Opinion ID: 2516446
Heading Depth: 1
Heading Rank: 4

Heading: Other Minerals

Text: As to other minerals, Carpenter points out in his comment that the inclusion of substances other than oil and gas in the deed reservation term other minerals is not so settled. See Carpenter, supra, at 481. This was the situation in Farrell v. Sayre, 129 Colo. 368, 270 P.2d 190 (1954), where we approved the use of two criteria for determining whether a substance is a mineral for purposes of a deed reservation, when ambiguity arises from the language of the deed itself or the surrounding circumstances regarding that substance's inclusion within the term minerals. In Farrell, we held that (1) the word minerals when found in a reservation out of a grant of land means substances exceptional in use, in value, and in character, and does not mean ordinary soil which if reserved would practically nullify the grant; and (2) in deciding whether exceptional substances are minerals, the true test is what that word means in the vernacular of the mining world, the commercial world, and landowners at the time of the grant, and whether the particular substance was so regarded as a mineral. See Farrell, 129 Colo. at 373, 270 P.2d at 192-93. See also United States v. Hess, 194 F.3d 1164, 1173 (10th Cir.1999) (applying Colorado law); United States v. 1,253.14 Acres of Land, 455 F.2d 1177, 1179 (10th Cir.1972) (applying Colorado law); Morrison v. Socolofsky, 43 Colo.App. 212, 213, 600 P.2d 121, 122 (1979). In Farrell, we held the deed reservation language for minerals to be ambiguous. Farrell, 129 Colo. at 372, 270 P.2d at 192. Two years after the deed transfer, the grantee entered into a contract to sell the gravel covering the entire surface of the property and the grantor objected, claiming that he had reserved the gravel and was entitled to a royalty. We found the taking of extrinsic evidence appropriate in determining the intent of the parties and applied the rule construing reservations against the grantor and in favor of the grantee. See Lazy Dog Ranch v. Telluray Ranch Corp., 965 P.2d 1229, 1235 (Colo.1998) (holding that Colorado generally follows the four corners principle when construing deeds, but conditionally allows extrinsic evidence in some circumstances to determine whether the deed is ambiguous); Notch Mountain Corp. v. Elliott, 898 P.2d 550, 557 (Colo.1995) (holding that reservations are construed more strictly than grants, and ambiguities are construed against the grantor); Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1313-14 (Colo.1984) (stating that whether an ambiguity exists and extrinsic evidence must be considered is a question of law). In contrast to the substances at issue in Farrell, oil and gas have the settled meaning of being included as minerals in Colorado deeds reserving other minerals. [3] We now proceed to discuss the Railroad grants and deed reservations at issue in this case.