Rickelton v. Universal Constructors, Inc.

OPINION

FEDERICI, Justice.

Plaintiffs-appellees Rickelton, et al. (Rickelton), pursuant to § 7-8-68, N.M.S.A. 1953 (Repl. 1974), initiated a contest before the defendant Commissioner of Public Lands (Commissioner), asking that the Commissioner cancel certain sand and gravel leases issued to the defendant Universal Constructors, Inc. (Universal). The sand and gravel leases covered the same state trust lands previously conveyed to the plaintiffs by land patent. The patent reserved to the grantor (State of New Mexico) “all of the minerals of whatsoever kind, including oil and gas,” together with the right to the use of the surface to explore for and remove the same. Thereafter, Universal filed an answer and, pursuant to § 7-8-8, N.M.S.A. 1953 (Repl. 1974), the Commissioner issued a “show cause order” directing Universal to show cause why the sand and gravel leases should not be can-celled as having been issued without authority of law. A hearing was held at which time oral testimony and documentary evidence were submitted. The Commissioner made findings of fact and conclusions of law and rendered a decision denying the plaintiffs’ requested relief with one minor exception. The Commissioner determined that sand and gravel were minerals reserved to the State under the mineral reservations in the patent, and that the sand and gravel leases were valid.

Thereafter, the plaintiffs appealed the Commissioner’s decision to the district court pursuant to §§ 7-8-71 and 7-8-72, N.M. S.A. 1953 (Repl. 1974), whereupon the Commissioner sent to the district court a complete transcript and record of the proceedings below. No additional evidence was submitted, and the case was tried on the administrative hearing record. On February 3, 1977, the district court reversed the Commissioner’s finding that the sand and gravel were minerals within the reservation in the granting patent.

The Commissioner appeals the decision of the district court. We affirm the district court.

There is only one issue to be determined: Are sand and gravel minerals as contemplated under the grantor’s mineral reservation in the conveying patent?

The mineral reservation reads:

Now, therefore, know ye, that the State of New Mexico, by its Commissioner of Public Lands, its duly authorized officer according to law, does hereby Grant, Bargain, Sell, and Convey unto the said Robert D. Garland, Frank Palmer, Miles S. Palmer and J. A. Palmer and to their heirs and assigns, the said tract of land above described, subject to valid, existing rights, easements, rights of way, and reservations, and reserving also to the State of New Mexico all minerals of whatsoever kind, including oil and gas, in the lands so granted, and to it, or persons authorized by it, the right to prospect for, mine, produce and remove the same, and perform any and all acts necessary in connection therewith. . . . (Emphasis added.)

What the Legislature meant to be included as a “mineral” is not well defined in New Mexico. In State ex rel. State Highway Commission v. Trujillo, 82 N.M. 694, 487 P.2d 122 (1971), this Court recognized that the category of “minerals” is a flexible one, and quoted with approval the following language from Bumpus v. United States, 325 F.2d 264, 266 (10th Cir. 1963):

“Mineral” is a word of general language, and not per se a term of art. It does not have a definite meaning. It is used in many senses. It is not capable of a definition of universal application, but is susceptible to limitation or expansion according to the intention with which it is used in the particular instrument or statute. Regard must be had to the language of the instrument in which it occurs, the relative position of the parties interested and the substance of the transaction which the instrument embodies. (Footnotes omitted.)

In Trujillo, supra, this Court concluded that sand and gravel taken from the surface was not a mineral.

The material which we are considering had no rare or exceptional character and possessed no peculiar property giving it special value. It seems useful only for road building purposes, and moreover it was stipulated to have been taken in its exposed state. Although courts have reached differing results in arriving at the judicially ascertained intent of reservation clauses such as the one before us, we are of the opinion that under the circumstances of this case the reservation of coal and other minerals was not intended to include rock.

Trujillo, id at 696, 487 P.2d at 124.

In Burris v. State ex rel. State Highway Commission, 88 N.M. 146, 538 P.2d 418 (1975), this Court held by implication that sand and gravel were minerals under a mineral reservation using language similar to that in the mineral reservation in the present case; however, Burris is distinguishable from Trujillo. The crucial distinction is the specific agreement to exclude sand and gravel as a mineral in the original “Application to Purchase” filed by the appellants in Burris.

Burris stands for a completely different proposition and set of circumstances than those found in Trujillo, and in this case. This Court in Burris, said:

In fact, in the application for the tract in 1964, the “Application to Purchase” contained the following statement by Mr. Burris:
“I further state that the land applied for herein is essentially non-mineral land, and that this application is not made for the purpose of obtaining title to mineral, including but not limited to caliche, sand and gravel, coal, oil or gas lands fraudulently but with the sole object of obtaining title to the surface of the land applied for.” (Emphasis supplied.) .
For example, in State ex rel. State Highway Commission v. Trujillo, 82 N.M. 694, 487 P.2d 122 (1971), heavily relied upon by Burris, the only writing of this sort before us, in addition to the statute, was the patent, which simply reserved to the United States “all the coal and other minerals in the lands * * *For the reasons stated in that opinion, we concluded that sand and gravel were not minerals in that factual context.
In contrast with State ex rel. State Highway Commission v. Trujillo, supra, a great deal more documentation, casting light on the intention of the parties, is before us here. Not only the patent, but also the “Application to Purchase” and the contracts, lead us to conclude that this case is readily distinguishable from Trujillo.

Burris, id at 147, 538 P.2d at 419.

We believe that the case before us is controlled by the Trujillo case, and that a careful reading of Burris supports the result reached by us in this case.

For cases in other jurisdictions which support the view expressed by this Court in this opinion see: Bumpus v. United States, supra; Resler v. Rogers, 272 Minn. 502, 139 N.W.2d 379 (1965); San Jacinto Sand Co., Inc. v. Southwestern Bell Tel. Co., 426 S.W.2d 338 (Tex.Civ.App.1968), U.S. cert. denied, 393 U.S. 1027, 89 S.Ct. 622, 21 L.Ed.2d 570 (1968); Annot., 95 A.L.R.2d 843 at 849, 854 and 865 (1964); A.L.R.2d, Later Case Service, Supplementing 92-100 A.L.R.2d at 248 et seq. (1976).

Whether sand and gravel are “minerals” as that term is used in a mineral reservation or grant depends upon the specific facts in each case. It would be an exercise in futility to attempt to reconcile the various conclusions reached in other jurisdictions. We are satisfied that the trial court was correct in concluding that under the facts in this case sand and gravel of the quality which they possessed here were not minerals, considering the statutes applicable thereto, the mineral reservation as expressed and the commonly understood meaning of the word, “minerals.”

The decision of the trial court is affirmed.

IT IS SO ORDERED.

SOSA and PAYNE, JJ., concur. McMANUS, C. J., dissenting. EASLEY, J., dissenting.