Replies to This Discussion

Permalink Reply by Brian on May 17, 2009 at 6:57

Did you mean "valid" or "invalid" in your response.

My title reads "If Vendor owns any mineral rights, all rights and interests are conveyed with out warranty. Neither United Title of Louisiana, Inc. nor the undersigned Notary Public warrant that a mineral examination has been performed upon the property." Since I had a copy of a mineral lease from Twin Cities signed by the sellers, I believed that was evidence the sellers owned the mineral rights. I was not aware of an outstanding mineral servitude at the time of purchase.

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Permalink Reply by Brian on May 17, 2009 at 7:17

Yes the mineral lease was executed by a land owner that did not own the mineral rights in April 2008. I bought the land December 2008. The mineral rights prescribed to me in April 2009. Yes I recently retained an attorney. Yes you are probaly right that I should not post in a public forum, but I wanted others to know about Twin Cities.

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Permalink Reply by Brian on May 17, 2009 at 7:38

Thank you for your replys. It has been interesting reading your responses. Since I do intend to pursue this legally I am going to stop talking about this here. I will update after the issue is resolved. Thanks again for your time and comments.

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Permalink Reply by Dion Warr, CPL on July 24, 2009 at 10:47

Caliente:

While a lease can apply to interests and/or portions of described lands accumulated by the signed Lessor during the primary term of the lease by the principle of after-acquired title, so-called 'future interests' cannot.

Just like a mineral reservation by a vendor who has no mineral rights has no effect upon the sale or on future owners, a lease signed by an owner who has not possessed the mineral rights cannot be made to apply against successors in title if said lessor had no mineral rights to lease during the time that may have owned a surface interest. Remember, the servitude prescribes to the instant surface owner upon the extinguishment of the servitude, not to or through his predecessor(s) in surface title.

Any attempt to somehow encumber the mineral rights of a successor in title who obtains their rights through the extinguishment of a servitude by contract (be it a lease, or covenant in a deed) would almost certainly be unenforceable as contra bonos mores, IMHO.

Further the declared non-lawyer sayeth not.

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Permalink Reply by Bobi Carr ("parker") on May 17, 2009 at 11:00

Brian,

They will have a complete title opinion after the well is drilled. At that time you'll be in a better position to receive a better lease.

But to the original question is Twin Cities dishonest or incompetent, my vote would be BOTH.

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Permalink Reply by Greedy Landowner on May 17, 2009 at 15:12

The reality is that the leasing industry, and not just Twin Cities, was under tremendous pressure to lease as much as possible as quickly as possible. Subsequently, they made big time mistakes. It will take a long time and a great deal of work to sort out who actually owns what. Don't give up.

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Permalink Reply by Dion Warr, CPL on July 24, 2009 at 10:35

Brian:

OK, my interest is piqued. Where is your property located? (Section, Township, Range, brief description (ie. NE/4 NE/4 NE/4, etc.)

You state that your parcel was part of a 40 acre tract of land and minerals were reserved as to said larger tract in April 1999. Was this '40' the only parcel of land that was conveyed in that deed that created the mineral servitude?

Did the April 1999 owner own adjacent property at the time of the sale?

Please be as specific as you can. The prospective life of a mineral servitude depends on the facts.

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Permalink Reply by Brian on July 24, 2009 at 12:10

The forty acres sold in 1999 retaining the mineral rights is Sec 2, T18 R15 the SE/4 of NW/4. We own 9.9 acres of the 40. There is no dispute of who own the mineral rights today. All parties agree the we now own the mineral rights. The issue that remains is if the minreal lease signed by the previous property owner (who never owned the minerals rights) binds the current property owner (who now does own the minerals rights). According to Twin Cities lawyer the lease is binding. The issue remains unresolved today.

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Permalink Reply by Dion Warr, CPL on July 24, 2009 at 13:45

Brian:

OK, everything seems to check out. Land appears to have been patented and properly severed from the sovereign in the 1850s based upon the Tract Books on file at State Lands.

Based upon information supplied, it would appear that the property was never adjudicated to the state after 1921 for delinquent taxes, which would have been reported by the Twin Cities attorney as that the minerals would have been owned by the State of Louisiana.

Production history of lands immediately surrounding your tract would point to the conclusion that a prior mineral servitude (prior to 1999) would likely not have any effect, based upon preliminary production research within an area of approximately one (1) mile around your property.

Qualified on all of these, my (non-legal) opinion would be

(1) Your predecessor in title, having no mineral rights as to the subject lands entered into an OGML which was of no effect at the time of the execution of the lease.

(2) To the extent that you entered into the chain of title at such a time when your predecessor in title had no mineral rights, any reservation of mineral rights by your predecessor in title is of no force or effect. Any attempt to effect a mineral reservation or any covenant requiring purchaser to convey mineral ownership or to revive an ownership claim of mineral rights in favor of seller would be voidable per contra bonos mores. You (as instant and current surface owner) would have acquired mineral rights to the subject lands when the servitude created in April 1999 prescribed.

(3) R. S. 31:144 applies only as to lessors which own mineral rights at the time of execution of the lease. Since according to the rationale established (1 - 3) above, your predecessor in title did not own mineral rights in and to the subject property and did not own mineral rights prior to the date of sale, the OGML has no effect upon the instant owner of mineral title in the subject tract.

(4) As you have not ratified the oil, gas and mineral lease on point (HAVE YOU??), The provisions under R. S. 31:145 would be inapplicable as to your interest in the subject lands.

The only possibility that may "torpedo" your argument would be if the owners of the mineral rights reserved in the April 1999 conveyance (or their successors in title in ownership of said mineral servitude) were to become possessed of the subject property. If so, the mineral servitude as to that portion or portions of the subject property which would be so possessed would be extinguished by confusion at some point between April 1999 and December 2008. At that point, said lease could apply, as the mineral reservation in the sale in December 2008 would still be in effect.

Absent that, I would suggest that the Twin Cities attorney crack that law book open one more time. Just my humble opinion (did I mention I'm not a lawyer, just a landman?).

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Permalink Reply by Brian on July 24, 2009 at 16:08

I am impressed. It took me several trips to the court house and a lot of research to understand and conclude with exactly what you stated. I took my neat little package to an oil and gas attorney and he agreed as well. We thought it was a simple matter of sending a certified letter to Twin Cities stating the law as everyone except Twin Cities understands it. My problem now is it appears that the attorney Malcolm Murchinson of Bradley Murchinson Kelly and Shea representing Twin Cities is going to force me to take them to court. The argument in his response is simply based on Mineral Code 144, which clearly does not apply. He aslo points out to the generic fine print of my deed below the initials where it states "subject to any restrictions, easements, or servatudes of record and any mineral grants, leases, or reservations of record". Malcolm argues that is a contractualy agreemnet to the lease. I was tempted to attach the actual letter, but I think I have probably shared too much already publicly as this is likely to end up in court one day. I believe he is bluffing and hoping I will not spend the money to go to court now that the price of natural gas is low and leasing is all but dead. Thanks for the interest. I now refer back to the title of this thread. My vote is that Twin Cities is both incompetent and dishonest, and I have the evidence to prove it on both accounts.

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Permalink Reply by Mac Davis on July 24, 2009 at 21:19

IANAL. ( I am not a lawyer.)

The previous owner signed a lease in 2008, leasing whatever mineral rights he had for the next 3 years. (I'll assume 3 years as a term.) In essence the lease implied, "Mineral rights will revert to me in April 2009. I hereby lease these mineral rights to Twin Cites from April 2009 to April 2011."

Would this lease be valid if he still owned the property? It seems to me that it would.

He sold the mineral rights for that time period. He got paid. Twin Cities had a valid claim for those mineral rights as long as he still owns the property.

Now, when he sells the property to you in the Fall of 2008, that doesn't invalidate Twin Cities' claim to those mineral rights. You didn't buy all interest in the land, you only bought whatever interest in the land the previous owner had.

It seems like a pretty open and shut case to me that Twin Cities does have a valid lease, even though you now own the surface rights.

Don't forget that your deed specifically states that your interest in the land is subject to any leases on the land.

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Permalink Reply by Dion Warr, CPL on July 26, 2009 at 16:12

Mac:

Based upon the information that has been submitted, Brian's predecessor in title did not have minerals at the time was lease was taken. He never had the mineral rights from the time he executed the lease to the time he divested himself of the property. You cannot encumber what you do not have.

R. S. 31:116: Who may grant a mineral lease

A mineral lease may be granted by a person having an executive interest in the mineral rights on the property leased. [Emphasis added]


If Brian's predecessor in title would have owned the mineral rights for one day prior to selling to Brian, and would have entered into the lease during the term of that one day, said lease to have been placed of record prior to the sale to Brian, he would have bought the property from a 'fee owner' (to the extent that such term applies in LA), and would have bought the property subject to a lease. That is not what happened here. Minerals appear to have prescribed (upon the information given here) from the prior servitude owner INSTANTLY to Brian, not through the predecessor(s) in title to Brian.

Think of it this way. If this principle behind Twin Cities' supposition were correct, one (as an independent landman) could make a small to moderate sized fortune buying leases from surface owners looking to sell their surface interests in tracts in which the servitude would be about to expire. One wouldn't have to deal with a single mineral owner. One could just buy leases from surface owner "wheeler-dealers" who couldn't give one flip about minerals, just collecting bonus money, and the landman could encumber a whole smattering of mineral interests from Shreveport to Minden and down Hwy. 71 flipping leases on folk's property without them having one word to say about it, with the O&G company relying on "Oh, I'm sorry, you bought your property subject to an OGML signed by someone who had no mineral lease, but you took it subject to 'all leases, rights-of-way, servitudes of record, etc.', so you're stuck".

Sound legal or fair? IMHO, it sounds like 'an absurd result'.

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