No. 25384 | La. | Dec 29, 1922
Lead Opinion
Defendants were the holders and owners of notes of the plaintiff for a large amount, secured by mortgage upon certain oil and gas leases, and including “four completed oil wells, with all equipment for operating the same, including tanks and standard pumping rigs and all other improvements on said leases belonging to said mortgagor, whether specially described herein or not.” The notes not having been paid at maturity, foreclosure proceedings were instituted. The demand and notice of seizure were properly served upon J. A. Thigpen, as the Louisiana Agent of the Choate Oil Corporation (hereinafter called the Choate Compány), but because of some defect in the proceedings it was decided to make new service. Thereupon another demand and notice were issued and served upon one Albert P. Garland, as attorney of record for the Choate Company. The property was advertised for sale, and Joseph Reid Gas Engine Company intervened, claiming a vendor’s lien upon certain machinery and appurtenances; and on November 11, 1921, the leases, together with all oil wells, machinery, appurtenances, etc., were adjudicated to A. C. Glassell and K. E. Merrin, for $45,000, out of which, the return recites, the .costs were paid and the balance “applied on writ per receipts attached.” Sheriff’s deed • was accordingly executed on the following day, November 12th, and recorded in the conveyance records of Caddo parish on the 17th of that month.
The Choate Company on November 26, 1921, filed suit to annul the said sale for the reason that no service of the demand to pay and notice of seizure had been made upon it, and prayed that the sheriff’s deed be declared “null and without legal effect.” The defendants in that suit first denied the allegations of the Choate Company, but subsequently filed an amended answer admitting the nullity, and judgment was rendered declaring the said sale “to be null and void and without legal effect.” This judgment was signed December 14, 192L
While the sheriff had noted in his return, as above shown, this sale, distribution of proceeds, etc., as a matter of fact, he had not returned the writ to the clerk’s office and the property was still in the custody of his keeper. On December 1, 1921, after the filing of answers by the purchasers at the sheriff’s sale admitting its nullity, another demand and notice were served upon Thigpen, the lawful agent of the Choate Company, and the same property was, on December 6th following, again advertised for sale on January 7, 1922. On the latter date, it was again bought in by Glassell et ai. for $47,000, which the return recites was applied pro tanto to their claims, and sheriff’^ deed,was again executed and recorded.
(1) That the authority of the sheriff had “expired” or was exhausted when the first sale was made and recorded;
(2) That said sale and recordation of the deed operated as a release in fact and law of the seizure, and the sheriff was without authority to take any further proceedings, without obtaining a new order for executory process and serving a new demand to pay and notice of seizure;
(3) That said sale was not an absolute but a relative nullity, and, until set aside by judgment of court, was in full force and effect;
(4) That the sale was without legal effect because of the failure to obtain a new order of seizure and to serve a new demand and notice of seizure;
(5) That it was also null because 30 clear days had not elapsed between the date of the judgment of nullity (December 14th) and the sale (January 7th) because until annulled; the former sale had the effect of vesting title and possession in the purchasers, and prevented the sheriff from advertising the property for sale until the said judgment was signed.
(6) In the alternative, if the sale herein attacked is found to be valid, then that the mortgage foreclosed' covered the leases alone, and did not include the oil wells, equipment for operating same, including tanks, gas engines, pumping rigs, and other improvements on said leases, for the reason that the resolution of plaintiff’s^board of directors authorizing said mortgage covered the naked leases only.
Defendant first pleaded judicial estoppel, based upon the fact that in ,the former suit to annul, plaintiff had alleged that the first sale was “illegal, null and void and without legal effect,” that the court below had so adjudged it to be in that identical language, and plaintiff could not afterwards shift its position and claim the sale to have been only relatively null. Further, that plaintiff was judicially estopped from alleging that the said mortgage did not cover the oil wells, equipment, tanks, gas engines, pumping rigs, and other improvements on said leases, for the reason that in said former suit it had alleged:
“That said proceedings under which petitioner’s title and ownership of said property was attempted to be sold by the sheriff of Caddo parish on November 11, 1921, was an ex-ecutory process on certain promissory notes and a conventional mortgage securing the same covering the property described in paragraph 1 and 3 hereof (which described all of the property now claimed not to have been covered by the resolution) given by you,r petitioner on the 6th day of January, 1921, said mortgage being filed for record in the mortgage records of Caddo parish, La., January 7, 1921, and recorded in Book 76 of Mortgages, p. 757; made part hereof by reference.”
The court below sustained the plea of estoppel as against all grounds of attack, save the alternative allegation that the resolution authorizing the mortgage did not cover the •oil wells, machinery, etc., and as to which latter point it held the law and evidence to be in defendant’s favor, rejecting plaintiff’s demands in toto.
Opinion.
In the first paragraph of its petition for the annulment of the first sale by the sheriff, plaintiff alleges that it “is the owner and in the actual corporal possession of the following described property,” while in the present suit it is alleged and contended that as a result of said sale, both in fact and law, the present defendants were put in possession, which látter contention is relied upon as divesting the sheriff of the custody and operating as a release of the seizure of the property.
Our conclusion is that the sheriff could ignore what he had done in the first attempt to sell the property, and after making proper demand and service of notice of seizure, was fully authorized to proceed with the advertisement and sale of the property, as was done in this case.
The Alternative Demand.
The lower court did not sustain the plea of estoppel as to the property claimed in the alternative demand, although the Choate Company had alleged in its first suit that the same was covered by the mortgage, but rejected it upon the merits. Defendants have neither appealed from that ruling, nor answered the appeal, and hence we can make no change in the judgment in their favor based upon estoppel. However, we are convinced that at least a part of the items covered by the alternative demand, such as the wells, casing, pumps, etc., are a part of the leases and necessary to their full operation; but since the proof in the record is not sufficient to enable us to determine whether all of those items have become immovables by destination covered by the mortgage, we think that justice can best be done by remanding the case for further evidence and adjudication upon the alternative demand. If such property had been attached to the leases and was necessary to their operation and development, they were immovables by destination and covered by the mortgage of said leases. R. C. O. 468; Scovel v. Shadyside Co., 137 La. 919, 69 So. 745" court="La." date_filed="1914-10-19" href="https://app.midpage.ai/document/scovel-v-shadyside-co-7169686?utm_source=webapp" opinion_id="7169686">69 South. 745, Ann. Cas. 1917B, 178V; Townsend v. Payne, 42 La. Ann. 913, 8 South. 626. The argument made by counsel for plaintiff to the effect that the owner of land to which improvements have been attached may claim the same when the land is recovered, while in a case like this the owner of the lease without the fee would not have that right, is without merit. The situation is- no different to any other case where the title to the immovable is or may become defeasible. If the mineral 'leases should be allowed to expire (and there was no agreement to the contrary), a mortgage covering either the leases or the immovables by destination would likewise come to an end, and the property would revert to the owner of the fee with full right to its owner to claim or require the removal of the improvements as provided by the Code. The .power of the holder of a defeasible title is certainly no greater for the purpose of incumbering, than it would be for purposes of alienation. The difference between this case,
For the reasons assigned, the judgment of the lower court is affirmed, except as to the alternative demand, and as to this, it is set aside, and this cause is remanded for the purpose of receiving further proof and for adjudication of the ease according to law and the views herein expressed; defendants to pay the costs of this appeal' and the costs pertaining to the alternative demand to await final judgment.
Rehearing
On Rehearing.
On reconsideration of this case we now conclude that the judgment appealed from should have been affirmed in toto except in a minor particular.
Act 232 of 1910, p. 393, was passed, as its preamble recites, to encourage the development- of oil, gas and mineral lands, by lessees and other grantees of mineral rights; and to that end the act provided that such lessees and other grantees should have the right “to mortgage such leases or contracts, together with all buildings, constructions and improvements placed and erected on such lands or to be placed and erected there-•OH * * *”
It is clear that an act intended to encourage and promote the welfare of an industry, ■especially a new one, ought to be interpreted as liberally as possible, so as to carry out, rather than hinder, the plain legislative intent.
But it is manifest that an oil, gas or mineral field cannot be developed by the lessee thereof without certain “buildings, constructions and improvements,” necessary to reach said minerals (by drilling, boring or digging) and to fextract and store or distribute the same. Hence such “buildings, constructions and improvements” become accessories and dependencies of the lease “without which it would be of no value or service”; and therefore form part of the thing alienated or mortgaged. C. C. 2461, 2490 ; Coguenhem v. Trosclair, 137 La. 985, 995, 69 South. 800.
And we believe'that it was the legislative intent in the act aforesaid that the mortgage of the lease should carry with it the aforesaid accessories and dependencies without any special mention being made of them. For it is clear that no one would accept a mortgage on the lease, which did not include the improvements made or to be made for the development thereof; and the Legislature does not appear to have contemplated the mortgage of the lease without the improvements, or of the improvements without the lease; but only the lease “together with” the improvements. And had it intended that these accessories should -be specially mentioned or particularly described in the mortgage, it would have said so, as it did in the chattel mortgage act.
I.
But in the case before us the mortgage included “four completed oil wélls, with all equipments for operating the same, including tanks and standard pumping rigs, and all other improvements on said leases belonging to said mortgagor, whether specially described herein or not”; and the property herein seized and sold by the sheriff was clearly only such as had been placed, or was about to be placed, permanently on the premises, and “designed to the perpetual use” of the mortgaged lease (O. O. 2490), except one Ford roadster, and one horse and saddle.
And we think the agent who executed the mortgage for plaintiff had abundant authority granted him by plaintiff’s board of directors. The power given him was to borrow money and to execute “such contract or contracts as he in his judgment might see fit and deem best” for the development of the
Therefore, from whatever angle we view this mortgage, we think it was sufficient to cover all the improvements, placed or to he placed upon the land leased.
The 'Ford roadster, and horse and saddle, were not improvements “placed or to be placed and erected on the land,” and were therefore not covered by the mortgage; but these are such minor matters that we will not put the costs of this appeal on the appellees on that account.
Decree.
It is therefore ordered that the judgment appealed from he affirmed in toto, except as to the Ford roadster and horse and saddle; which are hereby declared' to be the property of plaintiff. All costs to be borne by plaintiff.