Mountain Fuel Supply Company v. Smith

• Decision Date: 08 January 1973
• Docket Number: No. 72-1149.,72-1149.
• Citation: 471 F.2d 594
• Parties: MOUNTAIN FUEL SUPPLY COMPANY, a Utah corporation, et al., Appellants, v. Emory C. SMITH and Verland E. Smith, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

471 F.2d 594 (1973)

MOUNTAIN FUEL SUPPLY COMPANY, a Utah corporation, et al., Appellants, v. Emory C. SMITH and Verland E. Smith, Appellees.

No. 72-1149.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted September 12, 1972.

Decided January 8, 1973.

Brent J. Giauque (Glen M. Hatch, of Crawford, Hatch, Kirsch, Mollinet & Bates, and Leonard J. Lewis, of Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City, Utah, with him on the brief), for appellants.

Glen E. Fuller, Salt Lake City, Utah (Orval C. Harrison, Salt Lake City, Utah, with him on the brief), for appellees.

Before HILL, SETH and HOLLOWAY, Circuit Judges.

SETH, Circuit Judge.

This is an action by mineral lessees to enjoin the defendants, who are surface owners of land, from interfering with plaintiffs' use of a road on defendants' tract for hauling oil from producing wells on adjoining lands.

The defendants moved for summary judgment which was granted. The trial court signed on December 20th a judgment which dismissed the action and enjoined plaintiffs from entering defendants' lands. Some days later, on January 3d, the court signed another judgment which granted defendants' motion for judgment on the pleadings ". . . on the ground that the Court is without jurisdiction to entertain the action."

The defendants are the owners, and from the record before us, appear to be owners in common of the surface of lands in Utah used by them for grazing sheep. These interests were originally granted under eleven separate patents by the United States to the original entrymen under the Act of July 17, 1914. Defendants have acquired these titles. In the patents, and under the Act, the United States reserved the minerals together with so much of the surface as ". . . may be required for all purposes reasonably incident to the mining and removal of the minerals therefrom. . . ." The plaintiffs are oil and gas lessees under several leases issued by the Secretary of the Interior for the Ute Indians, the mineral owners, and from others. Some production here involved is from non-Indian and non-United States lands leased by plaintiffs.

More particularly, the record shows that the plaintiffs have producing wells in Sections 22 and 24 of Township 3 South, Range 7 West, and in Sections 19 and 20 of Township 3 South, Range 6 West, Uintah Special Meridian, Utah. The plaintiffs are hauling the production from the above wells by truck across the defendants' surface lands in Sections 24, 23, 22 and 21 in Township 3 South, Range 7 West, on a non-public road built by plaintiffs to connect with United States Highway 40. As is apparent from their description, the six sections described above are contiguous, and form a strip one mile wide from north to south and six miles long east to west. The defendants have no interest in Sections 19 or 20 of Township 3 South, Range 6 West. The Indians own the minerals in Section 19, but Section 20 is owned by non-Indians. The road is similarly used by plaintiffs for exploration and development of lands, the surface of which is owned by defendants and by others. The area concerned is unitized for oil and gas production pursuant to Utah statutes.

The plaintiffs assert their right to use the defendants' surface under the reservation in the Acts referred to above, and in the patents, for development and production anywhere in the general area and thus outside defendants' surface area. Plaintiffs thus assert that this is an action arising under the laws of the United States 28 U.S.C. § 1331.

We hold that the complaint does so allege an action under 28 U.S.C. § 1331, and the trial court had jurisdiction of the parties and the cause. The trial court considered the issues, but found, as we understand it, no facts entitling plaintiffs to utilize the statute. Thus it gave judgment on the pleadings for the defendants. The particular form of judgment is not of significance in our consideration, as the trial judge passed on the pertinent issue.

The statutory authority for issuance of the patents is referred to above, and need not be quoted here. This provision controls the reservation of minerals, and reserves the necessary use of the surface. The issue on appeal is whether the surface may be used for development and production on lands of others. We hold in accordance with the authorities hereinafter discussed that the defendants' surface may not be used for development on, or the hauling of production from, the lands of others. However, we also hold that under this record, the surface lands of defendants constitute but one tract in construing the existing reservations in the United States.

The authorities clearly hold that a surface owner of a tract of land on which minerals were reserved to the Government when patented under the Act of July 17, 1914, may object to surface use of his lands by an oil and gas lessee for operations conducted upon other lands under a different ownership.

As to the relationship of the surface owner and a mineral lessee generally, the Supreme Court in Kinney-Coastal Oil Co. v. Kieffer, 277 U.S. 488, 48 S.Ct. 580, 72 L.Ed. 961, considered an attempted interference with the surface use of the tract upon which the oil and gas lessee planned development. This was a case arising in Wyoming (8 Cir., 9 F.2d 260), and concerned lands which had been withdrawn from entry because they were within a known oil and gas field. The Act of July 17, 1914 38 Stat. 509, 30 U.S.C. §§ 121 and 122, provided for later entry and disposal subject to a reservation of the minerals. The Supreme Court considered the 1914 Act with the Mineral Leasing Act of 1920 41 Stat. 437, and said that the 1914 Act contemplated the severance and separate disposal of the surface and the minerals. The Court further said:

"The acts of 1914 and 1920 are to be read together —

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