Opinion ID: 2635152
Heading Depth: 1
Heading Rank: 9

Heading: the parties' intent

Text: Having rejected Central's proffered matter of law approach and declined the invitation to reform our rules for construing deeds, we proceed to determine what property the parties intended to pass by the coal deeds. In doing so, this court must put itself as nearly as possible in the situation of the grantors when they made the deed and, from a consideration of that situation and from the language used in each part of the deed, determine as best it can the purpose of the grantors and the intentions they endeavored to convey. [Citations omitted.] Davis, 173 Kan. at 510, 249 P.2d 625. As Central painstakingly sets forth in its brief, at the time of the subject deeds, the parties would have been aware that a gas, commonly referred to as fire damp or marsh gas, was released during the process of digging coal out of the ground and that the gas was a source of great danger to life in coal mines. See Amoco, 526 U.S. at 874, 119 S.Ct. 1719. They would not have been privy to our current scientific knowledge about the manner in which a portion of the CBM remains captive within the coal, i.e., adsorbed to the surface of the rock. Rather, the common understanding at that time was that the term coal did not encompass CBM, both because it is a gas rather than a solid mineral and because it was understood as a distinct substance that escaped from coal as the coal was mined, rather than as a part of the coal itself. Amoco, 526 U.S. at 874-75, 119 S.Ct. 1719. Therefore, the facts and circumstances existing in 1924-26 would suggest that a grantor's use of the term, coal, was intended to refer only to the solid mineral. Accordingly, a grantor would have no reason to include a reservation of gas in a coal deed. Moreover, the primary energy source of that era was coal. See Amoco, 526 U.S. at 875, 119 S.Ct. 1719 (In contrast to natural gas, which was not yet an important source of fuel at the turn of the century, coal was the primary energy for the Industrial Revolution.). In historical context, the obvious purpose of the coal deeds was to effect the sale of the commodity which was valuable at the time, i.e., coal. In reality, the parties to the coal deeds probably had no specific intent regarding other unspecified minerals, such as coalbed methane. Pierce, Evaluating the Jurisprudential Bases for Ascertaining or Defining Coalbed Methane Ownership, 4 Wyo. L.Rev. 607 (2004). Central points out that the deeds specifically granted its predecessors the right to mine and remove [the coal]. It suggests that the circumstances under which that right would have been executed should indicate to us that the parties impliedly intended for the CBM ownership to pass to the coal deed grantees. Central contends that the evidence it proffered for judicial notice supports that theory. We disagree. Central wants us to consider that CBM was dangerous and life threatening for the miners and that the mine operator had a legal duty to ventilate and control the gas during the mining process. It then argues that a landowner surely would not have intended to reserve ownership of such a deadly substance. But, of course, on the flip side, one would not expect a grantee to voluntarily seek full ownership of the CBM, knowing it to be a worthless and hazardous material. To the contrary, one would suspect that a mine operator in those days would have been ecstatic if the landowner had removed the CBM prior to the commencement of mining operations, thus relieving the operator of the cost of meeting its legal responsibility to dispose of the gas. Central also points out that, under the technology existing at that time, the process of mining and removing the coal resulted in the destruction or loss of all the CBM. Therefore, the argument continues, the parties must have intended that the CBM ownership would pass with the coal deeds. We do not reach the same conclusion. Obviously, the parties expected the CBM in a particular seam to escape while the grantee was exercising the right to mine and remove the coal from that coalbed. However, they would have considered that as a necessary consequence of the mining operation. From the deed language, we cannot divine that the grantors contemplated that the grantee could separately own and produce the CBM without exercising the right to mine and remove the coal, i.e., drill from the surface and remove CBM while leaving the coal in place. Curiously, Central makes the economic argument that the facts existing at the time of the conveyances make it wholly unreasonable to suggest that Central would have paid what in today's dollars would be $841,104.24 for `all coal' but not intend to obtain all rights to methane gas known to exist within the coal. The major premise Central strives to establish with its historical material is that CBM was an extremely hazardous material which it was legally and economically responsible for controlling during the mining process. The conclusion that a portion of the coal purchase price was allocated to obtaining ownership of the CBM does not follow from that premise. To the contrary, one would expect the additional operational expense caused by the CBM to be a deduction from the purchase price, rather than an addition. By way of analogy, if a rancher purchased a pasture containing noxious weeds which by law must be eradicated, one would not say that the rancher paid a portion of the purchase price to obtain ownership of the burdensome weeds. In short, at the time the coal deeds were executed, the purpose of each grantor was to consummate the sale of the solid mineral coal. CBM was simply a hazardous by-product of the coal mining process. The parties did not intend, either expressly or impliedly, for the coal deeds to pass ownership of the CBM. The district court's granting of summary judgment on the issue of ownership is affirmed. Affirmed.