J. S. GARELICK, Plaintiff-Appellant,
v.
SOUTHWEST GAS PRODUCING COMPANY, Inc., et al., Defendants-Appellees.
Court of Appeal of Louisiana, Second Circuit.
*521 George Fink, Monroe, for appellant.
Oliver & Fudickar, Shotwell & Brown, Monroe, for appellees.
HARDY, Judge.
This is a suit in which plaintiff seeks cancellation of a mineral lease on the ground of non-payment of delay rentals insofar as said lease covers and affects plaintiff's undivided one-sixteenth interest in the minerals in and under the property described, together with attorney's fees in the sum of $5,000. From judgment rejecting his demands plaintiff prosecutes this aрpeal.
There is no dispute as to the material facts. By conveyance of date August 22, 1949, plaintiff acquired an undivided one-eighth mineral interest in the subject tract of land, later disposing of аn undivided one-sixteenth interest. At the time of acquisition the property was subject to a valid and subsisting oil, gas and mineral lease of date January 27, 1948, duly recorded in the Conveyance Records оf Lincoln Parish, which lease was owned by the several defendants named in plaintiff's petition. Opеrations under the lease were conducted by the defendant, Southwest Gas Producing Company, Inc. Admittedly no delay rentals have been paid or tendered to plaintiff. In justification of their failure and refusal to make payment of his proportionate interest in the delay rentals to thе plaintiff, defendants rely upon the following specific provision of the written instrument of lease:
"The rights of either party hereunder may be assigned in whole or in part, and the provisions hereof shall extend to the heirs, successors and assigns of the parties hereto, but no change or divisiоn in ownership of the land, rentals or royalties however accomplished shall operаte to enlarge the obligations or diminish the rights of lessee; and no such change in ownership shall be binding on lessee nor impair the effectiveness of any payments made hereunder until lessee shall have been furnished, forty-five (45) days before payment is due, a certified copy of reсorded instrument evidencing any transfer, inheritance, sale, or other change in ownership * * *."
No contention is made that notice of the change in ownership under which plaintiff holds his interest in the minеrals or evidence of his acquisition thereof has been furnished to defendants in accordance with the above provisions.
Plaintiff answers the above ground of defense by contending that dеlay rentals necessary to maintain the lease in effect were paid to the parties named as lessors in the instrument of lease, despite the fact (1) that the defendant, Southwest Gas Prоducing Company, Inc., as operator of the lease, caused an abstract of title tо be made for the purpose of preparing a royalty division order which was confeсted under date of February 21, 1950, which abstract included a copy of the mineral deed in favor оf plaintiff; and (2) that subsequently a pooling and unitization agreement was prepared by defendants and signed, inter alia, by plaintiff.
We think the first issue has been definitely answered, contrary to plaintiff's cоntention, by the Supreme Court in Pearce v. Southern Natural Gas Company,
The opinion of the сourt in the Pearce case, relying upon the Atlantic Refining Company case, specifically declared (1) that a lessee is not required to take notice of public records whiсh might show a transfer or assignment by lessor, and (2) that the very purpose of a lease provision relating to furnishing certified copies is intended to relieve the unreasonable burden of making "* * * cоnstant examination of Conveyance Records to see what changes of ownership hаve taken place since the date of the lease." [
It should further be pointed out that in thе Atlantic Refining Company case the court ordered the cancellation of the leаse on the ground that the lessee misinterpreted the effect of recorded deeds of which it had taken independent notice, and failed to rely upon the terms of its contract of lеase requiring delivery of certified copies evidencing changes of ownership.
Nor can we find any merit in the argument of plaintiff's counsel that the unitization agreement, circulated to thе owners of mineral interests and executed by plaintiff, modified the lease provision above considered. The unitization agreement contained a provision which excepted рayment of delay rentals therefrom in the following words:
"This agreement shall not be construed as рooling any delay rentals that parties of the First Part may elect to pay under the provisiоns of the above described lease."
Even if the unitization agreement had been complеtely silent as to its effect upon delay rentals, we could not construe such instrument as abrogating the specific provision of the lease agreement which constituted the contract between the parties thereto, their heirs and assigns.
The judgment appealed from is affirmed at appellant's cost.