Reed v. Wylie

597 S.W.2d 743, 65 Oil & Gas Rep. 286, 23 Tex. Sup. Ct. J. 256, 1980 Tex. LEXIS 304
CourtTexas Supreme Court
DecidedMarch 19, 1980
DocketB-8477
StatusPublished
Cited by47 cases

This text of 597 S.W.2d 743 (Reed v. Wylie) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reed v. Wylie, 597 S.W.2d 743, 65 Oil & Gas Rep. 286, 23 Tex. Sup. Ct. J. 256, 1980 Tex. LEXIS 304 (Tex. 1980).

Opinions

GREENHILL, Chief Justice.

A conveyance of the land in question reserved an interest in oil, gas and other minerals. The first question is whether that reservation included an interest in lignite. Upon the first appeal of this case, the record contained no facts as to the depth of the lignite. The cause was remanded for a new trial to ascertain those facts. 554 S.W.2d 169. We now have them. Our holding is that the trial court correctly held that as a matter of law, lignite was “at the surface” of the land, was part of the surface estate, and was not reserved by the grantor as “oil, gas and other minerals.”

After our first remand of the cause, the grantors in the instrument in question, pleaded facts regarding a mutual mistake of the parties to the instrument; and they prayed for a reformation of the instrument.

Upon the second trial, after a development of the facts as set out below, the trial court entered a summary judgment which held (1) that as a matter of law, the lignite was “at the surface” and was not reserved as a mineral, and (2) that as a matter of law, the grantors were not entitled to reformation.

The court of civil appeals reversed that judgment on both grounds. 579 S.W.2d 329. There is but one judgment of the court of civil appeals, and that was that the judgment of the trial court be reversed and the cause remanded for a new trial.

We agree with the judgment of the court of civil appeals because we are of the opinion that it was error to render summary judgment on the issue of reformation. We disagree with the holding and the opinion of that court (as opposed to its judgment) on the ownership of the lignite if the deed is not reformed.

OWNERSHIP OF THE LIGNITE

Our holding as to the lignite is based on two opinions of this court. The first is Acker v. Guinn, 464 S.W.2d 348 (Tex.1971), a unanimous decision. Acker was expressly affirmed by our first opinion in this case, Reed v. Wylie, 554 S.W.2d 169 (Tex.1977), a divided opinion.

In Acker, the reservation was also of oil, gas and other minerals. The question was whether surface and near surface iron ore was reserved as a mineral. The record in Acker was that iron ore was found “extensively in Cherokee County and other areas in eastern Texas.” “The ore deposits are [745]*745solid beds varying in thickness from a few inches to three or four feet. These deposits conform generally to the contour of the earth’s surface. They outcrop on the surface at places and range in depth to as much as fifty feet below the surface. The ore must be mined by a process known as the open-pit or strip-mining method.” 464 S.W.2d at 350-351. “In terms of its location with respect to the surface, methods by which it must be mined, and the effect of production upon the surface, the ore is quite similar to gravel and limestone.” Id. at 352.

Without referring to an outcropping on the particular tract in question, we held that, as a matter of law, the iron was not intended to be reserved as a mineral. The intent of the parties to the grant and reservation was held to be a general intent and not a specific intent. Unless specifically referred to, a person granting or reserving an interest in “oil, gas and other minerals” by lease or other conveyance would not generally have intended that his surface be destroyed in order for the grantee to recover the unnamed minerals.

Our first opinion in Reed v. Wylie, after reviewing and affirming Acker, had two holdings relevant here. They may be summarized:

1. “[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 have consumed or depleted the land surface.”

2. On the other hand, “if lignite lies at the surface of the land, no further proof would be required to establish the title of Reed [the surface owner] to the lignite. . . *

The problem then is, what did we mean by “at the surface of the land”?

It is undisputed that the surface of the land in question has already been completely strip mined.

The facts and circumstances of this case began before the execution of the instrument in question. In 1949, Wylie et al., at a time when they owned the surface and three-fourths of the mineral estate, executed a lease to others expressly granting the right to the lessees to extract coal and lignite from the land in question by strip mining. It was recognized that at least part of the surface would be destroyed, and the Wylies were to be paid $50.00 per acre for the portion of the land destroyed or rendered useless.

In 1950, after the above strip mining lease, the Wylies conveyed the subject tract to the predecessors in title of Reed by the instrument in question. As stated, it conveyed the land in question but reserved to the Wylies an undivided interest in “all oil, gas and other minerals." So at least the Wylies, having executed the strip mining lease in 1949, contemplated that the lignite would be strip mined.

As to whether the lignite was “at the surface,” the facts are these: there are affidavits that persons in the area had been on the land, and farmed and hunted the land; and they never had seen any lignite on the surface of the land.

Lignite “outcrops” on the surface at one part of the land in question, we will call the Reed tract, in the bed of a gully or ravine. It also outcrops at many points in the same county. One outcrop is within a half mile of the Reed tract, and another within two miles of the Reed tract.

There is testimony that as lignite “comes toward the surface,” the exposure or moisture causes lignite to “oxidize” or to deteriorate in quality. The low grade lignite becomes “smut” or “clinker.” The smut or clinker is not of sufficient value to be mined because of its low BTU content and its higher ash content. “

The testimony is that it would be very unusual to see the hard lignite at the top of the surface because of the “oxidizing” process.

On the Reed tract, the smut or clinker begins at about seven or eight feet from the top of the surface. The hard lignite begins at twenty to twenty-two feet in one vein, and runs almost parallel to the top of the [746]*746surface. A second vein of hard lignite on the Reed tract begins at about twenty feet and extends to a depth of eighty feet.

While there is testimony that lignite is presently stripmined in the area, there is also testimony that many years ago, lignite was mined in Texas by underground mining, using the room and pillar method; and there is evidence that this lignite could have been mined by that method.

The test laid out in our first Reed v. Wylie opinion, that the person claiming lignite as part of the surface estate must prove that near surface lignite must have been recovered by strip mining methods, does not apply, however, if the lignite lies at the surface of the land. What did the opinion mean by “at the surface of the land”?

The Wylies contend that the surface means the top of the ground.

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Bluebook (online)
597 S.W.2d 743, 65 Oil & Gas Rep. 286, 23 Tex. Sup. Ct. J. 256, 1980 Tex. LEXIS 304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reed-v-wylie-tex-1980.