Tennessee Oil, Gas & Mineral Co. v. Brown

• Decision Date: 15 July 1904
• Docket Number: 1,295.
• Parties: TENNESSEE OIL, GAS & MINERAL CO. v. BROWN et al.
• Court: U.S. Court of Appeals — Sixth Circuit

131 F. 696

TENNESSEE OIL, GAS & MINERAL CO. v. BROWN et al.

No. 1,295.

United States Court of Appeals, Sixth Circuit.

July 15, 1904

This is a bill to remove a cloud from the title to a tract of mineral land situated in Scott county, Tenn. The land in question is wild mountain land, situated in the Cumberland Mountains, and has little or no value, save for its timber and minerals. The plaintiffs are in possession and claim title in fee through conveyance made by one Richard Slaven, under whom the defendants also claim the mineral interest in said lands. The alleged cloud consists in a prior conveyance or agreement of lease or license made by said Richard Slaven to one Geo. W. Colbert under whom defendants claim the mineral and timber interests in said land. This instrument is in these words:

'The said party of the first part, for the consideration of one dollar, to him in hand paid, the receipt of which is hereby acknowledged, as well as the agreements hereinafter mentioned does hereby bargain, sell, and convey unto the party of the second part, his heirs and assigns, all the mineral, coal, iron ore, ore and potter's clay, and other minerals, and all rock or petroleum oil and salines and all timber suitable for lumber, in, upon, or under the farm or tract of land in the district of No. 1st, in the county of Scott, in the said state of Tennessee, bounded and described as follows: * * * Granting to the party of the second part, or his assigns, the exclusive right to enter upon said lands at any time hereafter, and search for coal, iron ore, and all other minerals, oils, and salines and, when found, to remove the same from said lands, together with all rights and privileges incident to the mining and securing said coal, iron ore, clay, and other minerals, oils, and salines, including the right of ingress and egress. And the party of the second part agrees to enter upon and make search for coal, iron ore, or other minerals, or oils, or salines, in said lands and adjoining lands, of sufficient thickness, quantity, and quality to justify him, the party of the second part, to open and work said mines, or oils, or salines, then he, or his representatives or assigns, shall pay to the party of the first part, his heirs or assigns, within five years after the completion of a railroad, built in connection with any leading railroad by which said minerals or oil can be taken to any large markets, the sum of ten (10) dollars a year, until mining is commenced upon said premises, or during the continuance of this agreement; and the failure to make these advance payments yearly upon request, shall be deemed an abandonment of this agreement, but not to the injury of the party of the second part, or his assigns. And the party of the second part shall have the right to abandon said lands and mining at any time and remove all his buildings and fixtures from said lands. And the said party of the second part, by himself or assigns, agrees to pay to the party of the first part, his legal representatives or assigns, the sum of ten (10) cents for each ton of (2,240 pounds) of screened coal, iron ore, or other minerals mined and removed from said lands herein described; and the price shall be ten (10) cents per 1,000 feet of sawed lumber; and the price or rent for rock or petroleum oil and salines shall be one-twentieth of the net proceeds. But it is understood and agreed that any advance payments of ten (10) dollars as before mentioned to be paid yearly, that shall be made to the party of the first part, are to apply on the payment of rent of coal, iron ore, or other minerals, or oil first mined thereafter. The payment of rent per ton on coal, iron ore, other minerals, clays, oils, and salines, mined and removed, shall be made half-yearly and all payments required by this agreement shall be made and accepted in bankable funds of the state of Tennessee. It is mutually understood by the parties that the coal, clay, and ore under any dwelling house or other permanent buildings upon the premises shall not be mined out, and as little injury to the surface of said land shall be done as possible, in the mining, removal, and transportation of said coal, clay, and ore, as herein contemplated. It is also mutually understood that the stipulations herein contained shall apply to and bind the heirs, executors, administrators, and assigns of the parties, respectively. In witness whereof, the parties hereunto set their hands and seals the day and year first above written.'

Upon the pleadings and evidence, the prayer of the bill was granted, and a cancellation of the instrument above set out decreed.

H. H. Ingersoll and Wm. Wisner White, for appellant.

E. G. Foster, C. E. Lucky, Edward T. Sanford, and J. A. Fowler, for appellees.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

LURTON Circuit Judge, after making the foregoing statement of the case, .

The contention of the appellant company is that the agreement between Richard Slaven and Geo. W. Colbert, set out in the statement of the case, is a deed of conveyance of the minerals in the land and of the timber thereon, which operated to vest a fee in the minerals and timber, subject to defeasance only upon breach of the agreement to pay $10, upon request, annually, after the completion of the railroad referred to. This construction is based upon the insistence that the terms 'bargain, sell, and convey,' found in the first clause of the instrument, necessarily characterize it as a conveyance of the timber upon and the minerals under the surface of the land of Slaven. Prima facie this may be true. But before we give these words this construction we must look into the four corners of the agreement and give effect to the whole of the contract. The Cincinnati Southern Railroad was in prospect when this contract was made, and was constructed to a point within nine miles of this property within five years after this contract. But no railroad has been build connecting that railway with this property, and appellants say that they are not under covenant, implied or express, to construct such connecting road. Without such road they say the coal under this land cannot be profitably mined or the timber converted into lumber, and that, having the title to the coal and timber, and the title to any other minerals which may yet be found, they are under no obligation to mine the coal or other minerals, or cut down the timber, until it can be done to their advantage, and that they may hold this estate until such time as it suits them to remove the minerals or oil or timber, and that neither Slaven nor his subsequent lessees can complain because the instrument contains no agreement, express or implied, obligating them to begin or continue mining, if they should choose to begin. Though they have done nothing, and paid only the nominal consideration of $1 under this deed, they justify this nonaction for 25 years by the insistence that one may do as he will with his own in the absence of a contract to do a particular thing, and that, not having agreed to mine the minerals upon said land, they are within their right in biding their time, and that, if they shall deem it advantageous to ever commence mining, they are under no covenant, implied or express, to mine any definite quantity, or continually, or until the mineral is exhausted, but may, if they see fit, 'abandon said lands and mining at any time, and remove all buildings and fixtures,' having reserved the right to terminate the estate vested at will.

The logic of the situation compels the learned solicitor for the appellants to take up this extreme ground, for otherwise their utter failure to do any valuable thing in pursuance of the agreement after the lapse of 25 years would be unaccountable. If in all the time past they have had the right to stand upon their claim to be the owners absolutely of the mineral interest thus severed, in law, from the land, and to refuse to develop and operate that interest, because that is the right of an owner of the fee, the same right to hold onto this estate for the next century is undeniable. That they may be required to pay $10 annually if a railroad shall ever be constructed from the Cincinnati Southern to this land they concede. But this concession is possibly inadvertent; for, although one clause of the agreement does provide for such a payment until mining commences, and that the failure to make these advance payments yearly upon request shall be deemed an abandonment of this agreement, it is added, 'but not to the injury of the party of the second part or his assigns. ' If it is true that the appellants have for $1 acquired the right to prevent Slaven or his assigns from using, exploiting, or mining the mineral interests upon or under his own land, and can at no time be required to convert the timber into lumber, or to open and operate the very valuable vein of coal now known to underlie its surface, to say nothing of the possibilities of iron ore, coal oil, and other minerals, the contract is one of the most unreasonable and one-sided which any court has ever been called upon to uphold. But this $1 was not the real consideration moving to Slaven, for the recital of the contract is that the consideration is one dollar in hand paid, 'as well as the agreements hereinafter mentioned. ' Now, what are these agreements referred to? for before we may conclude that this is an out and out conveyance in praesenti of the timber and mineral interests owned by Slaven, we must scrutinize the agreements which constitute the real consideration, for in the 'agreements' we are most likely to find the purpose, intent, and meaning of the instrument regarded as a whole.

First. We find that Colbert agrees 'to enter upon said land and make...