. S. Átkinson and Alex F. Smith, all of Shreveport, for appellants.
Barret & Files, of Shreveport, for appellee.
Wm. Winans Wall, of New Orleans, and A. D. Keeney and M. D. Dimitry, both of Shreveport, for amici curiae.
By Division A, composed of PROVOSTY, C. J., and OVERTON and LECHE, JJ.

Opinion:
OVERTON, J.
Plaintiff alleges that it is the owner of 'a valid mineral contract of lease of certain lands in the parish of Cad-do, granted by the Caddo Mineral Lands Company. This lease plaintiff alleges it holds by a regular chain of assignments.
Plaintiff further alleges that after it had spent large amounts of money in developing the property, and after its further development had been interrupted by suits to annul the lease, which are still pending, and were instituted by H. J., V. T., and M. P. Lenoir, and are numbered 25283, 25284, and 25268 of the docket of the trial court, and are entitled Lenoir v. Texala Oil & Gas Co.1, and after the Caddo Mineral Lands Company, under which it holds, had alleged in' the Lenoir suits the validity of plaintiff's lease, and after the president of that company had testified to the validity thereof, said company pretended to grant, notwithstanding, a lease of the same kind, and on the same land, to Wilmot J. Homer, under which, by a pretended chain of assignments, one M. G. Peck now claims to hold.
Plaintiff further alleges that the Caddo Mineral Lands Company and W. J. Homer and the assignees of the Homer lease have bound themselves together to defraud it of its rights and property; that they have entered upon said land and have taken possession thereof, and are pumping the oil from plaintiff's wells and using its machinery and other property on the leased premises. Plaintiff therefore sues these defendants in solido for $25,000, the alleged value of its rights and property, of which property plaintiff alleges it has been unlawfully deprived. Plaintiff also sues to be recognized as the owner of the first lease granted by the Caddo Mineral Lands Company, which it holds by assignments from the grantee, and of certain property on the leased premises, and to have canceled and erased from the records of the recorder's office the lease granted by that Company to Homer and the assignments thereof made by Homer and his assignees, and prays that a judicial sequestrator be appointed to hold- the property during the pendency of the suit. In an amended petition plaintiff prayed for and obtained a writ of sequestration, ordering the sheriff to sequester the property.
The Caddo Mineral Lands Company and P. L. Hart, another of the defendants, answered the suit. Both aver the validity of the lease granted to Homer and the validity of the assignments thereof, and aver that, at the time this lease was made,, the lease under which plaintiff claims had become void by the failure to comply with its terms, and further, that plaintiff had abandoned the property. Both of these defendants deny the allegations in plaintiff's petition, which declare that, in the three Lenoir suits, the Cad- do Mineral Lands Company had alleged the validity of the lease, under which plaintiff claims, and deny that the president of that company had testified on the trial of those suits that plaintiff's lease was valid. The defendant Hart avers that the assignees of the Homer lease bought on the faith of the public records, and both defendants aver that possession of the property under said lease was taken openly, and that plaintiff had knowledge thereof, and stood by without protest until after large amounts of money had been spent in developing the property, and a producing well had been brought in, before plaintiff asserted its claims, and they aver that plaintiff is therefore estopped. They pray that plaintiff's demand be rejected.
In the court below plaintiff was successful to the extent of having its lease recognized and of obtaining a decree placing it in possession of the property and of obtaining a further decree directing the cancellation of the Homer lease and the assignments thereof, but the writ of sequestration was dissolved, and plaintiff's demand for damages nonsuited. The right was reserved defendants to sue for the value of the improvements placed by them on the premises, less the amount received by them as revenues from the property.
Both Hart and the Caddo Mineral Lands Company-have appealed.
On the trial, plaintiff offered in evidence the proceedings in the three Lenoir suits, including the evidence offered in each. While the offerings do not so.state, yet they were evidently made for the purpose of substantiating in part the allegation of plaintiff's petition to the effect that the continued development of the property by it was interrupted by those suits, and for the further purpose of proving its allegation that the Caddo Mineral Lands Company in those suits had alleged the validity of plaintiff's lease, and that the president of that company had testified in them that the lease was valid.
The three suits mentioned were not incorporated in the transcript, nor made part of it in any manner, nor does it appear why they were omitted. The clerk has concluded the transcript with the usual certificate that it includes the evidence, and a true and correct copy of all papers filed, orders made, and proceedings had in the case. No motion has been made to dismiss the appeal, nor has any effort been made to supply the deficiency in the transcript.
The allegations, which the above evidence was offered to sustain, are still relied on by plaintiff, and are discussed in the briefs of both plaintiff and defendants. The evidence was admitted by the lower court, though over the objection of defendants. Without it we are unable to determine the issue.
It does not appear that the omission was due to the fault of the appellants. We in fer that the original records were offered instead of certified copies thereof, and when an appeal was taken, and the clerk found no certified copies thereof in the record, he made none in making the transcript, and hence the omission.
However, Act No. 43 of 1870 (Extra Sess.) authorizes parties litigant to offer in evidence original records from the archives of the court. When the evidence offered on the trial is taken down, and such an offering is made, the act provides that an entry shall be made of the offering in the notes of evidence, and that it shall not be necessary to make a copy of the record offered, unless an appeal be taken, in which event the transcript of the record offered as evidence shall be made from the original.
The omission of these records from the transcript was doubtless due' to the failure of the clerk to carry out the mandate of the above statute, and not to the fault of the appellants. We have therefore concluded to remand the case for the purpose of having incorporated in the transcript, or in a supplemental transcript, the three records mentioned, or so much thereof as the parties to this suit, acting under Act No. 229 of 1910, may find necessary. Becnel v. Louisiana Cypress Lumber Co., 134 La. 467, 64 South. 380.
For the reasons assigned, it is ordered, adjudged, and decreed that this case be remanded to the lower court for the purpose of including in the transcript, or in a supplemental transcript, so much of said omitted, records as the parties to this suit may find necessary, as provided by said Act of 1910, and in default of directions as provided by said act, that a transcript of said entire three records be returned to this court, within 30 days from this date, to the end that this appeal may be disposed of.