United States Smelting, Refining & Mining Co. v. Wigger

684 P.2d 850, 1984 Alas. LEXIS 304
CourtAlaska Supreme Court
DecidedMay 25, 1984
Docket7403, 7404
StatusPublished
Cited by8 cases

This text of 684 P.2d 850 (United States Smelting, Refining & Mining Co. v. Wigger) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Smelting, Refining & Mining Co. v. Wigger, 684 P.2d 850, 1984 Alas. LEXIS 304 (Ala. 1984).

Opinion

OPINION

MOORE, Justice.

This appeal arises out of a summary judgment in favor of Walter Wigger against United States Smelting, Refining and Mining Co., UV Industries, Inc., Alaska Gold Co. and the Jesson heirs. On March 1, 1933, Clara and L.N. Jesson executed a mineral lease to Fairbanks Exploration Co. (hereinafter F.E. Co.). United States Smelting, Refining and Mining Co., UV Industries, Inc. and Alaska Gold are successors in interest to F.E. Co. Alaska Gold is the current lessee. The original lessors’ interest passed to their descendants, collectively referred to as the “Jesson heirs.”

The lease concerned mining properties owned by the lessors situated in the area of Ester Creek and its tributaries in the Fairbanks Mining and Recording District. The lease provided that rent be paid in the form of royalties. The lease was to “continue until all gold and other precious metals and minerals recoverable in the sole opinion of the Lessee at a profit shall have been recovered from the demised premises or from any claim on Ester Creek or its tributaries which the Lessee may be mining....”

The properties were mined for gold from the mid-1980s to 1964. Mining operations for gold were suspended in 1964 because mining costs made it uneconomical to continue operations. However, in 1968, Alaska Gold’s predecessor paid royalties to the heirs on tailings which had been condemned by the State for highway construction purposes. In 1972, Wigger asked the Jesson heirs to sell their interests in the mining properties for $100 per acre. He stated in letters to them that he was interested in buying the land because he wanted to construct a settling basin for other mining operations. He further wrote to the heirs that he was aware that they were reluctant to sell unless they could continue to receive royalties under the lease.

Most of the Jesson heirs deeded their property to Wigger; he obtained about ⅝ of the Jesson property. Each deed contained a reservation stating that the heirs would continue to receive the same royalties provided in the lease if and when gold was mined. 1

In September, 1972, two months after receiving all the deeds, Wigger wrote the current lessee requesting that the lease be terminated because the “claims have not been mined since 1963.” On November 18, 1974 Wigger mailed a lease termination notice to UV Industries on the grounds that the tailing, “gravel,” had been removed by the lessee without payment to Wigger. In August, 1980, Wigger filed a complaint against Alaska Gold and its predecessors seeking to have the lease declared null and void and to quiet his title to the real property free and clear of all claims of the defendants. Wigger alleged that the lease was terminated (1) because the lease had terminated on its own terms or (2) because the lessees had abandoned the leasehold.

In September, 1981, Wigger added a cause of action for tortious interference with his contract to sell gravel. After the commencement of the litigation, Wigger contracted to sell to Gareth Wright 27,000 cubic yards of gravel from the mining claims. Before Wright actually purchased the gravel, he was informed by the lessee, Alaska Gold Co., that it would seek to enjoin him from purchasing from Wigger. Wright reneged on the contract with Wig-ger and purchased gravel from Alaska *853 Gold, which owned other gravel locations and which Wigger claims is the only other major owner of gravel in the Ester Creek area.

Also, after the suit was filed, the corporate defendants moved to dismiss for failure to join indispensable parties, the Jesson heirs. Wigger admitted that the heirs were indispensable parties and amended his complaint. However, three heirs were never served.

The trial court granted summary judgment for Wigger on two alternate grounds: (1) that the lease had terminated in 1964 under its own terms and (2) that the lease had terminated by virtue of abandonment. The trial court granted summary judgment against all defendants, even those un-served. The lower court stated that all defendant heirs were represented by the law firm of Robertson, Monagle, Eastaugh & Bradley, and that they were therefore bound by its holding that the lease had terminated. In regard to the cause of action that Alaska Gold tortiously interfered with a contractual relation, summary judgment was granted in favor of Alaska Gold.

On appeal, the appellants argue that there are genuine issues of fact that should have precluded summary judgment in favor of Wigger. They assert that if the court had properly construed the lease, it would not have found that the lease had terminated by its terms or that the lessees had abandoned the lease. They further contend that the doctrines of commercial frustration and equitable estoppel, which were raised below, should have prevented summary judgment. Lastly, they argue that the case should have been dismissed because three indispensable defendants were never served.

Wigger cross-appealed. He states that summary judgment for Alaska Gold on the cause of action for tortious interference with contract was improper.

I. CONSTRUCTION OF THE LEASE

A. Is Gravel Considered a Substance to be Mined Under the Lease?

The appellants assert that the lease continues until the lessee finds the leasehold to be unprofitable. They assert that through the years the lessees have found the mineral leasehold to be profitable because gravel has been mined by the lessees since 1964 from the demised properties as well as from the lessees’ other claims in the Ester Creek area.

The question whether the parties intended gravel to be a mineral under a lease has arisen in other jurisdictions. In Praeletorian Diamond Oil Ass’n v. Garvey, 15 S.W.2d 698, 700 (Tex.Civ.App.1929), the court had to decide whether a lease of “all the oil and gas and other minerals in and under” the land was broad enough to include commercial gravel. The court stated that:

We do not think that the abstract question of whether or not gravel is a mineral is necessary to be determined. As we view it, the question is whether, if it be conceded that gravel is a mineral, it was the intention of the parties to convey same in the lease_ We think it evident, when the instrument as a whole is considered, that it was not the intention to convey gravel. While it is true that the lease recites that “all the oil, gas and other minerals” are conveyed, still it is manifest from the other provisions that gravel was not included. The lease provides that appellant shall have the right to “erect derricks,” “build tanks,” and “lay pipe lines” on the land in operating for minerals. These constitute the well-known and commonly understood instru-mentalities and method for the sinking of and operating oil wells and caring for the production of oil, but they are in no wise appropriate for the mining of gravel. The lease has no provisions for the mining of gravel, nor the caring for or disposition of gravel.

Id. See also Kinder v. LaSalle County Carbon Co., 310 Ill. 126, 141 N.E. 537 (1923) and Annot. 86 A.L.R. 983, 985 (1933).

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Bluebook (online)
684 P.2d 850, 1984 Alas. LEXIS 304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-smelting-refining-mining-co-v-wigger-alaska-1984.