United Gas Public Service Co. v. Eaton , 153 So. 702 ( 1934 )

It is conceded that we have no law in this state on the question submitted. Article 21 of our Civil Code provides:

"In all civil matters, where there is no express law, the judge is bound to proceed and decide according to equity. To decide equitably, an appeal is to be made to natural law and reason, or received usages, where positive law is silent."

In this case the lease is a joint or entire lease and not severable. Nabors v. Producers' Oil Co., 140 La. 985, 74 So. 527, L.R.A. 1917D, 1115.

The description of the land leased is: "South Half of Southwest Quarter of Section 27, Township 23 North, Range 16 West," containing 80 acres more or less. There is a recited consideration of $1 per acre and other good and valuable considerations. The term is three years and as long thereafter as oil or gas, or either of them, is produced from said land by the lessees.

The $1 per acre is not the main consideration. The real consideration is the obligation to explore for oil or gas. Why should this lease, which contains no suggestion of separation of interest in the description of the land or terms, be held a joint lease as to everything except its very essence development? The view adopted in the majority opinion does not make of it a gambling proposition, as suggested, but on the other hand invests the lessees with the sole power to determine whose land they will develop and which one of the joint lessors will receive the whole consideration for the lease to the exclusion of the joint lessors. It also enables the lessees to hold the land of the joint lessors, throughout the period of its mineral value, without development or the payment of any consideration whatever. There is no showing that the lessors are the owners of adjoining land which would increase in value or that the development would enrich them in any way, if denied the right to participate in the minerals produced on the leased premises.

Such a situation is not tolerated by the civil law and certainly is not equitable. I cannot conclude from the terms of the lease that any such condition was contemplated. On the other hand, it seems reasonable to me that the intention was that all the joint lessors should share proportionately in the consideration realized from the joint venture. To me, the best indication that the lease was intended to be joint is that the lessors entered into a joint and not a separate lease.

For the above reasons, I respectfully dissent and am of the opinion that the judgment of the lower court should be affirmed.