Ohio Oil Co. v. Ferguson , 213 La. 183 ( 1946 )

The question presented for our consideration here is: Can an estate, in the light of our jurisprudence that a mineral servitude is indivisible and"must stand or fall as a whole," be relieved of the servitude on a designated part of its acreage, even though the remaining acreage has been developed well within the prescriptive period fixed by law for its extinguishment because of nonuse, simply because the person purchasing the fractional portion of the servitude affecting the designated acreage from the primitive servitude owner failed to develop the area assigned to him within ten years?

The proper solution of the problem posed by this question is of the utmost importance not only to the bench and bar, but also to the petroleum industry as a whole and to the innumerable people who have dealt with mineral rights in this state either by their reservation, purchase, or sale of such rights. That the problem has proved to be complex and that it has given us much concern is evident from the fact that during the many months this case has been pending here, as well as the companion case of Byrd v. Forgotson, La.Sup., 34 So.2d 777, argued on rehearing the same day as this case but originally submitted to us for decision on December 19, 1944, the court, because of the divergence of the views of its members, has not only been unable to render a final decision ere this but, even today, the decision being handed down does not reflect the view of the majority of the court. It is, instead, maintained by three different supporting opinions, all based on entirely different concepts of the law relative to mineral rights.

With all due respect to these views, I find I cannot subscribe to any of them or to the result arrived at by the majority of the court, for it is my firm belief the conclusion reached does violence to a rule of property that has been firmly established by a long line of decisions in this state and that affects what we have, ever since 1918, recognized as "the most valuable property in the state" (De Moss v. Sample, 143 La. 243, 78 So. 482, 484), which property has, since that date, mushroomed into an industry of almost unbelievably gigantic proportions.

The error into which the author of the main opinion has fallen, in my opinion, lies in the fact that he has applied Paragraph 1 of Article 803 of the revised Civil Code, wherein it is declared that "When the estate to which the servitude is due ceases to be undivided, by means of a partition, each of those who were the coproprietors, only preserves the servitude by the use he makes of it, and the others lose it by nonusage during the time required for prescription," to a mineral servitude, substituting, by analogy, the owner of the so-called mineral servitude for the dominant estate. According to his opinion he has done this because he found that some of the articles of the code previously applied by this court in its decisions touching on mineral servitudes were under Title IV of the Revised Civil Code, dealing with predial servitudes or servitudes of land (found in Book II, that treats of things and the different modifications of ownership), under which title Article 803 is to be found.

In the first place, it is impossible to apply Article 803 by analogy or otherwise to a mineral servitude without dividing the servitude and without doing violence to innumerable other articles of the code to be found under this same title. To illustrate, when this article is properly applied to the cases intended, the party who loses his right of servitude by nonuse does not interfere with or have any effect whatsoever upon the right of those owners who have preserved the servitude to use the servitude in its entirety, i. e., the whole area affected by the primitive grant. As the article is here applied by analogy, the person who has preserved the servitude by using it within the ten year prescriptive period is forever barred from using this servitude to the extent that it affects the area released by prescription as against another owner who has failed to use it.

A study and analysis of all of the cases wherein this court has been called upon to determine and adjudicate with respect to the nature of the ownership and the rights acquired in the reservation, purchase, and sale of minerals, shows that from the very first the court concluded such ownership is not of the minerals themselves but only of a right to go upon the land and explore for and reduce to possession whatever minerals may be found underlying the designated area. Such a right was classified as a real right in the nature of a servitude in favor of a person, or, as otherwise expressed by Chief Justice O'Niell in his original decision in the Frost-Johnson case (150 La. 756, 91 So. 207, 216) as "a real right, or servitude of the sort called usufruct." What the court has actually done by its jurisprudence in this resepct is to establish a type of servitude that is neither predial nor personal, strictly speaking. It is clearly not a personal servitude because it does not expire with the death of the owner. And it is not a predial servitude, for it is not established upon one estate for the benefit of another estate. It cannot, therefore, be governed by the letter of any of the articles of the code that deal with either personal or predial servitudes. Instead, being sui generis, the court has, in the past, applied only such articles found under each of these categories as are capable of being applied to the so-called mineral servitude by reason of its nature and concept and it has refused to apply such of the articles as have been found to be either against public policy or detrimental to private rights. The court has consistently refused to classify the servitude as a predial one or to apply any of the articles found under the title dealing with predial servitudes to the so-called mineral servitude unless the article sought to be applied was found to be of such a character as to be applicable generally to all servitudes. Gulf Refining Co. v. Hayne, 138 La. 555, 70 So. 509, L.R.A. 1916D, 1147, Ann.Cas. 1917D, 130; Frost-Johnson Lumber Co. v. Salling's Heirs, 150 La. 756, 91 So. 207; Lee v. Giauque,154 La. 491, 97 So. 669; Wemple v. Nabors Oil Gas Co.,154 La. 483, 97 So. 666; Wilkins v. Nelson, 155 La. 807, 99 So. 607; Clark v. Tensas Delta Land Co., 172 La. 913, 136 So. 1; Palmer Corporation of Louisiana v. Moore, 171 La. 774, 132 So. 229; Sample v. Isaac Whitaker, 171 La. 949, 132 So. 511; Sample v. York Whitaker, 172 La. 722, 135 So. 38; Patton v. Frost Lumber Industries, 176 La. 916, 147 So. 33; Connell v. Muslow Oil Co.,186 La. 491, 172 So. 763; Ford v. Williams, 189 La. 229,179 So. 298; Ohio Oil Co. v. Cox, 196 La. 193, 194, 198 So. 902; and Frost Lumber Industries v. Republic Production Co., 5 Cir.,112 F.2d 462; as well as an excellent treatise on the entire subject of the so-called mineral servitude to be found in Dr. Harriet Spiller Daggett's work on Mineral Rights in Louisiana.

Under this jurisprudence the extinquishment of a so-called mineral servitude for its nonuse for ten years is governed by the public policy of the state touching on all servitudes generally as expresed in Article 789 of the Revised Civil Code (found, true, under Title IV) but when read in connection with Article 3546, which declares that "The rights of usufruct, use and habitation and servitudes are lost by nonuse for ten years."

Likewise, under this jurisprudence, the application of the provisions of Article 802, suspending prescription in favor of majors when the servitude is held jointly with minors, is not based upon the fact that a mineral servitude is in fact a predial servitude or is classified as one, but, rather, upon the conclusion of the court that the provisions of Article 802 are declaratory of a general principle which may be applied to a personal as well as to a predial servitude. See, Palmer Corporation of Louisiana v. Moore, 171 La. 774, 132 So. 229, and Sample v. York Whitaker,172 La. 722, 135 So. 38.

In the Palmer case Chief Justice O'Niell, the author of the main opinion on original hearing, had this to say in treating of articles 801, 802, and 803 [171 La. 774, 132 So. 231]: "The language of the articles quoted shows plainly that articles 801 and 802 and the first paragraph of article 803 are applicable only to real or predial servitudes, and not to a servitude in favor of a person. The second paragraph of article 803 seems applicable to a personal servitude, if the servitude be in favor of two or more persons and the right of each one of them is so defined that it may be exercised without interference with the right of another. Real or predial servitudes are defined in article 646 of the Code, thus: ``Real servitudes, which are also called predial or landed servitudes, are those which the owner of an estate enjoys on a neighboring estate for the benefit of his own estate.' Article 801 says: ``If the estate in whose favor the servitude is established,' etc., which cannot refer to anything but a predial servitude. And article 802 says: ``If among the coproprietors,' etc., which means the coproprietors of ``the estate in whose favor the servitude is established.' And the first paragraph of article 803 says: ``When the estate to which the servitude is due,' etc., which means only a predial servitude. Ever since the ruling in Frost-Johnson Lumber Co. v. Salling's Heirs, 150 La. 756, 91 So. 207, we have adhered to the view that the right of a person tothe mineral oil and gas in the land of another is a personalservitude, in the nature of a limited usufruct." He therefore concluded that these articles have no application to a mineral servitude. On rehearing, however, the court, in a per curiam, declared that the above statement in so far as it relates to articles 801, 802, and 803, "is not to be regarded as authority," remarking that while it had been argued with much force in the application for a rehearing that these articles are declaratory of a general principle only, which may be applied to personal as well as to predial servitudes, the court would express no opinion in that respect. This decision was handed down on original hearing in December, 1930, and on rehearing on January 5, 1931. (Italics are mine.)

In April following the decision on rehearing in the Palmer case, the court, in the case of Sample v. York Whitaker,172 La. 722, 135 So. 38, 40, squarely held that the provisions of Article 802 "are merely declaratory of a general principle to the effect that, as to an indivisible real right or servitude, where the prescription applicable to it is suspended as to one of several joint owners of the right, it is suspended as to all of them, and this necessarily so, because an indivisible right or obligation cannot be extinguished in part and exist in part." In this opinion, and in accord with the jurisprudence of this state on the subject, we find the following pertinent observation:

"Mineral reservations * * * are deemed servitudes in favor ofthe person, in the nature of a limited usufruct. * * * They arereal rights in favor of the person instead of an estate. * * * The real estate to which such servitudes attach is released from the servitudes by their nonuse for a given period, as provided by articles 789 and 3546 of the Civil Code. These articles are usually cited as pertinent to such reservations * * *.

* * * * * * "Prescription does not run against minors, but is suspended, as to them, during their minority, save in those instances specifically provided by law. * * * Hence the running of that prescription is suspended as to minors, so long as their minority continues. * * * * * * "Article 802 of the Civil Code reads that: ``If among the coproprietors there be one against whom prescription can not run, as for instance a minor, he shall preserve the right of all the others.' This article is the logical sequence ofthe principle that the rights of servitude are indivisible, a principle which was for the first time incorporated in the Code of 1825 as article 652, and repeated in the Revised Civ. Code of 1870, as article 656, although, as provided by article 657 of the Revised Civ. Code of 1870, which is article 653 of the Code of 1825, the advantages resulting from the servitude may be divided, whenever they are susceptible of division.

"While this court has defined, as we have said, a mineralreservation * * * to be a servitude in favor of the person, inthe nature of a limited usufruct, it has never defined it to be a usufruct, which is declared by article 538 of the Civil Code to be divisible. We think that it is indivisible in itsnature, although the advantages that may be derived from it are divisible. It must stand or fall as a whole." (Italics are all mine.)

With all due respect to the main opinion and the views therein expressed, it is my humble opinion that the observation made therein that this court reached the right result in the case of Hodges v. Norton, 200 La. 614, 8 So.2d 618, but applied the wrong principle of law (for the reason that the widow and heirs of the primitive owner of the so-called mineral servitude owned a fractional interest in the servitude throughout the entire tract in common with all of the other owners of the servitude, clearly showing a coproprietorship thereof, as contemplated by Article 801 of the code) shows that the author thereof has misinterpreted the issues in the Hodges case. The theory of coproprietorship was never at issue in that case. The sole issue was whether a new servitude had been established by the various transactions shown to have occurred in the factual set-up of the case and whether this new servitude had prescribed by its nonuse during the ten year prescriptive period although there was development and production on another portion of the tract of land affected by the original or primitive servitude.

I think the facts in the Hodges case may be fairly stated to be as follows:

Esmond Hodges and his wife sold a tract of 440 acres to A. J. Hodges on November 6, 1915, reserving unto themselves an undivided half interest in the oil, gas, and other minerals thereunder for a restricted period of 15 years. Thereafter Hodges died and Mrs. Hodges and his heirs sold an undivided 1/4 interest in the minerals in the entire acreage to J. A. Selby, Jr., on October 29, 1923. This was an undivided half of their reserved and undivided half interest in the minerals; but no mention was made in the Sale to Selby of the 15-year restrictive period. Two days later, on October 31, 1923, Selby sold the interest thus acquired by him from Mrs. Hodges and her children to R. W. Norton, but the interest sold by him to Norton did not cover the entire 440-acre tract. It covered only two non-contiguous tracts that formed a part of the original 440 acres — one tract containing 80 acres and the other 140 acres. Selby retained the mineral interest that had been acquired by him in so far as it affected the remaining 220 acres. In his sale to Norton, Selby also made no mention of the restrictive period of 15 years. On November 21, 1923, A. J. Hodges (to whom the land had been sold when the mineral rights were originally reserved) released Selby from the "reversionary" rights in so far as they affected the undivided 1/4 interest Selby had purchased from Mrs. Hodges and her children and on the following day Selby reconveyed this release back to A. J. Hodges, limited, however, to the mineral rights sold Norton by Selby. Two wells were drilled in 1924 under lease given by Mrs. Hodges, her children, and A. J. Hodges prior to the sale of the undivided 1/4 mineral interest to Selby. These wells were located on the land not affected by the interest Norton purchased from Selby. In other words, they were located on the 220 acres on which Selby had retained the mineral interest acquired by him, and not on the 80-acre tract or on the 140-acre tract affected by Norton's mineral interest. These wells continued to produce until 1931. The suit was instituted for the purpose of having declared extinguished for nonuse of 10 years the Norton mineral interest in the acreage affected by his purchase from Selby. It was the contention of the plaintiffs that Hodges, by his conveyance of the reversionary rights to Selby on November 21, 1923, and Selby's reconveyance of these rights back to Hodges on the following day — excepting from such conveyance the 220 acres affected by the mineral interest Norton had purchased from Selby, had intended to establish a new servitude in favor of Norton by reducing the same from the 15-year prescriptive period provided in the original mineral reservation when the land was sold to the 10-year prescriptive period provided for in Article 789 of the Revised Civil Code. In disposing of this issue the court said: "The land upon which the servitude was established is one continuous tract. There was but one indivisible servitude and the mere fact that the mineral owners conveyed undivided interests in the right to others did not have the effect of dividing it. * * * The reason for this is that a servitude can only be created by the owner of the land. Therefore, when the widow and children of E. W. Hodges conveyed an undivided one-fourth interest in the minerals to Selby, the servitude covering the entire land remained intact. Likewise, when Selby conveyed to Norton a one-fourth interest in the minerals in and under 220 acres of the tract, the servitude wasnot divided and exercise of the servitude on any portion of theland preserved it as to the whole." (Italics are mine.)

Clearly the court disposed of this issue in the light of the jurisprudence as it has up until now been generally understood not only by this court but also by the bench and bar throughout the state, and, I think, correctly so. The fact that Mrs. Hodges and her children retained a fractional interest in the entire servitude did not have the effect of interrupting the then running prescription, for this was never at issue. Instead, it was the fact that the servitude was indivisible and that it hadbeen exercised by the drilling of a well on the area covered by the original or primitive servitude, although not on the part of the estate affected by the interest acquired by Norton, that had the effect of preserving the servitude as to the entire tract, which, naturally, made Norton's title to the mineral interest purchased by him good.

Finally, I believe most apropos here the admonition the Chief Justice has posed on so many occasions to the effect that when the decisions of this court have established a rule of property, as has been done in the cited cases with respect to mineral rights, "they should not be reversed, even though a contrary rule might be deemed more logical, unless it be by an act of the Legislature." Roberson v. Pioneer Gas Co.,173 La. 313, 137 So. 46, 49, 82 A.L.R. 1264.

For these reasons I respectfully dissent from the views expressed and the result reached by the majority of the court.