Court Opinion

ID: 9675312
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:49:02.79855+00
Date Added: 2024-06-11T18:16:33.350008
License: Public Domain

On Rehearing
McCALEB, Justice.
Following the rendition of our original decision, all litigants adversely affected thereby in any respect, viz.,- — Plaquemines Parish Police Jury, as governing authority of Grand Prairie Levee District; *331Board of Levee Commissioners of the Orleans Levee District ánd John-E. Pottharst, Sr., timely applied for a rehearing. The application of Plaquemines Parish Police Jury was refused as we were and still are convinced of the correctness of our holding that the title and ownership of the Grand Prairie Levee District to any land embraced in the Bohemia Spillway area was transferred to the Orleans Levee District by Act 311 of 1942 and that this legislative grant invested Orleans Levee Board with legal title “ * * without necessity of formal act of conveyance”. However, we granted the other applications believing that the claim of Orleans Levee Board, -for its %sths contractual royalty, and that of Pottharst, for asserted recognition of his right of mortgage on the leased land, warranted further consideration.
The case is fully stated in our original opinion and a repetition of the pleadings and facts would be superfluous. Suffice it to say the only issues presently before us are (1) whether Orleans Levee Board is entitled to %eths or %sths royalty on production under its lease to Richardson & Bass, dated March ’30th 1950, and whether its royalty interest is subject to th.e %8th overriding royalty of Delta Development Co., Inc., and (2) whether the original decree adversely affected the contractual right of the intervening bondholder, John E. Pottharst, Sr.
In our original opinion, we upheld the validity of the lease granted by Grand Prairie Levee District in favor of Delta Development Co.,-Inc., in which that District reserved to itself a %th royalty, forasmuch as Grand Prairie was the record owner of the public lands affected by the lease at the time of its execution on July 20th 1936. We reasoned that, since, by specific provision of Act 311 of 1942, the transfer of title to Orleans Levee Board was subject to the valid leasehold rights previously granted by Grand Prairie, the former merely succeeded to whatever rights the latter possessed under the lease and therefore was entitled- to the %th royalty provided for therein.
Orleans Levee Board contends that it is, nevertheless, entitled to receive the %eths royalty agreed upon by Richardson & Bass in the • lease of March 30th 1950 and it further maintains that this royalty should not be burdened with the Jisth overriding royalty reserved by Delta Development Co., Inc. in its sublease to Richardson & Bass, dated December 27th 1950, for the reason that the 1936 lease executed by Grand Prairie Levee District is invalid.
In assailing the legality of the. 1936' lease, counsel for Orleans Levee Board do not contend that it terminated or was forfeited because of non-production or failure to pay delay rentals or for any de*333feet of form in confection.1 They merely reiterate the argument advanced by them on original hearing that Grand Prairie was completely divested of title to the property affected by the lease by Act 99 of 1924 or, in any case, by Act 246 of 1928.
Because of the earnestness of counsel, we have .reconsidered our original views and, as we have above indicated, entertain no doubt as to the soundness of our ruling that Orleans Levee Board did not acquire title to the lands situated in the Bohemia Spillway area before the effective date of Act 311. of 1942. Prior to that legislative grant, Grand Prairie Levee District unquestionably had a clear title to the land covered by the mineraj leases involved herein which had been duly recorded in the conveyance records of Plaquemines Parish. See Section 11 of Act 24 of 1898; State ex rel. Hodge v. Grace, 191 La. 15, 184 So. 527 and Kemper v. Atchafalaya Basin Levee District, 214 La. 383, 37 So.2d 844.
Act 99 of 1924, under which the construction of the Bohemia Spillway was authorized, did not divest Grand' Prairie Levee District of its prior ownership of lands within that area. Nor was a divestiture of title effected by Act 246 of 1928. That Act redefined the boundaries and jurisdiction of Grand Prairie and there is nothing in the statute indicating that Orleans Levee District was to or did acquire ownership of any of the lands then owned by Grand Prairie which were situated within the area of the Bohemia Spillway.
Furthermore, Act 311 of 1942, despite its multifarious -and inept use of the words “confirmed”, “quiéted” and “acknowledged” in describing the grant and transfer ■ of title of the public lands in the Bohemia Spillway area to Orleans Levee Board,, affirmatively recognized that Grand Prairie Levee District was the immediate holder of the legal and existing title thereto for the grant to Orleans is made “ * * * 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, * * * .(Italics ours.) Hence, *335in keeping with this provision, it is manifest that the title of Orleans Levee Board was burdened with the leasehold rights which had been granted by Grand Prairie in favor of Delta Development Co., Inc.
On the other hand, our present view is somewhat different from that previously announced in respect to the royalty percentage which Orleans Levee Board is to receive. We originally concluded that, in view of the validity of the 1936' lease, Orleans Levee Board, by its acquisition of title in 1942, merely stepped into the shoes of Grand Prairie and was entitled to no more than the %th royalty which would have been recoverable by Grand Prairie under that lease.
We are now of the opinion that, as Orleans Levee Board became the owner of the land in 1942, it had the right to lease it in 1950 to Richardson & Bass, such lease being burdened by “whatever valid leasehold rights” Delta Development Co., Inc. had acquired under the 1936 lease. However, since Orleans Levee Board’s lessee, Richardson & Bass, subsequently acquired all of Delta’s leasehold rights under the 1936 lease, save the reservation by Delta of a J4sth overriding royalty, the latter is the only valid outstanding leasehold right to which Orleans Levee Board is subjected. Richardson & Bass, the plaintiff herein, could not and does not question in this concursus proceeding the validity of the 1950 lease granted it by Orleans Levee Board. Nor does it claim that the Levee Board has not performed and is not now fulfilling all of the obligations required of it under that lease.2 In these circumstances, there being no other valid outstanding leasehold right, Orleans Levee Board is entitled to receive its contractual 94oths royalty, subject to the Visth overriding royalty of Delta Development Co., Inc., or a net royalty of %sths.
It remains only to consider the claim of the intervenor, John E. Pottharst, Sr. He alleges, in substance, that he is the owner of $10,000 worth of bonds which are part of a total $50,000 issue of Grand Prairie Levee District authorized by Act 325 of 1938; that the principal and interest of these bonds are payable out of the fundé derived from the collection of taxes and revenue of Grand Prairie Levee District and that, as provided in the statute, “the same shall operate as a mortgage on all of said Levee District lands until the final payment of said bonds in principal and' in interest”. He further alleges that the 1936 mineral lease between Grand Prairie and Delta Development Co., Inc. was of *337record at the time the bonds were issued; that all of the income and revenue derived by Grand Prairie from the mineral lease are part of the security for the payment of the principal and interest of the bonds and that any diversion of the revenues therefrom to Orleans Levee Board would constitute an impairment of the contract under which the bonds were issued in violation of Section 15 of Article 4 of the Louisiana Constitution and of Section 10 of Article I of the Constitution of the United States. He prays that he be allowed to intervene in the proceeding, aligned with Plaquemines Parish Police Jury, as governing body of Grand Prairie Levee District and that, in due course, the latter be recognized as owner of the lands covering the mineral leases herein and entitled as such to all income and the revenue accruing under the 1936 mineral lease.
In our original opinion, we rejected the intervention on the ground that the bonds issued by the Grand Prairie Levee District in 1938 did not operate as a mortgage on the land covered by the mineral leases herein in view of the reestablishment and reorganization of the Grand Prairie Levee District by Act 246 of 1928 in territory below the Bohemia Spillway area and that a fair construction of Act 325 of 1938, providing that the bonds issued by Grand Prairie Levee District shall be secured by a mortgage on all said Levee District lands, meant that these bonds were secured only by a mortgage on the property situated within the confines of the Levee District as reestablished by Act 246 of 1928.
Being doubtful of the correctness of this ruling, we granted intervenor a rehearing on his argument that he is entitled to have it recognized that his bonds are secured by a mortgage on the land under lease. However, as will be seen from the statement of intervenor’s pleadings, it does not appear that he is seeking the relief demanded in this Court. He makes no claim therein that his bonds are in default or that his rights as mortgagee of the land might be impaired by the outcome of this litigation or even that the issues in this case necessarily require that a determination be made of whether the transfer of the ownership of the lands in the Bohemia Spillway area from Grand Prairie to Orleans Levee Board by the 1942 Act impaired the security given him by law. Actually, his only plea is that Grand Prairie is entitled to be recognized as owner of a %th royalty interest in all production from the 1936 mineral lease and that, unless this is adjudged, the security of his bonds will be unconstitutionally diminished because Act 325 of 1938 provides that the bonds issued thereunder shall be secured, among other things, by the revenues and income of all lands owned by Grand Prairie Levee District.
*339' Obviously, this provision relative to the bondholder’s security in revenues from lands is applicable only to the mortgaged lands while they are owned by the Levee District. Grand Prairie had long since been divested of the land subject to the leases herein when production was obtained by Richardson & Bass and therefore none of the revenue derived therefrom belongs to Grand Prairie or is subject to the payment of the bonds which are not even alleged to.be in default. Accordingly, as the case merely involves the recognition of ownership of certain oil production, there is no necessity and really no issue for determination respecting the rights of a bondholder of Grand Prairie Levee District to have recognition of his mortgage and any opinion expressed by us in this proceeding would be purely advisory. Since the intervention. could only be considered on the basis that the bondholder had an interest in maintaining Grand Prairie’s position, the rejection of that Levee District’s claim operates as ground for its dismissal.
For the foregoing reasons, the third paragraph of our original decree is amended so as to read as follow:
It is further ordered that the Board of Levee Commissioners of the Orleans Levee District recover §4sths of 55 per cent of the proceeds of the oil and gas produced by Richardson & Bass (Louisiana Account) from the four wells designated as Wells Nos. 4-H, 6-H, 7-H and 14-H in Cox Bay Unit No. 2; that Delta Development Company, Inc. recover %sth of 55 per cent of the proceeds of the oil and gas produced from these wells and that each be paid so much of the funds deposited in the Registry of the Court as represents the value of these designated interests.
■ As thus amended, the original decree herein is reinstated as the judgment of this Court. The Board of Levee Commissioners of the Orleans Levee District is reserved the right to apply for a second rehearing.3
HAWTHORNE, J., concurs in part and dissents in part.
HAMITER, J., concurs in part and .dissents in part with written reason.

. In any case, Richardson & Bass, being a tenant in possession, is in no position to assert leasehold rights adverse to that of its lessor, Orleans Levee Board. Weil v. Segura, 178 La. 421, 151 So. 639 and Sabine Lumber Co. v. Broderick, 5 Cir., 88 F.2d 586.

. The reason for this is that some of the members of the Court, after a careful ■ examination of the record, entertain doubt as to tbe validity of • the leasehold rights claimed by Delta Development Co., Inc.