Court Opinion

ID: 9858554
Source: CourtListenerOpinion
Date Created: 2023-09-24 16:27:54.458092+00
Date Added: 2024-06-11T09:54:46.328848
License: Public Domain

HAWTHORNE, Justice
(dissenting).
I respectfully dissent from the holding that accruing prescription has been interrupted as to the mineral royalty rights from lands located outside the Harmon-A-Unit. It must be remembered that there has not been any production of minerals in fact from any part of the Barousse tract within 10 years of the date of the royalty sales, and, further, that only 24 acres of this tract were included in the Harmon-A-Unit. I am in full accord with the statement in the majority opinion that production from lands in the unit, although from a well drilled not on the Barousse tract but on other lands in the unit, interrupted the running of prescription as to the royalty under the 24 acres of the Barousse tract which were in the conventional unit, and as to this there is no dispute. But I do not think the majority opinion gives any sound reasons for holding that prescription has been interrupted as to the royalty on the remaining property comprising this tract. As I view the matter, such a holding will cause much litigation, and will afford a means of perpetuating for more than 10 years mineral rights without exercise of the servitude, and royalty rights without actual production. Under the holding of this case all that one will need to do to bring about such a result — a result which circumvents our law of prescription — will be (1) to include a small part of a large tract subject to the mineral servitude or the royalty rights in a conventional unit containing other lands on which a well has been drilled and production obtained and (2) to omit to declare or ex*1031press the intent or consent to divide the servitude or the royalty rights.
As I understand the majority opinion, the reason given for holding that prescription has been interrupted is simply that the conventional unitization agreement executed by the parties does not disclose or reflect an intent or consent by the royalty owners and the landowners to divide their royalty rights into two segments, one segment being those on the 24 acres of the Barousse tract in the unit and the other those on the remaining property outside the unit, because the unitization contract was not a triparty agreement among the landowners, the royalty owners, and the lease owners, but appeared to be a biparty agreement between all lease owners on the one part and all royalty owners on the other part, whether these latter are landowners, mineral owners, or merely royalty owners. How the form of this unitization agreement shows an absence of intent or consent to divide the royalty rights I am at a loss to understand.
The majority opinion states that the holding of this court in the case of Elson v. Mathewes, 224 La. 417, 69 So.2d 734, 735, is not controlling here. In that case the interest in dispute was a mineral servitude. There by the execution of a pooling or unitization agreement a unit was formed which included 40 acres of a 91-acre tract. A well was subsequently drilled in the unit and completed as a producer, but this well was not on any part of the 91-acre tract. The unitization agreement in that case provided :
“ * * * This agreement is executed with the specific purpose and intent on the part of each of the parties hereto to acknowledge the ownership of each and all of the parties hereto of their respective interest in and to the oil, gas distillate, condensate and other minerals and mineral rights in the lands pooled herein, so as to interrupt the running of the liberative prescription of nonuse, applicable under the laws of Louisiana to mineral servitudes, and each monthly payment of any of the royalties or other benefits hereunder, shall be considered and accepted by all parties as new acknowledgment made with the purpose and intent of interrupting said prescription as to all rights of all of the parties hereto under all the servitudes.”
In the instant case the unitization agreement provides, among other things:
“ * * * hereby pool and unitize their royalty rights insofar as said royalty rights relate to and affect lands within the outline of said Harmon et al. Unit * * *.
“The pooling and unitization of the royalty rights * * * shall be limited to royalties on and for gas and gas condensate or gas distillate produced from said unitized area ***.*** Royalty *1033Owners shall receive only such portion of the royalty owned by each of them as the amount of each Royalty Owner’s acreage within the Unit, or such Royalty Owner’s interest therein, bears to the total acreage within the entire unitized area ****** Drilling or reworking operations in connection with the production of gas and gas condensate or gas distillate on, or the production of gas and gas condensate or gas distillate from, any portion of the lands within said unitized area shall be considered as drilling or reworking operations on and production from all the lands within said Unit and under all the leases affecting any portion of said lands; and, to that extent, said leases are amended and supplemented accordingly * * *. * * * ” (Italics mine.)
In Elson v. Mathewes, supra, the court in holding that prescription had accrued as to the mineral servitudes insofar as they affected the land outside the unit said:
“Here, plaintiffs and the defendant, in the unitization and pooling contract, agreed to an interruption of prescription as to the 40-acre tract within the Dowling Unit, thereby extending the servitude as to it. However, the agreement made no mention of, and did not relate to, the remaining 51 acres (involved in this suit); and this omission along with the failure to drill on or otherwise use the 91 acres during the prescriptive period, resulted in 1947 in an extinguishment of the servitude to such extent. * * *” (Italics mine.)
Here, as in that case, the unitization agreement makes no mention of, or reference to, that part of the tract outside the unit, and we paraphrase what was said in Elson v. Mathewes and apply it to this case, thus:
“However, the agreement made no mention of, and did not relate to, the remaining acres outside the unit, and this omission along with the absence of actual production during the prescriptive period resulted in an extinguishment of the royalty rights to such extent.”
As stated previously, in Elson v. Mathewes we were dealing with a mineral servitude; but to hold that the rule of law in that case applies only to mineral servitudes and not to mineral royalties, and to hold that production of the area within the unit suspended or interrupted prescription of royalties on lands outside the unit, would give the royalty owner a right superior to that of the mineral owner. The holding in the instant case has, in effect, overruled the decision of this court in Elson v. Mathewes without specifically saying so, because in that case, as here, the conventional unitization agreement executed by the parties did not declare or reflect an intent or consent of the parties to divide the mineral servitude except by its failure to men*1035tion the remaining property. Such an omission along with the failure to drill or use the servitude during 10 years resulted in its extinguishment to the extent of the property outside the unit. Due to the omission in the Elson case the servitude as to the remaining property was held to have prescribed for non-use although there was drilling in the unit, whereas in the instant case an omission — that is, the failure to declare an intent or consent to divide the royalty rights — has resulted in the interruption of prescription as to such rights due to production in the unit though not from the lands here involved. I cannot see why the holding in that case is not controlling here, since the conventional unitization agreement here under consideration does not mention or relate to that part of the Barousse tract outside the unit.
As I view the matter, the execution of the unitization agreement had the effect of dividing the royalty rights. Accordingly these rights are still in existence as to the lands in the unit, but have prescribed for want of production as to the lands outside the unit.
In conclusion I should like to state that I respect the views of the author of the majority opinion and of my other colleagues who subscribed to them, but I cannot agree with these conclusions for the reasons given above.
I respectfully dissent.