State Ex Rel. Commissioners of the Land Office v. Butler

753 P.2d 1334, 1987 WL 2409

• Court: Supreme Court of Oklahoma
• Decided: May 24, 1988
• Docket: 51609
• Status: Published

Opinions

SIMMS, Justice.

The issue presented by this appeal is whether a reservation of an interest in “oil, gas and other mineral rights” includes coal. We hold it does not. Our holding is consistent with a long and unanimous line of cases. Our earlier opinion in this matter has previously been ordered withdrawn. Rehearing is granted, and this opinion is substituted therefor.

Claude Butler, the appellee, brought action to quiet title in the rights to the coal on land he owned in fee simple. His predecessors in interest acquired the property by three separate patents from the Commissioners of the Land Office by public sale of state-owned lands with notice as provided by law. One patent reserved to the state “an undivided fifty percentum of all oil, gas, and other mineral rights” and the other two patents contained reservations of “an undivided fifty percentum of all oil, gas and other minerals and mineral rights”. The notice of sale stated that the land would be sold subject to the state’s reservation of fifty percent of “all the oil, gas and other mineral rights”. The Commissioners counterclaimed to quiet the state’s claimed interest in the coal based on the reservations.

Mr. Butler sought summary judgment arguing that the phrase “oil, gas and other minerals” has an established meaning in Oklahoma; that it includes only oil and gas and other minerals produced as a component or constituent thereof. The Commissioners disagreed, urged the Court to hold that the phrase was ambiguous and to allow extrinsic evidence of the intent of the original parties at the time of the conveyances to be introduced.

The trial court found no significant distinction between the language of the patents, held that the reservations were unambiguous and disallowed any extrinsic evidence of intent. Based on our decision in Panhandle Cooperative Royalty Co. v. Cunningham, Okl., 495 P.2d 108 (1972), the trial court held that the state had reserved only fifty percent of the oil, gas and minerals produced as constituents and components thereof, whether hydrocarbon or non-hydrocarbon, and that no other mineral, including coal, was reserved by the state. The trial court granted summary judgment in favor of Mr. Butler and quieted title to all the coal in him.

The Commissioners bring this appeal contending primarily that the trial court erred by disallowing extrinsic evidence to show intent of the original parties. They argue that the phrase “oil, gas and other minerals” is ambiguous and that extrinsic evidence should therefore be allowed to show the intent of the original conveying parties. The same arguments have been presented and rejected repeatedly by this Court.

The phrase “oil, gas and other minerals” is, of course, common in the oil and gas industry. It, and its close variants, are standard terms which appear in very early oil and gas leases, and have commonly been used in fee conveyances and reservations, such as those before us today. The meaning of “oil, gas and other minerals” has been the subject of frequent and spirited litigation nationwide as well as in Oklahoma. Questions as to which unspecified minerals are included within the phrase have been answered with differing results under different rationales. See, for instance the annotation Grant, Lease, Exception, or Reservation of “Oil, Gas, and Other Minerals”, or the Like, as Including Coal or Metallic Ores, 59 A.L.R.3rd 116 (1974).

We have a consistent line of cases which offer no possible result except that a reservation of “oil, gas and other minerals”, standing alone, does not include coal. See, e.g., Barker v. Campbell-Ratcliff Land Co., 64 Okl. 249, 167 P. 468 (1917)—reservation of “mineral rights” includes oil and gas; Beck v. Harvey, 196 Okl. 270, 164 P.2d 399 (1945)—reservation of “mineral royalty” does not include gravel; State, ex rel., Com’rs of Land Office v. Hendrix, 196 Okl. 596, 167 P.2d 43 (1946)—conveyance of an interest in and to all the oil, petroleum gas, coal, asphalt and all other minerals of every kind and character does not include gravel; Cronkhite v. Falkenstein, Okl., 352 P.2d 396 (1960)—mineral deed for “oil, gas and other minerals” does not include gypsum rock; and Holland v. Dolese Co., Okl., 540 P.2d 549 (1975)—reservation of an interest in “the mineral rights” did not include quarried limestone.

In Oklahoma we have relied primarily on the rule of ejusdem generis to determine the scope of such mineral conveyances. Ejusdem generis is simply a rule of interpretation. It gives guidance to the ordinary insight that when specific words are followed by general words those specific words restrict the meaning of the general. Thus, where the phrase “other minerals” follows the enumeration of particular classes of minerals such as oil and gas, the general words will be construed as applicable only to minerals of the same kind or class as those specifically named. Wolf v. Blackwell Oil & Gas Co., 77 Okl. 81, 186 P. 484 (1920).

It is axiomatic that the interpretation of a written contract which is free from ambiguity is a judicial function and that oral testimony or other extrinsic evidence is not admissible to determine its meaning. The rules of interpretation of contract, both statutory as set forth in 15 O.S.1981, § 151, et seq., and non-statutory rules such ejusdem generis, are for use by the court to determine whether an ambiguity exists. An ambiguity in a written instrument allowing parol testimony does not appear until application of pertinent rules of interpretation to the face of the instrument leaves it genuinely uncertain which one of two or more meanings is the proper meaning. Whether words of a contract or conveyance or other written instrument are ambiguous and therefore will support the need for extrinsic evidence is determined as a matter of law by the trial court. See, e.g., Van Horn Drug Co. v. Noland, Okl., 323 P.2d 366 (1958); Panhandle Cooperative Royalty Co. v. Cunningham, supra; Morgan v. Wheeler, Ks., 150 Kan. 667, 95 P.2d 320 (1939); R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc., Tex., 596 S.W.2d 517 (1980). Appellants’ suggestion that the rule of ejusdem generis is a rule to solve an ambiguity and therefore extrinsic evidence should be allowed, is in error. This rule, like all rules of interpretation, exists to aid the trial court’s determination of whether or not an ambiguity is present.

There is no longer room for question in Oklahoma. The rule of law has evolved in this state that “oil, gas and other minerals” is not ambiguous. “Oil, gas and other minerals” is not a description of the entire mineral estate. The phrase has a certain and definite meaning: it includes only oil and gas and those minerals produced as constituents and components thereof.

In Panhandle supra, the Court upheld the trial court’s determination that a mineral deed granting interest in “oil, gas and other minerals” was not ambiguous and that extrinsic evidence of the parties’ intent as to the inclusion of metallic minerals such as gold, silver and copper was inadmissible. There the defendants had also argued that the phrase was ambiguous and included “all minerals”, and that extrinsic evidence should be allowed to show the parties’ intention to include metallic minerals. The Court there did not rely on ejusdem gener-is, although it recognized it as a rule of construction which is a useful part of our law, but the Court did cite and rely on Cronkhite v. Falkenstein, Okl., 352 P.2d 396 (1960), which was an ejusdem generis case.

In Panhandle the Court conducted a historical review of litigation on the issue which left no doubt that the phrase “other minerals” resulted from early litigation over rights to other distinct substances produced at the well head — particularly cas-inghead gas — under mineral deeds and conveyances of interest in “oil and/or gas” and “oil and gas”. The phrase “other minerals” has a special purpose in extending the connotation of “oil and gas”.

Applying the statutory rules of interpretation, 15 O.S.1961, § 151, et seq., the Court held that the deed in question granted interest in oil and gas and other minerals produced as oil or gas or produced as a component or constituent thereof whether hydrocarbon or non-hydrocarbon, but did not grant any other mineral or the right to produce any other mineral, including copper, silver, gold, or any other types of metallic ores or metallic minerals. Panhandle, supra at 113.

Following Panhandle the Court decided Allen v. Farmers Union Cooperative Royalty Co., Okl., 538 P.2d 204 (1975), where metallic minerals were once again the subject of a quiet title action brought to determine whether they were included in a reservation of “all oil, gas and mineral rights”. The same arguments which were presented and rejected in Panhandle and are now presented in the instant case, were before the Court in Allen, and were summarily rejected.

The appellants there criticized the decision in Panhandle, and contended that the reservation is unambiguous and clearly meant “all minerals” of every kind. Relying on the rule of ejusdem generis the Court determined that a reservation of “all oil, gas and mineral rights” has essentially the same meaning as “all oil, gas and other minerals” as set forth in Panhandle ... i.e., oil, gas and other minerals produced as a component or constituent thereof, whether hydrocarbon or non-hydrocarbon, and does not convey any other mineral or the right to produce any other mineral including copper, silver, gold or any other types of metallic ores or metallic minerals. The Court reaffirmed its holding in Panhandle that a deed granting oil, gas and other minerals is not ambiguous and consequently no extrinsic evidence of an interpretative nature could be introduced to ascertain the intention of the parties.

While coal was not the mineral directly at issue in Allen, the question of coal ownership was passed on indirectly by the Court in considering the mineral conveyance from Farmers to Flag. Farmers owned an interest in “oil, gas and other minerals” and conveyed to Flag an interest in the “oil, gas, coal, iron, and other minerals”. Farmers, held the Court, could not convey to Flag an interest in metallic ores or minerals as Farmers owned only an interest in the “oil, gas and other minerals” and consequently could only convey to Flag an interest in such minerals as defined in the Panhandle case, at 209.

Certiorari was denied by this Court in West v. Aetna Life Insurance Company, Okl.Ct.App., 536 P.2d 393 (1975), wherein the Court of Appeals considered two groups of deeds in an action brought by plaintiffs to quiet title to metallic ores or minerals, including copper, gold, silver, and lead. The defendants were claiming under reservations contained in deeds of conveyance and also under grants in mineral deeds. At trial defendants offered to show by parol evidence the intention of the parties at the time of execution of the various grants and reservations. The trial court, however, refused to admit the evidence, holding the reservations and grants unambiguous in law and quieted plaintiff’s title in and to the mineral ores and metals. Addressing the defendants’ arguments that the phrase “oil, gas and other minerals” is ambiguous and should be subject to parol testimony, the Court of Appeals conducted a thorough review of the Oklahoma decisions, and stated that:

“The courts of Oklahoma, both state and federal, over a course of more than half a century, [have adopted and applied] the rule of ejusdem generis ... A review of the rulings of the Oklahoma Supreme Court thereon constitutes a record of unanimity of ruling and decree, beginning with the case of Kansas City Southern Railway Company v. Reinnam, 63 Okl. 69, 162 P. 726 (1917), and continuing through the years to the recent case of Panhandle Cooperative Royalty Co. v. Cunningham ... The Supreme Court in construing contracts, statutes, deeds of conveyance, and other legal documents, have consistently adhered to the policy of ‘stare decisis'.” At 397.

Applying that rule in West, the Court of Appeals held that the deeds were not ambiguous, and that the reservations did not include metallic ores or minerals and affirmed the trial court.

The certainty of the fixed meaning of “oil and gas and other minerals” in Oklahoma is also reflected by the Tenth Circuit decision of Sloan v. Peabody Coal Co., 10th Cir., 547 F.2d 115 (1977). There, plaintiff had conveyed the land to third parties who leased to the defendant for coal mining purposes. Plaintiff had reserved one-half of “all the oil, gas and minerals in, on, or under the surface of said lands”. In its determination of whether the reservation included coal, the trial court had refused to consider plaintiff’s extrinsic evidence to show the intent of the parties and relied instead on the rule of ejusdem generis in support of its conclusion that the language was unambiguous as a matter of law. The parties had agreed that the issue was a legal one, that being whether under Oklahoma law the reservation included coal. Relying on Oklahoma decisions in Allen, Panhandle, and West, the Tenth Circuit affirmed the trial court’s summary judgment for defendant and noted that the Oklahoma courts in their application of statutory and decisional law, have held that the reservation of “oil, gas and other minerals” in a deed is not ambiguous. Finding that the application of the rule of ejusdem generis is well established in Oklahoma, the Tenth Circuit found it was properly applied by the trial court and that the court was also correct in refusing to admit extrinsic evidence as to intent of the parties. The court also ruled that the chemical similarity between coal and oil does not lead to a different result or a different rule of construction.

We denied certiorari in Hutchison v. McClure, Okl.App., 621 P.2d 546 (1980), wherein the Court of Appeals held, in reliance on Sloan and 16 O.S.1971, § 19, that a reservation of “oil, gas and other minerals” did not reserve an interest in coal.

The rule of law is clearly well settled in Oklahoma. “Oil, gas and other minerals” or similar phrases are not, standing alone, ambiguous and do not allow the introduction of parol evidence. The meaning of the words must be derived from common understanding which means that “other minerals” shall be limited to minerals similar in kind and class to “oil and gas”. Coal is not similar in kind and class to oil and gas. Appellant urges us to find that since all three belong to the class hydrocarbons, they are similar and belong together. It is not, however, the chemical composition which is important, but rather those traits which a man of common understanding would find to be similar or dissimilar. While coal has some chemical similarities to oil and gas, dissimilarities dominate. Coal is a solid substance extracted from the land in ways fundamentally different from those used to obtain oil, gas or a “component or constituent thereof”, Panhandle, 495 P.2d, at 113. We therefore reaffirm our consistent position that “oil, gas and other minerals” and similar phrases are not ambiguous. They do not include coal or other unspecified minerals.

Appellants also suggest that slight differences in the wording between the minutes of resolution of the Commissioners to sell the property, the notice of sale, and the patent support their argument that extrinsic evidence should be allowed as to intent of the original parties.

It is fundamental that a patent is solemn evidence of title; it is a written public grant of the highest character, and high evidence of its own validity. Where government officers have issued a patent in due form which on its face is sufficient to convey title to land described, it is to be treated as valid in actions of law. The recitals of the patent are conclusive as to the estate conveyed, and no evidence can be received for construction thereof. A patent is deemed to have been issued regularly and the presumption exists that all usual necessary steps were taken before the title was perfected by patent. See, e.g., Sharp v. City of Guthrie, 49 Okl. 213, 152 P. 403 (1915); Bagnell v. Broderick, 38 U.S. 436, 13 Pet. 436, 10 L.Ed. 235 (1839); Colorado Coal & Iron Co. v. United States, 123 U.S. 307, 55 S.Ct. 131, 31 L.Ed. 182 (1887); See, 1 O.S.1981, § 11.

To look behind the patent to the minutes of the meeting would be totally unsupported by law. The notice, certificate of purchase, and patent were the specific acts of the Commissioners and the entire sale process was regular under 64 O.S. 1941, §§ 95, 96, and in fact, the words of the patent follow the statute, 64 O.S.1941, § 82(d).

Appellants’ final argument is that a sacred trust of the school lands existed for the benefit of the beneficiaries and that as part of that trust, Commissioners were forbidden by the Constitution to diminish the corpus. They contend that by conveying coal rights without specific remuneration therefor, a diminution of the corpus was effected which was beyond the Commissioners authority. In support of this argument, appellants rely on Lassen v. Arizona, 385 U.S. 458, 87 S.Ct. 584, 17 L.Ed.2d 515 (1967), which held that when trust lands are obtained by anyone, including the state, the trust must be compensated in money for the full appraised value. Lassen is inapplicable here for, inter alia, this land sold for more than its appraised value. Appellants’ argument would mean that every time a new mineral was discovered on subject lands, appellants could argue in retrospect that at the time of sale it did not receive full compensation. We reject the argument and find the notion contrary to the language and spirit of the Enabling Act, the Oklahoma Constitution, and common sense.

The trial court correctly granted the motion for summary judgment and we affirm.

JUDGMENT AFFIRMED.

DOOLIN, C.J., and HODGES, KAUGER and SUMMERS, JJ., concur. HARGRAVE, V.C.J., and LAVENDER, OPALA and WILSON, JJ., dissent.