CNX Gas Co. v. Rasnake ( 2014 )

PRESENT: Lemons, Goodwyn, Millette, Mims, and Powell, JJ., and
Russell and Koontz, S.JJ.
CNX GAS COMPANY LLC
OPINION BY
v. Record No. 130306 SENIOR JUSTICE CHARLES S. RUSSELL
January 10, 2014
JAMES RASNAKE, ET AL.
FROM THE CIRCUIT COURT OF RUSSELL COUNTY
Michael L. Moore, Judge
This appeal turns upon the interpretation of the language
used by the grantor in a deed of bargain and sale.
Facts and Proceedings
The essential facts are undisputed. In 1887, Jacob Fuller
and Mary Fuller, husband and wife, were the owners of a tract of
land in Russell County containing 414 1/8 acres. By deed dated
February 14 of that year, they conveyed "all the coal, in, upon,
or underlying" the 414-acre tract, as well as the appurtenant
timber interests and privileges, to Joseph J. Doran and W. A.
Dick. No other interests in the 414-acre tract were conveyed
until 1918.
By deed dated May 23, 1918, W. T. Fuller, the successor in
interest to Jacob and Mary Fuller, conveyed to Unice Nuckles a
75-acre portion of the 414-acre tract. That deed is the subject
of this controversy. It provides in pertinent part:
That in consideration of the sum of Eight Hundred and
Forty-Six 58/100 Dollars, in hand paid, the receipt of
which is hereby acknowledged, the said W. T. Fuller has
sold and by these presents do grant unto the said parties
of the second part, with General Warranty, all the
following piece or parcel of land lying on the ridge
between Lewis Creek and Swords Creek and contains about
seventy-five acres be the same more or less [metes and
bounds description follows]. This sale is not ment [sic]
to convey any coals or minerals. The same being sold and
deeded to other parties heretofore.
The dispositive question before us is the interpretation to be
given to the last two sentences quoted above. 1
The appellant, CNX Gas Company, LLC (CNX) claimed the
mineral rights, excluding coal, in the 75-acre tract as lessee
under the successors in interest to Unice Nuckles, the grantee
in the 1918 deed. The appellees, James D. Rasnake, Mike O.
Rasnake and Lucy Mae Blankenship, claimed the same rights as
successors in interest to the Fullers, the grantors in the 1918
deed. CNX has been producing coal bed methane gas for some time
from the property it has leased. 2
The plaintiffs brought this action in the circuit court and
CNX filed an answer and counterclaim for a judgment declaratory
of its title to the mineral estate in the 75-acre tract. By
1
CNX contends that the last ten words do not constitute a
sentence, but were intended to be a dependent clause modifying
the preceding sentence. This appeal involves only mineral
rights.
2
Parties on both sides were later added, substituted and
dismissed by orders in the circuit court. When the final order
was entered, the parties plaintiff were James Rasnake, Bobby Lee
Rasnake, Peggy Rasnake, Donna Jean Whitt, Debbie Cook Carlock
and Harold David Dye (hereinafter the plaintiffs), as successors
in interest to the Fullers. The sole defendant was CNX, as
successor in interest to Unice Nuckles.
2
agreement of the parties, the court heard the case and arguments
of counsel ore tenus on the above evidence, which was not
disputed.
By letter opinion, the court held that the questioned
language in the 1918 deed created "an unambiguous exception of
the coal and minerals located on the property. The first clause
excepts all coal and minerals from the conveyance, and the
second clause explains the reason for the exception. As the
deed excepts any coal and minerals, the exception is not limited
to . . . coal and minerals previously conveyed. The second
clause does not limit the exception created in the first
clause." The court entered a final order declaring that the
plaintiffs owned the mineral estate. We awarded CNX an appeal.
Analysis
Where the language of a deed clearly and unambiguously
expresses the intention of the parties, no rules of construction
should be used to defeat that intention. Where, however, the
language is obscure and doubtful, it is frequently helpful to
consider the surrounding circumstances and probable motives of
the parties. Harris v. Scott, 179 Va. 102, 108, 18 S.E.2d 305,
307 (1942); Schultz v. Carter, 153 Va. 730, 734, 151 S.E. 130,
131 (1930).
Applying that principle, we initially confine our
consideration to the four corners of the 1918 deed to ascertain
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whether its language concerning mineral rights is plain and
unambiguous. We have defined "ambiguity" as "the condition of
admitting of two or more meanings, of being understood in more
than one way." Berry v. Klinger, 225 Va. 201, 207, 300 S.E.2d
792, 796 (1983) (internal quotation marks omitted).
The disputed language in the 1918 deed is obviously capable
of being understood by reasonable persons in more than one way,
as demonstrated by the interpretations advanced by the
plaintiffs, CNX, and the opinion of the circuit court. The
language suggests at least three possibilities: (1) that the
grantors mistakenly believed that all mineral rights, including
coal, had previously been conveyed to others and wished to make
clear that they were being excluded from the 1918 conveyance to
avoid future liability under their general warranty; (2) that
the grantors knew that coal alone had been previously conveyed
and wished to reserve all other mineral rights to themselves,
and (3) that the grantors intended to convey to the grantee only
those mineral rights that had not been previously conveyed to
others.
It is therefore appropriate to go outside the four corners
of the deed to consider the existing circumstances, at least to
the extent of the fact that coal interests had been conveyed in
1887 but that all other mineral rights remained in the grantors
until delivery of the 1918 deed. See, e.g., Ott v. L&J
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Holdings, LLC, 275 Va. 182, 188, 654 S.E.2d 902, 905 (2008)
("Because the deed could be understood in more than one way, the
circuit court correctly decided that it was ambiguous and
admitted parol evidence to resolve the ambiguity.").
We are also aided by several well-established rules of
construction. Where language in a deed is ambiguous, the
language must be construed against the grantor and in favor of
the grantee. Ellis v. Commissioner, 206 Va. 194, 202, 142
S.E.2d 531, 536 (1965). We have called this rule "one of the
most just and sound principles of the law because the grantor
selects his own language." Elterich v. Leicht Real Estate Co.,
130 Va. 224, 238, 107 S.E. 735, 759 (1921). A grantor must be
considered to have intended to convey all that the language he
has employed is capable of passing to his grantee. Hamlin v.
Pandapas, 197 Va. 659, 664, 90 S.E.2d 829, 833 (1956).
Other rules of construction also apply when language in a
deed is found to be ambiguous. The whole of a deed and all its
parts should be considered together. Auerbach v. County of
Hanover, 252 Va. 410, 414, 478 S.E.2d 100, 102 (1996). Effect
should be given to every part of the instrument, if possible,
id., and no part thereof should be discarded as superfluous or
meaningless. Foster v. Foster, 153 Va. 636, 645, 151 S.E. 157,
160 (1930). Where the meaning of the language is not clear, or
the deed is not artfully drawn, the court should interpret its
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terms to harmonize them, if possible, so as to give effect to
the intent of the parties. See id. at 646, 151 S.E. at 160.
When a deed's language is unclear as to the nature and
extent of the estate the grantor intended to convey, so strong
is the presumption in favor of that interpretation most
favorable to the grantee, that we have held that where there is
doubt whether one or two parcels of land were intended to be
conveyed, the deed will be construed to pass title to both.
Carrington v. Goddin, 54 Va. (13 Gratt.) 587, 610 (1857), cited
with approval in Bostic v. Bostic, 199 Va. 348, 355-56, 99
S.E.2d 591, 597 (1957); see also Chapman v. Mill Creek Coal &
Coke Co., 46 S.E. 262, 263 (W. Va. 1903).
The granting clause in the 1918 deed purports to convey a
fee simple absolute. The language that follows the description
appears to impose a limitation of questionable effect. At
common law, the granting clause always prevailed over language
repugnant to it, but under the modern rule, the intent of the
parties, where clearly and unequivocally expressed, will be
given effect. When, however, it is impossible to discover with
reasonable certainty the parties' intent from the language of
the deed, the common law rule still applies and the granting
clause prevails. Goodson v. Capehart, 232 Va. 232, 236, 349
S.E.2d 130, 133 (1986).
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That rule applies with particular force to exceptions in a
deed that are repugnant to the granting clause. "An exception
in a deed is always to be taken most favorably for the grantee,
and if it be not set down and described with certainty, the
grantee shall have the benefit of the defect." Bradley v.
Virginia Railway & Power Co., 118 Va. 233, 238, 87 S.E. 721, 723
(1916) (citation and internal quotation marks omitted).
Applying the foregoing rules to the disputed language in
the 1918 deed before us, we consider the three possible
interpretations suggested above. The first fails because it is
contrary to the undisputed facts. The coal had previously been
conveyed to others and the grantors are bound by the condition
of their title of record. The second interpretation fails
because it discards the last ten words of the purported
exception as superfluous and meaningless and treats the first
sentence as an unlimited and unconditional reservation of
mineral rights. 3 The third interpretation gives effect to all of
the language employed by the grantors and eliminates conflict
among its parts. Under that interpretation, the last ten words
3
The second interpretation treats the ambiguous language as an
express and unconditional exception, although it lacks any words
demonstrating an intent on the grantors' part to reserve any
mineral rights to themselves. Further, the explanation that all
mineral rights had been conveyed to others is inconsistent with
an intent to reserve them to the grantors.
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modify the preceding sentence, denoting the grantors' intent to
exclude from the conveyance only those mineral rights previously
conveyed to others, namely the coal.
So construed, the deed conveys to the grantee in fee simple
all of the mineral interests in the land embraced within the
deed's metes and bounds description that the grantors were
capable of conveying at the time, excluding only the coal, which
they no longer owned. Accordingly, we adopt that interpretation
and hold that the circuit court erred in construing the disputed
language to constitute an unambiguous exception of all coal and
other minerals from the conveyance.
Conclusion
For the reasons stated, we will reverse the judgment
appealed from and enter final judgment here for CNX, holding
that the 1918 deed conveyed to Unice Nuckles and her successors
in interest all of the mineral estate in the land described
therein except the coal previously conveyed to others.
Reversed and final judgment.
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