United States Steel Corp. v. Whitley

636 S.W.2d 465, 1982 Tex. App. LEXIS 4387
CourtCourt of Appeals of Texas
DecidedMay 20, 1982
Docket1868
StatusPublished
Cited by18 cases

This text of 636 S.W.2d 465 (United States Steel Corp. v. Whitley) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Steel Corp. v. Whitley, 636 S.W.2d 465, 1982 Tex. App. LEXIS 4387 (Tex. Ct. App. 1982).

Opinion

OPINION

NYE, Chief Justice.

This is an appeal from a judgment which construed a uranium lease and awarded damages in accordance with the jury’s verdict. Appellants and cross-appellees are United States Steel Corporation and N. M. Uranium, Inc. (hereinafter called U.S.S.). Appellees and cross-appellants are the Whitley family (hereinafter Whitleys). All parties have perfected limited appeals.

A review of the pertinent facts reveals the following: On March 4, 1969, a Uranium Mining Lease and an Assignment of Overriding Royalties covering 98.35 acres of land in Live Oak County, Texas, was executed between U.S.S. and the Whitleys. U.S.S., the lessor under the lease, received the right to exclusively mine uranium in return for paying royalties and overriding royalties to the Whitleys. At the time of the execution of the lease (1969), all commercial uranium mining was done by either shaft or strip mining methods. “In-situ leaching” was not a known method of recovering uranium at the time this lease was executed.

In 1978, U.S.S. decided to exercise its mining rights and locate an “in-situ leaching” pilot plant upon this tract. The record shows that “in-situ leaching” was the only method by which uranium was produced from the Whitley lease.

The present controversy arose over the construction of the royalty payment provision of the lease signed in 1969. The following lease provisions are pertinent:

“Lessee shall pay lessor a royalty for the leased substances mined by lessee from the Leased Premises and sold, or processed and sold, by or for Lessee, the total amount of which royalty shall be determined and computed as provided in the schedule marked Exhibit “A” attached hereto and made a part of this lease.” (PX1)

This exhibit provides that:

A. Royalty for uranium-bearing ores
For all uranium-bearing ores (i.e., mineral-bearing materials that are mined primarily for their uranium content) which are mined, saved and removed from the Premises by Lessee hereunder for sale or processing, the royalty reserved to Lessor shall be ten per cent (10%) of the Mine Value of such ores in raw, crude form.
For the purpose of computing such royalty to be paid for uranium-bearing ores, the Mine Value thereof shall be determined according to the following subpar-agraphs (i) and (ii) of this paragraph A.
(i) The Mine Value of uranium-bearing ores sold by Lessee in raw, crude form shall be the actual net proceeds received for such ores by Lessee after deducting the cost, if any, of transporting such ore from the mine to the point of sale.
(ii) The Mine Value of uranium-bearing ores which are not sold in their raw form but which are processed in a mill owned or controlled, wholly or partly, by Lessee or which are processed in a custom mill for Lessee, shall be determined from the following price schedule with the applicable adjustments provided hereunder:

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Bluebook (online)
636 S.W.2d 465, 1982 Tex. App. LEXIS 4387, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-steel-corp-v-whitley-texapp-1982.