Court Opinion

ID: 8595228
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:02:20.864613+00
Date Added: 2024-06-11T16:54:52.554388
License: Public Domain

Nichols, Judge,
dissenting:
My first or threshhold objection to tbe trial judge’s able opinion is that be fails to state wbat law governs tbe interpretation of tbe deed involved, wbicb relates to Kentucky land. Plaintiff urges it is definitely the case law of Kentucky, and I think it is right. United States v. Certain Property, Etc., 344 F. 2d 142 (2d Cir. 1965). We have recently refused to apply Massachusetts law to a lease to the Federal government of Massachusetts property, indicating, however, that this turns on a lease being more like a contract than like a deed. Keydata Corp. v. United States, 205 Ct. Cl. 467, 504 F. 2d 1115 (1974). The trial judge straddles the problem but pays special attention to Kentucky cases.
Perhaps it is true that most cases considered, in Kentucky courts and others, actually turn on context indications of what the parties were thinking about, the term “mineral” itself having no fixed meaning at law. According to 'Webster's Unabridged (1968 ed.) the term definitely does include building stone and clay, as well as gravel and sand. In the circumstances, it appears to me the proper canon of interpretation is that the common meaning is presumptively the legal meaning, in Kentucky and elsewhere, unless a contrary intent appears. Webster’s is a good source for common speech, which the trial judge has ignored.
The trial judge quotes from Northern Pacific Ry. Co. v. Soderberg, 188 U.S. 526, 530 (1903), but the decision taken as a whole tends against his decision here. It involved a clause in a Government land grant to the railroad, excluding “all mineral lands.” The issue was whether this excluded a quarter section chiefly valuable for a ledge of granite suitable to be quarried. In construing such a grant, obviously full adherence to the dictionary meaning of “mineral” would be impossible as excluding all lands. Nevertheless the Court calls attention to that meaning, and to some English decisions equally broad. It derives light from other sources as to Congressional intent, too varied to be summarized here. It comes down solid against the railroad: thus granite lands, at least, are “mineral lands”. This would be a fortiori for any exclusion, not of entire quarter sections, but just of the *808mineral itself, where a broad construction would not frustrate the grant entirely.
I am willing to go down the trial judge’s road, analyzing the surrounding circumstances to ascertain the intent of the parties, and it leads me to a different result.
Defendant by the involved deed acquired 26,158 acres for a national forest. The grantor was a coal company. It agreed to exercise its reserved right in accord with rules and regulations prescribed by the Department of Agriculture, and these required it to pay for all trees it might remove.
Sandstone and clay are not normally articles of commerce and are normally extracted from the ground only when, as here, they are wanted for local construction purposes. The feeling seems to be that the intent was only to reserve minerals of commercial importance, such as coal, the grantor’s business concern, or petroleum. That seems to me a fleeting and uncertain test. Suppose there were uranium in the rock. Was it excluded because it had no commercial value on the date of the grant, or included because it has commercial value on the date of the court’s judgment?
It appears to me from the findings a reasonable inference that the Government wished to pay the lowest price and in order to do so, decided to take a chance on future mineral exploitation in the area. The possibility would have appeared very slim that extraction for either commercial or local construction purposes would seriously interfere with the intended use over any substantial portion of the tract, and the grantor was making commitments to mitigate injury therefrom if any should occur. As to minerals in no commercial demand, the injury was predictably slight because any use for local construction demands would be sporadic and minimal in quantity.
It appears to me that anyone who was called on to approve the title in 1935 (the Attorney General ?) would have had to consider the dictionary meaning and assume it to be the legal meaning unless shown otherwise: that anything the clause might include, it did include. Otherwise he would be required to guess at the parties’ intent. And the deal could not have been justified on the Government side unless the price was low enough to make it beneficial to the public interest even *809on the most unfavorable assumption. The grantor’s reservation should have made it possible to grow many more acres of trees than could have been grown on the amount of land obtainable by buying a full fee simple, with expenditures of the same amount of money. If the United States had wanted to use the granted premises for, e.g., a military post or a National Park, the reservation of such minerals as sandstone and clay would have been more difficult to reconcile with the intended use, and the argument that minerals not of commercial importance were excluded, would have had more persuasive force.
The decision throws the reservation language in this deed into such uncertainty of meaning that it will be impossible to use it in future deeds.
In my view the non-commercial character of the sandstone and clay deposits should have its effect, not on entitlement, but on quantum of recovery.
I would enter judgment for plaintiff on the trial judge’s findings, and remand to the trial division for further proceedings under Eule 131(c), to determine quantum.
FINDINGS OF FACT
1. (a) The plaintiff, Cumberland Mineral Company, is a corporation that was organized under the laws of the State of Kentucky in 1935.
(b) The plaintiff owns the mineral, oil, and gas in, upon, and under 26,158 acres of land located in Laurel, Whitley, and Pulaski Counties in the State of Kentucky.
2. Prior to the year 1935, The Castle Craig Coal Company, a Kentucky corporation, was the owner in fee of 26,158 acres of land located in Laurel, Whitley, and Pulaski Counties in the State of Kentucky.
3. (a) By means of a deed dated October 14, 1935, and recorded in Deed Book 79, page 379, in the Office of the County Court Clerk for Laurel County, London, Kentucky, The Castle Craig Coal Company conveyed to the defendant, for a purchase price of $209,264, the 26,158 acres of land mentioned in finding 2. (For the sake of convenience, this land will usually be referred to hereafter in the findings of fact as “the Castle Craig land.”)
*810(b)The deed conveying the Castle Craig land to the defendant contained the following provision (among others) :
RESERVING, however, from the operation of this conveyance, unto the party of the first part [The Castle Craig Coal Company], its successors, grantees and assigns, the mineral, oil, and gas, in, upon and under the above described tracts of land, -in perpetuity * * *.
(c) The deed provided that operations under the mineral reservation should be carried on in accordance with rules and regulations prescribed by the Secretary of Agriculture.
(d) The acquisition of the Castle Craig land by the defendant was part of a large-scale program which the Government was conducting in the 1930’s for the acquisition of land to be used for national forest purposes. Since the acquisition of the Castle Craig land by the defendant, such land has been administered by the Forest Service, U.S. Department of Agriculture, as part of a national forest. The original name of this national forest was Cumberland National Forest, but in 1966 it was redesignated as the Daniel Boone National Forest.
4. (a) On December 10,1935, The Castle Craig Coal Company purported to convey to the plaintiff “the oil, gas and all minerals whatsoever on, in and underlying the surface of” the Castle Craig land. The deed mentioned in the preceding sentence was recorded in Deed Book 79, page 551, in the Office of the County Court Clerk for Laurel County, London, Kentucky.
(b) So that all interests reserved by The Castle Craig Coal Company were transferred to the plaintiff, two additional deeds of conveyance were executed. The first was executed on December 10, 1935, and purported to convey to the plaintiff “the oil, gas and all minerals whatsoever on, in and underlying” certain of the Castle Craig land located in Whitley County. The additional deed of December 10, 1935, was recorded in Deed Book 133, page 209, in the Office of the Whitley County Court Clerk.
(c) The second additional deed was executed December 14, 1937, and purported to convey to the plaintiff “the minerals of every kind, including gas and oil in, on and under” certain *811named tracts of the Castle Craig land located in Laurel, Whitley, and Pulaski Counties in the State of Kentucky. The additional deed of December 14, 1937, was recorded in Book 137, page 495, in the Office of the Whitley County Court Clerk; also in Book 113, page 334, in the Office of the Pulaski County Court Clerk; and also in Book 137, page 421, in the Office of the Laurel County Court Clerk.
(d) The plaintiff is still the owner of the interests conveyed by the deeds referred to in the preceding paragraphs of this finding.
5. (a) In 1970, the defendant, acting through the Corps of Engineers, Department of the Army, began the construction of an earth-filled dam across the Laurel River in Kentucky for the purpose of impounding water in the interest of flood control, the generation of electric power, and other related purposes. The dam is located upon a portion of the Castle Craig land, in an isolated area about 19.5 miles from Corbin, Kentucky, about 22 miles from London, Kentucky, and about 35 miles from Williamsburg, Kentucky. When the reservoir extending upstream from the dam is filled, it will cover approximately 6,000 acres and will have approximately 200 miles of shoreline.
(b) Two types of material were needed for the construction of the earth-filled dam mentioned in paragraph (a) of this finding — an impervious material for the core of the dam and a covering material to give the dam stability. A clay deposit, known as Borrow Area C and located about a mile from the dam site in a straight line, or about 4 miles over the haul road that was built for the purpose, was selected as the source of the impervious material. Sandstone cliffs located on opposite sides of the Laurel River in the vicinity of the dam site, and known as Quarry Areas 2 and 3, were selected as the sources of the covering material.
(c) Approximately 516,362 cubic yards of clay were removed from Borrow Area C and used in the construction of the Laurel River Dam as the impervious core of the dam.
(d) Approximately 2,228,000 cubic yards of sandstone were removed from Quarry Areas 2 and 3 and used in the construction of the Laurel River Dam as the covering material in the form of riprap.
*812(e) The dam site, Borrow Area C, and Quarry Areas 2 and 3 were located on — and the clay and sandstone referred to in the preceding paragraphs of this finding were removed from — the Castle Craig land, as to which the plaintiff owns the mineral, oil, and gas.
6. Borrow Area C and Quarry Areas 2 and 3 were located in rough terrain, approximately 2 miles from the nearest graded road.
7. (a) Borrow Area C was a 41.36-acre parcel of land. In order to remove clay from Borrow Area C for use in the construction of the Laurel Liver Dam, it was first necessary to clear the timber from the area and to recover all the merchantable timber for the Forest Service, which had title to the timber. Then the area had to be grubbed in order to remove all stumps and all roots that were 1 inch in diameter, or larger. After that, the organic matter and the top soil, totalling approximately 108,450 cubic yards, had to be stripped from the surface of the area and stockpiled for future use. Following the removal of the clay that was used in the construction of the Laurel Liver Dam, it was necessary to regrade Borrow Area C in order to eliminate any steep slopes, to respread the top soil and organic matter over the area, and to reseed the area. The cost of clearing the timber from Borrow Area C was $29,365; the cost of grubbing the area was $22,748; and the cost of stripping the top soil and organic matter, and later replacing it, was $70,492.
(b) Prior to the commencement of the Laurel Liver Dam project, the nearest paved road to Borrow Area C was approximately 2 miles away, and the only access to the borrow area was over a Forest Service fire trail.
(c) As there was no road in the vicinity of Borrow Area C, it was necessary to construct a two-lane, unsurfaced haul road from Borrow Area C to the site of the Laurel Liver Dam in order to transport clay from Borrow Area C to the dam site. This road was about 4 miles in length and was constructed at a cost of $96,651.61.
8. (a) In order to remove sandstone from Quarry Areas 2 and 3 for use in the construction of the Laurel Liver Dam, it was necessary to clear the timber from the two areas (Quarry Area 2 contained approximately 11.5 acres and *813Quarry Area 3 contained approximately 15.7 acres), and to salvage all the merchantable timber for the Forest Service. Then it was necessary to remove the overburden above the sandstone that was suitable for use as riprap, and to place the overburden in designated spoil areas. The overburden consisted mostly of shale, but there was also some earth and some weathered sandstone that was not suitable for use as riprap. The overburden varied greatly in depth, up to a maximum of from 60 to 65 feet.
(b) The cost of removing overburden from Quarry Area 3, which represented less than half of the total acreage of the two quarry areas, was $363,865.
(c) The cost of removing the overburden from Quarry Area 2 is not disclosed by the evidence in the record.
(d) Prior to the commencement of the Laurel Liver Dam project, there was no access by road to Quarry Areas 2 and 3.
9. (a) The Corps of Engineers removed clay and sandstone from the Castle Craig land, and used these materials in the construction of the Laurel Liver Dam, without obtaining or seeking the permission of the plaintiff. These activities of the Corps of Engineers occurred in 1970 and 1971.
(b) When the plaintiff learned that the Corps of Engineers was using clay and sandstone from the Castle Craig land in the construction of the Laurel Liver Dam, the plaintiff approached the Corps of Engineers and requested that the plaintiff be compensated for the clay and sandstone in question. However, the Corps of Engineers refused to compensate the plaintiff for the clay and sandstone, on the asserted ground that the clay and sandstone were the property of the Government and not the property of the plaintiff.
(c) The defendant has never made any payment to the plaintiff as compensation for the clay and sandstone that were taken from the Castle Craig land by the defendant and used in the construction of the Laurel Liver Dam.
10. The plaintiff has never attempted to extract or dispose of any sandstone or clay from the Castle Craig land since acquiring mineral interests in such land.
11. (a) Except for the places from which sandstone and clay were removed by the defendant for use in the construction of the Laurel Liver Dam, there are no sandstone quarries *814or clay removal pits in the Castle Craig land, and there is no evidence of past quarrying or clay removal operations in such land.
(b)Four sandstone quarries, from which material was removed in the past, have been identified within a few miles of the Laurel Eiver Dam. However, none of these quarries is currently productive, although stone is available for sale at one quarry and some stone is stockpiled at another quarry.
12. The only development activity attempted by the plaintiff on the Castle Craig land since acquiring mineral interests in such land has consisted of the drilling of several wells for oil, only one of which produced oil in commercial quantities.
13. The geological formations in the Kentucky region containing the Castle Craig land are composed principally of flat-lying strata of sandstone (approximately 75 percent), with variable amounts of shale strata and clay (aggregating approximately 25 percent).
14. (a) A mineral, in the scientific sense of that term, is a chemical element or compound occurring naturally as a product of inorganic processes. Any mixture is outside the mineral category, in the true sense of the term “mineral.”
(b) Rocks are mixtures and, therefore, are outside the mineral category.
(c) Sandstone and shale are sedimentary rocks. (Limestone is the third type of sedimentary rock.)
(d) Clay is a soil deposit that is derived from the decomposition of rock, principally shale, and is characterized by a relatively high degree of plasticity.
(e) Neither sandstone nor clay is a mineral, in the scientific sense of the term “mineral.”
15. Both sandstone and clay have characteristics that make them suitable for commercial use in certain situations, where a demand exists and the costs of extraction and of transportation to the place of utilization are not excessive. When developed for commercial use, sandstone and clay are customarily referred to as falling within the category of “ores” or “industrial minerals.”
16. (a) Virtually any quality of sandstone is suitable for use as fill in highway construction.
*815(b) Sandstone of a quality that can withstand the effects of weathering and of immersion in water is suitable for use as riprap in the construction of earthen dams or in connection with projects for the improvement of rivers or harbors.
(c) Sandstone of the best quality, when found in evenly bedded strata of the proper thickness, is suitable for use as dimension stone in the construction of bridges, houses, and other structures.
17. (a) Virtually any quality of clay is suitable for use as fill in the construction of highways or earthen dams, particularly where fill of an impervious nature is needed.
(b) Many clay deposits are of a quality that is suitable for use in the making of bricks. The color of bricks made from clay depends principally upon the type of clay that is used in the brick-making process, but the color can be affected to some extent by the intensity of the heat when the brick is fired. Most of the clay of brick-making quality in the Kentucky region containing the Castle Craig land produces the common type of red bricks. Such bricks are considered to be less desirable, and they are less expensive, than bricks of a lighter color.
18. (a) All of the sandstone which the defendant took from the Castle Craig land and used in the construction of the Laurel River Dam was suitable for use as fill in road-building operations; and all of it was also of a quality that was suitable for use — and it was actually used — as riprap in an aqueous environment.
(b) A small percentage of the sandstone which the defendant took from the Castle Craig land and used in the construction of the Laurel River Dam was evenly bedded and of fairly uniform thickness, with thin laminae allowing for easy removal of slabs, and would have been suitable for use as dimension stone. However, most of the sandstone which the defendant removed from the Castle Craig land and used in the construction of the Laurel River Dam would not have been suitable for use as dimension stone because it was jointed, or fractured, or too thick, or of uneven thickness.
(c) Sandstone that is suitable for use as riprap in an aqueous environment is more valuable — where there is a commercial market for it — than sandstone that is suitable *816for use only as fill; and sandstone that is suitable for use as dimension stone is more valuable — assuming a commercial market — than sandstone that is suitable for use as riprap in an aqueous environment but not for use as dimension stone.
19. (a) All the clay which the defendant removed from the Castle Craig land and used in the construction of the Laurel River Dam was suitable for use — and it actually was used — as fill.
(b) All the clay which the defendant removed from the Castle Craig land and used in the construction of the Laurel River Dam was suitable for use in the manufacture of commercial-type facing bricks having an orange, tan, or buff color. The quality of such clay for brick-making purposes was superior to that of most of the clay deposits in the same region of Kentucky.
(c)' Clay suitable for use in the manufacture of bricks having an orange, tan, or buff color is more valuable — where there is a commercial market for it — than clay that is suitable only for the manufacture of red bricks.
(d) The only brick manufacturer identified in the general vicinity of the Laurel River Dam is the Corbin Brick Company, owned by Hiram Begley, at Woodbine, Kentucky, approximately 2.5 miles south of Corbin, Kentucky, and approximately 21 miles from the dam site.
20. (a) A cubic yard of sandstone weighs approximately 1.9 tons.
(b) A cubic yard of brick-making clay weighs approximately 1.7 tons.
21. Quarry Areas 2 and 3 have been inundated by the Laurel River Reservoir.
22. Because of the isolated locations of the clay and sandstone deposits involved in the present litigation, the distances between such locations and places of possible utilization of the clay and sandstone, the high cost that would have been involved in the construction of haul roads over rough terrain from the nearest graded road to such locations, the high cost that would have been involved in removing the overburden above the clay and sandstone deposits, and the *817more ready availability of great quantities of similar substances elsewhere, there was no commercial market at the time for the clay or for the sandstone which the defendant removed from the Castle Craig land and used in the construction of the Laurel Liver Dam.
23. (a) On March 23,1973, the United States filed in the U.S. District Court for the Eastern District of Kentucky a condemnation suit entitled United States v. 2,490.70 Acres of Land, More or Less, Situate in Laurel and Whitley Counties, State of Kentucky, Etc., Docket No. 2215, the purpose of the suit being to acquire through condemnation the mineral, oil, and gas which The Castle Craig Coal Company reserved in 2,490.7 acres of the Castle Craig land when such land was conveyed to the United States on October 14, 1935.
(b) The 2,490.7 acres of land involved in the condemnation suit mentioned in paragraph (a) of this finding comprise the site of the Laurel River Dam and its upstream reservoir.
(c) Quarry Areas 2 and 3, from which sandstone was removed by the defendant for use in the construction of the Laurel River Dam, are within the area involved in the condemnation suit referred to in paragraph (a) of this finding. Borrow Area C, from which the defendant removed clay for use in the construction of the Laurel River Dam, is outside the area involved in the condemnation suit.
(d) The removal of sandstone and clay from the Castle Craig land by the defendant had been completed, and the use of these materials in the construction of the Laurel River Dam had ceased, prior to March 23,1973, when the condemnation suit was filed by the United States.
24. The sandstone and clay which the defendant took from the Castle Craig land and used in the construction of the Laurel River Dam were not minerals within the scope of the reservation of “the mineral, oil, and gas,” as set out in the deed of October 14, 1935, whereby the Castle Craig land was conveyed to the defendant; and such sandstone and clay were not the property of the plaintiff, but were the property of the defendant.
*818CONCLUSION OF LAW
Upon the foregoing findings of fact and opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is not entitled to recover, and the petition is dismissed.