Moser v. U.S. Steel Corp., B-9735

• Decision Date: 27 June 1984
• Docket Number: No. B-9735,B-9735
• Parties: Margaret Lyne MOSER et al., Petitioners, v. UNITED STATES STEEL CORPORATION et al., Respondents.
• Court: Texas Supreme Court

Page 99

676 S.W.2d 99

Margaret Lyne MOSER et al., Petitioners, v. UNITED STATES STEEL CORPORATION et al., Respondents.

No. B-9735.

Supreme Court of Texas.

June 27, 1984.

Rehearing Denied Oct. 3, 1984.

John H. Miller, Jr., Sinton, Luther E. Jones, Jr., Corpus Christi, Wm. G. Burnett, Sinton, for petitioners.

Bracewell and Patterson, Charles G. King, III and John L. Harvey, Houston, Robert D. Nogueria, Beeville, for respondents.

ON MOTION FOR REHEARING

CAMPBELL, Justice.

Our opinion of June 8, 1983, is withdrawn. The Motion for Rehearing is denied.

This is a suit to quiet title to an interest in uranium ore. We must determine whether uranium is included in a reservation or conveyance of "oil, gas and other minerals." The trial court awarded title to the defendant mineral owners, and the court of appeals affirmed the trial court judgment. 601 S.W.2d 731. We affirm the judgments of the courts below, and hold that uranium is a part of the mineral estate.

The Mosers, plaintiffs, ¹ and the Gefferts, defendants, ² own neighboring tracts of land in Live Oak County. Prior to 1949, the boundary between the Mosers' land and that of the Gefferts was a winding road. In 1949, the road was straightened and, as a result, no longer represented the true boundary between the two ranches. The new road separated a 6.77 acre tract of the Geffert ranch on the Moser side of the road and a 6.42 acre tract of the Moser ranch on the Geffert side of the road. To avoid crossing the highway to reach their tracts, the Mosers' predecessor in title and the Gefferts executed similar deeds conveying the surface estates of the isolated tracts to the other party. The 1949 deeds contain identical language reserving:

[A]ll of the oil, gas, and other minerals of every kind and character, in, on, under and that may be produced from said tract of land, together with all necessary and convenient easements for the purpose of exploring for, mining, drilling, producing and transporting oil, gas or any of said minerals.

Substantial quantities of uranium were discovered on the 6.77 acre tract. The Mosers, as surface owners of the 6.77 acre tract, sued the Gefferts to establish ownership of the uranium. The Gefferts, as owners of the mineral estate under the 6.77 acre tract, counterclaimed to establish that uranium is one of the "other minerals" reserved from the conveyance of the surface.

At trial, the parties offered conflicting evidence on the depth of the uranium deposits and the effect its removal would have on the surface. Special issues were submitted based on the test set out by this Court in Reed v. Wylie, 554 S.W.2d 169 (Tex.1977) (Reed I): if substantial quantities of the mineral lie so near the surface that extraction, as of the date of the severance of the surface and mineral estates, would necessarily have destroyed the surface, the surface owner has title to the mineral. The jury found there would have been no substantial surface destruction at the time the deed was executed. The trial court accordingly held the uranium was a part of the mineral estate retained by the Gefferts in the 1949 deed.

After the Mosers' appeal to the court of civil appeals, but prior to final disposition by that court, we rendered our decision in Reed v. Wylie, 597 S.W.2d 743 (Tex.1980) (Reed II). The court of civil appeals held that Reed II should govern the appeal. In Reed II, we modified the rule of Reed I by holding that a substance "near the surface" is a part of the surface estate if it is shown that any reasonable method of production, at the time of conveyance or thereafter, would consume, deplete, or destroy the surface. 597 S.W.2d at 747. A deposit within 200 feet of the surface was held to be "near the surface" as a matter of law. In addition, we held if a surface owner establishes ownership of a substance at or near the surface, the surface owner owns the substance beneath the tract at whatever depth it may be found. Id. at 748. The Moser court of civil appeals found, as a matter of law, that at the time of trial the only reasonable method of mining uranium from the tract was by in-situ leaching or solution mining, a process which it found did not result in substantial destruction of the surface. 601 S.W.2d at 734. ³ Accordingly, the court of civil appeals affirmed.

We have previously attempted to create a rule to effect the intent of the parties to convey valuable minerals to the mineral estate owner, while protecting the surface estate owner from destruction of the surface estate by the mineral owner's extraction of minerals. See Reed v. Wylie, 597 S.W.2d 743 (Tex.1980); Reed v. Wylie, 554 S.W.2d 169 (Tex.1977); Acker v. Guinn, 464 S.W.2d 348 (Tex.1971). In so doing, we decided that determinations of title should be based on whether a reasonable use of the surface by the mineral owner would substantially harm the surface. Application of this rule has required the determination of several fact issues to establish whether the owner of the surface or the mineral estate owns a substance not specifically referred to in a grant, reservation or exception. See Reed v. Wylie, 597 S.W.2d 743, 750 (Spears, J., concurring). As a result, it could not be determined from the grant or reservation alone who owned title to an unnamed substance. Determining the ownership of minerals in this manner has resulted in title uncertainty. We now abandon, in the case of uranium, the Acker and Reed approach to determining ownership of "other minerals" and hold that title to uranium is held by the owner of the mineral estate as a matter of law.

In Texas, the mineral estate may be severed from the surface estate by a grant of the minerals in a deed or lease, or by reservation in a conveyance. See Humphreys-Mexia Co. v. Gammon, 113 Tex. 247, 254 S.W. 296 (1923). This severance is often accomplished by a grant or reservation of "oil, gas and other minerals." Consequently, Texas courts have had many occasions to construe the scope of the term "other minerals." We have determined that some unnamed substances have been impliedly conveyed or reserved in mineral conveyances by cataloging each, on a substance-by-substance basis, as part of the surface or mineral estate as a matter of law. See, e.g., Sun Oil Co. v. Whitaker, 483 S.W.2d 808 (Tex.1972) (fresh water not included in mineral estate reservation of "oil, gas, and other minerals"); Heinatz v. Allen, 147 Tex. 512, 217 S.W.2d 994 (1949) (devise of "mineral rights" held not to include limestone and building stone); Atwood v. Rodman, 355 S.W.2d 206 (Tex. Civ. App.--El Paso 1962, writ ref'd n.r.e.) ("oil, gas, and other minerals" did not include limestone, caliche, and surface shale); Union Sulphur Co. v. Texas Gulf Sulphur Co., 42 S.W.2d 182 (Tex. Civ. App.--Austin 1931, writ ref'd) (solid sulphur deposits conveyed by ordinary oil and gas lease); Praeletorian Diamond Oil Ass'n v. Garvey, 15 S.W.2d 698 (Tex. Civ. App.--Beaumont 1929, writ ref'd) (gravel and sand not intended to be included in lease for "oil and other minerals"); Reed v. Wylie, 597 S.W.2d 743 (Tex.1980) (near surface lignite, iron and coal is part of the surface estate as a matter of law).

In making these determinations of ownership, our courts have considered a number of construction aids. We have refused to employ the ejusdem generis rule of construction to limit the term "oil, gas and other minerals" to hydrocarbons. Southland Royalty Co. v. Pan American Petroleum Corp., 378 S.W.2d 50 (Tex.1964). Likewise, we have acknowledged that the scientific or technical definition of a disputed substance is not determinative of whether it is a mineral, because the term "other minerals" would then "embrace not only metallic minerals, oil, gas, stone, sand, gravel, and many other substances but even the soil itself." Heinatz v. Allen, 147 Tex. 512, 217 S.W.2d 994, 997 (1949). Such a construction would eliminate any distinction between the surface and the mineral estates. We have, however, approved of considering whether the substance is thought to be a mineral within the ordinary and natural meaning of the term. See Heinatz v. Allen, 217 S.W.2d at 997; Psencik v. Wessels, 205 S.W.2d 658, 660-61 (Tex.Civ.App.--Austin 1947, writ ref'd). The knowledge of the parties of the value, or even the existence of the substance at the time the conveyance was executed has been found to be irrelevant to its inclusion or exclusion from a grant of minerals. See Cain v. Neumann, 316 S.W.2d 915, 922 (Tex.Civ.App.--San Antonio 1958, no writ). Accord Barden v. Northern Pacific Ry., 154 U.S. 288, 314, 14 S.Ct. 1030, 1033, 38 L.Ed. 992 (1893) ("[T]he knowledge or want of knowledge at the time [of the grant] by the grantee in such cases, of the property reserved in no respect affects the transfer to him of the title to it."). In Acker v. Guinn, 464 S.W.2d 348 (Tex.1971), we quoted with approval Professor Eugene Kuntz' theory that the proper focus when construing an implied grant of minerals is the general, rather than the specific, intent of the parties. We adopted the view that the general intent of parties executing a mineral deed or lease is presumed to be an intent to sever the mineral and surface estates, convey all valuable substances to the mineral owner regardless of whether their presence or value was known at the time of conveyance, and to preserve the uses incident to each estate. Id. at 352; Kuntz, The Law Relating to Oil and Gas in Wyoming, 3 Wyo. L.J. 107, 112 (1949).

Professor Kuntz suggested the apparently irreconcilable conflict between the rights of the surface owner to preserve the integrity of his surface fee and the right of a mineral owner who takes a mineral under an implied grant to extract his mineral could be compromised as follows:

The rights of the surface owner to subjacent support and his right to the use of the top-soil in its place would have to be respected, and at the same time, the owner of the mineral fee should have a right of extraction. Since...