Western Coal & Mining Co. v. Middleton

362 F.2d 48, 24 Oil & Gas Rep. 575, 1966 U.S. App. LEXIS 5787
CourtCourt of Appeals for the Eighth Circuit
DecidedJune 17, 1966
DocketNo. 18181
StatusPublished
Cited by4 cases

This text of 362 F.2d 48 (Western Coal & Mining Co. v. Middleton) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Western Coal & Mining Co. v. Middleton, 362 F.2d 48, 24 Oil & Gas Rep. 575, 1966 U.S. App. LEXIS 5787 (8th Cir. 1966).

Opinion

HUNTER, District Judge.

This is a diversity action. Appellants are Missouri corporations, with their principal place of business in St. Louis, Missouri, and appellees are citizens of the State of Arkansas, residing in Sebastian County. The dispute presented concerns the ownership of the gas and oil lying under a 320-acre tract of land located in Sebastian County, Arkansas. The particular issue is whether the words “other minerals” in a deed executed on April 2, 1904, in Sebastian County include oil and gas. The District Court found they did not, and entered judgment accordingly.

[49]*49The background circumstances are that on April 2, 1904, Franklin Bache and Nannie T. Bache, who owned 320 acres of land located just south of Fort Smith, Arkansas, conveyed by deed “all and singular the coal, fire clay and other minerals contained within the underlying” 320-acre tract to Western Coal and Mining Company. Appellee, Robert J. Middleton for the purposes of this suit is the stipulated owner of the 320-acre tract, subject only to such rights as appellants may have in the tract and its underlying minerals. Appellant Missouri Improvement Company is the present holder of the interest acquired by Western Coal and Mining Company..

The District Court, in a well-reasoned opinion reported at 241 F.Supp. 407 (W.D., Ark. 1965), held that although the. business community regarded oil and gas as a valuable mineral, the common and commercial usage of the terms “mineral” and “other minerals” in Sebastian County did not include oil and gas on April 2, 1904. The appellants contend this holding of the District Court is clearly erroneous.

In this diversity action the substantive law of the State of Arkansas governs our decision. Mothner v. Ozark Real Estate Company, 300 F.2d 617 (C.A. 8th, 1962). The question of whether such words as “other minerals” contained in a deed concerning Arkansas land which was executed around the turn of the century include gas and oil has been before the Arkansas Supreme Court upon several occasions, the last time being after this appeal was submitted. In its latest decision, Ahne v. The Reinhart and Donovan Co., 240 Ark. 691, 401 S.W.2d 565 (April 18, 1966), the Arkansas Supreme Court approvingly reviewed the same earlier decisions relied upon by the District Court, and stated, loe. cit. 696, 401 S.W.2d 568: “In our most recent decision involving construction of an instrument containing reservations, Stegall v. Bugh, supra,1 *relied upon by both parties to the appeal, we adhered, to the princiciples of construction of such instruments announced in Missouri Pac. R.R. Co. v. Strohacker, supra.2 Thus for the past twenty-five years it has been the settled rule of this court that, where there is ambiguity as to minerals actually embraced in instruments purporting to convey or to reserve certain unspecified minerals under generalized terms as to minerals, a fact question is presented as to the true intent of the parties; and in such cases the contemporary facts and circumstances surrounding the execution of the instrument are admissible in evidence on the question. Furthermore, the intent of the parties will be determined so as to be consistent with and limited to those minerals commonly known and recognized by legal or commercial usage in the area where the instrument was executed.” The Arkansas Supreme Court concluded that on the record before it, the chancellor’s findings that gas was a commonly recognized mineral in Logan County on July 26, 1905, was not against the preponderance of the evidence.

Among the cases reviewed and approved in the Ahne decision is the landmark case, Missouri Pacific R. R. Co., Thompson, Trustee v. Strohacker, 202 Ark. 645, 152 S.W.2d 557 (1941). That case held that deeds executed in 1892 and 1893 in Miller County reserving “all coal and mineral deposits” did not constitute a valid reservation of oil and gas minerals, for the reason that such substances were not commonly recognized as minerals in Miller County at the time of the execution of the deeds. The Strohacker decision, loc. cit., 561, 152 S.W.2d at p. 561 stated: “If the reservations had been made at a time when oil and gas production, or explorations, were general, and legal or commercial usage had assumed them to be within the term ‘minerals’, certainly appellant should prevail.”

In Stegall v. Bugh, 228 Ark. 632, 310 S.W.2d 251 (1958), the Court had for its consideration a deed executed in 1900 conveying 120 acres in Union County, [50]*50Arkansas. The deed exception clause provided, “except the mineral interest in said lands.” The trial court held the quoted words did not include oil and gas. The Arkansas Supreme Court affirmed saying, loc. cit. 253, 310 S.W.2d at p. 253, “We think that the meaning which this court has heretofore and should hereafter give to the word ‘mineral’, * * * in its accepted legal and commercial usage, did not include oil and gas in Union County in 1900.” And in Mothner v. Ozark Real Estate Co., 300 F.2d 617, we affirmed the District Court’s finding of fact that the use of the words “coal and mineral” did not include oil and gas in an 1891 conveyance of property in Johnson County, Arkansas.

Thus, where as here, there is ambiguity in the deed, the problem presented involves a question of fact to be decided by the trial court in each instance. As provided in Rule 52, F.R. Civ.P., in all actions tried upon the facts without a jury, findings of fact shall not be set aside unless clearly erroneous. The Supreme Court of the United States in United States v. United States Gypsum Co., 333 U.S. 364, at page 395, 68 S.Ct. 525, at page 542, 92 L.Ed. 746 (1947), in considering the rule stated, “A finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” This is the standard set for our review.

All of the evidence is in the form of exhibits. There was no testimony as to the legal or commercial usage of the words “other minerals” in 1904.

The numerous exhibits may be generally classified in five categories: (1) Contemporary (around 1904) publications, including almanacs, city directories and newspaper articles; (2) Publications or books on the oil and gas industry in Arkansas; (3) A large number of oil and gas leases made at various times between about 1888 and 1910; (4) The articles of incorporation of a number of corporations that were interested in oil or gas; (5) City ordinances. We have carefully examined all of these exhibits, but because of their nature and number, we will not endeavor to discuss them individually. We have concluded from our review of them that the District Court’s finding that the common and commercial usage of the terms “mineral” and “other minerals” in Sebastian County on April 2, 1904, did not include oil and gas is not clearly erroneous.

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362 F.2d 48, 24 Oil & Gas Rep. 575, 1966 U.S. App. LEXIS 5787, Counsel Stack Legal Research, https://law.counselstack.com/opinion/western-coal-mining-co-v-middleton-ca8-1966.