THE REED DECISIONS:
ARE COAL AND LIGNITE INCLUDED
IN "OIL, GAS AND OTHER MINERALS?"
Prepared for Professor Hemingway
One-Hour Independent Research
by Jim F. Avant
April 15, 1981
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C O N T E N T S
Pa
I.
II.
III.
?e
BACKGROUND AND DISCUSSION OF REED I AND REED II.
1
A.
Brief History of the Reed Litigation.
1
B.
Reed I.
3
C.
Reed II.
7
THE LAW BEFORE THE REED DECISIONS.
REED II:
PROBLEMS AND ALTERNATIVES.
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8
13
I.
BACKGROUND AND DISCUSSION OF REED I AND REED II.
A.
Brief History of the Reed Litigation.
Defendants W.C. Wylie and wife conveyed 223.385 acres of
land in Freestone County on September 30, 1950, to James F.
Baker.
The following mineral reservation was included:
...there is hereby excepted and reserved to the
Grantors herein a one-fourth (1/4) undivided
interest in and to all oil,gas and other minerals
on and under the land and premises herein described and conveyed; and it is hereby expressly
agreed and understood that Grantors herein, their
heirs and assigns shall have, and they hereby
have the right of ingress and egress for the
sole and only purpose of mining and operating
for oil, gas and all other minerals, on and under
said land, and to produce, mine, save and take
care of said products, and to take all usual,
necessary and convenient means for working, preparing and removing said minerals from under and
away from said land and premises.
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Through mesne conveyances —
vation —
all referring to this reser-
the entire surface and an undivided 3/4 mineral interest
came to rest in plaintiff Reed, trustee.
Reed brought suit for declaratory judgment and other
relief, alleging that she owned all of the coal and lignite under
or produced from the property by open pit or strip mining methods.
The issue thus became:
Did the coal and lignite belong to the
surface estate (and so owned by Reed) or were these substances
included within "other minerals"
(and thus owned by Wylie to the
extent of his 1/4 mineral interest)?
At the trial level surface owner Reed moved for summary
judgment.
The court granted it, declaring that Reed was the
owner of all of the coal and lignite that may be mined by the
open pit or strip raining methods. The trial court based its
. .
2
opinion on Acker v. Guinn and on an affidavit offered by Reed
containing an opinion by a landman that the coal and lignite in
the area could be recovered only by open pit or strip mining.
The court of civil appeals agreed with Wylie that the
summary judgment was improper because opinion testimony could not
3
establish any material fact as a matter of law.
versed and remanded.
The court re-
Both parties sought writ of error in the
Texas Supreme Court.
The supreme court held, in Reed I, that "the surface
estate owner must prove that, as of the date of the instrument
being construed, if the substance near the surface had been extracted, that extraction would necessarily have consumed or
depleted the land surface."^
The other major holding was that if
"lignite lies at the surface of the land, no further proof would
be required to establish the title of ... (the surface owner)"
5
to the lignite.
The court agreed with the court of civil appeals that
summary judgment had been improperly granted and remanded so
that, among other things, the trial court could determine the
depth at which the lignite was found.^
On remand the trial court once again granted summary
judgment for Reed, holding that (1) as a matter of law the lignite was "at the surface" and was therefore not reserved as a
mineral,
(2) as a matter
of law the grantors were not entitled toand
reformation.
7
The court of civil appeals reversed on both grounds and
2
A
held that (1) there were genuine issues of material fact as to
the ownership of the coal and lignite, and (2) there were genuine
issues of material fact as to the reformation issue.
For the second time the case was appealed to the Texas
Supreme Court.
The court affirmed the judgment of the court of
civil appeals that the case be reversed and remanded, but disagreed with the first of that court's two holdings.
Therefore,
the trial court had been correct in its decision that lignite
was "at the surface" as a matter of law.
The court then remanded
9
to the trial court on the reformation issue.
B.
Reed I.
In order to understand fully the rationale of Reed II it
is necessary to examine Reed
Mr. Justice Reavley, writing
for the majority, first stated that Acker controlled the ultimate
issue in the case.
In Acker, the question examined was whether
iron ore was included in a grant of "an undivided 1/2 interest
in and to all of the oil, gas and other minerals in and under,
and that may be produced from" a tract of 86-1/2 acres located
in Cherokee County.
The ore was found in outcroppings on the
surface as well as at fifty feet below the surface.
It was un-
disputed that the ore had to be mined by open pit or strip mining.
The Acker court reasoned that —
unless the instrument
expressed a specific intent as to what substances were included
in the phrase "other minerals" —
apply.
That test became:
a general intent test should
"Unless the contrary intention is
affirmatively and fairly expressed, therefore, a grant or reser-
5
vation of 'minerals' or 'mineral rights' should not be construed
to include a substance that must be removed by methods that
will, in effect, consume or deplete the surface estate." 11 Applying this test to the facts, Acker held that the iron ore was not
included in "other minerals" since surface destruction was the
only method of removal.
In Reed I, the court stated that if application of the
Acker general intent test resulted in a substance not being a
"mineral," then the substance would not be a mineral "at whatever depth." 12
Because of the Acker rule, the court disagreed with the
trial court that the "surface owner is entitled to only so much
of the substance as may be produced by strip mining or pit mining. We are not dividing the right to produce the substance;
we are construing the instrument of conveyance to ascertain the
ownership of the substance."1-^
The court then stated what became the first (and most
controversial) of the two principal rules of Reed I:
"[T]he
surface estate owner must prove that, as of the date of the
instrument being construed, if the substance near the surface
had been extracted, that extraction would necessarily have consumed or depleted the land surface."^
The possibility of sur-
face reclamation as well as the value of the material was immaterial . ^
The second principal rule of Reed I was that "if lignite
lies at the surface of the land, no further proof would be required to establish the title of [the surface owner] . . .
13
6
to
the lignite ...
This rule appears to suggest that if lig-
nite were "at the surface," it would not be subject to the first
17
rule.
Since adequate proof of the depth of the lignite was not
shown in the record, the court could not apply these rules.
Therefore, it affirmed the court of civil appeals and remanded
to the trial court.
1q
In his concurring opinion
Mr. Chief Justice Greenhill
agreed that there was lack of proof for the trial court's summary judgment.
However, the concurrence criticized the first main rule
in the majority opinion on the basis that it placed a heavy
burden on the surface owner, i.e., that the method of extraction
must necessarily have depleted the surface.
The concurrence
would have modified that rule to require a showing that, as of
the date of the execution of the instrument, any "reasonable
method of extraction would have entailed the destruction of the
surface.1,20
21
Mr. Justice Daniel dissented.
Emphasizing that his
opinion dealt specifically with the particular words used in the
deed ("oil, gas and other minerals"), the dissent would have
held as a matter of law that surface owner Reed was entitled to
judgment.
Three approaches were urged:
(1) Acker should be
read as emphasizing the "near surface" nature of the substance
rather than the fact that the removal of the substance "must
destroy" the surface.
Thus, the test should be that "near-
surface coal and lignite which may be mined ... by open pit or
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strip mining methods" are not "other minerals." 22
Once that
test determines the character, the character is the same regard23
less of depth;
(2) Ejusdem generis 24 should be used; (3) The
"ordinary meaning" test should be taken into consideration.25
While not explicitly recognizing its use of ejusdem
generis, the dissent stated that the catch-all phrase "'and other
minerals' ... obviously applies only to oil and gas related
minerals which may be extracted
through wells drilled into the
2 ft
sub-surface of the soil." °
Such related minerals were "sulphur,
helium, carbon dioxide, casing head gas, and distillate, but not
lignite, coal, gold, silver or other solid
minerals."2^
The third approach utilized was the "ordinary meaning"
test.
"[S]and, gravel, limestone, iron ore and near-surface
lignite
are not within
ordinary and natural meaning of the
S
term 'minerals'
.... " 2the
The dissent's use of these three approaches happened to
produce the same result, i.e., that near-surface lignite was
not a mineral.
That uniformity of outcome would not be the
case if, for example, the court were dealing with "near-surface"
gold and silver:
The ejusdem generis rule of construction
would favor "surface;" the "ordinary meaning" test would say
"mineral;" and the Acker "surface destruction" test would indicate "surface" (or "mineral" if the gold and silver were at a
great depth). 29
The dissent stated that it had reached a "clear and simple test which can be made by reading the instrument."30
statement was not quite accurate.
13
8
That
C.
Reed II.
On this second appeal to the Texas Supreme Court, the
court began by stating that Acker and Reed I governed.
Reed I had held that a substance lying "at the surface"
31
was not a mineral within "oil, gas and other minerals."
examined what "at the surface" meant.
Reed II
Affidavits showed that
the lignite outcropped on the surface of the Reed tract in a
gully or ravine and at other points in the same county.
One out-
crop was within a -5half
mile of the Reed land and another was
T
within two miles.
The court examined these facts and the pre-
vious decisions, and it then formulated several guidelines:
(1)
The "at the surface" test in Reed I referred
to a surface having "some depth — a depth
shallow enough that it must have been contemplated that its removal would be by a surface
destruction method." Visibility to those
walking on the surface is not r e q u i r e d . 3 3
(2)
In Acker there had been no dispute that open
pit or strip mining had to be used to remove
the ore; therefore, the "thrust of Acker is
not addressed to the word 'must' — an agreed
fact, but [to] the surface — destructive
method of removal ...."34 Consequently, the
court overruled its holding in Reed I that
the substance "must" be removed by a surface
destruction method.
"The rule for near surface lignite, iron or
coal, therefore, is that if the deposit lies
near the surface, the substance will not be
granted or retained as a mineral if it is
shown that any reasonable method of production would destroy or deplete the surface."
The "controlling factor is the close physical relationship of the substance to the
surface itself."35
(3)
The "at the surface" requirement refers to
the land within the "reasonably immediate
7
9
vicinity" and not to the particular tract of
land in question.36
(4)
A deposit which is within 200 feet of the
surface is "near surface" as a matter of
law.37
(5)
Since strip mining is a reasonable method
of removal as a matter of law, the test
is met and lignite here is part of the
surface.38
(6)
The surface owner need not show surface
destruction as of the "date of the instrument." That Reed I requirement was
overruled because it was not required by
Acker.39
(7)
If the surface owner satisfies the tests
set out above, and establishes ownership
of the substance at or near the surface,
he or she owns the lignite, iron, or coal
beneath such land at whatever depth it
may be found.
After discussing these guidelines, the court considered
the reformation issue; that issue alone was remanded to the
trial court. 41
II.
THE LAW BEFORE THE REED DECISIONS.
When a grant or reservation refers to "all oil, gas and
other minerals," what substances are intended to be included in
"other minerals?" 42
and numerous
This question has inspired much litigation
c o m m e n t a r i e s .
4
3
"Geologists, scientists, courts,
legislatures, dictionaries, and even encyclopedias, do not agree
on the meaning" of the word "mineral."44
For example, in a
scientific sense, all land belongs to the mineral kingdom, and
thus a reservation of minerals could not be given effect without
destroying the grant. 45
13
10
Certainly, the intent of the parties should be given
effect; however, often a problem arises when the parties had no
particular intent with regard to the substance in question when
they executed the instrument, and a later determination of ownership results in a windfall to the prevailing party.
Professor
Kuntz recognized the problem and offered a solution:
The intention sought should be the general
intent rather than any supposed but unexpressed specific intent, and, further, that
general intent should be arrived at, not by
defining and re-defining the terms used,
but by considering the purposes of the grant
or- reservation in terms of manner of enjoyment intended in the ensuing interests.
When a general grant or reservation is made
of all minerals without qualifying language,
it should be reasonably assumed that the parties intended to sever the entire mineral
estate from the surface estate, leaving the
owner of each with definite incidents of
ownership enjoyable in distinctly different
manners. The manner of enjoyment of the
mineral estate is through extraction of
valuable substances, and the enjoyment of
the surface is through retention of such
substances as are necessary for the use of
the surface ....46
Thus, general intent should be followed unless specific
intent is ascertainable.47
Whether Texas has completely followed
Professor Kuntz's reasoning is questionable, although the relatively recent Acker case gave it much weight.4 8
Historically,
the Texas courts have focused on various approaches to what substances are minerals:
ejusdem generis, preservation of the
surface estate; nature of the transaction, specifically mentioned tools and methods to be used in the extraction, ordinary
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meaning, easement provisions, unique value of the substance.49
In Praeletorian Diamond Oil Ass'n v. Garvey 50 the court
looked at the instrument as a whole to determine the intent of
the parties to a lease.
The court held that gravel was not a
mineral because the instrument specifically referred to derricks,
tanks, pipelines, and the lessor's 1/8 royalty; these terms did
not deal with removal of gravel.
Similarly, another early case
held that granting a right to "mine" did not include the right
to drill for oil and gas. 51
However, the general rule in Texas
is that the word "mine" includes all means of extraction.
rr o
Psencik v. Wessels JJ held that sand and gravel were not
— in the "common vernacular" —
regarded as minerals and thus
they were part of the surface estate.
"It is a matter of common
knowledge that where those subjects are dealt with they are
referred to specifically."54
The important case of Heinatz v. Allen 55 dealt with a
devise of "the surface rights exclusive of the mineral rights."
The court held —
after examining the nature of the substance,
its relation to the surface, its use and value, and the method
of extraction —
"mineral rights."
that commercial limestone was not included in
More specifically, the factors discussed were
as follows:
(1)
The "ordinary and natural meaning" was the
key to the testator's intent, unless there
was a clear indication in the will that
the words have a more or a less extended
significance.56
(2)
"Sand, gravel and limestone are not minerals within the ordinary and natural mean10
ing of the word unless they are rare and
exceptional in character or possess a
peculiar property giving them special
value, as for example sand that is valuable for making glass and limestone of
such quality that it may profitably be
manufactured into cement."57
(3)
The limestone here either outcrops or is
at shallow depths and is removed only by
surface destruction methods (quarrying
and open pit). It is "so closely related
to the soil" that it is reasonably considered part of the surface.58
CQ
Atwood v. Rodman
dealt with the issue of whether "oil,
gas and other minerals" included limestone.
The court reasoned
that the instrument should be construed by the "ordinary terms,
customs and usages in effect" at the time of execution.
The
mineral owner had argued that the limestone had acquired "special
value" because of the construction of a cement plant adjacent to
the property.
The court rejected this Heinatz argument, saying
that usage, which here is used to mean subsequent development to
fi n
the dates of the instruments, cannot change the intent.
Acker was the most important case to which the Reed cases
looked.
The question was whether iron ore was an "other mineral"
and the court concluded that, as a matter of law, it was not.^l
An important and undisputed fact was that the ore there had to
be mined by surface destruction methods.
The Acker court
approved the general intent test offered by Professor Kuntz, 62
and then continued:
A grant or reservation of minerals by the fee
owner effects a horizontal severance and the
creation of two separate and distinct estates:
an estate in the surface and an estate in the
11
13
minerals .... The parties to a mineral lease or
deed usually think of the mineral estate as including valuable substances that are removed from the
ground by means of wells or mine shafts. This
estate is dominant, of course, and its owner is
entitled to make reasonable use of the surface for
the production of his minerals. It is not ordinarily contemplated, however, that the utility of
the surface for agricultural or grazing purposes
will be destroyed or substantially impaired.63
The rule of Acker thus became:
Unless the contrary intention is affirmatively and
fairly expressed, therefore, a grant or reservation of "minerals" or "mineral rights" should not
be construed to include a substance that must be
removed by methods that will, in effect, consume
or deplete the surface e s t a t e . 6 4
Williford v.
Spies65
was
the first Texas case involving
lignite in an "oil, gas and other minerals" context.
The court
followed Acker and determined that, as a matter of law, "other
minerals" did not include coal and lignite that must be removed
by the open pit or strip mining methods.
The fact that replac-
ing soil and replanting the trees was possible was
The rule of ejusdem
numerous Texas decisions.
generis
6
"?
immaterial.66
has been discussed in
There is some question whether the
rule is applicable to minerals in Texas.
Some courts have
applied it68 and others have rejected it. 69
Since Texas courts have held that "other minerals" is not
ambiguous,
extrinsic evidence is i n a d m i s s i b l e . I t has been
suggested that this holding is consistent with avoiding the
ejusdem generis rule. 72
The Acker court declined to apply the
rule. The weight of authority seems to be that the rule is not
73
to be used in these mineral cases.
the difficulty:
Luse v. Boatman
outlined
Would the same general class be determined by
value, use, form, density, color, weight or nature of origin?
10
II.
REED II:
PROBLEMS AND ALTERNATIVES.
Some of the criticisms of Reed I are applicable even to
the more reasonable guidelines in Reed II:
There are factual
determinations that must be made to determine the ownership of
any particular substance.
The concurring opinion of Mr. Justice Spears in Reed II
pointed out these problems and then discussed four alternatives
which he believed superior to the majority rule.
summarized the majority holding:
He first
If "in the reasonable imme-
diate vicinity the mineral deposit is at or near the surface and
any reasonable method of removal will consume, deplete, or destroy the surface, the minerals belong to the surface owner.
Four possible factual disputes may be present:
there deposits in the "reasonably immediate vicinity?"
there deposits "at or near" the surface?
(1) Are
(2) Are
(3) Must the deposits
"conform generally to the contour of the earth's surface" as
suggested by Acker?
(4) What is a "reasonable" method of
7S
recovery?
J
These weaknesses in the current Reed II holding preclude
a title examiner, for example, from determining what has been
granted or reserved from an examination of the instrument itself.
The first suggested alternative rule is that a substance
"normally considered a mineral" is a mineral, regardless of the
method of extraction; but the mineral estate owner is limited
to reasonable use of the surface.
Therefore, ownership and
reasonable use are two separate questions.
13
15
This approach does not completely solve the problem
because of different results in the application of the "normal
meaning" test.
For example, some commentators have suggested
that the term "other minerals" meant practically all valuable
substances except for materials such as "granite, limestone,
sand, gravel, caliche, clay, and water" (which had been held to
be part of the surface).
Iron ore, coal, lignite and uranium
77
were considered "other minerals."''
Yet the dissent m
Reed I
declared that coal (at least, near-surface lignite) was not
78
within the ordinary meaning of "other minerals."'0
However, this difference of opinion in the application
of the "ordinary meaning" test is a small problem when compared
with the disadvantages of the Reed II surface destruction test.
If substances such as gold and uranium were found near the surface so that surface destruction was a reasonable method of
extraction, those substances would be part of the surface
estate.
This result is in striking contrast to the result of
the "ordinary meaning" test that gold and uranium are minerals.
The surface owner in this example would get a windfall.
Cer-
tainly, those substances are not necessary to enjoyment
7 9 of the
surface estate, and thus Professor Kuntz's rationale
is also
violated.
It seems that Heinatz was more logical in its suggestion
that the surface destruction test be one of several factors in
the determination of the substances conveyed or reserved.
Un-
fortunately, it appears that the Reed decisions have foreclosed
the Heinatz approach by the statement that "mineral ores and
coal and lignite would ordinarily be reserved to the mineral
interest owner by the terms of the Wylie to Baker instrument.
That is not true, however, under Acker v. Guinn, if any part of
the substance lies ... near the surface ...." 80
The second alternative suggested by the concurrence in
Reed II is that coal and lignite (regardless of depth or extraction method) belong to the surface, unless the contrary is
affirmatively and fairly expressed in the instrument.8-^-
The
rationale is that these substances generally require surface
destruction.
This "coal and lignite" rule would certainly answer
the question of ownership by a mere examination of the instrument
on record.
Of course, an unusual result —
contrary to the
general intent test and the surface destruction test —
would
be reached if a large tract contained only deep-basin lignite:
the lignite would be part of the surface.
The third alternative suggested is that "other minerals"
does not include lignite and coal.
This alternative is supQ p
posedly taken from the Reed I dissent.
The fourth alternative is that the mineral owner is
"entitled to those mineral substances that he can extract from
the land by wells or shafts, using only so much of the surface
as is reasonably necessary for the dominant estate owner to
accomplish the purposes of his estate."8-^
The authority cited
for this alternative is Professor Kuntz; however, it appears
that Professor Kuntz's "manner of enjoyment" theory is more
accurately stated:
The mineral owner is permitted to strip mine
near-surface substances, but he must compensate the surface
15
17
owner for damage to the surface estate; those damages would be
based on the reduction in value of the land for its surface use
and not on the value of the substance in its new use. 84
It appears that the "manner of enjoyment" test is preferable to the Reed II test.
If one party has conveyed "oil,
gas and other minerals" it would seem reasonable that he or she
desired to retain those substances necessary for use of the
surface, i.e., to maintain farming operations or whatever his
activities are.
The mineral owner's manner of enjoyment is
through extraction of all other substances, and he pays the surface owner for the latter's lost value due to activities by the
mineral owner.
The most generous comment that can be made of the Reed II
test is that it is superior to the harsh rules of Reed I.
How-
ever, the former is open to the criticism expressed in the concurrence that a person examining the recorded instrument itself
cannot determine whether a particular substance belongs to the
mineral or surface estate.
The rationale behind the surface destruction test is
sound, but the test should not be the only guideline considered.
The Reed I court appeared to acknowledge the weaknesses in the
Acker approach but stated that, "whatever the merits or demerits ... what we said in that opinion would continue to be the
Texas law."85
Two things are certain:
(1) Parties should more clearly
enumerate substances as "surface" or "mineral."
(2) More liti-
gation, dealing with factual settings different from Reed, will
13
18
surely arise.
But the courts will have a difficult time in not
giving the surface destruction test the utmost weight.
10
F O O T N O T E S
1. Reed v. Wylie, 554 S.W.2d 169, 170-71 (Tex. 1977) [also
referred to as Reed I].
2. 464 S.W.2d 348 (Tex. 1971).
3. Wylie v. Reed, 538 S.W.2d 186, 189 (Tex. Civ. App. —
1976), aff'd, 554 S.W.2d 169 (Tex. 1977).
Waco
4. 554 S.W.2d at 172.
5. Id. at 173.
6. Id
7. The reformation claim (based on mutual mistake) was raised
by Wylie for the first time on the remand following Reed I.
The dissent in Reed I had hinted that reformation was a
possible ground upon which Wylie could recover. Id. at 178
n. 7.
8. Reed v. Wylie, 579 S.W.2d 329 (Tex. Civ. App. — W a c o 1979),
aff'd, 597 S.W.2d 743 (Tex. 1980).
9. Reed v. Wylie, 597 S.W.2d 743 (Tex. 1980) [also referred to
as Reed II]. See Part I.C. infra. On the reformation issue,
the Wylies claimed that Wylie, his wife, his drafting attorney, and his grantee Baker had believed that the deed reserved 1/4 of the lignite. While the affidavits of these
parties might have shown mutual mistake as between the
Wylies and Baker, the affidavits did not show a basis for
reformation between Wylie and Reed. The Wylies were directed
to show on remand that "all subsequent purchasers bought with
notice of the mutual mistake" in the Wylie-to-Baker deed.
Id. at 749.
10. The court issued its first opinion on May 25, 1977, with Mr.
Justice Daniel dissenting. Later, the court denied Reed's
motion for rehearing and then substituted the opinion of
July 8, 1977 for the original opinion. Mr. Chief Justice
Greenhill wrote a separate, concurring opinion. Mr. Justice
Daniel modified his original dissent and was joined by Mr.
Justice Steakley.
11. 464 S.W.2d at 352 (emphasis added).
12. 554 S.W.2d at 172.
13. Id
14. Id
1
15. Id. The "value of the material" was apparently a reference
to the dictum in Heinatz v. Allen, 147 Tex. 512, 217 S.W.2d
994 (1949), that substances normally considered part of the
surface might become "minerals" if they possess special
value for some specific purpose. See note 57, infra, and
accompanying text.
16. 554 S. W. 2d at 173 (emphasis added).
17. Reed II interpreted this rule in the same way.
S.W.2d at 746.
See 597
18. For a general discussion and criticism of Reed I, see Prendergast, The Texas Enigma--When is a Mineral Not a Mineral?,
23 Rocky Mtn. Min. L. Inst. 8 65 (1977); Comment, Lignite;
Surface or Mineral—The Surface Destruction Test and More,
29 Baylor L. Rev. 879 (1977); 9 St. Mary's L. Rev. 624 (1978).
19. 554 S . W. 2d at 173.
20. Id. at 174.
21. Id.
22. Id. at 174-75.
23. Id. at 178.
24. See note 67, infra.
25. See note 56, infra, and accompanying text.
26. 554 S . W. 2d at 175.
27. Id. at 178.
28. Id. at 182.
29. A tract containing only deep-basin lignite would present a
similar problem: Under ejusdem generis (as applied by the
dissent) the lignite would be "surface," while under Acker
it would be a "mineral."
30. 554 S . W. 2d at 179.
31. Id. at 173.
32. 597 S. W. 2d at 745.
33. Id. at 746.
34. Id. at 747. The opinion did not overrule its previous statement that possible surface reclamation is immaterial to the
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surface destruction test. It has been argued that this
approach is inconsistent with current legislation enacted
to promote surface mining. 9 St. Mary's L. Rev. 624,
630-31 (1978) .
35. Id.
36. Id. at 748. What constitutes "reasonably immediate vicinity" will be a problem in future cases. The court examined
the language in Acker where that court had before it an
affidavit stating that iron ore deposits were "within a
mile of the 68-1/2 acre tract" and "in cuts through hills
along the highways and roadways of Cherokee County, Texas."
Acker also referred to an area of East Texas; this reference appears to be a greater area than a half mile or one
mile. At any rate, the Reed II court held that an "outcropping in a creekbed on the particular tract and another
outcropping within half a mile" were the reasonably immediate vicinity. Id.
37. Id.
38. Id.
39. Id. at 747. In overruling the requirement, the court is
looking more to practicality than strict contract law. A
basic requirement of interpretation and construction of
any contract is to "construe the intent of the parties at
the time of the contract." See generally Horner, Lignite—
Surface or Mineral?, 31 Ark. L. Rev. 75, 98 (1977).
40. Id. at 748. The court in this guideline (7), as well as in
(2), refers only to lignite, iron, and coal. However, the
underlying reasoning of the court would appear to be applicable to other substances as well. See Moser v. U.S. Steel
Corp., 601 S.W.2d 731 (Tex. Civ. App. —Eastland 1962, no
writ). (application of Reed II test to uranium.)
41. See note 9, supra.
42. Most of the cases cited in this article deal with this type
of phrase. However, when a grant or reservation of "all
minerals" is used without qualification, it has been held
in several jurisdictions that the reference is to all inorganic substances in the land. 54 Am. Jur. 2d Mines and
Minerals §113 (1971). Thus, even clay, sand, and gravel
have been held to be part of the mineral estate in some
jurisdictions. See Annot., 95 A.L.R.2d 843 (1964).
43. See Kuntz, The Law Relating to Oil and Gas in Wyoming, 3
Wyo. L. J. 107 (1949); Clark, Uranium Problems, 18 Tex.
B.J. 505; Comment, Surface or Mineral: A Single Test?,
23 Baylor L. Rev. 407 (1971); Comment, Lignite—Surface
10
or Mineral? The Single Test Causes Double Trouble, 28 Baylor
L. Rev. 287 (1976); Comment, Is Coal Included in a Grant or
Reservation of "Oil, Gas, or Other Minerals?", 30 S.W.L.J.
481 (1976); Comment, Lignite: Surface or Mineral—The Surface Destruction Test and More, 29 Baylor L. Rev. 879 (1977);
see also Annot., 1 A.L.R.2d 787 (1948); 59 A.L.R.3d 1146
(1974).
44. Atwood v. Rodman, 355 S.W.2d 206, 212 (Tex. Civ. App. — E l
Paso 1962, writ ref'd n.r.e.).
45. Psencik v. Wessels, 205 S.W.2d 658, 659 (Tex. Civ. App. —
Austin 1947, writ ref'd). Also, scientifically, a mineral
is a chemical substance occurring naturally as a product of
inorganic processes. H. Williams & C. Meyers, Oil and Gas
Law, Manual of Terms, 261 (1971). Interestingly, this
definition would exclude oil and gas as minerals.
46. Kuntz, note 43, supra at 112.
47. Id. at 114.
48. See 464 S.W.2d at 352.
49. Comment, Lignite: Surface or Mineral—The Surface Destruction Test and More, 29 Baylor L. Rev. 879, 882 (1977); see
also R. Hemingway, Handbook of the Law of Oil and Gas,
§1.1 (1971). Another approach in other jurisdictions is
based on applicable state statutes. For example, in 1955
North Dakota enacted a statute providing that mineral rights
did not include gravel, coal, clay or uramium. The legislative intent was to prohibit lessees and grantees from
destroying the surface owner's estate. See Fleck, Severed
Mineral Interests, 51 N.D.L. Rev. 369 (1974). The statutory
approach has been recommended. See Comment, Between A Rock
and a Hard Place, 17 Wm. & Mary L. L. Rev. 140, 144 (1975).
There is no such statute in Texas.
50. 15 S.W.2d 698 (Tex. Civ. App. —
Beaumont 1929, writ ref'd).
51. Barton v. Wichita River Oil Co., 187 S.W. 1043 (Tex. Civ.
App. — Fort Worth 1916, writ ref'd).
52. Comment, Is Coal Included in a Grant or Reservation of "Oil,
Gas, or Other Minerals?", 30 S.W.L.J. 481, 489 (1976).
53. 205 S.W.2d 658 (Tex. Civ. App. — Austin 1947, writ ref'd).
The case dealt with a "one-half interest in and to all mines
and wells of, and all minerals of whatever description ...."
Id.
54. Id. at 661.
/w'A
55.
147 Tex. 512, 217 S.W.2d 994 (1949).
726 (1949).
See 27 Tex. L
Rev
56.
Id. at 997.
57.
Id. The "unique value" test was apparently rejected in Atwood v. Rodman. See note 60, infra, and accompanying text.
58.
Id.
59.
355 S.W.2d 206 (Tex. Civ. App. —
n.r.e.).
60.
Id. at 215.
61.
464 S.W.2d 348 (Tex. 1971).
62.
See text accompanying note 46.
63.
464 S.W.2d at 352.
64.
Id. Whether this "contrary intention" must be expressed in
the instrument or may be shown by surrounding circumstances
was unclear. The problem was discussed in Williford v.
Spies, note 65, infra at 130, where the court reasoned that,
since the deed was not ambiguous, surrounding and attending
circumstances should not be considered.
65.
530 S.W.2d 127 (Tex. Civ. App. —
66.
Id. at 131.
El Paso 1962, writ ref'd
See Comment, note 52, supra at 486.
Waco 1975, no writ).
67. When the terms "mineral" or "mineral rights" are coupled
with an enumeration of specific substances, the general
words following a specific enumeration will be limited to
things of a like class. See R. Hemingway, Handbook of the
Law of Oil and Gas, § 1.1 (1971) . See generally Note, Has
Ejusdem Generis as Applied to Mineral Deeds Been Accepted
in Texas?, 2 Texfi Tech L. Rev. 164 (19 70) , where the author
argues that the rule has been accepted in Texas, even though
Southland Royalty Co. v. Pan American Petroleum Corp., 37 8
S.W.2d 50, 54 (Tex. 1964), stated that the doctrine had
never been accepted with regard to minerals in Texas.
68. See Fleming Foundation v. Texaco, 337 S.W.2d 846 (Tex. Civ.
App. — Amarillo I960, writ ref'd n.r.e.); Right of Way Oil
Co. v. Gladys City Oil, Gas and Mfg. Co., 106 Tex. 94, 157
S.W. 737 (1913).
69. Most commentators agree that the rule has not been accepted.
See Lange, Does the Phrase "Oil, Gas and Other Minerals" in
a Mineral Lease Include Uranium?, 2 Natural Resources Lawyer,
360, 361 (1969); Horner, Lignite—Surface or Mineral, 31 Ark.
/w'A
L. Rev. 75, 86 (1977); Ratliff, Deed's Reservation of "Oil
Gas and Other Minerals" does not~Include Water 40~Tex L—~
Rev. 163, 165 (1961).
~
'
70. Anderson and Kerr Drilling Co. v. Bruhlmeyer, 134 Tex
574
583, 136 S.W.2d 800, 805 (1940).
71. Some jurisdictions hold that "oil, gas and other minerals"
is ambiguous, so that evidence of surrounding circumstances
is allowed. See Besing v. Ohio Valley Coal Co., 293 N.E.2d
510 (Ind. App. 1973), Annot., 59 A.L.R.3d 1137 (1974).
72. Comment, Lignite: Surface or Mineral—The Surface Destruction Test and More, 29 Baylor L. Rev. 879, 881 (1977).
73. 217 S.W. 1096, 1099 (Tex. Civ. App. —
writ ref'd).
Fort Worth 1919,
74. 597 S.W.2d at 750 (Spears, J., concurring).
75. Id. at 750.
76. Id. This alternative is discussed by a commentator who
favors abolition of the surface destruction test and its
replacement with a rule of construction that will decide
ownership of substances as a matter of law. Comment, note
72, supra at 905.
77. See Prendergast, note 18, supra at 869; Comment, note 52,
supra at 499.
78. 554 S.W.2d at 182.
79. See text accompanying note 46.
80. 554 S.W.2d at 172 (emphasis added).
81.
82.
597 S.W.2d at 750. See also Note, Beneath the SurfaceDestruction Test: The Dialectic of Intention and Policy,
56 Tex. L. Rev. 99 (1977).
Id. at 750-51. The Reed I dissent was not so concise. At
one point it suggested that near-surface lignite was not a
"mineral" within the ordinary and natural meaning. 554
S.W.2d at 182. At another point, the suggestion was made
that all coal and lignite falls without the phrase "oil,
gas and other minerals." 554 S.W.2d at 175.
83. 597 S.W.2d at 751.
84. See Kuntz, note 43, supra at 115.
85. 554 S.W.2d at 171.
6