"In 1938, when Leiter sold to the Government and reserved the mineral rights, the government had no assurance that the mineral rights would not be forever preserved to the vendor. The government's right to become thereafter vested with the ownership of the minerals, depended entirely on the uncertain future. The contract contained specific provisions which would have permitted Leiter to maintain his mineral rights forever, or at least indefinitely. It is this Court's considered opinion that what the parties did in 1938 was to establish, in a mode not prohibited by law or public policy, a conventional or contractual prescription as to the mineral rights and when the Legislature passed Act 315 a year and a half later, those mineral rights were still in effect. Likewise, at the time the Legislature passed the 1940 Act the government's rights to the minerals were just as contingent and uncertain as they were when Leiter executed the deed in 1938." (132 So. 2d at p. 859.) The State Court of Appeals took a diametrically opposite view, and "declared and decreed that Act 315 of 1940 (LSA-R.S. 9:5806) does not apply in this case since the mineral reservation is of specific ex contractu duration, less than the prevailing statutory period of ten year for nonuser." (126 So. 2d at 82.) Mr. Justice Hawthorne, speaking for the majority of the Supreme Court of Louisiana, thought that both the Louisiana district court and the Louisiana Court of Appeals went too far, and that they should have confined their opinions to an interpretation of the Louisiana statute: "As we view the matter, both the Louisiana district court and the Louisiana Court of Appeal went for beyond the directive of the United States Supreme Court, as our state courts were not asked to interpret or construe the reservation of the mineral rights in the deed to the United States." (132 So. 2d at p. 850.) It nonetheless seems clear that the majority of the Supreme Court of Louisiana held the opinion that when the entire reservation was read together and in context, Leiter's servitude was one of indefinite duration. It disagreed flatly with the opinion of the Louisiana Court of Appeals and, continuing the paragraph of its opinion last quoted, said: "In this connection, however, we cannot help but observe that the Court of Appeal in reaching its conclusion did not consider the entire reservation but concentrated its whole attention on a single date in it. In this it was in error, for under Article 1955 of our Civil Code 'All clauses of agreements are interperted the one by the other, giving to each the sense that results from the entire act'. For this reason the decision of the Court of Appeal on this point should not be given any weight." (132 So. 2d at p. 850.) In another part of its opinion, the Supreme Court of Louisiana said: "An example of a servitude established for a certain time (a servitude of specific duration) is that created by the mineral reservation in the case of Hodges v. Norton, 200 La. 614, 8 So. 2d 618. Counsel for the government's lessees argue that the mineral reservation in that case is similar to the reservation in the Leiter deed. For what it may be worth, our opinion is that it is not." (132 So. 2d at p. 852.) We agree that, since the United States had the right to invoke federal jurisdiction (28 U.S.C.A. § 1345), the ultimate responsibility for the interpretation of the reservation rests upon the federal courts. That interpretation, however, must be in accordance with State law; and the opinions of the State courts, and especially of the State Supreme Court, are entitiled to the most earnest and respectful consideration. While the State Supreme Court undertook to confine its opinion to the interpretation of the State statute, it was proper and inevitable that it do so "in light of" the reservation to which that statute might apply. See England v. Louisiana State Board of Medical Examiners, et al., U.S. No. 7, Oct. Term, 1963, decided January 13, 1964, 32 L.W. at 4095. After careful consideration, we find ourselves in full agreement with the Supreme Court of Louisiana. The federal district court observed that: ""Contractual prescription' is, at best, an odd notion." (204 F. Supp. 567.) The notion, however, appears to us consistent with the concept of a private law between the parties embodied in the provisions of the Louisiana Civil Code that, "agreements legally entered into have the effect of laws on those who formed them," Article 1901; and, again, "legal agreements having the effects of law upon the parties, none but the parties can abrogate or modify them," Article 1945. That last expression is, of course, not intended to deny any power of the Louisiana Legislature to render an agreement inoperative, for in this case the Louisiana Supreme Court has advised as to Act 315 of 1940 that: "The act draws no distinction between statutory and contractual prescription, and, as we view the matter from the history of the act and the objects and pur poses for which it was adopted, it is manifest that the Legislature intended the act to be applicable to prescription whether established by statute or by contract where prescription had not already accrued at the time the act became effective." (132 So. 2d at p. 854.) The Louisiana Supreme Court cites as kinds of servitude which may not be affected by prescription, those which meet the tests of Article 821," or of Article 783 (6) of the Civil Code of Louisiana (132 So. 2d at 852). Whether the parties stipulated for a period of contractual prescription must be determined from their viewpoint as of the time they entered into the contract. That is shown by the words "have been established" in Civil Code Article 821, note 6, supra, and is recognized in the Louisiana Supreme Court's summary of its holdings which we have quoted, and at other places in the opinion of the Louisiana Supreme Court, e.g.: "Where mineral rights in lands sold to the United States government are reserved for a certain, definite, and fixed time in the contract, or, in other words, where the servitude has been established for a certain or fixed time, at the expiration of the time fixed the servitude is lost or extinguished; and since in such a case there is no question of prescription, Act 315 of 1940 is without application." (132 So. 2d at p. 845.) Under that language, it seems clear that "a certain time only" as used in Article 821 means "a certain definite and fixed time." Louisiana Civil Code, Articles 2048 and 2049 make it equally clear that "certain event" means an event which in the course of nature is certain to occur. "Art. 2048. The time given or limited for the performance of an obligation, is called its term." "Art. 2049. A term may not only consist of a determinate lapse of time, but also of an event, provided that event be in the course of nature, certain; if it be uncertain, it forms a condition." The first paragraph of the reservation provided: “* * * the right to enter upon said lands at any time for the purpose of mining and removing said oil, gas, and minerals, said right, subject to the conditions hereinafter set forth, to expire April 1, 1945 * * *. But for the words "subject to the conditions hereinafter set forth" the servitude would have been established "for a certain time only." The first condition was expressed in the next paragraph, as follows: ***** if at the termination of the ten (10) year period of reservation, it is found that such minerals, oil, and gas, are being operated and have been operated for an average of at least 50 days per year during the preceding three (3) year period to commercial advantage, then, and in that event the said right to mine shall be extended for a further period of five (5) years, but that the right so extended shall be limited to an area of twenty-five acres of land around each well or mine producing, and each well or mine being drilled or developed at time of first extension, to-wit: April 1, 1945." It seems to us inescapable that that condition made the period for which the servitude was established indefinite and uncertain. At the time the parties entered into the contract it could not be known whether that condition would be met. The event was not "in the course of nature, certain". Successive conditions, likewise indefinite and uncertain, are provided in the succeeding paragraph: "*** said right to mine as previously stated shall be further extended from time to time for periods of five (5) years whenever operation during the preceding five (5) year period has been for an average of 50 days per year during this period ***” At the time the servitude was established, it might extend, according to the contract, for 10 years, 15 years, 20 years, or until the minerals were exhausted. The district court properly commented that, "the Louisiana Supreme Court itself has told us that an 'uncertain and indefinite duration' is the hallmark of prescription,” and continued, "Here the hallmark is missing." (204 F. Supp. at p. "Art. 821. Servitudes are also extinguished when they have been established for a certain time only, or under a condition that in a certain event they shall cease; for when the time expires, or the event takes place, the servitude becomes extinguished or right." 3LSA-C.C.-4. 7 "Art. 783. Servitudes are extinguished: "6. By the expiration of the time for which the servitude was granted, or by the happening of the dissolving condition attached to the servitude." 3 LSA-C.C.-4. 8 Art. 2049 of La. Civil Code. 567.) We cannot agree, but think that here the hallmark is inescapably present. The district court pointed out many ways in which the "periods of reservation" differed from statutory prescription: "*** There are other essential differences between the effect of these provisions and the rules of liberative prescription. These may be summarized: "First, under the present contract, a large area will be released from the servitude after the expiration of ten years regardless of use or production, for only 25 acres around each well are saved in any event. "Second, no use of the servitude short of actual production in paying quantities for at least fifty days a year for three years will preserve any part of the servitude beyond the primary term. "Third, only production in the last three years of the primary term will renew the servitude. "Fourth, even the requisite production at the right time will renew the servitude for only five additional years. "These are not the characteristics of legal prescription, nor of any known contractual variant." (204 F. Supp. at pp. 566, 567.) There would be no need to recognize contractual prescription if it had to conform to statutory prescription. Art. 1764 of the Louisiana Civil Code provides, in part, that, "All things that are not forbidden by law, may legally become the subject of, or the motive for contracts ***." Thus, Louisiana provides for the utmost liberty to contract. We can see no reason why the contracting parties were not at liberty to prescribe he type of user which will overcome the presumption of abandonment and to require that it be a successful user. Keebler v. Seabert, La. 1929, 120 So. 591, 592. We conclude that the district court erred in holding that the reservation in the deed did not provide for a contractual prescription for the conditional extinguishment of the mineral servitude which was rendered inoperative by the Louisiana statutes. See Appellees insist, however, that if the Louisiana statutes are so applied they would be unconstitutional because they would impair the obligations of the contract. Article I, Section 10 of the Constitution provides that, "No state shall *** pass any *** law impairing the obligation of contracts." The Constitution of Louisiana contains a similar provision, as to which the Supreme Court of Louisiana held: "Act 315 of 1940 does not violate Article 4, Section 15, of the Louisiana Constitution of 1921, which provides that vested rights shall not be divested and that no law impairing the obligation of contracts shall be passed." (132 So. 2d at p. 854.) The reasoning upon which that holding was based seems to us sound and to apply with equal force to the like provision of the Constitution of the United States. That discussion, together with the full discussion of the constitutionality of Act 315 of 1940 contained in this Court's opinion in United States v. Nebo Oil Co., 5 Cir. 1951, 190 F. 2d 1003, 1009, 1010, make it unnecessary further to labor the constitutional question. That is even more clear when we consider that the contract may not have become legally binding until it was ratified and adopted by Thomas Leiter on October 24, 1938, after Act No. 151 of 1938 had been passed. Theretofore the contract of March 14, 1935, had been executed only by the executors and trustees under the will of Joseph Leiter without any court authority, and though a space was provided for the execution of the agreement on behalf of the United States by the Secretary of Agriculture, it had never been so executed. Thomas Leiter's ratification recites that, "*** on June 27, 1935, the United States of America mailed a notice of acceptance of the aforesaid offer to Mr. C. J. Tessier, 217 Carondelet Street, New Orleans, Louisiana, accepting the option above described on the terms and provisions stipulated therein' ***” Mr. Tessier's authority or connection with the title does not otherwise appear from the record. It does appear, however, that on October 18, 1935, the Executors and Trustees under the will of Joseph Leiter executed a grant of preliminary use and occupation "in order that the United States may immediately establish the Delta Migratory Waterfowl Refuge by Executive Order." Under that permission, the United States entered into possession in 1936 and surveyed and mapped the area during the Winter of 1936-1937. It is thus doubtful whether the contract became legally binding prior to the passage of Act No. 151 of 1938. Upon the assumption, however, that it became binding on its date, March 14, 1935, we hold there is no constitutional obstacle to the application of the Louisiana statutes-Act No. 151 of 1938 or Act No. 315 of 1940. The judgment of the district court is therefore reversed and the cause remanded for further proceedings in accordance with this opinion. Reversed and remanded. GEWIN, Circuit Judge, dissenting: After carefully considering the brilliant, clear and well-written opinion of the majority, I find myself more in agreement with the opinion of the District Court than with the majority opinion. Accordingly, I would adhere to the result and the conclusions reached by the District Court. 1 It appears to me that the majority opinion is not correct in holding that the mineral reservation provided for a contractual prescription for the conditional extinguishment of the mineral servitude which was rendered inoperative by the Louisiana statutes, which is to say, that there were conditions or a condition set forth in the contract which made the period for which the servitude was established indefinite and uncertain. The reservation was not of indefinite duration in my view, but was for a definite, fixed and specified time which elapsed on December 21, 1948, before the Government executed its lease and before the discovery of oil. The contract did not provide for a conditional extinguishment, but actually provided for a conditional partial renewal. The renewal conditions were not met during the intial 10 year period, and only the occurrence of those uncertain conditions would have renewed or extended the definite, fixed initial period of 10 years. The term of the servitude is definite. The right of renewal or extension is conditional and indefinite. In addition to the foregoing, as clearly pointed out by the District Court and noticed by the majority, a large area of the property would be released from the servitude inevitably, regardless of what took place. I would affirm the judgment of the District Court. Mr. FINNEGAN. Delta Refuge and Plaquemines Parish in Louisiana. Mr. DINGELL. What it says is that there would be no revenues from gas and oil to the United States so that would diminish payments to the Delta and to Plaquemines Parish by the amount of what, $280,000? Mr. FINNEGAN. Right. Mr. DINGELL. How soon is that matter going to be resolved? Mr. FINNEGAN. The Department as of yesterday requested and recommended to the Department of Justice that an appeal be taken. The time for rehearing in full before the full bench has not yet expired and the Department of Justice may be taking that approach. Mr. DINGELL. Are there other gas and oil receipts in issue down there? Mr. FINNEGAN. Not at the moment, sir. Mr. DINGELL. Are there any other refuges on which there are large payments of gas and oil receipts to the State of Louisiana? Mr. McBROOM. No, sir. Mr. DINGELL. In other words, this is the only one? Mr. McBROOM. Yes, sir. Mr. FINNEGAN. Just for your information, it is in the record, I think, it represents about 1.1 million of the total net receipts. Mr. DINGELL. I understand. Well, gentlemen, thank you very much. The committee will stand adjourned until 10 o'clock tomorrow. (Whereupon, at 12:25 p.m., the subcommittee recessed, to reconvene at 10 a.m., Thursday, April 23, 1964.) 1 United States v. Leiter Minerals, Inc. (D.C.E.D. La. 1962), 204 F. Supp. 560. 2 See note 26 of the District Court's opinion reported in 204 F. Supp. 560. PARTICIPATION BY COUNTIES IN REFUGE RECEIPTS THURSDAY, APRIL 23, 1964 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON FISHERIES AND WILDLIFE CONSERVATION Washington, D.C. The subcommittee met at 10:10 a.m., pursuant to recess, in room 219, Cannon House Office Building, Hon. T. A. Thompson (chairman of the subcommittee) presiding. Mr. THOMPSON. The subcommittee will come to order. Today we are continuing the consideration of the participation of the counties and the States in the revenue from national wildlife refuge systems. Yesterday we heard the Secretary and others testify on the bills that had previously been introduced. Since that time, and since yesterday, the chairman of the subcommittee has introduced another bill, H.R. 11008, which has incorporated in it the optional features that have been suggested by the other body. I think this bill will be considered as a subcommittee bill and if any of the witnesses today are familiar with the so-called Metcalf suggestions, and the optional provision, they, of course, may address themselves to that point. Let a copy of this bill be placed at the appropriate place in the record. We will try to conclude these hearings today by 11 o'clock. The subcommittee will then go into executive session shortly thereafter to consider two other matters previously heard. First, I want to call our colleague from Colorado, the Honorable Wayne Aspinall, the distinguished chairman of the Interior and Insular Affairs Committee. Mr. Chairman, it's an honor to have you here with us this morning. STATEMENT OF HON. WAYNE N. ASPINALL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO Mr. ASPINALL. Thank you, Mr. Chairman, I appreciate the opportunity to comment on H.R. 2393, and similar legislation, which would increase the participation of counties in the distribution of revenues from the National Wildlife Refuge System. I will be very brief in my remarks, for I will not address myself to the particulars in the legislation that you are considering, but rather to the general purpose of the measures. The conservation value of our wildlife refuge system has been clearly established, and the recreational advantages are being enjoyed by increasing numbers of our citizens each year. Our wildlife refuge system is one of many responses that we can make, as a nation, to the desires of an exploding population. |