Groves v. Terrace Min. Co.

• Decision Date: 14 November 1960
• Docket Number: No. 2,No. 47732,47732,2
• Citation: 92 A.L.R.2d 861,340 S.W.2d 708
• Parties: Dall B. GROVES, Individually and as Executor of the Estate of Elizabeth B. Groves, Deceased, Respondent, v. TERRACE MINING COMPANY, a Corporation, Appellant
• Court: Missouri Supreme Court

Page 708

340 S.W.2d 708

92 A.L.R.2d 861

Dall B. GROVES, Individually and as Executor of the Estate of Elizabeth B. Groves, Deceased, Respondent, v. TERRACE MINING COMPANY, a Corporation, Appellant.

No. 47732.

Supreme Court of Missouri, Division No. 2.

Nov. 14, 1960.

Motion for Rehearing, for Modification of Opinion or to

Transfer to Court En Banc Denied Dec. 12, 1960.

Samuel Richeson, Dearing, Richeson & Weier, Hillsboro, for appellant.

Thurman, Nixon & Blackwell, J. W. Thurman, Jeremiah Nixon and Earl R. Blackwell, Hillsboro, for respondent.

STOCKARD, Commissioner.

Appellant has appealed from a judgment in the amount of $7,563.07. Jurisdiction is in this court because the appeal was taken prior to January 1, 1960. Gooch v. Avsco, Incorporated, Mo.Sup., 337 S.W.2d 245.

On August 15, 1946 Dall B. Groves and his mother, owners of a tract of land known as the Old Mines Place, executed a 'Mining and Mineral Lease' to Terrace Mining Company 'for the purpose of exploring for, mining, taking out, and removing therefrom merchantable barytes ore,' with the right of the lessee 'to make all excavations, openings, ditches, drains, roads, and other improvements upon the said premises which are or may become necessary or suitable for the mining, cleaning or processing and removing of barytes ore, and other associated ores and by-products from said premises, * * *.' The lease provided that the lessee was to pay 60 cents per ton 'for all mined barytes ore,' and it further provided that 'in the event that lessee obtains ores from other lands, lessee may use the mills on the premises herein leased to pour such ore by paying lessor 20 cents per ton of finished product therefor.' There is no explanation by the parties of the term 'to pour such ore,' but in the trial and in their briefs they have treated it as referring to the processing of ore. Lessee also agreed that 'sufficient barytes ore' shall be mined each and every year 'from the said premises' to pay a royalty therefor not less than $300 annually, and in any year for which the royalty was less than that amount lessee was to pay as 'lease rent' the sum of $300 in lieu of the royalty. The other lease provisions are not material to the issues on this appeal.

On May 1, 1950 Dall B. Groves and his mother executed and delivered to Florin Wallace Floyd and Julia Elizabeth Groves Floyd a general warranty deed to the Old Mines Place conveying to them all their interest therein except as retained pursuant to the following reservation: 'Excepting and reserving to grantors all mines, barytes and all other minerals and all oil and gas under said premises hereby conveyed with power for grantors their heirs and assigns to take all usual necessary or convenient means for working, getting and processing the same.'

Dall B. Groves was a director of Terrace Mining Company, and was also its president, treasurer and general manager in sole charge of its operations. He served in those capacities from 1946 until September 1, 1957, when because of a dispute with Florin Wallace Floyd (who with his wife, a sister of Dall B. Groves, were the majority stockholders) over the question of whether the lease had terminated he was relieved by the stockholders of all such positions with appellant except that of director.

On November 30, 1957 the pending suit, in two counts, was filed by Dall B. Groves. His mother died after the suit was filed, and Dall B. Groves as executor of her estate was added as a party plaintiff. By the first count recovery was sought (as limited by the verdict directing instruction) for 'royalty or rentals' in the amount of $7,563.07 accrued under the lease for processing in the mill on Old Mines Place during 1951 through 1957 ore obtained from other lands, and for the sum of $900 as rent in lieu of royalties for the years 1955 through 1957. The verdict on this count was in favor of lessors in the amount of $7,563.07. No mention or issue is made on this appeal concerning the failure of the jury to award any rent in lieu of royalties. By the second count damages were sought in the amount of $30,000 for the alleged failure of appellant to continue mining operations on the Old Mines Place while barite was commercially available. The verdict of the jury on this count was for appellant, and the appeal taken by respondents from the judgment entered on this count was subsequently dismissed.

The 'Mining and Mineral Lease' executed by Dall B. Groves and his mother to appellant was a transfer of two distinct and separate rights or interests. First, it constituted a usual mineral lease giving to appellant as lessee the right to enter the land and take therefrom barytes ore and other associated ores and by-products and to use such parts of the surface necessary for such operations. Title to the ore in the ground was not thereby conveyed to the lessee, but the lessee received the right to convert the barytes ore to personalty and dispose of it. Austin v. Huntsville Coal & Mining Co., 72 Mo. 535, 37 Am.Rep. 446; Thacker v. Flottmann, Mo.App., 250 S.W.2d 810; Providence Min. & Mill Co. v. Nicholson, 8 Cir., 178 F. 29; 58 C.J.S. Mines and Minerals Sec. 151. For this use of the premises provision was made for a royalty based on the amount of the minerals taken therefrom. Second, it granted to the lessee the right to use the surface of the land 'to pour' or process ores obtained from lands other than the leased property. For this use a different and additional royalty was provided. This use by the lessee was not authorized by reason of the grant of the right to take minerals from the land (with the right to use the surface for that purpose and to process that ore), and for the lessee to have this additional right a specific provision therefor was necessary. White v. Bevier Coal Co., 364 Mo. 313, 261 S.W.2d 81; Russell v. Texas Company, 8 Cir., 238 F.2d 636, 642; Moore v. Lackey Mining Co., 215 Ky. 71, 284 S.W. 415, 48 A.L.R. 1402; 36 Am.Jur. Mines and Mining Secs. 170, 180, 181; Annotation 48 A.L.R. 1406.

The owner of land containing minerals may segregate the surface rights from the underlying minerals by a conveyance in writing so that there is a complete severance of title and separate estates are created. 58 C.J.S. Mines and Minerals Sec. 151; Bostic v. Bostic, 199 Va. 348, 99 S.E.2d 591, 66 A.L.R.2d 971; Carlson v. Lindauer, 119 Cal.App.2d 292, 259 P.2d 925. This may be done by a conveyance of the land with an express reservation of the mines and minerals, Gordon v. Million, 248 Mo. 155, 154 S.W. 99; 58 C.J.S. Mines and Minerals Sec. 152, and the separate estate in the mines and minerals thus created in the grantor is the same as though there had been an express grant thereof to him. Wardell v. Watson, 93 Mo. 107, 5 S.W. 605. This was the effect of the warranty deed and the reservation therein. Prior to the execution of the warranty deed, Dall B. Groves and his mother were the owners of both the surface rights and the mineral rights in the Old Mines Place subject to the right of appellant for the remainder of the term of the lease to mine for barite and use the surface for that purpose and to process the ore removed therefrom, and also subject to the right of appellant 'to pour' or process ore thereon which was obtained from other lands. When respondents executed the warranty deed, the interest conveyed to the Floyds was subject to the lease for the remainder of its term, and if there had been no reservation in that warranty deed the Floyds would have succeeded to all the interest and rights of repondents under the lease. Goodson v. Comet Coal Co., 182 Ark. 192, 31 S.W.2d 293; 58 C.J.S. Mines and Minerals Sec. 193c(1). However, since the respondents did make a reservation and thus segregate the surface estate from the mineral estate the royalties accruing thereafter are apportionable among the owners according to their respective interests. 58 C.J.S. Mines and Minerals Sec. 193c(1); United Feldspar & Minerals Corporation v. Bumpus, 141 Me. 7, 38 A.2d 164. It is obvious that...