Ohio Oil Co. v. Ferguson

On Rehearing Originally this case involved the claims of several parties to the proceeds of a one-eighth royalty in certain oil produced by the Ohio Oil Company from a tract of land situated in Claiborne Parish, and was in the nature of a concursus proceeding. On February 11, 1946, this court adjudicated the rights of all claimants in this suit, and thereafter refused a rehearing to all applicants except Toklan Royalty Corporation, and as to it a rehearing was granted. On original hearing we affirmed a judgment of the lower court which decreed that the Toklan Royalty Corporation's one-fourth mineral interest in a 40-acre tract of land had been extinquished by the prescription of 10 years liberandi causa. On February 19, 1945, this court handed down an opinion in the case of Byrd et al. v. Forgotson et al., 213 La. 276 , 34 So.2d 777 . The principles of law to be applied in the Byrd case and in the Ohio Oil Company case are identical, and the issues are the same, except that in the Byrd case the question is whether prescription of the servitude was suspended by the minority of one of the servitude owners, while in the Ohio case the question is whether prescription of the servitude was interrupted by the exercise of the servitude by one of the servitude owners. In each case the original mineral owner had divested himself of title to all the mineral *Page 244 interests acquired by him in a designated and particular portion of the tract covered by the original grant, which grant by the landowner, of course, created the servitude. Application for rehearing was pending in the Byrd case at the time the present case was argued and submitted to this court. Both cases then being before the court, careful consideration was given to each. Thereafter our original opinion and decree was rendered in the instant case, and at that time a rehearing was granted in the Byrd case for the reason that the result reached in the decision in the instant case was diametrically opposite to that reached in the decision theretofore rendered in the Byrd case. This court, realizing that the decision to be rendered in each of these two cases is of vast importance for the reason that each will regulate valuable property rights in this state, in due course granted the application for rehearing of the Toklan Royalty Corporation, so that all litigants and parties interested, as pointed out by Justice Fournet in his concurring opinion in the Ohio case, might have an opportunity to present their views to the court. Accordingly both cases were argued and submitted on rehearing at the same time, on October 7, 1947, and both are now before the court for decision. There is no dispute as to the facts out of which the claim of Toklan Royalty Corporation arises, and, as they have been completely set forth in our original opinion, *Page 245 there is no necessity of reiterating or setting them out in detail again. Counsel supporting the claim of Toklan Royalty Corporation contend that our original decree rendered in this case is contrary to the established jurisprudence of this state and does violence to Article 656 of the Revised Civil Code, which provides that the rights of servitudes, considered in themselves, are not susceptible of division, either real or imaginary; or, stated somewhat differently, counsel argue that the decree affirming the judgment of the lower court, to the effect that Toklan Royalty Corporation had lost its one-fourth mineral interest in the 40-acre tract by non-usage for a period of 10 years, divided the servitude. They base their argument on the fact that there was but one servitude established, that by the landowner, R. P. Bond, to S.C. Clark covering the tract of 240 acres, and contend that, this being so, our holding that Clark's use on 200 acres (there being only one servitude) did not enure to the benefit of Toklan Royalty Corporation, a co-owner of the servitude, divided the servitude. Counsel in brief state that mineral rights in Louisiana are neither personal servitudes nor real servitudes within the strict definitions of the Code, and point out that this is true for the reason that a personal servitude terminates with the death of its beneficial owner and a predial servitude is established only for the benefit of an estate, neither of these characteristics being *Page 246 true of a mineral right, and that this court has consistently held mineral rights to be real rights in the nature of servitudes, subject by analogy as near as may be to the provisions of the Civil Code relating to real or predial servitudes; or, as stated in the exact language used in one of the briefs, as follows: "For a quarter of a century and more, this Court has consistently held that the sale or reservation of minerals creates a real right, analogous to, or, as so frequently said by the Court, in the nature of a servitude. And during that time it has developed and extended that doctrine, by the analogical application of those provisions of the Civil Code which relate to real or predial servitudes, and it has refused to attribute to this real right, in the nature of a servitude, those characteristics, which are essential attributes or characteristics of personal servitudes." We now come to a consideration of the various articles of the Code insofar as they may be applicable and pertinent to the issues here involved. Under Title IV, which deals with predial servitudes or servitudes of land, we find Articles 656 and 776, which read as follows: "Art. 656. The rights of servitudes, considered in themselves, are not susceptible of division, either real or imaginary. It is impossible that an estate should have upon another estate part of a right of way, or of view, or any other right of servitude, and also that an estate be charged with a part of a servitude. *Page 247 "The use of a right of servitude may be limited to certain days or hours; but thus limited, it is an entire right, and not part of a right. "From thence it follows that a servitude existing in favor of a piece of land, is due to the whole of it, and to all the parts of it, so that if the land be sold in parts, every purchaser of a part has the right of using the servitude in toto." "Art. 776. If the estate for which the servitude has been established, comes to be divided, the servitude remains due for each portion, provided that no additional burden accrue thereby to the estate which is subject to the servitude. "Thus, for instance, in case of a right of passage, all the owners are bound to exercise that right through the same place." The pertinent articles on prescription of an indivisible servitude are found in the same title and are as follows: "Art. 789. A right to servitude is extinquished by the nonusage of the same during ten years." "Art. 801. If the estate in whose favor the servitude is established belongs to several and has never been divided, the enjoyment of one bars prescription with respect to all." "Art. 803. 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 *Page 248 servitude by the use he makes of it, and the others lose it by nonusage during the time required for prescription. "If a servitude be due to several persons, but on different days, as the right of drawing water, he who does not exercise his right, loses it, and the estate subject to the servitude becomes free from it, as respects him." We concede that dominant and servient estates, which are necessary for the establishment of predial servitudes, are not necessary under our jurisprudence for the establishment of mineral servitudes. However, this court has consistently applied to mineral servitudes Article 789, which provides that a servitude is extinguished by non-usage of the same during 10 years, and Article 801, which provides that, if the estate in whose favor the servitude is established belongs to several and has never been divided, the enjoyment of one bars prescription with respect to all. Both of these articles are found under title of our Code dealing with predial servitudes, and both contemplate, as they must, a servient and a dominant estate; yet, notwithstanding this fact, both have been made applicable to mineral servitudes, as stated hereinabove, and they have been applied, as pointed out by counsel, by analogy and as near as may be to problems arising in connection with mineral servitudes. In our opinion Clark's sale of all of the mineral interests he owned in a particular *Page 249 portion of the original tract is analogous to the division of the dominant estate by the sale of a portion of it. Let us determine what effect a division of the dominant estate would have on the indivisibility of a servitude existing in favor of it, and on the prescription of that servitude. Applying the provisions of the quoted articles, let us assume that A, the owner of a servient estate, has established a servitude of passage in favor of the dominant estate, owned in indivision by B and C. B and C divide equally the estate in whose favor the servitude was established. Under Article 776 it is clear that the servitude or right of passage remains due for the portion of the estate allotted to B and likewise remains due for the portion allotted to C. How, exactly, has the division of the dominant estate affected the servitude? Obviously the servitude or right of passage, considered of itself, has not been divided. Under Article 656, B does not now have half a right of passage and C half a right of passage. Each still has a whole right of passage. However, the area or portion of the estate from which B and C may exercise their servitude has been limited by the division of the estate, without any additional burden's accruing to the servient estate of A. B may now exercise his right only from that portion of the dominant estate which he owns, and C may exercise his right only from that portion which he owns. The servitude therefore has not *Page 250 been divided, but the estate to which it is due has been divided. How does this division of the dominant estate affect prescription of the servitude? It is clear under Article 801 that, prior to the division of the estate, exercise of the right of passage by either B or C would bar prescription as to the other. It is likewise clear under Article 803 that after the division of the dominant estate the use B makes of the servitude will not preserve the servitude as to C, or vice versa. If B does not exercise the right of passage, he loses it for his portion of the dominant estate. This is true not because the servitude was divided but because the dominant estate was divided, and, under the plain provisions of the Code, after division of the dominant estate each owner has the burden of preserving the right of servitude as to his portion of the estate. It is true that Article 803 and Article 776 seem to be applicable only to a partition by the owners of the dominant estate, for they use the language that "When the estate to which the servitude is due ceases to be undivided, by means of a partition" and "If the estate for which the servitude has been established, comes to be divided". However, in our opinion, it would be illogical to say that the Code contemplates that separate owners of parts of the dominant estate could preserve the servitude for each other if the estate was sold in parts but could not preserve it for each other if the dominant estate was partitioned by *Page 251 the co-owners; therefore the effects in the assumed case would obtain if B, the owner of a dominant estate, had sold a portion to C. We now apply the assumed case and the articles of our Civil Code applicable thereto, by analogy, to the case at bar. In doing so it follows that R. P. Bond, who granted the mineral servitude, is in the position of A, the owner of the servient estate, and S.C. Clark is in the position of B, the owner of the dominant estate in favor of which the servitude was granted. I. R. Bordages (Toklan Royalty Corporation by mesne conveyances) is in the position of C, to whom part of the dominant estate was sold. Clark must take the position of the dominant owner, and his act of selling to Bordages all of the mineral rights acquired by him on a portion of the area subject to the servitude must be analogous to B's sale of part of the dominant estate to C. By analogy, what Clark did was to divide the dominant estate; he did not divide the servitude, for Clark and Bordages still had the whole right to explore for minerals. Clark by his act of sale merely limited the place on which each could exercise that right. Clark and Bordages, by analogy, became owners of portions of the dominant estate, and it follows that each must preserve the right to his portion or limited area, or he loses it under Article 803, Paragraph 1, of the Civil Code. We concede that analogy between the assumed case and the case at bar is somewhat *Page 252 difficult, not only because the two estates which are necessary for predial servitudes are not necessary for the creation of a mineral servitude, but also because predial servitudes themselves are not subject to alienation while mineral rights are. However, as pointed out hereinabove, this court has applied articles dealing with predial servitudes to mineral servitudes, among these being Article 801 dealing with a dominant estate undivided, where the enjoyment of one-co-owner bars prescription with respect to all, and Article 789, which provides that a right to servitude is extinguished by non-usage of the same during 10 years. These articles having been applied to mineral servitudes in no other way except by analogy, we find there is full precedent for us in the case here under consideration to apply, likewise by analogy, the first paragraph of Article 803. When this article is so applied, it naturally follows that, since Toklan Royalty Corporation did not exercise its right, the servitude prescribed by non-usage as to the 40-acre tract in question, for the exercise of the right on the 200 acres on which Clark could exercise the servitude could not enure to the benefit of Toklan Royalty Corporation for the purpose of interrupting prescription. From this it can be readily seen that the decree originally rendered in this case in first hearing has in no way destroyed or affected the rule or proposition of law that a servitude is indivisible. In other *Page 253 words, the servitude was not divided by Clark's sale to Bordages, and it was not divided by the court's decree that Toklan Royalty Corporation's right had prescribed although Clark's right still remained in full force and effect. In support of its contention that our original decree rendered in this case is erroneous, Toklan Royalty Corporation relies principally on the cases of Lee et al. v. Giauque, 154 La. 491 , 97 So. 669 ; Patton et al. v. Frost Lumber Industries, Inc., et al., 176 La. 916 , 147 So. 33 ; Connell v. Muslow Oil Co., Inc., et al., 186 La. 491 , 172 So. 763 ; and Hodges et al. v. Norton et al., 200 La. 614 , 8 So.2d 618 . All of these cases, as well as others cited by counsel, were fully discussed and analyzed at length in the majority opinion rendered on original hearing in this case, and the result reached in our opinion on first hearing was shown not to be in conflict with the holding of any of these earlier cases. We are still of that opinion. For example, as stated in our original opinion, the case of Lee et al. v. Giauque, supra, "* * * is authority merely for the proposition that where the mineral rights are reserved on two or more separate tracts of land the effect is to establish as many servitudes as there are tracts of land, and the exercise of the right upon one of the tracts will prevent the right from being extinguished by prescription on that tract, but not on any noncontiguous tract of land". *Page 254 Counsel in citing these cases rely on statements and expressions found therein in support of their contention in this case, as, for instance, the following statement from Lee et al. v. Giauque [ 154 La. 491 , 97 So. 670 ]: "We are of opinion that the exercise upon any part of a continuous tract of land of a servitude extending over the whole tract preserved the servitude over the whole for the reason that there is but one servitude on the whole tract." We fully subscribe to the principle of law as stated in this passage, but this principle of law has no application where the owner of the mineral servitude himself, by the sale of all the mineral rights acquired from the landowner in a designated area, limits the area or place on which he as well as his vendee may exercise the servitude, because these facts are analogous to those contemplated by Article 803, Paragraph 1, and that article is therefore the law applicable to these facts. In Patton et al. v. Frost Lumber Industries, Inc., et al., supra, this court, in discussing the contention of plaintiffs set out in their supplemental brief to the effect that the issue there involved should be solved by the principle of law expounded in Articles 776 and 803 of the Civil Code (which articles we have quoted above and found to be applicable in the instant case), correctly said [ 176 La. 916 , 147 So. 36 ] : "* * * What these articles mean is that, if two or more persons who *Page 255 own in indivision an estate to which a servitude is due, or for which it has been established (such as that of natural drain), partition the same in kind, each of the parts is still due the servitude originally due the whole estate. But, after the partition, the respective proprietors can reserve the servitude as to his estate only by making use of it. Either or both will lose it by nonusage during the time required for prescription." In that case Frost Lumber Industries owned a continuous tract of land of approximately 30,000 acres. On January 12. 1917, it established by convention a mineral servitude on the entire tract. Thereafter, in 1918, plaintiff Patton acquired from Frost Lumber Industries 40 acres of this tract, and plaintiff McLeod by mesne conveyances from Frost Lumber Industries acquired another tract containing 40 acres. In making the conveyances covering these two tracts of land, the vendor, Frost Lumber Industries, reserved all the oil, gas, and other minerals in each tract. The owner of the mineral servitude, Federal Petroleum Company, exercised it by drilling and producing gas within the 10-year period, but not on either of the tracts conveyed to plaintiffs. Plaintiffs contended that a mineral servitude was created by Frost Lumber Industries in its reservation when it sold these two tracts, and that, since it had not exercised this servitude, the servitude had prescribed, more than 10 years having elapsed since the *Page 256 reservation was made. This court found that the servitude was created not in the reservation made by Frost Lumber Industries in its sale of these two tracts of land, but by its sale of the minerals to Federal Petroleum Company, and that Frost Lumber Industries by its reservation did not intend to establish a servitude but intended to protect the one already established, and that, since the servitude owner had exercised it by drilling and producing gas within the 10-year period from the date of the servitude's creation, the servitude was still in full force and effect. Under these facts, we think the court correctly stated in that case that manifestly these articles of the Code relied upon by plaintiffs (Articles 776 and 803) had no application to the issue involved in the case. This is true, for by analogy Frost Lumber Industries at the time the servitude was created was in the position of a servient owner, and Federal Petroleum Company was in the position of the dominant owner or the one to whom the servitude was due. Frost Lumber Industries in its sale of each of the 40-acre tracts which the plaintiffs owned did not divide the dominant estate; consequently the articles relative to the partitioning of dominant estates could have no application to the acts of the Frost Lumber Industries. In the majority opinion on original hearing, we pointed out in our discussion of that case "* * * that the owner of a *Page 257 mineral servitude could not be affected adversely, so far as the liberative prescription was concerned, by the sale by the landowner of numerous small parts of the land burdened with the servitude. The doctrine of that case is simply that the owner of a tract of land burdened with a mineral servitude cannot do anything to lessen the value of the servitude to its owner without his consent". In the case of Connell v. Muslow Oil Co., Inc., et al., supra, plaintiff claimed by the prescription of 10 years acquirendi causa the mineral rights in 40 acres of land acquired by him in January, 1919, without any reservation or mention of mineral rights in the land. Previous to this acquisition the Natalie Oil Company had sold 80 acres of land, in which plaintiff's 40-acre tract was included, reserving the minerals on the entire tract. No well was drilled on plaintiff's land, but there was drilling and production on other land subject to the servitude. This court found that plaintiff's plea was without merit for the reason that the Natalie Oil Company and its successors in title had retained possession of the mineral rights or servitude on the whole of 80 acres of land, of which the 40 acres in question formed a part, by the drilling of a well on land subject to the servitude and by production of oil by the lessee of Natalie Oil Company and its successors in title continuously since the well was brought in in 1912. The plaintiff therefore *Page 258 never had the possession necessary for acquisitive prescription. We pointed out in the original opinion that that decision had no application to the instant case, but counsel no doubt place great reliance on the following expression therefrom [ 186 La. 491 , 172 So. 766 ]: "The rule of law that controls this case is that the exercise of mineral rights, or servitude, on any part of one continuous tract of land upon which the servitude is imposed is considered exercise of the right on the whole tract." As we have stated above in our discussion of Lee et al. v. Giauque, this is a correct principle of law, but it has no application in the instant case. The facts in Hodges et al. v. Norton et al., supra, have been clearly, concisely, and correctly set forth by Chief Justice Charles A. O'Niell, the author of the original opinion rendered herein. As there pointed out, Mrs. Augusta Ann Hodges and her children owned a one-fourth mineral interest in the whole 440 acres subject to the mineral servitude, or, in other words, she and her children owned a fractional interest throughout the tract in common with all other owners of the servitude; thus a co-proprietorship existed. For this reason the facts in that case are distinguishable from the facts in this case, and the prescription of 10 years liberandi causa had not accrued, under the provisions of Article 801 of the Civil Code. The decree in that case is therefore *Page 259 in no way in conflict with the result which we have reached in this case. Counsel for Toklan Royalty Corporation rely on the following language found in that case to show that the result in this case on original hearing was incorrect: "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 was not divided and exercise of the servitude on any portion of the land preserved it as to the whole." We agree that, when E. W. Hodges and Mrs. Augusta Ann Hodges conveyed the land to Andrew J. Hodges and reserved one-half of the minerals over the entire tract of 440 acres, one, and only one, indivisible servitude was created, and the fact that subsequently thereto the widow and heirs of E. W. Hodges conveyed one-fourth of the minerals in and under the entire tract to Selby, and *Page 260 that Selby in turn conveyed the one-fourth acquired by him only on 220 acres of the tract, did not and could not have the effect of dividing the servitude. Likewise we agree with the conclusion therein that the exercise of the servitude on any portion of the tract subject to the servitude preserved it as to the whole tract, not for the reason advanced therein, but because the servitude owners were coproprietors under Article 801 of the Civil Code. The problem of the prescription of the servitude in that case, as in this one, arose as a result of a sale by a servitude owner of a mineral interest in a particular part of the tract subject to the servitude. In that case the court reached the right result, as pointed out before, but applied the wrong principle of law. The problem should have been solved by the application of Article 801 of the Civil Code, but it is apparent from the decision that the court did not think it necessary to consider Article 801. This is because the court did not realize that Selby's sale to Norton of his one-fourth interest in the minerals in 220 acres had the effect, under Article 803 of the Code, of dividing the dominant estate as between them, and that, but for their coproprietorship with the widow and heirs of E. W. Hodges, the user of the servitude on the area retained by Selby would not have interrupted the running of prescription as to the area held by Norton. *Page 261 In truth, the first paragraph of Article 803 has never heretofore been considered in determining whether the running of prescription has been suspended or interrupted in the case where an owner of a mineral servitude is limited to a particular area of the tract subject to the servitude for the exercise of his right. Application of Article 803 results from new thought founded on further study and research into the vexing problems which we have been called upon to decide and from our efforts to apply consistently, by analogy, the articles of the Code relating to predial servitudes in the development of the mineral law of this state. With the exception of Lee et al. v. Giauque, supra, all of the cases discussed above by us and many others were fully analyzed by Justice Hamiter in his concurring opinion filed herein on original hearing, and he likewise pointed out that none of the results reached in any of these cases is in any way in conflict with our decision herein. We have already stated that the principle of law to be applied in this case and in the case of Byrd et al. v. Forgotson et al., 213 La. 276 , 34 So.2d 777 , is the same, and, in a decision handed down this day in the Byrd case, the right to apply for a rehearing was granted to defendants-appellees herein, and therefore in fairness to Toklan Royalty Corporation *Page 262 we are of the opinion that the same right should be expressly reserved to it. For the reasons assigned herein, our decree rendered on original hearing, affirming the judgment of the lower court decreeing that the mineral interest of Toklan Royalty Corporation in the 40 acres forming the SE 1/4 of the NE 1/4 of Section 21, Township 23 North, Range 8 West, has been extinguished by the prescription of 10 years, is reinstated. The costs of these proceeedings are to be paid out of the sum deposited in the registry of the court by the Ohio Oil Company. The right is expressly reserved to Toklan Royalty Corporation to apply for a rehearing. O'NIELL, C. J., concurs in the decree for the reasons given in the majority opinion rendered on the original hearing of this case. BOND, J., absent. FOURNET and PONDER, JJ., dissent. HAMITER, J., concurs for the reasons given in his concurring opinion on the original hearing and also for the reasons assigned by HAWTHORNE, J., herein.