## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N os. 09

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- 3265 A MERI CAN L AND H OLDINGS OF I NDI ANA, LLC , e tal ., P la intif fs-A pp ella nts/ C ross-A pp ellees , v.

S TAN LEY J OBE , e tal ., D efend a nts-A pp ellees, an d W I L L I A M B OY D A LEX ANDER, D efend a nt-A pp ellee/ C ross -App el lant.

A pp ealsfr o m the United S t ates Di strictC our t fo r the S outhernDi stricto f Indian a, T erreH aute D ivisi on. No . 2:0 8-cv-04 48 -WTL-WGH

—WilliamT. Lawrence , Judge .
A RG UE D M AR CH 30, 2010

— D ECI DE D M AY 6, 2010

Befo re P OSNER, R OV NER, a nd T INDER, C ircu it Judges .2 N os. 09

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- 3265 P OSNER, Cir cu i tJudg e . Thi s d iver si ty sui t, br ought by affi l i ate s o fthe Peabo dy EnergyCor pora ti on ( f or sim p licit y w e’ll p re te n d th er e is a sin gle p lain ti f fan d ca ll i t Peabody) , se eks bo th a decl ar ati on that Peabody has th e r i g h t t o s t r i p mi n e c o a l o n th e d e fe n d a n t s ’ l an d, a nd s pe c i fi c p e r f o r m ance o fa n o pt i o n t o p ur c ha s e the l a nd

. T h e l a n d is inInd ian a, an d th e s u b st an tiv e is su es in the c ase ar e g ove rned byI nd i ana l aw . The di str i ct j ud ge, afterco nd ucti ng a b en ch tr i al, ente re d j ud gm ent for th e d efend an ts, 655 F . S u p p . 2d 882 (S. D
. I nd

. 2009), an d Peab od y ap p eals. O n e of th e d efend an ts (A lexan d er) c ro ss -ap p ea ls

— i m proper l y, bec ause he i s s eeki ng notto m odi fy the j ud gm ent but m er el y to defe nd i t ( so f ar as it aff ects hi m ) o n an al ter nati ve gr ound to the di str i ct j ud ge’ s. WellP o i n t, Inc. v. C o m m ission er, 59 9 F
. 3d 641, 64 7- 51 ( 7th Cir
. 20 10)
. The o therdefendants al so fi l ed a c ro ssappeal, but have dism i sse d i t. The de f en dan ts o wn a to ta l o f6 2 ac r es o ff ar m l an d i n S ul l i va n Coun ty, I ndi an a; the r e ar e f ar m ho us es a nd othe r bui l dings o n th e lan d

. The l and i s a n i sl and i n an ar ea th at P ea b od y i s b u sy st rip m in in g for co al, an d it is ea g ert o s tr i p m i ne the de fen d an ts’ lan d a s wel l, a nd i nsi sts t hat a 19 03 deed enti tl es i t t o do so

. The co al be ne ath the l an d i s wor th$ 50 mil l i o n ( o fc o ur se min us th e co st ofextr acti on) atthe curr ent s pot pri ce o f $42 per ton f orco alo fthis t yp e and qual i ty. The part i es saythe coa l i s worth $18 0 m i l l i on, but th at appears to be an ar i thm eti caler ro r; f orthe quanti ty ofco althat Pe abody expe ct s to e xt r ac t i fi t i s al l o wed t o s tr i p m i ne th e land is only 1.2 m il li on ton s. (Th ere is, how ever, m ore at sta ke f orPeabo dy, because i fi t ca nnot e xtend i tsN os. 09

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ex ist in g s tr ip m in e a c ro ss th e d e fen d an ts ’ lan d it w ill appa r en tl y be unabl e to g et at an o th er 2. 5 m i l l i o ns to ns o fc o ali n the l an d i m m edi at el y s ur r o undi ngthe de fen d an ts ’ lan d .) P ea b od y c on te n d s t h at th e d ee d en tit les it b ot h to st rip m i ne th e l an d wi th o ut co m pen sa ting th e o wners and al so, if i t wants, to o btain fullti tl e t o the l and (that i s, f ee si m ple ) f or$3 0 a n a c re . U nd erthe fi rs t e nti tl em en t th e r i g htt o us e th e su r f ac e woul d r ev er t t o the defe nd ants w hen Peabo dy w as fi ni shed str i p m i ni ng i t; un de r the s e c o nd i two ul d b e P e a b o dy ’ s p ro per t y t o do wi thi t as i t want ed, f o r ev er . One mightwon derwhy Pe ab o dy woul d pr eferl i ti g at i ngr athe r tha n j us t di g g i ng anunde r g r o und mi ne , a s th e dee d a l l o ws. Bu t the dist ri ct j ud ge fou n d that s tr i p m i ni ng was neces sar y t o re m ove al l the coa l

— u n d er gr ou n d m in in g w ou ld n 't d o it because the coa l se am s a re n’tve ry thi ck and i n pla ces th eya r e l ay er ed over o ne a no th ers o tha t a g o o d a m o unt ofthe coa l would have to be l eft in pla ce in or der t o su ppo r t th e sh afts r equi r ed f o r g et ting ata nd e xt r ac ting th e re st of th e c oa l. The deed, gi ven bythe defe nd ants’ pred ec essor s t o Peabo dy’s predeces sor, gr ants the l att er and i ts success or s “ al l the coa l s, c lays , m i nera l s a nd m i nera l substa nces und er l yi ng” the defendants’ l an d , “tog etherwith the r i ght t o m i ne and r em ov e s ai d coal s [ etc.

— w e ca n i gnor e the r efer ence to ‘c l ays , m i nera l s a nd m i nera l substa nces, ’ as do the par ti es] witho ut fu rt h erpaym ent o f an y na tu r e what so ev er . ” M o r eo ve r, th e co al com pan y i s no t t o be l i abl e for any dam age s “ occa si oned by m i ni ng or re m ovi ng of sai d c oal s . . . not to exce ed4 N os. 09

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- 3265 5 a cre s”

— i n other w or ds , it can dam age fi ve acr es of th e defen dan ts ’ 6 2 ac r es wi th o utha vingt o pa y fo r the damag e. And “ ata ny t i m e he r ea fte r upon d em an d a nd p aym en t the refor at rate of $30 per ac re, ” the grantors ar e t o conve y t o the c oalco m pany “witho ut further pa ym en ts
. . . such por ti on o fsur f ace ofsa i d Real Estat e as m ay be ne cess ar y forl oca ti on o fco alm i nes, tr acks , t i pp l e s , r a i l r o a ds , r a i l r o a d s wi t c he s a nd a l l b ui l di ngs ne ce ss ar y t o c ar r y o n bus i ne ss o fmin i nga nd t r an spo r ting sa i d .

. . c o al

. ” The c o alc o m pan y is a lso “g r an te d the use o fso m uc h o f sur f ace ofsa i d Real Estat e a s m ay be ne cess ary in p utti ng down te st hol es and hol es f or pum pi ng wat er f r o m an d f o r ve nt i l at i ng an d dr aini ng m ine s a nd f or other li ke p urp oses n eces sary to secu re [ the c oalco m pany’s ] m i ni ng and re m ovi ng tha t por ti on of s aid R e a l E st at e t h er eb y g ra n te d an d co n ve ye d to it.” H owever, “no
. . . co al

. . . [i s] to be m i ned orr em ove d fr om und erany dw el l i ng hous e n ow si tuate d on sa i d Real Est ate, ” a nd “ fi ve a cr es o fs ur f ac e wher e pr es en t b u ild in gs are n ow sit u at ed is re se rv ed by th e g ra n to rs .” Peabo d y a rgues that the co nveya nce o f“a l l the coa l s” m ean s t hat i t o wns a l l the c o alunde r the s ur f ac e o fthe defen dan ts ’ l an d a nd s o , s i nc e th e dee d en ti tl es i t “t o min e and rem ove ” the co al, it can extr act i t byany m etho d i t wants, i ncl ud i ng st ri p m i ni ng. Bu t the furtherpor ti ons ofthe deed that we quoted see m to co nfine the co al c om pany’s use ofthe surf ace to str uctures and act i vi ty re l ati ng to underground m i ni ng. For$3 0 a n acr e the co m pany can purchas e por tio n s o f th e su r f ac e f o r s tr uctur es r el at ed to su chmin i ng, b ut rem oval ofthe su rface for p urp oses u nrelate d t o un d er-N os. 09

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- 3265 5 g r o und mi ni ngi s no wher e au th o r i ze d unl es s bythe re fer en c e t o “ all th e c oa ls.” The t en si o n be twe enthe ri g htto m i ne “ al l the c o al s” a nd the l i m i ts on the m i ni ng co m pany’s use ofthe surf ace o fthe l an d m ar k s th e dee d a s a m bi g uo us . And s o the j udg e admi tt ed ex tri ns i c ev i den ce ( ev i den ce b ey o nd the deed i tse l f ) to h elp h i m deci de w hetherthe deed had conve yed, ei therdi re ctl y o r by gr ant o fthe pu rchas e op tio n, th e rig h t t o s tr ip m in e t h e l a n d . E x tr in sic ev i den ce i s ad m i ss ibl e to di sa m bi g ua te a n a m bi g uo us dee d , S ymm e s v . Brown , 13 In d . 318 (18 59 ); H oos ev. D oody, 88 6 N .E .2d 83 , 89-9 0 (In d . A p p . 20 0 8); Kop e t s kyv . Cre ws , 83 8 N .E .2d 11 18 , 1 1 2 4 (In d . A p p . 200 5); U ni t e d S t at e s v. La R o sa , 765 F.2d 693 , 696-97 (7 t h C ir. 1985 ) (Ind iana law ), j us t as i t i s admi ss ibl e to di sam big ua te a n a m bi g uo us contr act. The keyextr i nsi c ev i dence pres ented atthe bench tr i al w as th at t h er e was no str i p m i ni ng o fco ali n Sul l i van C ou n ty , In d ian a , in 19 03 ; an d ap p ar en tly n o s tr ip m i ni ng o fco alanywhere i n the U nite d S ta tes atthat ti m e, bey ond i sol ate d experim en tat i on. S ee Denver H ar per, Chri s W al l s & D ebo ra h DeC hurch, “Coal M i ni ng H i sto ryo fthe U nited S tat es W i th an Em phasis on I nd iana” ( I nd ian a G e ologi cal Survey 2003), i gs. i nd i ana. edu/ge ol ogy /c oal Oil Gas/co al M i ni ngH ist or y/ coa l _hi sto ry.h tm l ( vi si ted A pri l 12 , 20 10) ; Denver H ar p er , “T h e D ev elo p m en t o f Su rfa c e C oa l M in in g in In d ian a” 5-7(Ind ian a D ep t. of N at u ra l R es ou rc es , G eo log ic al Su rv ey Sp ec ial R ep or t N o. 35 , 198 5). C om m er c ially si g ni fi ca nts tr i p m i ni ngha d to a wai t th e adv en t o fthe huge s t e a m s ho v e l s de v e l o pe d f o r the c o ns t r uc t i o n of6 N os. 09

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- 3265 th e Pa na m a Can al, whi chbegan i n 1 90 4. S tr i p m i ni ng ev en on a m od es t s c ale se em s n otto h av e b ee n d o n e in Sul l i van County unti l 19 18, o r to have beco m e co m m on an yw he re i n Ind iana u nt ilthe 19 2 0 s . S e e H arp er e tal ., sup ra ; H a r p er , sup ra , at 7 -11 ; H ar p er , “C oa l M in in g in Sul l i van County, I nd i ana” 2 ( I nd i ana D ept. o fN atur al R esou rces, G eologi cal Surv ey Sp ecial R ep ort N o. 43, 1988). T h e d efe n d an ts ’ ex p er t w itn es se s t es tifie d co n sis te n tly wi ththe pub l i sh ed so ur ce s; Pe ab o dy o ffer ed no e xper t te st i m o ny r el at i ngt o the hi st o r y o fs tr i p m i ni ng i n I nd i ana. The j udg e co nc l ude d tha t th e r i g htt o min e “a l l the coa l s” re f er re d to extr acting th e coalbene ath the sur f ace ofthe defe nd ants’ l and by undergr ound m i ni ng o nl y. That expl ain ed , he thought, wh y a l l the surf ace uses perm i tte d to the c oa l com pany, and the pu rchas e o pti on as wel l, r el at ed ex pre ss l y t o unde r g r o und mi ni ng

— no ne t o s t r i p min i n g . H i s c o n c l u s i o ntha t t h e d e e d i s a mb i g u o u s a n d th e i n fe a s ib i l i t y o fs t r i p min i n ga tth e t i me it w as gra n te d allow s t h e a m b igu ity t o b e r es olv ed in f avo r ofthe su rfa ce o w ner i s co nsi ste nt with the c ase law

. P hill ips v. Fo x , 458 S. E
. 2d 327, 335 (W
. Va. 1995); Ski vol oc kiv. Eas tO hi o Gas Co. , 313 N .E .2d 374, 37 6, 37 8- 79 (O h io 19 74 ); S t e wa r tv . C h e r n i cky , 266 A
. 2d 259, 26 2- 65 (P a. 19 70 ); We s tVi rgi ni a- Pit t s b urgh C oal Co. v. St r ong, 42 S.E .2d 46 , 47-5 0 ( W
. V a . 194 7); c f. Com pas s Coal Co. v. Com m onwe al t h of

Pe nns yl van i a Gam eCom m i s s i on , 45 4 A. 2d 11 67( Pa
. Co m m o nwea l thC t. 1 98 3)
. The I ndi an a S up r e me Co ur th a s n o ts po k e n t o the i s s ue . Bu tP e a b o dy argu es th at Ind iana’s interm ed iate ap p ell ate cou rt has hel d i n a pai r ofsucce ssi ve case s

— Cons ol i datio n CoalN os. 09

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- 3265 7 Co. v. M ut ch m an , 5 65 N. E. 2d 1074 ( I nd. App. 1 99 0) , a nd M utch man v. Co n s ol i da t i on Co al Co
. , 6 6 6 N. E. 2 d 4 6 1 ( I nd

. A pp . 1 996)

— th ata c o nv ey an ce o fthe r i g htt o min e “a l l c o al ” ( th e phr as e i n o urde ed i s “all the c o al s, ” but presum abl y th e m eaning i s the sa m e) can be l i m i ted to un d ergrou nd m ining only ifthe d eed i m p o ses a “sev ere li m itation” on th e m ining com p an y’s us e o f th e surf ace, wh ate verexact l y that m eans. Assu m i ngtha t th ese i nt er m edi at e appe l l at e dec i si o ns are au th oritative sta tem en ts of Ind iana law , nev erthel ess we don’t re ad them as Peabod y d oes . I n the fi rs t M ut ch m an cas e the co urt w as i n te rp reti ng a l ar ge nu mbe r o fh e t e r o g e ne o us de e ds g r a nt i ngc o a l r i g hts, and the co u rt n ot ed thattwo se ts ofthe deeds “appearto se ve r el y l i m i t su r f ace u se, e i th erb y e xpr es sl y s ta ting th ati t i s no t t he i nt en ti o n o fthe g r an to r s to ‘ g r an t an y surf ace ri ghts, ’ o r re quir in g th e g ra ntee to acco m m odate su r f ac e f ar m i nga nd pa y da m ag es f o r c ro ps as the dam age o c c u rs . ” 5 65 N
. E.2 d at 1 082. That was an observat ion rathe r than the sta tem en t of a rule. T he cou rt sa i d tha t th e dee ds wer e am big uo us a nd s o , “ to c o ns tr ue [ them ] , i t would be appropr i ate t o p erm i t the i ntro
du cti on o fextr i nsi c ev i dence to ai d i n const ruction
. ” Id

. a t10 8 3
. I tfur the r o b s e r v e d tha tthe y “ e xp r e s s l y p r e c l ud e use o f the s ur f a c e o r . . . r e qu i r e i mm e di a t e pa y men t o f dam age s f ori nj ury to the s urf ace. ” Id

. On rem and fr om the fi rst M ut ch m an de ci si o n b y the appell ate co urt, the tr ial cour t r ecei ved ev i dence w hi ch showed that in 192 2, wh en the d ee d s in questi on had been issu ed ( the date i s no t in the M ut ch m an o pi ni o n, b uti s i n the b r i ef s i n tha t c ase), “ st r i p m i ni ng8 N os. 09

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m etho ds wer e be i ngus ed in t he c o unt i es s ur r o undi ng [the c o unty i n whi chthe g r an to r s’ l an d was l o ca te d] ; a nd it w as m ost lik e ly th e grant ors of th e coal dee d s w ere awar e o fthe pr obabi l i tytha t th ei r c o alwas b eing acqui re d for st ri p m i ni ng . . . [ and] would have bee n aw ar e o f th e w id es p re a d s o l i c ita tio n of lan d for s tr ip m in in g pu rpos es. ” 6 66 N
. E.2 d at 4 65- 66. The appel l ate cou r t c o nc l ud e d tha t “ f r o m thi s e v i de nc e , we c a nn o tsa y i t was unre aso nabl e f orthe tr i alco urt to concl ud e that th e grantor s had kno w l edge that the sur f ace coa l co u ld be r emov ed bys tr i p m i ni ngm etho ds, a nd, i fthe gr antor s di d not want thei r l and str i p m i ned, they coul d hav e cl ear l y l i m i ted the use of the surf ace to p recl ud e s tr i p m i ni ng. ” Id

. at46 6. N ei therapp el l ate o pini on i n the M ut ch m an c a s e h o l ds that onlya “ se ve r e l i m i ta ti o n” o n a c oalc o m pan y ’ s r i g ht to use the sur f ace ofth e la nd to ge t a t i ts coa l can excl ud e, fro m a gr ant o fthe ri ght t o m i ne “al l co al ” o r “a ll th e c oa ls,” co al t h at c a n b e e x tr ac te d on ly b y s tr ip m i ni ng. W e rea d the c o ur t to b e sa y i ngtha t, c o ns i st en t w i th the cas es w e ci ted ea rl i er, i fthe d ee d bo th gr ants the coa l com pany the ri ght to m i ne “al l the coal s” an d i m p os e s restrictions incon sisten t w ith a l iteral interpr et at i o n o ftha t r ightthe de ed i s ambi g uo us a nd extr i nsi c ev i dence can pr oper l y b e use d to disa m bi guate i t. A co nveya n c e that co ntai ns a contr adic ti on m ust be interp re te d wi ththe he l p o fs o m ethi ngmor e th anthe in c on sis te n t tex t an d th at so m et h in g us u ally a n d in th is ca se , a s i n M ut ch m an , i s e xtrinsi c ev i dence. T h e d ee d in o u r c as e s at i s f i e s t h e c on d itio n th at it b e a m b i g u o u s (th u s a llow in g re c ou rs e t o e x tr in sic ev i-N os. 09

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- 3265 9 den ce ) b ec au se i t i m po se s a nu m be r o fr es tr i ct i o ns , a nd i n f act ra thero nero us one s, o n the coa l co m pa n y’ s use o fthe s ur f ace; to g etfr ee o fmos t o fthe m the c o m pan y w ou ld h av e t o p ay th e g ra n to rs $3 0 p er ac re , w h ich is th e equi val en t o fha vingt o pa y da m ag es f o r i m pai r i ng the la n d ow ners ’ use ofthe surf ace, a re str i cti on s i m i l ar to o ne m ent i o ne d i n M ut ch m an . The de ed f o rba de th e com pany to ta ke coa l fro m under the defendants’ bui l dings o r the fi ve acr es on wh ich the bui l dings sa t (p lu s y ar d s p re su m ab ly, sin c e a p p ar en t ly th er e w as on ly one f ar m ho us e i n 1 90 3 pl us s o m e f ar m b ui l di ng s, a nd the e ns e mbl e wo ul d no th a v e o c c up i e d fi v e a c r e s )
. P e a b o dy ac k no wl edges thati fi t ha d t o l ea ve fi ve a cr es o fthe surf ace untouched i t m i ght b e unabl e to re cove r m ost o fthe c o a l b e ne a th the de fe nd a nt s ’ l a nd

. I t tr i es t o s ne aka r o und thi s l i m i ta ti o n b y a r g ui ng th at since the con tou rs of th e fi ve-acre reserv ed tract a re not i nd i cate d i n the deed, the re ser vati on is vo i d und er I nd i ana pro p er ty l aw bec ause i ts boundari es cannot be d et er m in ed . Tr u e, Eden s v. M i l l e r, 4 6 N
. E
. 526 (Ind

. 1897); D e Lo ngv. Sta rkey , 92 N
. E.2 d 228, 23 0 ( I nd

. A pp . 19 50) ; 10 Ind ia na La w E ncyc lo ped ia (D eeds) § 17 (2 010) ; se e a l so B ar low B u rk e, A n n M . B u rk h ar t & R .H . H elm h olz , Fun dam e nt al s of

Pr ope r ty L aw 49 0 ( 2d e d . 2004) , but a t w oedged swo rd : i fthe fi ve- acr e t ra ct c ar ved out ofthe 62- acr e g ra nt i s in d efinite ( and the ind efi ni tenes s ca nnot be r es o l ve d b y e xt r i ns i c ev i den ce ) , a s a p p ea r s to b e th e case , the 57- acr e t r a c ti n w hi ch Peabo dy does ha ve min er alr i g ht s i s equa l l y i nde fi ni te. Anywaythe i nde fi ni te ne ss i s i r r el ev an t. The o nl y s i g ni fi ca nc e o fthe five -ac re res er va tio n for t h e c as e a t h an d i s t h e ligh t it10 N os. 09

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- 3265 cast s o n the parti es’ u n d er sta nd i ng o fwh at the dee d g r a n te d th e c oa l co m p an y: th e g ra n to rs co u ld h ar d ly ha ve tho ug httha t th e r es er va ti o n was void and the coa l c om pany’s r i ghts ther ef or e m or e e xtensi ve than the dee d sai d they w er e. S o th e 1 9 0 3 d e e d i s r i c h l y a mb i g u o u s , l i k e th e c o mparabl e deeds i n the M ut ch m an cas es. But ther e i s a c r i t i c a l di ff e r e nc e b e t we e n thi s c a s e a nd M ut ch m an , a nd i t i s the di ff er ence between 19 03 and 1922. By 19 22 i t was c lea r th at a c oa l co m p an y s ee kin g a g ra n t o f “a ll coa l” m i ght s eekto st ri p m i ne i t, but ni netee n yea rs ea rl i er st rip m in in g of c oa l h ad b ee n u n kn ow n an d ap p ar en tly u n an tic ip at e d

. A n d n o t i c e t h a t P e a b o d y ’ s cla im p rod uc es a pa r ado x: i fPe ab o dy bui l t a r ai l l i ne t o the entr ance t o an undergr ound m in e, i t would have to pay $3 0 pera cr e f o r the s ur f ac e o cc upi ed bythe t r ac k ; b ut i f it d estro yed the sur f ace com ple tel y b y s tr i p m i ni ng, i t would, o n i ts i nter preta ti on o fthe deed, o w e no thi ng. T he diff e renc e betw een strip m ining an d un d erg r o und mi ni ng, a s f ara s th e effect onthe g r an to r o fthe m i ni ng rig ht s i s co nc erne d, i s pr o f o und: s tr i p m i ni ng destr oys the surf ace, m aki ng it co m ple tel y unusabl e by the o w ner of the s urf ace unle ss and untili t i s r est or ed afte r a l l the c o alhas been st r i pped, whi l e unde r g r o und m i ni ng al l ows som e a nd m aybe al m ostal l o fthe surf ace to r e ma i n u n d i s t u rb e d a n d th e r e b y u s a b l e b y t he surf ace own er . On thi s basi s, so m e co urts cr eat e a pre sum pti on a gai nst inter preting a gr ant o fm in eralr i ghts to co n ve y a righ t t o s tr ip m in e t h e g ra n to r’s lan d . E .g ., Phil l ips v. Fo x , s up ra , 458 S.E .2d at33 2-3 5; Ski vol oc kiv.N os. 09

- 3151 , 09

- 3265 11 EastO hi o Gas Co. , sup ra , 31 3 N
. E.2 d at 3 77

- 79 and n. 1; St e wartv. Che r ni cky, sup ra , 266 A .2d at26 3; Com pas s Coal Co. v. Com m onwe al t h of Pe nnsy lvania Gam eCom m i s s i on , sup ra , 45 4 A.2 d at 1 169- 70; se e a l so Wa r d v
. Har di ng, 86 0 S.W .2d 28 0, 2 8 2 -88 (K y. 19 93 ); D o o ch in v . Ra ck ley, 61 0 S.W .2d 71 5, 71 8-1 9 (T en n . 198 1); Wil kes- B arreTo w nship Sc hool D i s t r i ctv. Corgan , 17 0 A
. 2d 97, 99-100 (Pa
. 1961); We s tVi rgi ni a- Pit t s b urgh C oal Co. v. St r ong, sup ra , 42 S
. E. 2 d a t4 9

- 5 0
. We do n’ th a v e t o g o tha tf a r t o c o nc l ud e th atthe di st r i ctj udg e d id not c o m m i t a cl ea r e r r o r ( th e p r o pers ta nda r d o fa ppel l at e r ev i ew o fa de ci si o n i nterp re tin g a co n t r a c t, d ee d , or ot h er d oc u m en t w ith th e a id of e x tr in sic ev id en c e, e.g ., M a tterho r n , I n c. v. N C R C o rp ., 76 3 F
. 2d 86 6, 8 73 ( 7th Ci r . 1 98 5) ) i n r ul i ngtha t, i n l i g ht o fthe l an g ua g e o fthe de ed r ea d a g ains t a backgrou nd th ati nc l ude s th e te ch no l o g y o fc o almin i ngwhenthe d eed w as si g ne d, the g r an t o fa r i g htt o min e “a l l the co al s” was i nt en ded to b e l i m i te d t o unde r g r o und m i ni ng, and l i kewis e th e ri ght t o use the sur f ace to enabl e m i ni ng. Forco m ple tenes s we ad d re ss the tw o al ter nati ve gr ound s fo r affi rm ance propos ed by the defendants. O n e, w h ich is l im ite d to P ea b od y’s cla im for s p ec ific perf or m ance o fthe opti on t o pu rchas e th e defendants’ l an d, i s th atthe o pti o n v i o l at es the r ul e agains t per petui ti es, wh i ch re m ai ns i n f or ce i n I nd i ana. I nd

. Code §§ 3 2- 17- 8- 1 ets eq . ( U niform Statu tory Ru le A gainst Perp etu iti es). Forpro pert y inter est s cr eat ed as i n thi s ca se bef or e 1 991 ( the da t e o f the I nd i a na s t a t ut e ) , the c o m m on l aw rul e a gai nst per petui ti es continues to go ver n , s ee secti on 32- 17- 8- 1( b) , and inval i dates the gr ant of a p ro p er ty12 N os. 09

- 3151 , 09

- 3265 i n t e r e s t th a t g o e s i n t o e ffe c t mo r e th a n 2 1 y e a r s a n d ni ne m onths afterthe death o fa perso n l i vi ng wh en it w as m ad e. Fra nc is v. Ya tes, 700 N
. E
. 2d 504, 506 (I nd

. A p p . 1998); B uc kv. B a nk s, 668 N
. E
. 2d 1259, 126 0 -6 1 (Ind

. A p p . 1996); see al so I nd

. Code § 32- 1- 4- 1 ( 1982 )
. I fthe gr ante e is a corpo r at i o n a nd the a g r ee m en t do es n’ t us e a per son ’s l i f e as a m easur i ngr o d f o r the v es tingde adl i ne , the gr a n t m u s t go in to effe c t w ith in 21 ye ar s. E .g., M urphy E xp lo rati o n & P rod uc tio n C o . v. Sun O pera ting Lim ited P artne rs hip , 74 7 S o. 2d 26 0, 26 5 ( M i ss. 19 99); Sy m phon y S p a ce, Inc. v. Pergola Prop er ti es, Inc. , 66 9 N
. E.2 d 799, 80 6 ( N
. Y. 19 96) ; se e a l so R es tate m entof Proper ty § 3 74 , c o mm en ts h an d o ( 19 44 )
. W e ha ven’ t f o und a n Indi an a case , but w e a ssum e that the I nd i ana r ule i s the sa m e. There i s a cr uci aldiffer en ce b etween the going i nto eff ect ofa gr anted r igh t an d the e xerci se ofthe ri ght b y i ts h old er o n ce i t has go ne i nto effect. I fthe 1903 deed con veyed the right to strip m ine, w hich i s P e a b o d y’s pri m ar y a rgum ent, thatr i ght t oo k effec t in 190 3, ev en th o ug h s tr i p m i ni ngdi d no t be g i n the n. S i m i l ar l y, the ri ght t o m i ne ( i fo nl y b y underg ro und m i ni ng) the coa l und erthe defe nd ants’ l and too k e ffect in 19 03 and so woul d no t ha ve been f o r fei te d e ve n i fthe min i ngo fthe coa l had not begun unti l 20 00. T h e ri ght t o m i ne i s a n “appu rt enant” ri ght, m eani ng a ri ght ( w h ich m ay be gr anted expre ssl y, as i n the deed i nvol ved i n thi s c ase , o r b y i mpl i c a t i o n, a s wh e n a l a nd o wne r s e l l s a p a rce l w h olly su rro u n d ed by h is l a n d a n d th e p u rc h as er is dee m ed to ha ve a n i m pl i ed ea se m en t o fi ng r es s an d egr ess thr ough the se l l er ’ s prop er ty) thati s nec ess ar y t o th e ful l e xpl o i ta ti o n o fa no th erpr o per tyri gh t. The r i g htN os. 09

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- 3265 13 to m i ne co ali s a pp urte na n t to the ownershi p ofa coa l d ep osi t, f orwitho ut thatr i ght the co alwould have seve rely d im inished value to its ow ne r ( th ou gh not zero val ue, bec ause the o w ner ofthe surf ace w oul d have a n i nc en ti ve t o b uy the c o alfr o m the o wnero fthe c oal). To su bj ec t t he exer ci se o fa n a ppur te na ntr i g htt o the rul e a gai nst per petui ti es w oul d ther ef or e e ncoura ge prem atur e e xploi tat i on o fthe ri ght. Sup p ose th a t a fter the sale of coal ri gh ts to Pea bod y’s predeces sori n 190 3 the pri ce o fco alhad plum m ete d or th e co sto fe xt r ac ti o n h ad so ar ed a nd a s a r es ul t m i ni ng th e c oa l w as u n ec on om ica l, b u t t h at co n d itio n s g ra d u ally i m prove d and in 1 92 3 th e co alco m pany j ud ged that m in in g t h e c oa l w ou ld be p ro fita b le b eg in n in g in 19 25 . I f to prese rv e i ts ri ght t o m i ne, the coa l co m pa n y had to b eg in m in in g w ith in 21 ye ar s o f ac q u i rin g t h e rig h t, it w oul d h ave an i ncenti ve to begin m i ni ng pre m atur el y, i n or der t o prese rv e i ts ri ght. A nd tha t w ou l d be wastefu l. Se e, e.g ., Q uar t o M i ni ng Co. v. Li t m an , 3 2 6 N. E. 2d 676, 685 ( Ohio 1975 ) ; Dougl as A
. Kysar, “ L aw , Envi ro nm ent, and Visi on, ” 9 7 Nw . U . L. R ev . 6 7 5 , 6 9 8

- 9 9 ( 2 0 0 3 ) ; R o b e r tC. El l i c k s o n, “ Pr o pe r t y i n La nd , ” 1 0 2 Yale L.J
. 13 15, 13 68- 69 ( 19 93 )
. I n e ff ec t, i t woul d b e m i ni ngt o a cqui r e a r i g ht to m i ne i n the future , ra th erthan m i ni ng be cause i twa n t e d t o e x t r a c ta n d s e l l th e c o a l n o w. Con si st en t w ith thi s an al y si s, we r ea d i n Thre l ke l d v
. Ingle tt, 12 4 N
. E. 368, 37 1 ( I l l

. 1919 ) ( ci tat i ons om i tte d), that “whe n a ny th i ngi s g r an te d, a l l the mean s to at ta i n i t an d al l the f rui ts and effec ts o fi t a re gr anted al so, and pass, to g ethe r wi ththe gra nt o fthe thi ngi ts el f, wi th o uta ny14 N os. 09

- 3151 , 09

- 3265

w or d s t o t h at effe c t. W h er e a gra n t is m ad e fo r a v alu ab le consi derat i on i t i s presum ed that the gr antori ntended to co n ve y a n d t h e g ra n te e e x p ec te d to rec eiv e t h e fu ll be ne fi t o fi t, a nd the r efo r e th e gr an to r no t o nl y c o nvey ed the thi ng speci fi cal l y desc ribed, but al l o ther th i n g s , s o f a r as i t was w i th i n h i s p o we r t o p a s s th e m, which w er e ne ce ss ar y t o the e nj o y m en t o fthe thi ng gr anted . The dee d, w hen m ade, would not onl y pass the c o a l, o i l, a nd g a s , wi th the r i g ht t o mi ne a nd r em ove the s am e, but al so the ri ght t o enterupon and use s o m uc h of th e su rface of th e land as m ight b e nec essary t o the e nj oym en to fthe p r o pe r t y a nd r i g ht s c o nv e y e d, and the ag re em ent was m er el y that the l and take n f or such use sh oul d be pai d fo r, wh en l oca ted, atthe ra te of $1 50 a n a cr e. I t was no t w ithi n the r ul e ag ains t per petuitie s.” The dis tr i ct j ud ge as w e s ai d w as enti tl ed to r eject Peabody’ s co ntenti on that the 19 03 deed convey ed to i ts pr e de c e s s o r the r i g htto s t r i p mi ne the de fe nd a nt s ’ l a nd

. Bu t no t be cause Peabo dy ( ori ts predeces sor) f ai l ed to begin str i p m i ni ng the l and by 1 924. Peabo dy al so c lai m s, ho wev er, tha t th e dee d g av e i t ano pti on to buy al l the d efend an ts’ l an d at any tim e for $30 an acre

— an o pt i on that Peabo dy so ught t o exer c ise m or e than 21 yea rs after i ts pr ede ce ss o r a cqui r ed th e o pti o n. That o pti o n i s th e ta rg e t o f th e d efe n d an ts ’ at ta c k b as ed on th e ru le ag ain stp er p et u itie s. T h er e is a d iffer en c e, p o i n te d ou t in P o st v. B a iley, 15 9 S
. E. 524, 52 6- 27 ( W
. Va. 19 31) , b etween the pr ese nt gr ant of a r i ght t o the use o fl and and an opti on t o acqui re t h at ri ght in the future. I n the l att er ca se , the g r an t, b ec au se i t do es no t ta k e effec t unt i l theN os. 09

- 3151 , 09

- 3265 15 op tio n is ex er c ise d , is subj ec t to the r ul e ag ains t per petuitie s. We s tVi rgi ni a- Pit t s b urgh Coal Co. v. Strong, sup ra , 42 S.E .2d at50 -52 ; Bart on v. Thaw , 92 A
. 312, 315 (Pa
. 1914). N ot that “opti on” i s a m agi c w or d, the m ere u tt er ance o fw h i c h co nj u re s u p th e ru le. B uc kv. Wa lk er, 1 3 2 N
. W. 205, 2 0 8 ( M i nn . 1 9 1 1 )
. Th e wo r d i s s o met i mes us e d t o desi gnate an a pp urte nant r i ght, as wh en o ne sa ys that by acqui ri ng l and zoned r esi denti alo ne acqui re d an “o pti o n” t o b ui l d a ho us e, o r no t, a s o ne c ho o se s, a t an y ti m e. Buttha t i s di ffer en t f r o m an o pti o n to buy ana dj ac en t proper ty

— t hati s a r i ght t o the future gr ant o fa proper ty ri ght. A nd so the pu rchas e o pti on g ra nted i n the 1903 dee d woul d b e ex ting ui sh ed bythe r ul e ag ains t per petui ti es w er e the o pti on i nter prete d to enabl e Peabody t o b uy the defe nd ants’ l and in or der to str i p m in e it r athe r tha n j us t to us e par ts o fi t to e nable unde r g r o und m i ni ng . Butwe ha ve r ej ec ted th ati nt er pr et at i o n. The deed w e hav e s ai d perm i ts the purchas e o fthe surface only as m ay be n eces s a r y for m ining op erations u nd ergrou nd

. Th e grant of t hat opti on i s the gr ant o fan a pp urte
n an t rig h t t h at P ea b od y c a n e x er c ise atan y t im e. Cons ol i dat ion Coal Co. v. M ut ch m an , sup ra , 565 N
. E.2 d at 1 084- 85 ; Q uar t o M i ni ng Co. v. Li t m an , sup ra , 32 6 N
. E.2 d at 6 83- 8 5
. I fth e r i g h tw e r e n o ta p p u r t e n a n tt o P e a b o dy ’ s ( l i mi ted) m ining r i g ht

— if it w er e a righ t t o b u ild a fer ris whee l o n th e defen dan ts ’ l an d

— then i t would be subj ect to the r ule ag ai nst per petui ti es. But i t i s no t a r i gh t t o str i p the s urf ace. The other al ter nati ve gr ound, thi s o ne pre sse d onl y b y defen dan t Ale xa nde r, o n whi chw e ar e ur g ed to a ffi r m the16 N os. 09

- 3151 , 09

- 3265 dist ri ct c ourt ’ s dec ision ( but o nl y insof aras i t r el ate s t o A lex an der) i s that bo th federa l l aw and I nd i ana l aw forb id st rip m in in g w ith in 3 0 0 f e et of a re sid en c e, an d all ofA l exander’ s l and (i t i s o nl y three ac re s) i s withi n that r adi us o fhi s ho us e. 3 0 U. S
. C. § 1 27 2( e) ; 3 12 Ind

. Adm i n. Code § 2 5- 3- 1( 5)
. Buti fthe de ed g av e th e co alc o m pan y the r i ght t o a c quir e the sur f ace ( f orany and al l purposes , i nc l udi ngs tr i p m i ni ng ) f o r $ 30 a n a cr e, the c o m pan y coul d exerc i se the r i ght, te ardow n the house, an d be the n f r e e o fl e g a l r e s t r i c t i o ns o n s t r i p mi ningthe l a nd

. Bec au se s tr i p m i ni ng is a m o r e va l uabl e us e o fthe defen dants’ l an d tha n f ar m i nga nd ho m e o cc upy i ng, o ur deci si on w i l lnotpre vent the l and fr om being put to i ts m os t v alu ab le u se , w h ich is in d ee d for s tr ip m in in g. It w i l l si m plyaff ect the t er m s o n w hi ch Peabo dy acqui re s th e rig h t to st rip m in e t h e la n d . I t w ou ld like t o b e a b le t o a c qu i r e the r i g ht f o r $ 1 8 6 0 ( 6 2 a c r e s t i mes $30)

. W i th $50 m i l l i on worth ofco alunder the l an d (though i ts net val ue, as we sai d earli er, i s l ess bec ause ofthe cos t o f extr acti on

—but m ay be m or e because Peabo dy needs t o strip m ine th e d efend an ts’ l an d in order to ex tract m ore coa l fro m bene ath the sur ro u n d ing l and), i t wil l have to pay the defendants a go od dealm or e. Th e j ud g men ti s a ffi r med a nd the c r o s s - a pp e a l de ni e d.

5- 6- 10