Court Opinion

ID: 9859182
Source: CourtListenerOpinion
Date Created: 2023-09-24 19:07:55.941359+00
Date Added: 2024-06-11T10:07:43.773896
License: Public Domain

TATE, Justice ad hoc
(dissenting).
With the utmost respect for the views of the majority expressed in the learned opinion of the organ of the court, I must nevertheless dissent.
By the present decision, this Court is holding that by the device of a mineral lease a landowner may burden or restrict indefinitely the right of his succeeding owners in title to the minerals underneath the land, despite the well-established jurisprudence and public policy of this State that a landowner’s retention of control over the minerals after he parts with title to the surface of the land cannot be sustained'for longer than ten years unless there is user. Frost-Johnson Lumber Co. v. Sailing’s, Heirs, 1922, 150 La. 756, 91 So. 207, and the succeeding jurisprudence.
Such a result so contrary to the public policy of this state is not required by the jurisprudence. To the contrary, as the majority opinion frankly states, we are by this opinion overruling the contrary decision of Arent v. Hunter, 171 La. 1059, 133 So. 157, which has since 1931 prevented a landowner from affecting by a mineral lease the mineral interest underneath the land after any servitude created by him is extinguished. While it is true that the rationale of the Arent case has been eroded by subsequent decisions, its basic holding has not until now been overruled; and it should not be, in the absence of legislation or compelling jurisprudential reason.
Before discussing the particular legal issue involved, it is not inappropriate to state the factual setting of this decision, in the light of which may be understood the concern of this dissent that the holding of the majority marks a fundamental and undesirable1 departure from the aforestated jurisprudence and public policy of this State.
In 1941, Holt granted a lease upon some 19,000 acres of land owned by him, including the 40-acre tract involved in the present suit and also the 40-acre tract involved *545in the companion suit, Jones v. Sun Oil Co. (Murphy), 235 La. 554, 105 So.2d 219. In 1942 and 1943 respectively, the plaintiffs in these two suits acquired their 40-acre tracts, subject to a reservation by Holt of the entire mineral interest and subject to the 1941 mineral lease granted by him. It is admitted that no mineral user or development occurred as to the present 40-acre tracts, which are non-contiguous to land of Holt upon which development did take place pursuant to the mineral lease in question, and that consequently after ten years (in 1952 ánd 1953 respectively) the mineral servitude reserved by Holt was extinguished by non-user.
Although thus under our settled law, the present landowner then theoretically became entitled to full ownership and possession of the entire mineral interest pertaining to his property, which theoretically included the right to explore for minerals and to reduce them to possession, the effect of the present decision is that the landowner received this mineral interest restricted by and subject to the terms of the mineral lease granted by his ancestor in title. (This mineral lease under its terms, which we are now upholding, is maintained without subsequent payment of rentals by production anywhere on the scattered 19,-000 acres covered by the lease. Production did occur upon a portion of the acreage originally subject to the lease, which acreage is non-contiguous with the present tracts and situated in the Delhi Oil Field some eight miles distant; and it is stipulated that this production will continue indefinitely into the future.)
Although as the majority indicates the present landowner has the right to force either development under, or else cancellation of, the lease, it is to be borne in mind that he has lost by the ancient action of his predecessor in title the most valuable rights pertaining to the mineral interest he theoretically acquired when Holt’s mineral servitude was extinguished by non-user: the right to bargain for and receive a bonus for granting a lease; the right to bargain for and receive greater annual rentals (the payment of which rentals to these landowners under the present lease has been unnecessary because of production on non-contiguous lands belonging to others covered by the lease); and the right to bargain for and receive a greater share of production as royalty rental than the one-eighth normal to a landowner in 1941. Thus we have held by the present decision that a landowner can reduce the right to the minerals that his succeeding owners in title will receive, from a mineral interest to what is in effect only a mineral royalty interest; and this latter, restricted to the proportion of mineral production for the present landowner as set forth by the initial lease granted perhaps many years before he acquired his land.
Now the present lease has all the appearances of being a bona fide lease grant*547ed after arm’s length bargaining; but the effect of the present decision would also uphold a mineral lease granted for, say, ninety-nine years, giving the landowner as royalty rental only a %eth or even a %eoth interest in production. We have opened by this decision a fairly broad avenue by which owners of great and scattered acreages can, by leasing to self-owned mineral development corporations for minimal royalty rental, in effect reserve to themselves through their subsidiary corporations a great share of the proceeds of mineral production, the right to which would otherwise revert after ten years’ non-user to the landowners succeeding them in title.1
I have not described the factual consequences of this decision from any notion that they supply a basis for decision in substitution for legal principles.
But it must be remembered that the development of the mineral law in Louisiana has, in the absence of comprehensive legislative enactment, been left to the judiciary. Case by case the Louisiana Supreme Court has been forced to develop from the ancient concepts of our civil code the rules and principles to apply to the infinitely variegated problems of a complex and ever changing industry. Without legislative guidance in the main, and utilizing codal articles devised when the existence of modern oil development was unimagined, the court has properly taken into account the general public interest of the commonwealth when resolving by civilian principles the competing interests of the landowners and of the oil-producers and their financiers. The jurisprudence thus evolved has received well nigh universal approbation and has been ratified by legislative acceptance without fundamental change as to the regulation of mineral property rights evolving through this enlightened judicial interpretation.2
*549Probably no principle of our mineral law thus developed has become more firmly established than the basic rule that no one may retain his interest in minerals underneath land he does not own for a period of longer than ten years, unless he attempts to or does develop or use same in the interim. And, as the description of the factual consequences of this decision indicates, the rule set forth by the majority opinion herein is contrary to this basic principle of our law and to the fundamental reasons of public policy which have dictated its application: a recognition that prolonged divorce of the ownership of the land from the undeveloped mineral interest thereunder is detrimental to the welfare of the State, both as tending to inhibit development of our mineral resources (without the spur of a time limit and of a financially interested landowner), and as tending to divert in the event of production the royalty rentals therefrom away from the local landowner and the local community often into the hands of such absentee financial interests as for long range investment acquire mineral interests at a time when virtually valueless on the open market.
I respectfully suggest that this Court is at almost as important a cross-roads as that at which it stood in Frost-Johnson Lumber Co. v. Salling’s Heirs, 1922, 150 La. 756, 91 So. 207 and Vincent v. Bullock, 1939, 192 La. 1, 187 So. 35, when in consideration of the basic reasons of public policy above suggested, the appropriate codal articles were found to supply the vital principle of a ten years’ prescription for non-user to the “mineral interest” 3 and the “mineral royalty interest” 4 respectively. The basic question at issue is whether, by the device of a “mineral lease” 5 granted by the initial owner of the land, the rights of the future owners of the land with re-
*551gard to the minerals thereunder may be indefinitely restricted or regulated, although following the divestment of title by the initial owner there has been for over ten years no attempted user by or through him of the mineral interest pertaining to the land in question.
The landowner’s ownership of the minerals underneath his land, is as previously stated a valuable economic right in addition to the mineral royalty right to share in production if and when received. And as we have seen, the effect of the majority opinion is to convert the right a landowner acquires, when prescription extinguishes a mineral interest created by a predecessor in title, from a mineral servitude (the right to go upon the land and reduce the oil thereunder to possession, see footnote 3 above; i. e., the right to grant mineral leases and to bargain for and receive greater bonuses, annual rentals, and royalty rental in the event of production than provided by the ancient lease granted by his predecessor many years previously when production was not imminent) into a mineral royalty interest (the right to receive, in the event of production, see footnote 4 above, such a share of the production as is assigned to the landowner by such.-ancient lease.)
I do not think that the nature of the right conferred upon the mineral lessee requires this result, nor do I think that relationships and interests resulting from mineral leases would be disturbed if in the present case we followed rather than overruled the long-standing holding of Arent v. Hunter, supra cit.
Essentially, I feel that when the landowner grants a mineral lease upon his land, the lease is granted and the consideration therefor paid with the full knowledge that any mineral right which is thus affected by the lease may be extinguished by prescription through ten years’ non-user should the landpwner sell the land itself.6 A landowner cannot by a mineral lease contract have a greater power to restrict the rights of his successors in title to the minerals underneath the land than he can by other contract reserve or affect the ownership itself of the mineral rights.
While it is true that “possession and ownership of the surface carries with it the right to reduce the minerals to possession,” Dixon v. American Liberty Oil Com*553pany, 226 La. 911, 77 So.2d 533, 536, 537, such surface ownership does not carry with it the right to reduce the minerals to possession for a period of longer than ten years after the owner divests himself of title to the surface of the land; nor does it carry with it the power to restrict or-otherwise hind this right. It is my view that, whatever the nature of the transaction with regard to such mineral interest the landowner attempts to make, no action on his part can bind the mineral servitude beyond the time prescribed by the mineral jurisprudence and the public policy of Louisiana; that is, for longer than ten years without user after creation of the mineral servitude by reservation or other deed. I think such a result is dictated by the principle stated in LSA-Civil Code, Article 2015 as “ * * * The law establishes the rule that no one can transfer a greater right than he himself has. * * * ”
As the majority opinion reiterates, quoting from In re Morgan R. & S. S. Co., 32 La. Ann. 371: “the lessee does'hot hold'one of the elements of property in the thing. His right is a jus ad rem, a right upon the thing”; but the right of the lessee is, for the payment of rentals, to go upon the land and reduce the minerals to possession. The lessee receives his right from his lessor subject to whatever fight the lessor himself had. The lease is granted and taken with this knowledge and circumscribed by this limitation. The lessor cannot confer upon his lessee a greater right with regard to the land and to the mineral interest thereunder than he himself has.
For the reasons perhaps too' fully above stated, I respectfully dissent.

. At present, to maintain mineral interests for longer than ten years without user, it is necessary for these landowners to retain title to the land. If this decision stands large landowners can, for instance, grant a lease to their own mineral corporations (cf., Perkins v. Long-Bell Petroleum Co., 227 La. 1044, 81 So.2d 389, Long-Bell Lumber Co. v. Granger, 222 La. 670, 63 So.2d 420, wherein servitudes were granted to such same-owned corporations) providing for a l/960th royalty payment upon production. Once production was secured anywhere on the vast and scattered acreage, the lease would be continued indefinitely (that is, until production anywhere upon the entire acreage ceases.)
In that manner, the large landowner could, without his present responsibility of maintaining title to and possession of the land and paying taxes thereupon, etc., through his self-owned mineral lessee in effect maintain his right to 119/120th of the landowner’s normal %th royalty interest (i. e., 120/960th, or %th; less the l/960th royalty payable to the landowner under the unfavorable mineral lease the ancient landowner had granted to his own mineral corporation.)

. As Professor Daggett stated in her authoritative treatise, Louisiana Mineral Bights (Revised Ed. :1949), p. xix : “The Louisiana courts deserve unstinting praise for the formulation of the govern*549ing principles regarding mineral law. The meshing of the old articles of the code for traction in a modern and peculiar industry was not an easy task.”

. The mineral interest in a land created by reservation or deed “constitutes a servitude imposed upon the land, giving the owner thereof the right of ingress and egress for the purpose of exploring for and reducing to possession the minerals under the property so burdened,” Horn v. Skelly Oil Co., 224 La. 709, 70 So.2d 657, 660.

. As we recently restated in description of the mineral royalty interest involved in Union Sulphur Co. v. Andrau, 217 La. 662, 666-670, 47 So.2d 38, 40, such an interest “imposed on the property a real obligation, since it was attached to an immovable, and passed with the property, conditioned upon the production of oil and gas or other minerals; but if such condition did not happen within ten years, such royalty interest was lost by the prescription of ten years”; “the right of the owner of such an interest ‘is restricted to a sharing in production if and when it is obtained by the landowner or a lessee.’ ”

.A mineral lease “is merely a contract which permits the lessee to explore for minerals on the land of the lessor in consideration of the payment of a rental and/or bonuses,” Dixon v. American Liberty Oil Company, 226 La. 911, 922, 77 So.2d 533, 537.

. It is of some interest that in the original opinion in Frost-Johnson Lumber Co. v. Salling’s Heirs, 150 La. 756, 91 So. 207, Chief Justice O’Niell stated that a mineral reservation, 150 La. 780, 91 So. 216, “created a real right, or servitude of the sort called usufruct.” Cf., Article 555 of the Civil Code, which provides:
“Tlie usufructuary may enjoy by himself or lease to another, or even sell or give away his right; hut all the contracts or agreements which he makes in this respect, whatever duration he may have intended to give them, cease of right at the expiration of the usufruct.” (Italics minp.)