Court Opinion

ID: 9666865
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:29:01.216368+00
Date Added: 2024-06-11T18:15:33.097547
License: Public Domain

McCALEB, Justice
(dissenting).
While I take no issue with the finding of the majority that the failure of The Texas Company to timely pay plaintiff production royalties was not justified, I do not subscribe to the view that its lack of reasonable grounds for withholding payment authorizes a forfeiture of the mineral lease.
Paragraph 8 of the lease provides, in part:
“After production of oil, gas, sulphur or other mineral has been secured from the land covered hereby, this lease shall not be subject to forfeiture or loss, either in whole or in part, except after judicial ascertainment that the Lessee has failed to perform and discharge its obligations hereunder and has been given a reasonable opportunity thereafter to prevent such loss or forfeiture by complying with and discharging its obligations as to which Lessee has been judicially determined to be in default.”
This clause is clear and explicit; it is the law between the parties and should be given full force and effect by this Court. Article 1901, Civil Code. It simply signifies the clear intent of the parties to be that the lease is earned when the lessee has secured production and that, thereafter, it shall not be lost or forfeited without first having a judicial ascertainment of the breach and then giving lessee an opportunity to perform its obligation.1
Public policy does not preclude the parties from thus contracting and the majority does not place its decision on that basis. Rather, it appears to be the majority view that Paragraph 8 of the lease is enforceable but only in a restricted degree — that is, in cases where the court finds that there is a bona fide dispute between the parties relative to an alleged breach by the lessee of its obligations. And it is reasoned that, since the failure to timely pay the production royalties in the instant matter was not *631founded on reasonable grounds, the lessee cannot avail itself of the judicial ascertainment provision.
This conclusion effects a re-writing of the lease by adding to Paragraph 8 a proviso that it will not apply unless lessee’s failure to comply results from a bona fide dispute. But that is not the contract of the parties and the court should not change their agreement without the consent of each. And it will not do to say, as suggested by the majority, that application of Paragraph 8, as written, leads to an absurd consequence and therefore forms an exception to the principle set forth in Article 1945 of the Civil Code that “Legal agreements having the effects of law upon the parties, none but the parties can abrogate or modify them”. On the contrary, no absurdity results from applying the conditions agreed upon by parties to a contract which will prevent the forfeiture of accrued rights. This is particularly true when consideration is given to the fact that the judicial ascertainment clause applies only in instances where production has been secured and the lessee may be said to have earned the lease. Evidently, the stipulation of this clause resulted from a realization by the parties that summary forfeiture for acts of omission by the lessee would be unjust after the securing by lessee of production which necessarily involved great effort and expense on its part.
Finally, it is to be borne in mind that the law does not favor forfeitures; they are strictly construed and will not be maintained in the absence of clear provisions, leaving no doubt as to the right of their exercise. People’s State Bank v. United States Fidelity & Guaranty Co., 164 La. 95, 113 So. 779 and Schultz v. Texas & P. Ry. Co., 191 La. 624, 186 So. 49. In the case at bar, the clear provisions of the lease deny the forfeiture and should not, under the-guise of interpretation, be held to warrant it. See Summers, Oil and Gas, Section 614 and authorities therein cited.
I respectfully dissent.

. Compare Paragraph 4 of the lease which provides for immediate termination or forfeiture (before production) for lessee’s failure to drill or pay delay rentals during the primary term.