Opinion ID: 1855481
Heading Depth: 1
Heading Rank: 3

Heading: The Effect of the Tidewater Release

Text: The Bauman group urge that when Tidewater released its rights in the leases under which the Aladdin-Waterbury group were operating it also released the rights of its sublessee Aladdin. Their contention is that the sublessee had no rights except those it derived from the sublessor Tidewater, and when Tidewater granted the release, the rights of the Waterbury group were relinquished also. In effect, the Bauman group is saying that Tidewater with full knowledge of the valuable rights the Waterbury group had acquired, and by which they were maintaining the lease in full force and effect, deliberately released and relinquished its rights and the rights of its assignee or sublessee. The contention requires close scrutiny of the facts and circumstances surrounding the release, for if Tidewater did in fact intend such a result its action was irrational. Under the terms of the leases it held, Tidewater was granted the right to assign its rights in whole or in part. The pertinent lease provision reads: ... this lease may be assigned, in whole or in part, either as to any interest therein or any portion of the premises .... Based upon this contractual right Tidewater assigned or subleased to Aladdin the rights asserted by the Waterbury group. The letter agreement to which reference has been made was a prelude to the execution of the release by Tidewater and is evidence of what the parties contemplated by the formal instrument. As it is pertinent to this issue, the letter reads: In consideration of your payment of $2,750.00 to the undersigned attorneys for the plaintiffs in the above captioned case and the release of your retained rights in the oil, gas and mineral leases involved in the said case, we do hereby agree that in the event a judgment is awarded in favor of the plaintiff and attorney's fees are granted, then we will enforce collection of one-third of the total of any attorney's fees awarded against Aladdin Oil Company and one-third of said fees against Robert L. Waterbury. It is implicit in this letter agreement that Tidewater had previously divested itself of certain rights in the leases and had retained others. It was these retained rights which were to be the subject of the release not the rights which Tidewater had conveyed to others. These latter rights were to be unaffected by the contemplated releasethey were to be undisturbed by it. Thus, when Tidewater executed the instrument whereby it did release, relinquish and quitclaim all of its rights, title and interest in and to the leases, it intended, in accordance with its agreement with the attorneys for the landowner, to release its retained rights. The retained rights were those which it had not conveyed to Aladdin and the Waterbury group. This agreement to release only retained rights had been arrived at with the landowners, the predecessors in interest of the Bauman group and the parties from whom the Bauman group obtained their rights. Notwithstanding, at this time the Bauman group as the successors of the landowners are taking a position diametrically opposed to the latter agreement. It is not what Tidewater could have done at the time of the release, for, if the purported assignment to Aladdin was in fact a sublease, Tidewater was undoubtedly in a position to relinquish those rights also and to answer to Aladdin's successors for the consequences. However, this Tidewater did not do. The release instrument only cancelled by its very terms its interest in the leases, and not the full rights in these leases, the most valuable part of which were then owned by Waterbury. It is also noted that the lease provides that Tidewater as lessee may at any time prior to or after the discovery and production of minerals on the land, execute and deliver to Lessor or place of record a release or releases of any portions of the lands and be relieved of all requirements hereof as to the land surrendered.... Implicit in this provision is the right of Tidewater to preserve for its assignee or sublessee all rights not surrendered so long as the lease provisions are otherwise complied with. The meaning and effect of the language release, relinquish and quitclaim all of its rights, title and interest has been considered by this Court in Waterman v. Tidewater Associated Oil Co., 213 La. 588, 35 So.2d 225 (1947). There the Court was concerned with a deed in which the grantor did remise, release, sell, convey and Quit Claim unto the grantee all the right, title, interest, claim, and demand which he had in and to the property conveyed. In discussing the effect of a quitclaim in Louisiana the Court said: Obviously, the declarations do not convey the land but only the right, title and interest of the vendor. It is in the nature of an assignment of a right or an interest and as such falls squarely within the category of the common law quitclaim deed. Discussing the matter further the Court said: A quitclaim deed is one which purports to convey, and is understood to convey, nothing more than the interest or estate in the property described of which the grantor is seized or possessed, if any, at the time, rather than the property itself. What this means under the facts of this case is that Tidewater relinquished its retained rights, not those conveyed by it to the Waterbury group. A contrary result is both harsh and not expressive of the intent of the parties. In light of the lease provisions, the letter agreement, the language of the release, and the valuable rights the Waterbury group were then exercising, it is not reasonable to say that Tidewater intended to cancel those rights. We cannot subscribe to the conclusion of the Court of Appeal to the contrary. For the reasons assigned, it is ordered, adjudged and decreed that the exceptions of res judicata of Robert L. Waterbury and Aladdin Oil Co., Inc., and its successors and assigns be and the same are hereby overruled. It is further ordered, adjudged and decreed that the claims asserted herein (as landowners or lessees) by Mrs. Betty Jane Garber Ellis, Vernon J. Main, Jr., James Braden, Mrs. Mildred Bollman, Donald S. Bollman, R. L. Bauman, Jon Rogers Bauman Trust, Michael Collins Bauman Trust, Adler V. LeDoux, Mrs. Mildred Moreau House, James Pitre and Burice C. Bihm, relating to, arising from or dependent upon the validity of the lease executed June 23, 1961 by Adler V. LeDoux, et al. to Vernon J. Main, Jr., recorded in Lease Book 240, Folio 334, under Entry No. 454,309 of the records of St. Landry Parish, Louisiana, and the Oil, Gas and Mineral Lease dated June 23, 1961 from Adler V. LeDoux et al. to Vernon J. Main, Jr., recorded in Lease Book 240, Folio 331, under Entry No. 454,308 of the records of St. Landry Parish, Louisiana, are hereby dismissed with prejudice, at their cost. It is further ordered, adjudged and decreed that, in accordance with a stipulation, no distribution of the funds held in the registry of court will be made until all controversies over well costs and operating expenses are terminated, and then only upon proper order of court. The case is remanded to the trial court for this limited purpose, otherwise this judgment and decree shall be considered final in accordance with law. BARHAM, J., concurs with reasons.