Lovelace v. Southwestern Petroleum Co.

• Decision Date: 08 June 1920
• Docket Number: 3353.
• Citation: 267 F. 513
• Parties: LOVELACE et al. v. SOUTHWESTERN PETROLEUM CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

267 F. 513

LOVELACE et al. v. SOUTHWESTERN PETROLEUM CO. et al.

No. 3353.

United States Court of Appeals, Sixth Circuit.

June 8, 1920

J. W M. Stewart and S. S. Willis, both of Ashland, Ky. (Willis &amp Davis and Hager & Stewart, all of Ashland, Ky., on the brief), for appellants.

Stephen T. Davis, of Winchester, Ky., and Robert H. Winn, of Mt Sterling, Ky. (Benton & Davis, of Winchester, Ky Worthington, Cochran, Browning & Reed, of Maysville, Ky., and John A. Judy, of Mt. Sterling, Ky., on the brief), for appellees.

Before KNAPPEN, DENISON, and DONAHUE, Circuit Judges.

KNAPPEN Circuit Judge.

This is a suit to recover the oil and gas rights in certain parcels of land in Lee county, Ky. The controversy arises thus: On January 4, 1908, the Miller's Creek Lumber Company conveyed to John S. Robinson a tract of 2,000 acres, excepting therefrom 148 acres, known as the Malin Jones parcel. The deed of conveyance in terms reserved 'a one-half undivided interest in all the minerals in, on, or under the land embraced by this conveyance. ' Prior to December 8, 1910, Robinson and wife conveyed to one McIntosh 50 acres of the land without reservation, and to D. B. Pendergrass two parcels, aggregating 590 acres, as to which one-half the coal was reserved. They also made to various other parties separate conveyances of other portions of the land, aggregating several hundred acres, reserving all minerals, oil, and gas. On the last-mentioned date Robinson and wife conveyed to Pendergrass the remainder of the original tract, by deed containing this further provision:

'The said D. B. Pendergrass is hereby deeded one-half of all the coal in said boundary above mentioned (the original 2,000-acre tract) and also one-half of all the minerals, metals, and mineral substances of every kind and character on, in, or under said above-described boundary, except' the Jones, McIntosh, and two Pendergrass parcels before mentioned.

Defendants respectively claim title to an undivided one-half interest in the oil and gas rights in separate portions of the tract through deeds from Pendergrass based on Robinson's deed of December 8, 1910. Plaintiffs claim to own, as heirs at law of Robinson, the entire of the oil and gas rights, on the theory that no effective reservation of one-half of such rights was contained in the lumber company's deed to Robinson, and that the latter's deed to Pendergrass of December 8, 1910, was ineffectual to convey any interest therein. Upon trial by jury, the court, being of opinion that the lumber company's deed to Robinson effectually reserved, and that the latter's deed to Pendergrass of December 8, 1910, effectually conveyed, an undivided one-half of the oil rights in question, directed verdict for defendants. That action was rested upon this reasoning:

The word 'minerals' in its ordinary and popular sense, includes petroleum rights; the broad term 'all the minerals on, in, or under' a given parcel of land, when used in a deed, by way of either reservation or conveyance, and without qualifying or limiting language, clearly and unambiguously embraces petroleum rights; and that in neither the deed from the lumber company to Robinson nor in that from Robinson to Pendergrass of December 8, 1910, is there anything qualifying or limiting the ordinary meaning of the term in question.

That the word 'minerals,' in its ordinary and popular sense, includes petroleum rights, is too firmly established to admit of substantial controversy. The question has more than once come before the Supreme Court of the United States in construing land grants from which 'mineral lands' were in terms excluded. In Northern Pacific Ry. Co. v. Soderberg, 188 U.S. 526, 534, 23 Sup.Ct. 365, 368 (47 L.Ed. 575), where land chiefly valuable for granite quarries was held to be 'mineral land,' although not metalliferous, reference was made to the rulings of the Land Department that the words 'valuable mineral deposits' should be construed as including 'all lands chiefly valuable for other than agricultural purposes, and particularly as including nonmetallic substances, among which are held to be * * * diamonds, * * * petroleum * * * and coal. ' Reference is also made with apparent approval to the decisions of the Pennsylvania courts holding both petroleum and natural gas to be mineral, as well as (188 U.S. 536, 23 Sup.Ct. 369, 47 L.Ed. 575) to the 'overwhelming weight of authority to the effect that mineral lands include, not merely metalliferous lands, but all such as are chiefly valuable for their deposits of a mineral character, which are useful in the arts or valuable for purposes of manufacture.'

Burke v. Southern Pacific Co., 234 U.S. 669, 34 Sup.Ct. 907, 58 L.Ed. 1527, involved the question whether petroleum or mineral oil was within the meaning of the term 'mineral,' as used in certain acts of Congress reserving mineral lands from railroad land grants. In answering this question in the affirmative, there were cited the decisions of courts of Pennsylvania, West Virginia, Ohio, Tennessee, and New York, affirming the mineral character of petroleum, and attention was called to the fact that Congress had at different times spoken of it as a mineral, and that the Supreme Court of the United States had done the same in Ohio Oil Co. v. Indiana, 177 U.S. 190, 202, 20 Sup.Ct. 576, 44 L.Ed. 729, and (234 U.S. 679, 34 Sup.Ct. 911, 58 L.Ed. 1527) adverting to the apparent disagreement among scientists as to whether petroleum was strictly a mineral, or merely a 'resultant of the decomposition of organic matter under certain conditions of temperature and pressure, and therefore not a mineral,' the court, without passing upon that question, held that the words 'mineral lands' should be applied in their ordinary and popular sense, and that in that sense petroleum lands were embraced therein. This holding was renewed in United States v. Southern Pacific Co., 251 U.S. 1, 40 Sup.Ct. 47, 64 L.Ed. . . . .

The courts of the oil-bearing states, so far as we are advised, now generally, if not uniformly (so far as they have spoken), hold that petroleum and natural gas in place are minerals and part of the realty, and, with the exception of Pennsylvania, that a reservation or conveyance of 'all minerals,' or 'all mineral rights,' in land, not otherwise limited or qualified, so as to show a different intention, embraces petroleum and natural gas.

Isom v. Rex Crude Oil Co. (1905) 147 Cal. 659, 661, 82 P. 317, 318: 'Oil is a mineral, and as a mineral is part of the realty. ' Kelley v. Ohio Oil Co. (1897) 57 Ohio St. 317, 49 L.E. 399, 39 L.R.A. 765, 63 Am.St.Rep. 721: 'Petroleum oil is a mineral, and, while it is in the earth, it forms a part of the realty. ' People v. Bell (1908) 237 Ill. 332, 337, 86 N.E. 593, 594 (19 L.R.A. (N.S.) 746, 15 Ann.Cas. 511): 'In some of the states petroleum forms a very valuable part of the natural wealth, and has been given careful consideration by the courts, and they have uniformly held, so far as the authorities we have examined show, that it should be classed as a mineral. ' An oil and gas lease was held taxable as 'a mining right,' and included in the statutory term 'other mineral.' Lanyon Zinc Co. v. Freeman (1904), 68 Kan. 691, 696, 75 P. 995, 997 (1 Ann.Cas. 403): 'Whatever may be the origin of petroleum and natural gas, and the question appears as yet to be matter of controversy, it is well settled that they are minerals.'

In Murray v. Allred (1897) 100 Tenn. 100, 43 S.W. 355, 39 L.R.A. 246, 66 Am.St.Rep. 740, the question is elaborately considered, and the conclusion announced that petroleum oil and natural gas are minerals, within a reservation by deed of all 'mines, minerals and metals in and under the land. ' Beckett-Iseman Oil Co. v. Backer, 165 Ky. 818, 819, 178 S.W. 1084: 'It is well settled that oil and gas are minerals, and are a part of the realty. * * * ' In Sult v. Oil Co. (1908) 63 W.Va. 317, 325, 61 S.E. 307, 311, it is said: 'Legally and scientifically, oil and gas are universally held to be minerals. At the present time, they are popularly so considered'-- and upon careful consideration and discussion of the authorities it was held (63 W.Va. 324, 61 S.E. 310) that a clause in a deed reserving to the grantor the 'right to all minerals in and under' a certain portion of the land conveyed, not limited or qualified as to intention by any clause of the deed, or by any facts within the knowledge of the parties which may properly be deemed to have determined their intention, saves to the grantor, not only solid minerals, but petroleum oil and natural gas. In Barker v. Campbell, etc., Co. (Okl. 1917) 167 P. 468, L.R.A. 1918A, 487, it was held that oil and gas are minerals within the meaning of a reservation by deed 'of all mineral rights' upon the land described therein. And see Ontario Natural Gas Co. v. Gosfield, 18 Ont.App.Rep. 626.

The original decision of the Supreme Court of Pennsylvania to the contrary effect-- Dunham v. Kirkpatrick (1882) 101 Pa. 36, 43, 47 Am.Rep. 696-- is rested upon the proposition that while petroleum is a mineral, yet in popular estimation it is not so regarded, and therefore would not be embraced within the reservation of 'all minerals.' Its doctrine has been reaffirmed in Silver v. Bush, 213 Pa. 195, 198, 199, 62 A. 832, and in Preston v. South Penn Oil Co., 238 Pa. 301 et seq., 86 A. 203. In both these later decisions the fact that Dunham v. Kirkpatrick has become a rule of property in Pennsylvania, and that many land titles rest upon it, is emphasized. Dunham v. Kirkpatrick seems not to have been followed by the courts of any other state, except to the limited extent hereafter stated. It has been more than once disapproved. See Weaver v Richards, 156 Mich. 320, 324, 120 N.W. 818;...