Harris v. Chas. Pfizer & Co.

• Decision Date: 05 December 1967
• Docket Number: No. 18700.,18700.
• Citation: 385 F.2d 766
• Parties: Edwin HARRIS, Dorothy Harris, Rivermont Village, Inc., James B. Crismon and C. L. Furry, Appellants, v. CHAS. PFIZER & CO., Inc., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

385 F.2d 766 (1967)

Edwin HARRIS, Dorothy Harris, Rivermont Village, Inc., James B. Crismon and C. L. Furry, Appellants, v. CHAS. PFIZER & CO., Inc., Appellee.

No. 18700.

United States Court of Appeals Eighth Circuit.

December 5, 1967.

Samuel Richeson, of Dearing, Richeson, Weier & Roberts, Hillsboro, Mo., for appellants and filed brief.

W. Stanley Walch, Thompson, Mitchell, Douglas & Neill, St. Louis, Mo., for appellee, William G. Guerri and Edwin D. Akers, Jr., and Jean J. Thyson, St. Louis, Mo., were on the brief.

Before BLACKMUN, GIBSON and LAY, Circuit Judges.

LAY, Circuit Judge.

This case involves the conflicting claims of owners in surface rights and owners of mineral interest in the same land. An appeal is taken from the granting of a permanent injunction restraining the subdivision, platting and selling of residential or building lots on a 6,002 acre parcel of land known as the Kingston Claim in Washington County, Missouri. Appellants were further restrained from constructing dams and lakes on the land as well as from any development of commercial facilities which would interfere with appellee's mineral rights in the land. Appellants contend the decree below is erroneous in two basic particulars: (1) in holding that the grantee of the mineral rights is not liable to appellants under a lease-sale for damage to structures or improvements erected subsequent to 1945 (the date of the lease) by reason of appellee's mining operation; and (2) in finding sufficient evidence to support the ruling (a) restricting appellants' use of the entire property and (b) restricting such use permanently without consideration to appellants' rights in the land after the ore is exhausted. We affirm.

The common source of title for both interests in the Kingston Claim is the Washington Land and Mining Co. Appellants purchased their surface interest from Washington Land and Mining Co. in 1963. Appellants' deed was expressly made "subject to" mineral and mining rights conveyed in 1945. Appellee-Chas. Pfizer & Co., Inc. (hereinafter Pfizer) acquired by a lease-sale agreement certain mineral rights in May 1963. Its predecessors leased the interest in March 1945, with rights, ultimately exercised by appellee, to acquire the mineral rights by warranty deed.

Essentially, the Pfizer deed incorporated the terms of the lease, which conveyed to Pfizer's predecessor the following property and rights:

1. Title to all of the "barytes or tiff now or at any time hereafter" located on the Kingston Claim;

2. Extensive rights to utilize the surface for washer sites, mud ponds and storage facilities which can be used for processing minerals extracted from the Kingston or from other properties;

3. Incidental rights of ingress, egress, and the right to construct roads, railroads, power lines and the like; and finally,

4. The exclusive right (except on the Mineral Fork River) to capture, impound and dam all water on the Kingston Claim.

The lower court held that these rights constituted the "dominant estate," and that appellants "may use the surface of the Kingston Claim for agriculture, forestry and grazing purposes, but the use by appellants is subject to appellee's right to use and to destroy the surface of the land." (Emphasis ours.)

In 1965 the individual appellants formed Rivermont Village, Inc., for the purpose of developing residential subdivisions and a recreational lake on the Kingston Claim. They engaged in extensive advertising of the lots for sale, and the evidence shows that a total of eight building lots have been sold at various places on the Kingston Claim by the Harrises and by Rivermont Village for a total consideration of $12,750.00. The deeds to these lots reserved or excepted mineral rights, but did not specifically refer to barite or to any restrictions with respect to improving said lots. The appellants platted two subdivisions, known as the "Rivermont Village Estates" and the "Timber Ridge Lake Estates," the latter of which is platted around a proposed artificial lake created by an earthen dam, which at the time of the trial was already partially completed. In addition to the lake, appellants also cleared an air strip to serve the Timber Ridge Lake Estates.

Barite is mined by either the "open cut" or "strip" methods.¹ The evidence discloses that both procedures involve the scooping up of earth directly from and below the surface of the land and dumping the same into large power trucks which transport the material to a "washer," which then separates the barite ore from the clay and earth. Great quantities of water used in the washing process, along with the waste materials are channeled into large mud ponds upon the surface of the land near the washer. Either method completely destroys the surface of the land and necessitates the removal or destruction of any improvements located thereon. Because the washing process requires great quantities of water, the appellee Pfizer emphasizes its right to exclusive use of the surface waters on the Kingston Claim (with the exception of the Mineral Fork River), and thus asserts that a proposed dam and artificial lake of the appellants would constitute an improper invasion of appellee's rights.

CONSTRUCTION OF LEASE

The 1945 mineral lease, under paragraph 6, obligated the lessee (appellee's predecessor) to pay the lessor damages if in the process of mining operations they "impair or interfere with use by Lessor of any roads, structures or improvements. * * *" The trial court construed this to mean "existing roads, residential structures, the grove, the orchard and permanent pasture areas contained in the survey." (Emphasis ours.)

Pursuant to paragraph 10 of the lease, a survey was made identifying the permanent pasture area then existing. According to this provision of the lease, damages to this area were restricted to the first twenty years of the lease. The district court observed:

"In interpreting the Mineral Deed and the 1945 lease, it is clear from the terms of these instruments that damages for improvements were to be paid only for interference with the then existing roads, residential structures, the grove, the orchard and permanent pasture areas contained in the survey. Damages for crop lands and pasture lands were limited to $50 an acre for bottomlands and $10 an acre for hill land, and only in the lands included in the survey. Damages were not contemplated for improvements after the expiration of the lease, which has now expired."

Under the law of Missouri the "rule to be observed in the construction of deeds * * * is to ascertain the intention of the grantor, and to give effect to such intention, unless it conflicts with some positive rule of law. It is necessary to take the deed as a whole in arriving at such intention and not to give any clause in the instrument undue preference." Triplett v. Triplett, 332 Mo. 870, 60 S.W.2d 13, 15 (1933); Lloyd v. Garren, 366 S.W.2d 341, 345 (Sup.Ct.Mo. 1963). To adopt appellants' interpretation and award compensation for damage to all "improvements," including those placed on the land since 1945, would obviously result in the diminution or out-right extinction of the exercise of the mineral rights by making mining prohibitive in cost, thereby defeating the dominant estate. Appellants' interpretation is clearly repugnant with the main purpose of the lease, that is, the right to strip mine and destroy the land. Cf. Kinney-Coastal Oil Co. v. Kieffer, 277 U.S. 488, 505, 48 S.Ct. 580, 72 L.Ed. 961 (1928).

We feel the district court made it clear that no ambiguity existed and his construction of the instruments was "plain from the face of the lease and deed." It is true that the trial judge allowed parol testimony as to the intention of the parties, but it is well within his discretion to do this in a trial to the court. And we have held many times that unless the contrary appears, "in the trial of a case to the court without a jury, the presumption is that the trial court considered only competent evidence and disregarded all evidence which was incompetent." Montgomery Ward & Co. v. Steele, 352 F.2d 822, 830 (8 Cir. 1965); Manning v. Jones, 349 F.2d 992, 996 (8 Cir. 1965); Thompson v. Baltimore & O. R. R., 155 F.2d 767, 771 (8 Cir. 1946).

We find no error in the trial court's construction of the lease.

THE INJUNCTION

It has long been recognized in Missouri that mineral rights constitute a separate and distinct interest apart from the surface rights in the land. Wardell v. Watson, 93 Mo. 107, 5 S.W. 605 (1887). Generally, it is understood that where separate estates coexist each should adjust to the other to the extent possible, in order to allow the maximum use and enjoyment of both interests. General Refractories Co. v. Swetman, 303 Ky. 427, 197 S.W.2d 908 (Ct.App.Ky. 1946). Thus, it has been held that the owner of surface interest has the unquestioned right to subjacent support from subsurface mining unless otherwise waived. Clinchfield Coal Corp. v. Compton, 148 Va. 437, 139...