Court Opinion

ID: 9675315
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:49:02.809058+00
Date Added: 2024-06-11T18:16:33.353665
License: Public Domain

On Second Rehearing
SIMON, Justice.
On rendering our opinion on rehearing, some of the members of the court having entertained serious doubt as to the validity of the leasehold rights claimed by Delta Development Co., Inc. (hereinafter referred to as "Delta”), we reserved the right to the Board of Levee Commissioners of the Orleans Levee District (hereinafter referred to as “Orleans Levee Board”) to apply for a second rehearing, which presents again that feature of the case for our consideration.
All of the facts of this concursus proceeding are correctly and succinctly stated in our original opinion, thus dispensing-with the necessity of repetition.
In our original decree, besides other dispositions not pertinent to the issue . here involved, we held that the Orleans Levee. Board was entitled to recover a %th of 55% of the proceeds of the oil and gas produced by Richardson & Bass from the. four wells designated in this controversy; and that Delta was entitled to recover» Jisth of 55% of said proceeds.
On first rehearing, in .additioii to the issue presented by intervenor, John E, Pottharst, Sr., which is .not here under, consideration, we considered whether Orleans Levee Board was entitled under -its mineral lease of March 30, 1950, in favor of Richardson & Bass, to recover %eths. or %8ths of the royalty proceeds of the oil and gas produced by Richardson & Bass, and whether said royalty interest was subject to the %sth overriding royalty claimed by Delta. We held that Orleans Levee Board was entitled to recover §4sths of 55% of said proceeds and that Delta was entitled to recover J4sth thereof. As thus amended our original decree was reinstated.
In this second rehearing, Orleans Levee Board contends (a) that Delta did not acquire valid leasehold rights under its purported mineral lease from the Grand Prairie Levee District (hereinafter referred to as “Grand Prairie”) dated July *34320, 1936, Grand Prairie not having right, title or interest in or to or jurisdiction over the land so leased; and (b) that Richardson & Bass has a contractual obligation to pay to Orleans Levee Board, under the reservation made in its mineral lease dated March 30, 1950, in favor of Richardson & Bass, a %eths royalty, irrespective of any alleged obligation to pay the overriding royalty of J4sth claimed by Delta.
Therefore, the sole and singular issue to be resolved, shorn of all irrelevant tangibles, is whether on July 20, 1936, Grand Prairie had the legal right to execute and grant a mineral lease covering the land involved in this controversy and by said act thereby effect and constitute an outstanding valid leasehold right.
The mineral lease executed by Grand Prairie in favor of Delta, dated July 20, 1936 and recorded July 25, 1936, had a primary term of five years and covered an area in excess of 10,000 acres, for a cash bonus consideration of $300. It described the lands as being all of the lands of Grand Prairie acquired by it from the State by act of conveyance dated January 18, 1905, registered in Conveyance Office Book 39, Folio 105 of the public records of Plaquemines Parish, except those lands which had been sold by Grand Prairie, and all lands owned by Grand Prairie on which it has any rights or interest, or may acquire under Acts 24 of 1898, 27 of 1904 and 246 of 1928, from the east bank of the Mississippi River to the rear boundary of this Levee District, all lying and being in T. 18 S., Rs. 16, 17 and 18 E.; T. 19 S., Rs. 16, 17, 18, 19 and 20 E.; T. 20 S., Rs. 18, 19 and 20 E.; and T. 21 S., Rs. 18 and 19 E.
Grand Prairie was originally created by Act 24 of 1898. Its territorial boundaries defined therein included all lands contained within the Parish of Plaque-mines on the left or east bank of the Mississippi River, beginning at the lower line of Bohemia Plantation and extending southward to the upper line of the U. S. Reservation for Fort St. Philip. Under section 11 of said act after the recordation of the conveyances of land by the State Land Office on behalf of and in the name of the State to the Board of Levee Commissioners of the Grand Prairie Levee District, as provided therein, the title to said lands, with the possession thereof, became vested absolutely in said Board of Levee Commissioners, its successors or grantees, as long as said lands remained in the possession or under the control of said Board.
Act 24 of 1898 was amended by Act 43 of 1900, extending the lower limit of Grand Prairie from the upper line of the U. S. Reservation for Fort St. Philip to the lower line of Baptist Collette’s Gap and granting to Grand Prairie territorial jurisdiction over all lands embraced within *345its limits as extended. This teriitorial jurisdiction, as extended, was confirmed by Act 27 of 1904.
As an emergency measure and in order to grant adequate protection from the danger of floodwaters of the Mississippi River to the City of New Orleans, by Act 99 of 1924 the Legislature authorized the Orleans Levee Board to construct or cause to be constructed a spillway or waste weir or other works on the east bank of the Mississippi River in the Parish of Plaquemines, located and designed according to plans and specifications approved by the State Board of Engineers and the Mississippi River Commission. To this end the Orleans Levee Board was authorized to acquire by purchase, donation or expropriation lands or other property necessary for the construction of said works and to receive and expend therefor any funds contributed by the U. S. Government or any levee district of the State benefited by said works. The Legislature further authorized the Orleans Levee Board to pay the purchase price or award necessary for the expropriation or acquisition of lands and property privately owned within the area covered by the proposed plan from the upper to the lower limits thereof and from the Mississippi River to the sea; to arrange with the Board of Levee Commissioners of the Grand Prairie whereby the bonded and other indebtedness of said Levee District, as to the area to be affected by the proposed spillway, would be acquired and paid by said Orleans Levee Board, at values as of June 17, 1924, and evidence of said indebtedness cancelled; that upon completion of the said spillway to consent to the removal at the expense of the Orleans Levee Board of all of the levee systems of said district located within the said spillway and as may he determined by the Orleans Levee Board shall be removed ; to levy annually, for such period of time as it may determine, such taxes as may be required for the construction of said spillway.
Pursuant to the authority of this act and in accordance with the plans and specifications designed and approved by the State Board of Engineers and the Mississippi River Commission, the Orleans Levee Board constructed said spillway and which is commonly known as the Bohemia Spillway. The design, plans and specifications defining the limits of said Bohemia Spillway conclusively show that the upper boundary of said spillway is the southern boundary of Bohemia Plantation, and the lower boundary of said spillway is the northern line of the Cuselich 'Canal, its western boundary the east bank of the Mississippi River, and its eastern extremity extending to the sea. In connection with this project, levees were built paralleling the northern and southern boundaries of the spillway. A small weir levee was constructed 2500 to 3000 feet to the rear of the east bank of the Mississippi River.
*347All survey maps and plats and public documents, including acts of the Legislature, unmistakably show that the property involved in this controversy is located well within the territorial limits of said spillway, notwithstanding that in our original opinion' we observed in Note 3 that said lands are not within its confines.
Although .Grand Prairie was originally created and its territorial limits defined by Act 24 of. 1898, it was re-created and reestablished by Act 246 of 1928. Section 1 of the latter act, after defining the territorial limit's’ of 'Grand- Prairie, declared that all' lands embraced within said limits “shall constitute a Levee District to be known and styled the 1Grand Prairie Levee Districf(Italics' 'ours.) Its territorial limits were defined as being the area contained within the Parish of Plaquemines, on the left or east bank .of the Mississippi River, beginning at the lower side of the Cuselich Canal at Ostrica and extending to the upper side line of Cupid’s Gap and main pass and including all lands within said limits.. As in the original act creating the Grand-Prairie, the Legislature embodied in the Act .of 1928 the same provision as to title, right and jurisdiction while said lands remained in the possession and under the control of the Board of Commissioners of the Grand Prairie Levee District.
It is inescapable that in re-creating and re-establishing Grand Prairie and defining its territorial' limits, in the exercise of its inherent power, the Legislature excluded and • ousted the Grand Prairie from exercising jurisdiction over any lands not included within said territorial limits and divested it of all its corresponding powers, rights, titles and interest. in, to and over the lands embraced within the confines of the Bohemia Spillway.
Under Act 24 of 1898, the Board of Commissioners of the Grand Prairie Levee District enjoyed the authority and right to' contract for the sale, mortgage, pledge or other disposition of the lands within its then-existing jurisdiction. As a result of its re-creation and re-establishment by Act 246 of 1928, the Grand Prairie was granted identical rights and jurisdiction over the territorial limits therein defined, but of necessity said rights and jurisdiction were limited thereto.
Thus we adhere to our holding in our. original opinion that this 1928 Act, recreating and re-establishing the Grand Prairie Levee District in territory below the spillway area, divested it of all rights and relieved it of all duties in the area of the spillway which' it had enjoyed under the provisions of Act 24 of 1898.
It is undisputed that the construction of the Bohemia Spillway proposed by Act 99 of 1924 became a fait accompli in 1926. Upon its completion it became public property, dedicated to meet the public emergency which prompted the adoption of Act 99 of 1924, with fixed and well-defined *349boundaries, embracing not only a portion of lands previously owned by Grand Prairie but also a portion of lands previously owned and controlled by the Plaquemines Parish East Bank Levee District.
The case of Emery v. Orleans Levee Board, 207 La. 386, 21 So.2d 418, 421, involved a petitory action affecting certain land located within the boundaries of the Bohemia Spillway, Plaintiffs obtained a certificate of redemption covering the property which had been sold in 1922 and brought suit against the Orleans Levee Board to have said certificate of redemption and ownership recognized. Taking cognizance of the statute authorizing the construction of the Bohemia Spillway, we said:
“From our appreciation of the provisions of Act 99 of 1924, the Legislature intended for the lands embraced in the spillway to be set aside and removed from commerce.
“The act provides for the acquisition of the fee title of the lands embraced in the spillway * *
In the Emery case we recognized that the lands located within said spillway were dedicated to public use; that there is no sacramental form to be followed in dedicating property to public use, LaSalle Realty Co. of Louisiana, Inc. v. City of New Orleans, 169 La. 1035, 126 So. 545; that a statutory dedication is generally indicated by the statute itself and there need not be a special grant as is required in common law dedications, Arkansas-Louisiana Gas Co. v. Parker Oil Co., 190 La. 957, 183 So. 229; City of Shreveport v. Drouin, 41 La.Ann. 867, 6 So. 656; Brasseaux v. Ducote, La.App., 6 So.2d 769; Ford v. City of Shreveport, 204 La. 618, 16 So.2d 127; and that such property is out of commerce, held as a special trust for public uses and is inalienable by corporations, City of New Orleans v. Carrollton Land Co., 131 La. 1092, 60 So. 695. We concluded that since said lands had been thus dedicated to public use several years prior to the certificate of redemption and ownership the plaintiffs had no rights of ownership therein. . '•>
Undoubtedly, once the lands embraced within the confines of the Bohemia Spillway became dedicated to public use and governmental functions and upon its completion in 1926, such dedication instigated and became the mainspring for' the adoption of Act 246 of 1928 which re-created and re-established the Grand Prairie Levee District, ousting the latter from all jurisdiction, rights and privileges whatsoever over the lands located in the Bohemia Spillway.
Both the Orleans Levee Board and'the Grand Prairie are creatures or agencies of the State,'and, as to such agencies, it is the inherent right of the State to abrogate, rescind and nullify any grant of title to land made by it to one of the districts and *351to vest complete title thereto in the other. The State, having dedicated the lands located in the Bohemia Spillway for public uses by Act 99 of 1924, vesting control, possession and ownership thereof for governmental functions in the Orleans Levee Board, under the plain and unambiguous provisions of Act 246 of 1928, Grand Prairie was without legal right or authority to execute any contract or grant any valid leasehold right affecting said lands, such as the mineral lease granted in favor of Delta.
Delta strenuously contends that Act 311 of 1942 is an original legislative grant and conveyance of title to the lands confined in the Bohemia Spillway to the Orleans Levee Board and that not until the enactment of this statute was Grand Prairie divested of rights of ownership and control over said lands. This contention is untenable.
Act 311 of 1942 is an act “To confirm and quiet the Board of Levee Commissioners of the Orleans Levee District in the ownership and control of all public lands in the Bohemia Spillway when it was constructed by said Levee Board in obedience to Act 99 of the Legislature of 1924.”
In the preamble of said statute the Legislature took cognizance of the fact that Act 99 of 1924 authorized the location and construction of the Bohemia Spillway in the Grand Prairie and East Bank Levee districts; that the location of said spillway and the public works constructed therein included the entire area from the lower line of Bohemia Plantation to the upper line of the Cuselich Canal, embracing all the lands in those limits between the Mississippi River and the sea; that the Orleans Levee Board had paid to Grand Prairie the entirety of its outstanding indebtedness affecting the lands within said spillway, and thereby the Grand Prairie had been removed and ousted therefrom and the Orleans Levee Board entitled to and invested with all rights, title and interest of . Grand Prairie.
Therefore, by section 1 of Act 311 of 1942, the Legislature declared:
“That the right, title, ownership and possession of the Board of Levee Commissioners of the Orleans Levee District to all public lands in the area of the Bohemia Spillway between Bohemia Plantation, above, and Cuselich Canal, below, and from the river to the sea subject to whatever valid leasehold rights as may have been granted by the Grand Prairie Levee District on lands previously granted and conveyed to it, prior to the passage of this Act, be now confirmed, quieted and acknowledged, it being recognized that said rights, ownership and possession came into existence when said Orleans Levee Board located and constructed said Bohemia Spillway in the year 1925.”
*353In language unambiguous, clear and not susceptible to judicial interpretation, the Legislature recognized the rights, ownership and possession of Orleans Levee Board as having existed from the date of the construction of the spillway in 1925. Thus, Act 311 of 1942 merely confirms, quiets and acknowledges that which previously existed. In the use of the positive words “confirmation”, “quieted” and “acknowledged” the Legislature deliberately gave approbation and assent to an estate already created, and its confirmation does not in itself create the estate, but makes firm and gives a new assurance of truth and certainty to an existing situation.
These words naturally import a preexisting title, which in the instant case relates back to the year 1925; and the act of confirmation only becomes conclusive evidence of that which it concedes existed before.
Delta can find no judicial comfort in the provision of this act confirming the title of Orleans Levee Board subject “ * * * to whatever valid leasehold rights as may have been granted by the Grand Prairie Levee District on lands previously granted and conveyed to it * *
The mineral lease of 1936, executed by Grand Prairie to Delta was made with knowledge on the part of both parties of the provisions of Act 99 of 1924, and more particularly Act 246 of 1928. It pannot be said that Delta lacked knowledge of the provisions of Act 246 of 1928, for in the mineral lease itself specific reference is made thereto.
Contracting parties must take notice of the public laws by which they are governed, and hence all persons interested in transactions made pursuant to public statute are chargeable with notice of all that the law contains. The parties to this mineral lease were bound by the laws of the State, and the validity of all negotiations involving State lands is subject to and controlled by said laws.
It is axiomatic that subdivisions of the State are creatures of the Legislature, the fountainhead of their rights, powers and jurisdiction finding source in the express legislative will. Persons negotiating with such agencies or subdivisions do so charged with knowledge of not only the laws of the State affecting said agencies but that the validity of their acts are subject to those laws. Consequently, one contracting in respect to public property must determine for himself that the agency representing the State has authority to deal in respect thereto, being charged with knowledge of the duty of fully ascertaining all laws affecting the property involved as well as the said agency.
In line with these academic fundamentals, it was the duty of Delta to fully *355determine the rights of Grand Prairie in and to the lands which it sought to lease and to ascertain the extent of the rights of ownership, if any, in said lands at the time of its negotiation. In failing to discharge this obligation, Delta acted at its own peril.
In seeking to buttress the validity of its mineral lease, Delta relies upon the suit filed by it on January 10, 1950, against the Plaquemines Parish Police Jury and Grand Prairie Levee District, bearing Docket No. 2591 of the Twenty-fifth Judicial District Court for the Parish of Plaquemines, wherein a declaratory judgment was rendered recognizing the mineral lease of July 20, 1936, as being a valid and existing lease as to all of the lands described in or included under said lease. No appeal was taken from the judgment so rendered.
It is not clear to us whether in provoking this proceeding Delta and Grand Prairie entertained serious doubt as to the validity of this mineral lease or what was the nature of their purpose in seeking a declaratory judgment relative thereto.
Be that as it may, the Orleans Levee Board was not made a party defendant in said suit, nor did it have any knowledge or notice thereof, actual or constructive. As the dedicated owner of said lands within the Bohemia Spillway, the Orleans Levee Board was a necessary and indispensable party defendant in such proceedings. Therefore, the judgment is fatal as to it and can have no legal effect upon said Board.
For the foregoing reasons, our decree as 'finally expressed in our opinion on first ' rehearing is hereby amended so as to' read as follows:
It is further ordered that the Board of Commissioners of the Orleans Levee District recover %6ths or %sths of 55% of the proceeds of the oil 'and gas produced by Richardson & Bass (Louisiana Account) from the four wells designated as Wells No. 4-H, 6-H, 7-H and 14-H in Cox Bay Unit No. 2; and that the claim of Delta Development Co., Inc., for the recovery of a Yisth of 55% of the proceeds of the oil and gas produced from these wells, be, and the same is hereby dismissed.
It is further ordered that the Board of Commissioners of the Orleans Levee District be paid its %sths or 94sths of 55% of the funds deposited in the registry of the court as representing the value of its interest.
As thus amended, the original' decree herein and the decree on first rehearing are reinstated as the judgment of this court.
HAMITER, J., dissents, adhering to his previously assigned written reasons.
*357HAWTHORNE, J., dissents.
McCALEB, J., dissents with written reasons.