Mining Corp. of Arkansas v. International Paper Co.

Decision Date26 March 1971
Docket NumberNo. HS-69-C-11.,HS-69-C-11.
Citation324 F. Supp. 705
PartiesMINING CORPORATION OF ARKANSAS, Plaintiff, v. INTERNATIONAL PAPER COMPANY, Defendant.
CourtU.S. District Court — Western District of Arkansas

Tackett, Young, Patton & Harrelson, Texarkana, Ark., for plaintiff.

Gaughan, Laney, Barnes & Roberts, Camden, Ark., for defendant.

OPINION

JOHN E. MILLER, Senior District Judge, Sitting by Designation.

There is before the court the motion of defendant, International Paper Company, for declaratory and summary judgment filed November 9, 1970, supported by copies of conveyances, records, affidavits, certificates and other evidence, and brief in support thereof.

The plaintiff filed no response but did submit brief on March 2, 1971, in opposition to defendant's motion and in answer to defendant's brief.

The complaint was filed July 16, 1969. Jurisdiction exists because of diversity of citizenship of the parties and the amount involved. 28 U.S.C. § 1332.

The plaintiff alleged that it is the owner of the mineral rights in certain described real property in Clark County, Arkansas; that during the years 1942, 1943, 1944 and 1945, the defendant leased to various individuals and corporations the mineral interests under said lands and received a 10 percent royalty for all of the mercury which was removed from said lands and sold to the United States; that the defendant fraudulently concealed from plaintiff's predecessor in title that it was removing minerals from the lands and did so with the intent to defraud its predecessor in title and to keep for itself all the proceeds derived from the sale of said mercury; that through the years that have passed since the minerals were mined, the defendant has further concealed from plaintiff and its predecessors in interest any operations regarding the minerals beneath said lands; that plaintiff did not discover the said minerals had been removed until approximately January 1, 1969, and that plaintiff's predecessor in title never had knowledge that the minerals had been removed and sold.

On July 30, 1969, the original answer of defendant was filed, in which it denied that plaintiff acquired title as alleged in the complaint to the cinnabar ore, mercury.

On October 7, 1969, the defendant filed its first amendment to its answer, in which it alleged that the mercury taken from the lands described in the complaint was taken during the years 1942, 1943, 1944 and 1945, and that the royalty from such production which plaintiff seeks to recover was received by defendant during those years; that the claims of plaintiff are barred by laches and limitations. The defendant also alleged "that the reservation contained in the deed from Grayson-McLeod Lumber Company to Graysonia Nashville Lumber Company under which plaintiff claims title to the mercury produced from the lands described in the complaint does not include mercury or cinnabar under the term mineral. That the term mineral is qualified and limited by the words, coal, oil and gas that follow; and mercury ore in the locality of the lands was not known to exist in the year 1911 when the reservation was made."

On November 16, 1970, defendant filed its second amendment to the answer, in which it alleged that the deed and contract dated December 3, 1962, executed by Inghram Grayson, individually and as trustee, to plaintiff is a cloud on the title of defendant and others who acquired title under similar circumstances through the deed from Grayson-McLeod Lumber Company containing the alleged reservation of mineral, oil, gas and coal; that at the time the contract and deed was executed by Inghram Grayson to plaintiff, he had no title to the mineral mercury or to any other minerals, oil, gas, or coal on said lands.

The defendant alleged eight grounds upon which it based its motion for declaratory and summary judgment. In its brief it discussed all of the issues but consolidated them under three headings: (1) the deed to Graysonia-Nashville Lumber Company was not intended to reserve minerals, oil, gas and coal in favor of the grantor; (2) the plaintiff's claim is barred by limitations, laches and estoppel; and (3) the term "mineral" as used in the reservation would not include mercury, the existence of which in this area was not recognized until 1931.

The plaintiff in its brief contended that many of the issues and allegations contained in the brief of defendant are matters which are not subject to a motion for declaratory and summary judgment for the reason that many of the assumptions made by defendant will be controverted in fact. Plaintiff then proceeded to discuss only a portion of the issues and argued that the issues are not susceptible to determination by summary judgment.

Rule 56(c), Fed.R.Civ.P., provides:

"The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

At the time defendant filed its motion, November 9, 1970, it also filed 14 exhibits comprising several pages of affidavits, deeds, documents and official bulletins detailing the discovery and geology of deposits of cinnabar. The plaintiff filed no affidavits or other documents in opposition to the facts recited and established by the exhibits filed by defendant. The plaintiff seems to argue that the allegations contained in the complaint are decisive of whether a motion for summary judgment should be granted.

In Marion County Co-op. Ass'n v. Carnation Co. (W.D.Ark.1953), 114 F.Supp. 58, the court had occasion to examine the law relative to a similar contention, and after a thorough discussion held at page 64:

"`If it is made clearly to appear on such a motion that even though there is an issue under the pleadings there is in fact no dispute as to controlling material facts, then the court should enter summary judgment.'"

On appeal, the Court of Appeals for the Eighth Circuit, 214 F.2d 557 (1954), after examining the affidavits and documents supporting the defendant's (appellee's) motion for summary judgment, said at page 561:

"Against this showing by defendant that it had paid the usual and normal price for milk during the period alleged in the complaint, plaintiff offered nothing to rebut or contradict defendant's evidence or to affirmatively establish the allegations of the complaint. It chose to rest on the broad charge that defendant had paid a `fictitious' price, or a price in excess of the usual and normal price, for milk and thereby `run a corner' on the market. It is clear that no genuine issue of material fact existed as to any of the facts stated in the affidavits or depositions. The question, therefore, resolves itself to this: Is a general allegation in a complaint, standing alone, sufficient to withstand a motion for summary judgment supported by a prima facie showing that no genuine issue of material fact exists?
"Courts, including our own, which have considered this question have uniformly answered it in the negative."

In 1963, Rule 56, Fed.R.Civ.P., was amended by adding the following to subdivision (e):

"When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him."

The exhibits, indisputable records, and noncontroverted affidavits, filed by defendant in support its motion, establish that there is no genuine issue as to any material fact.

The land to which title of the mineral rights is in question is described as:

E½ SW¼ and the W½ SE¼, Sec. 34, T 6 N, R 23 W.
SW¼, Sec. 6, T 7 S, R 22 W.
SW¼, Sec. 5, T 7 S, R 22 W.
S½, Sec. 1, T 7 S, R 23 W.

The chain of title of defendant, except the SE¼ of Sec. 1, is as follows:

Grayson-McLeod Lumber Co. to Graysonia Nashville Lumber Co.

May 10, 1911.

Graysonia Nashville Lumber Co. to J. L. Johnston, as Trustee.

July 17, 1919.

J. L. Johnston, Trustee, to Louisiana Pulp & Paper Company.

April 15, 1925.

Louisiana Pulp and Paper Co. to Southern International Paper Co.

March 4, 1927.

Southern International Paper Co. to International Paper Co.

Dec. 5, 1927.

International Paper Co. to Southern Kraft Corp.

April 1, 1930.

Southern Kraft Corp. to Old International Paper Co. Old International Paper Co. to New International Paper Co.

Dec. 23, 1941.

The title to the SE¼ of Sec. 1, T 7 S, R 23 W, was not conveyed by J. L. Johnston, Trustee, to Louisiana Pulp and Paper Company in his deed of April 15, 1925, but was conveyed as follows:

J. L. Johnston, Trustee, to Felix E. Gunter, Trustee,

August 1, 1925.

Felix E. Gunter, Trustee, to S. E. Evans,

May 14, 1938.

S. E. Evans and wife to Caddo Quicksilver Corp.

Oct. 20, 1941.

Drew Bowers, Trustee in Bankruptcy for Caddo Quicksilver Corporation to Ozan Lumber Company,

May 21, 1946.

Ozan Lumber Company to International Paper Co.

June 17, 1946.

On June 5, 1873, William Grayson and others incorporated under the laws of the State of Missouri the St. Louis Wooden Gutter Manufacturing Company. The name was later changed to Grayson-McLeod Lumber Company. On July 6, 1907, Grayson-McLeod Lumber Company filed its Missouri articles of incorporation in the office of the Secretary of State of Arkansas. The Arkansas charter expired on May 22, 1923, due to the expiration of its existence in Missouri. Graysonia-Nashville Lumber Company was chartered March 7, 1911. On April 23, 1923, the charter was revoked by the proclamation of the Governor of Arkansas for nonpayment of franchise taxes.

The deed of May 10, 1911, from Grayson-McLeod Lumber Company to Graysonia-Nashville Lumber Company...

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