An “Appendage” Determines a Louisiana Royalty Dispute

Originally published by Charles Sartain.

In Glassell Producing Company v. Naquin, the question was:

Did a conveyance among siblings create a real right in property, or was it an appendage of a lease that ceased to burden the property once that lease was terminated?

• Carol, Junius and Dolores each inherited an undivided 1/3^rd interest in their father’s 1/16th interest in 31 acres in Lafourche Parish.
• A 1947 mineral lease provided for a 1/8th royalty. In decimal form, each sibling acquired a .00781255 royalty interest under the lease.
• In 1993 Junius and Dolores signed an act of cash sale to Carol in which each conveyed “All of Seller’s right, title and interest consisting of an undivided one third in a .00781255 mineral royalty interest…”
• The 1947 lease terminated and Carol signed a new lease with Glassell. Carol received a 1/6th royalty. Delores and Junius did not sign.
• Junius, Carol and the heirs of Dolores began arguing.
• Glassell initiated a concursus and deposited $397,000 into the court registry.
• Junius failed to answer timely, so he’s out.

Carol’s position: Junius and Dolores sold all their royalty interest in the property, and the reference to the .00781255 interest was a typographical error by the notary.

Glassell: Delores placed no limitation on the royalty interest conveyed. There was no reference to the lease in the deed.The deed is a general conveyance of her entire royalty interest under La. R.S. 31:80.

Heirs of Delores: She only assigned her royalty interest in the 1947 lease. The language is limited to the royalty percentage in that lease and did not purport to convey future royalty interests. Carol could not grant a lease because all she obtained was a royalty interest; which makes Delores an unleased owner in the well.

Is there no justice?

Carol’s undisputed affidavit asserted that Junius and Dolores intended to transfer all of their rights in an effort to divest themselves of income so as to qualify for government assistance. Delores still gets the income. Go figure.

The court

The owner of a royalty has no executive rights. A royalty that is an appendage of a lease depends on the continued existence of the right to which it is an appendage.  It ceases to burden the property when the lease terminates.

Civil Code Art. 2052: When parties intend a contract of general scope but, to eliminate doubt, include a provision that describes a specific situation, interpretation must not restrict the scope of the contract to that situation alone.

The deed is devoid of language evidencing a general transfer of all of Dolores’ royalty interest. “All of Seller’s right title and interest” modifies the phrase “consisting of one undivided one third … royalty …”. The deed was a discrete conveyance of the .00781255 royalty interest in the 1947 lease. The interest conveyed by Dolores was an appendage to the 1947 lease. When the lease terminated the royalty interest ceased to burden her interest.

There was no merit in Carol’s argument that the reference to the royalty interest in the 1947 lease was a typographical (scrivener’s) error.

The heirs of Delores are unleased owners in the well.The trial court will divvy up the money.

Our musical interlude is for Junius and Delores before they went on the dole.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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