McCabe Petroleum Corp. v. Easement & Right-Of-Way Across Township 12 North, Range 23 East
McCabe Petroleum Corp. v. Easement & Right-Of-Way Across Township 12 North, Range 23 East
Opinion of the Court
delivered the Opinion of the Court.
¶1 McCabe Petroleum Corporation filed an action in the United States District Court for the District of Montana seeking to condemn an access easement and right-of-way across lands owned by N Bar Ranch, LLC. Pursuant to Rule 44, M.R.App.P., the United States District Court certified two questions of Montana law to us, which we restate as follows:
¶2 1. Is exploration and development of a federal oil and gas lease a “mine” which constitutes a “public use” under § 70-30-102(33), MCA?
¶4 Our answer to the first certified question is “no” and, for reasons which will become apparent, we do not address the second question.
BACKGROUND
¶5 McCabe holds United States oil and gas leases covering lands in Fergus County, Montana. N Bar Ranch owns property adjacent to the land covered by McCabe’s leases. In its federal court action, McCabe seeks to condemn an easement and right-of-way over the property owned by N Bar Ranch to allow it access to drill and operate oil wells. ¶6 N Bar Ranch moved to dismiss McCabe’s condemnation action on the basis that the complaint fails to state a claim upon which relief can be granted under Rule 12(b)(6), Fed.R.Civ.P. N Bar Ranch contended McCabe’s proposed activities are not a “public use” within the meaning of § 70-30-102(33), MCA, and that § 82-2-201, MCA, does not grant McCabe the power of eminent domain. Following briefing, the United States District Court certified the above-restated questions to this Court and we accepted them for response.
DISCUSSION
¶7 Is exploration and development of a federal oil and gas lease a “mine” which constitutes a “public use” under § 70-30-102(33), MCA?
¶8 Eminent domain is the right of the state to take private property for public use. Section 70-30-101, MCA. Private individuals and corporations, like state agencies, have no inherent power of eminent domain, and their authority to condemn must derive from legislative grant. Montana Talc Co. v. Cyprus Mines Corp. (1987), 229 Mont. 491, 495, 748 P.2d 444, 447.
¶9 The general public uses for which the Montana Legislature has granted the. power of eminent domain are enumerated in § 70-30-102, MCA, a statute first enacted in 1877. McCabe argues that an access road to explore and develop landlocked federal oil and gas leases is a “public use” for which the power of eminent domain may be exercised under § 70-30-102(33), MCA, which provides that “roads, tunnels, and dumping places for working mines, mills, or smelters for the reduction of ores” are a public use. McCabe asserts that potential oil wells are “mines” under the above statute. It relies on Montana Talc for its substantive argument and also for its contention that the public uses
¶10 In the 1987 Montana Talc decision, 229 Mont, at 498, 748 P.2d at 448, the Court stated it was not aware of any Montana judicial decision declaring that the public uses set forth in § 70-30-102, MCA, are to be strictly construed. While the Court technically may have been correct about the “strictly construed” language, prior authority on the subject apparently was overlooked.
¶11 We addressed the appropriate interpretation of statutory public uses in State v. Aitchison (1934), 96 Mont. 335, 30 P.2d 805. In that case, the plaintiffs seeking to exercise the power of eminent domain conceded-based on existing case law-that authority to condemn must be “expressly given or necessarily implied.” They sought to proceed on the “necessarily implied” theory. Aitchison, 96 Mont. at 337-38, 30 P.2d at 806 (citation omitted).
¶12 In discussing eminent domain powers, we cited to authorities stating clearly that the eminent domain power being against common right, it cannot be implied or inferred from vague or doubtful language, and that the right to exercise that power does not exist when made out only by argument or inference. Aitchison, 96 Mont. at 339, 30 P.2d at 807. We also observed that all prior cases had held against extending the right of eminent domain under a theory that the power had been granted by implication. Aitchison, 96 Mont. at 340, 30 P. 2d at 807 (citations omitted). Thus, while not using the “strictly construed” language, it is clear that case law prior to Montana Talc took a narrow approach to interpreting the statutorily-delineated public uses.
¶13 The Montana Talc Court went on to reference § 1-2-103, MCA, to the effect that statutes are to be liberally construed and, in addition, that “[n]o interpretation is required when the plain meaning can be derived from the words of the statute.” Montana Talc, 229 Mont. at 498, 748 P.2d at 449. It is difficult to mesh the Montana Talc Court’s use of both the”liberal construction” and “plain meaning” terminology. Because of subsequent case law, however, it is unnecessary to attempt to do so.
¶14 In City of Bozeman v. Vaniman (1994), 264 Mont. 76, 869 P.2d 790, we again addressed the power of eminent domain. There, a unanimous Court stated clearly and without equivocation that “[t]he legislature’s grant of the eminent domain power ... must be strictly construed.” Vaniman, 264 Mont. at 79, 869 P.2d at 792 (citation omitted). Because private real property ownership is a fundamental right under the Montana Constitution, “any statute which allows [the
¶15 McCabe’s first substantive argument is that Montana Talc is controlling authority for its proposition that potential oil wells are “mines.” We disagree.
¶16 In Montana Talc, we addressed whether the power of eminent domain could be used to condemn land for an open pit talc mine. We determined that, under § 70-30-102(15), MCA (1985), an open-pit excavation necessary to “backslope” the mining of an ore body is an authorized public use. See Montana Talc, 229 Mont. at 496, 748 P.2d at 447. Section 70-30-102(15), MCA (1985), is now recodified in substantially similar language in § 70-30-102(44), MCA, which provides in pertinent part that authorized public uses are “projects to mine and extract ores, metals, or minerals owned by the condemnor located beneath or upon the surface of property where the title to the surface vests in others.”
¶17 In Montana Talc, the company seeking condemnation was the owner of the body of talc ore and sought to open-pit mine that ore; to do so, it was necessary for the company to “backslope” the mine over land owned by Cypress Minerals Corporation. The Court merely applied the statute to the facts before it, and concluded that, “[f]or the purpose of mining that ore body, Montana Talc therefore has the power of eminent domain.” Montana Talc, 229 Mont. at 496, 748 P.2d at 447.
¶18 In the present case, McCabe does not rely on § 70-30-102(44), MCA. Thus, in addition to the facts that Montana Talc did not involve oil and gas leases or wells and did not hold that oil and gas exploration is “mining” under Montana’s eminent domain statutes, the entire basis ofthe Montana Talc analysis was a different subsection of § 70-30-102, MCA, than is now at issue. That subsection is not applicable here. For those reasons, Montana Talc is neither controlling nor particularly relevant here.
¶19 McCabe also relies on this Court’s statements in Mid-Northern Oil Co. v. Walker (1922), 65 Mont. 414, 427, 211 P. 353, 356, and Rice
¶20 In Mid-Northern, an oil company sought an injunction restraining the state board of equalization from enforcing an annual license tax against it. Mid-Northern, 65 Mont, at 420-21,211P. 354. Rice involved an action to recover a portion of an oil well net proceeds tax paid to Toole County. Rice, 86 Mont, at 430,284 P. at 145. Thus, in both cases, our characterizations of an oil well as a mine were made within the context of tax litigation, not eminent domain statutes which expressly enumerate the public uses for which condemnation proceedings can be maintained. Definitions from other sources are not readily impoi'ted into the eminent domain arena. See Richter v. Rose, 1998 MT 165 ¶¶ 18-20, 289 Mont. 379, ¶¶ 18-20, 962 P.2d 583,¶¶ 18-20. One of the reasons, of course, is the clash between real property rights and the power of eminent domain.
¶21 Moreover, the statements in both Mid-Northern and Rice are premised on Burke v. Southern Pac. R. Co. (1914), 234 U.S. 669, 34 S.Ct. 907, 58 L.Ed. 1527, a case in which the United States Supreme Court addressed several questions concerning the Southern Pacific Railroad Company’s title to mineral lands patented under the authority of a railroad land grant. One of the issues was whether petroleum or mineral oil was included within the meaning of the term “mineral” as it was used in acts of Congress reserving mineral land from railroad grants. Burke, 234 U.S. at 676, 34 S.Ct. at 910, 58 L.Ed. at 1543. The Supreme Court analyzed the issue by addressing the manner in which the term “mineral” had been used in the federal laws reserving mineral lands from railroad land grants. Burke, 234 U.S. at 679, 34 S.Ct. at 911, 58 L.Ed. at 1544. No federal statutes are at issue here. Furthermore, § 70-30-102(33), MCA, unlike § 70-30-102(44), MCA, does not contain the word “mineral.”
¶22 McCabe also relies on Coronado Oil Co. v. Grieves (Wyo. 1979), 603 P.2d 406, in which the Wyoming Supreme Court held that the interests of a federal oil and gas lessee permit the lessee to condemn private property to obtain a right-of-way to its landlocked oil and gas
¶23 The eminent domain provision of Montana’s Constitution, Article II, Section 29, is not at all similar to the provision of the Wyoming Constitution cited in Coronado: Montana’s Constitution does not allow the taking of private property for private ways of necessity. Indeed, private ways of necessity in Montana may be obtained only by satisfying several criteria. See, e.g., Kullick v. Skyline Homeowners Ass’n, Inc., 2003 MT 137, ¶ 21, 316 Mont. 146, ¶ 21, 69 P.3d 225, ¶ 21; Loomis v. Luraski, 2001 MT 223, ¶ 51, 306 Mont. 478, ¶ 51, 36 P.3d 862, ¶ 51.
¶24 Montana’s constitutional eminent domain provision provides, in pertinent part, that “[pjrivate property shall not be taken or damaged for public use without just compensation to the full extent of the loss having first been made to or paid into court for the owner.” Art. II, Sec. 29, Mont. Const. The primary foci of the constitution are “public use” and “just compensation.” No specific “public uses” are contained in the Montana Constitution either expressly or by implication.
¶25 Montana’s general, substantive and procedural eminent domain statutes are codified in Title 70, Chapter 30, of the Montana Code Annotated. Section 70-30-102, MCA, enumerates 45 public uses for which the right of eminent domain may be exercised. The public use upon which McCabe relies, subsection 33, was first enacted in 1877 and has been carried forward to the present in essentially the same form. See Section 580, p. 189, Montana Territorial Laws of 1877. A general knowledge of Montana history supports the notion that the intent of that mining-related subsection enacted in 1877 was to encompass “hard rock” or “ore” mining, and McCabe presents no argument or evidence suggesting otherwise. Indeed, the language of subsection (33), “roads, tunnels, and dumping places for working mines, mills, or smelters for the reduction of ores” reflects a legislative
f 26 Title 82 of Montana Code Annotated is entitled “Minerals, Oil, and Gas.” Chapter 1 of Title 82, “General Provisions,” contains no eminent domain provisions. Thereafter, mining and oil and gas exploration are addressed in separate statutory frameworks. Statutes relating to ore mining, including rights-of-way and eminent domain for roads to work mines, are codified in Chapters 2 and 4 of Title 82, MCA. Oil and gas are governed by Chapters 10, 11 and 15 of Title 82, MCA. The only eminent domain provisions in the oil and gas chapters involve underground storage of natural gas. See §§ 82-10-302 through -305, MCA.
¶27 Had the Montana Legislature intended to extend the power of eminent domain to encompass the development of oil wells, it easily could have done so in the portions of Title 82 which apply to the oil and gas industry. It also could have done so in § 70-30-102, MCA. Indeed, the Legislature added numerous new public uses to § 70-30-102, MCA, during the 2001 session and another in the 2003 session. See 2001 Mont. Laws 125; 2003 Mont. Laws 451.
¶28 [3] Finally, McCabe relies on Montana Talc, 229 Mont. at 497, 748 P.2d .at 448 (citing Butte Anaconda and Pacific Railway Co. v. Montana Union Railway Co. (1895), 16 Mont. 504, 41 P. 232), for the proposition that it has long been Montana public policy to foster and encourage the development of mineral resources in every reasonable way. We observe that the discussion to which McCabe refers occurred in the real context of a different subsection of § 70-30-102, MCA, and in the factual context of an ore mine. A court’s role in construing statutes is to declare what is in terms or substance contained therein; not to insert what has been omitted. Section 1-2-101, MCA. Moreover, because eminent domain interferes with the fundamental right of private ownership of real property, any statute which allows a condemnor to take a person’s property must be strictly construed, giving the statute its plain interpretation, but favoring the person’s fundamental rights. Vaniman, 264 Mont. at 79, 869 P.2d at 792.
¶29 Under a plain meaning of the legislative language used, we
Dissenting Opinion
dissenting.
¶30 I dissent.
¶31 The Court here declares that there is no right of eminent domain for oil and gas production, because it is not a “public use.” To arrive at this decision, the Court concludes that Montana Talc Co. v. Cyprus Mines Corp. (1987), 229 Mont. 491, 748 P.2d 444, is “neither controlling nor particularly relevant here.” ¶ 18. The Court further concludes that McCabe is not entitled to relief under the plain language of the eminent domain statutes on the basis of “[a] general knowledge of Montana history.” ¶ 25. The Court dismisses the other authority offered by McCabe, and then concludes, without reference to specific authority, that “oil wells” are not “mines.” I cannot agree with any of these conclusions. The Court’s decision stands in opposition to our eminent domain law, as well as the sum of our commercial, tax and natural resource law-all of which recognize “oil wells” as “mines.”
¶32 Montana Talc should not be so easily discarded. It is, as McCabe correctly recognizes, our most complete statement on Montana’s eminent domain law. It discusses statutory language which we also interpret herein and should not be tossed away as being irrelevant.
¶33 First, Montana Talc illustrates that the Court has applied the wrong standard of statutory interpretation herein. The Court relies heavily on City of Bozeman v. Vaniman (1994), 264 Mont. 76, 869 P.2d 790, for the proposition that “any statute which allows a condemnor to take a person’s property must be strictly construed.” ¶ 28 (emphasis added). The Court then uses this “strict construction” standard to avoid a general consideration of the meaning of “mines” under § 70-30-102(33), MCA. However, Montana Talc instructs quite differently:
No Montana judicial decision that we are aware of declares that the public uses described in Section 70-30-102, MCA, must be strictly construed.... If strict construction of public uses for which eminent domain may be had were required by the common law,*393 where the law is declared by statute, common law may be applied only if not in conflict with the statutes. Section 1-1-108, MCA. By law the statutes establish the law of this state respecting the subjects to which they relate and their provisions and all proceedings under them are to be liberally construed with a view to effect their objects and to promote justice. Section 1-2-103, MCA.
Montana Talc, 229 Mont. at 498-499, 748 P.2d at 448-49 (emphasis added). The seeming conflict between Montana Talc and the Court’s citation to Vaniman is easily resolved by understanding that Vaniman had nothing to do with the determination of “public use,” but, rather, addressed the procedure by which eminent domain is implemented, a completely different issue. Montana Talc explained this difference in statutory construction, noting that, although “public uses” would be liberally construed, “[w]e have, however, held that vigorous compliance with procedures required for eminent domain is commanded.” Montana Talc, 229 Mont. at 498, 748 P.2d at 448. Here, the Court imports the “strict construction” standard from procedural eminent domain, and erroneously applies it to a substantive issue of eminent domain-the determination of public use.
¶34 The Court also omits the preeminent rule of statutory construction: legislative intent. As Montana Talc instructs, “[statutes may not be interpreted to defeat their object or purpose, and the object sought to be achieved by the legislature is of prime consideration in interpreting them.” Montana Talc, 229 Mont. at 498, 748 P.2d at 449 (citing Dover Ranch v. Yellowstone County (1980), 187 Mont. 276, 609 P.2d 711). Fortunately, we need not look far to determine the Legislature’s “object” in this case, because Justice Sheehy, for the Montana Talc Court, explained at length the Legislature’s intent in enacting the statute we are interpreting today. He stated, in part:
[TJhe intention of the Montana legislature [was] to encourage the development of the mining industry. Understandably so, because the mineral wealth of this Treasure State, so named for its huge store of minerals taken and yet to be taken, is a prime springhead of past and future economic increase for Montanans. In keeping with this outlook, the legislature has given to mining concerns the awesome power to condemn private property for public use in return for just compensation where the ownership of the minerals and of the surface do not coincide. So it is that in addition to the power of condemnation for the mine itself under [the identical predecessor provision], there is further power for the construction*394 of roads, tunnels, ditches and other appurtenances necessary to the mining effort.... Expansion, and not restriction, appears to be the legislative watchword.
Montana Talc, 229 Mont. at 497, 748 P.2d at 448 (emphasis added). Thus, the Court in Montana Talc concluded from this legislative intent that the appropriate “rule of construction, sustained by the great weight of well-considered authority” for determination of “public use” in regard to mining, was as follows:
[PJublic use must be exercised and can be exercised only so far as the authority extends, either in terms expressed by the law itself, or by implication clear and satisfactory.
Montana Talc, 229 Mont. at 498, 748 P.2d at 448 (citing Butte Anaconda and Pacific Railway Co. v. Montana Union Railway Co. (1895), 16 Mont. 504, 536-37, 41 P. 232, 243) (emphasis added).
¶35 The Court attempts to sidestep the holding in Montana Talc by reference to the holding in State v. Aitchison (1934), 96 Mont. 335, 30 P.2d 805. Although admitting that Aitchison did not apply a “strictly construed” standard to the interpretation of “public use” statutes, the Court nonetheless asserts, erroneously, that Aitchison stands for the principle that eminent domain cannot be granted by statutory implication. The Aitchison Court expressed its reluctance to extend the right of eminent domain by implication, but it reiterated that the correct standard allowed exactly that: “The authority to condemn must be expressly given or necessarily implied. ... All of our decisions have been in accord ....’’Aitchison, 96 Mont. at 339, 30 P.2d at 807. Thus, as Montana Talc correctly recognized, public use for eminent domain purposes has been determined by a rale of construction which requires “terms expressed by the law itself, or by implication clear and satisfactory” since 1895.
¶36 Further, the statute under which the State sought to create a fish rearing pond by eminent domain in Aitchison was completely silent as to such rights-requiring the State to argue “implication” out of thin air. Aitchison, 96 Mont. at 339, 30 P.2d at 807. That is clearly not the case here.
¶37 Considering the correct rule of construction then, what is a “mine” under § 70-30-102(33), MCA? The common and plain meaning of “mine” is simply “[a]n underground excavation used to obtain minerals, ores, or other substances.” Black’s Law Dictionary 1009 (7th ed. rev. 1999). On this common definition, and considering the Legislature’s expansive intent for “public uses” with regard to mining, I would conclude that “mine” necessarily, or at a minimum, “by
¶38 Such a conclusion is, of course, consistent with our statutory and case law: “In the case of Mid-Northern Oil Co. v. Walker, 65 Mont. 414, 211 Pac. 353, this court held that an oil-well is a mine.” Callender v. Crossfield Oil Syndicate (1929), 84 Mont. 263, 272, 275 P. 273, 276-77; “Oil is a mineral and the process of extracting it from the rocks is mining.” Rice Oil Co. v. Toole County (1930), 86 Mont. 427, 431, 284 P. 145, 146 (citing Burke v. Southern Pac. R. R. Co. (1914), 234 U.S. 669, 34 S.Ct. 907, 58 L.Ed. 1527); “ Mineral’ means ... gas, oil...” § 15-38-103(3), MCA (Chapter 38, Resource Indemnity Trust and Ground Water Assessment); “[0]il, gas and other minerals ... become personal property (goods) and eligible to be collateral ...” § 30-9A-102, MCA (annotations) (Uniform Commercial Code); see also specific exclusion of oil and gas from mineral definition in statutes governing metal mines, “ Mineral’ means any ore, rock, or substance, other than oil, gas ...” § 82-4-303(8), MCA (Part 3, Metal Mine Reclamation) (emphasis added).
¶39 I would answer the two certified questions affirmatively.
Dissenting Opinion
dissenting.
¶40 I agree with Justice Rice’s dissent. I write separately to illustrate what I believe is error in the Court’s interpretation of § 70-30-102, MCA.
¶41 The first oil well drilled in the United States was drilled in Pennsylvania in 1859. As a fuel, oil was originally used as kerosene and later in furnaces. With the invention of the internal combustion engine in the later 1800's, it became clear that oil would be a highly sought-after commodity.
¶42 In 1914, the U.S. Supreme Court was called upon to decide whether a federal land grant to a railroad company included mineral lands. The issue arose when plaintiff and his associates discovered petroleum and attempted to locate placer mining claims upon the lands patented to the railroad. Burke v. Southern Pacific Railroad Company (1914), 234 U.S. 669, 34 S.Ct. 907, 58 L.Ed. 1527. The Burke Court determined that all the issues in the case turned upon the question, “[i]s petroleum or mineral oil within the meaning of the term ‘mineral’ as it was used in said acts of Congress reserving mineral land from the railroad land grants?” Burke, 243 U.S. at 676, 34 S.Ct. at 910. The Burke Court reviewed both scientific and historical evidence. It culled the decisions of several state courts, various other acts of Congress utilizing the terms “mineral” and “mineral lands,” and decisions of the Land Department, all of which had determined that in
¶43 Cases citing Burke include issues of royalty law, conveyancing law, real property law, taxation, etc. And while “[t]he term ‘mineral’ has been the source of considerable confusion in mineral law litigation nationwide,”Farley v. Booth Brothers Land & Livestock Co. (1995), 270 Mont. 1, 5, 890 P.2d 377, 379, Burke’s conclusion that oil is popularly understood to be a mineral, set precedent for the entire nation. See U.S. v. Standard Oil Co. (S.D. Cal. 1937), 20 F.Supp. 427; Lovelace v. Southwestern Petroleum Co. (E.D. Ky. 1919), 267 F. 504; Amoco Production Co. v. Guild Trust (D.Wyo. 1978), 461 F.Supp. 279; U.S. v. Southern Pacific Co. (1919), 251 U.S. 1, 40 S.Ct. 47; Union Oil Co. of California v. Smith (1919), 249 U.S. 337, 39 S.Ct. 308; Rowe v. Chesapeake Mineral Co. (6th Cir. 1946), 156 F.2d 752; General Petroleum Corp. of California v. U.S. (S.D.Cal. 1938), 24 F. Supp. 285; Brennan v. Udall (D.Colo. 1966), 251 F.Supp. 12; Long v. Madison Coal Corp. (W.D.Ky. 1954), 125 F.Supp. 937; Estate of Fairbank v. U.S. (Ct.Cl. 1964), 164 Ct.Cl. 1 ;Lee v. Straughan (Ark. 1920), 226 S.W. 171; Cornwell v. Buck & Stoddard, Inc. (Cal.App. 1938), 82 P.2d 516; Mid-Northern Oil Co. v. Walker (Mont. 1922), 65 Mont. 414, 211 P. 353.
¶44 By 1920, the oil and gas industry was well-established nationwide.
¶45 Montana, meanwhile, did not experience its first commercial quantity discovery of oil until 1913.
Every person engaging in or carrying on the business of producing, within this state, petroleum, or other mineral or crude oil, or engaging in or carrying on the business of owning, controlling, managing, leasing or operating, within this state, any well or wells from which any merchantable or marketable petroleum or other mineral or crude oil is extracted or produced ... must... pay to the state treasurer ... license tax for engaging in and carrying on such business ....
Section 2398, RCM (1921). The case also implicated the recently enacted federal Mineral Leasing Act of 1920. The company argued that because it was a lessee of the federal government under the federal Mineral Leasing Act of 1920, it was an agent of the federal government and could not be taxed by a state. This Court held that the oil company was merely a private contractor dealing with the United States in its proprietary character; that it was not elevated to status of agent by virtue of its lease. Mid-Northern, 65 Mont. at 427, 211 P. at 356. In so holding, this Court cited Burke and stated:
It must be conceded that the interests of the United States in the lands covered by plaintiffs leases are mineral in character; that oil is a mineral, and that an oil well is a mine .... But mining is not a public utility. It is a private industry, and the exploitation and development of mines are no more governmental functions than the cultivation of the soil or the manufacture of farm machinery.
¶47 Today, however, things change. At ¶ 25, the Court states that “[a] general knowledge of Montana history supports the notion that the intent of that mining-related subsection enacted in 1877 was to encompass ‘hard rock’ or ‘ore’ mining, and McCabe presents no argument or evidence suggesting otherwise.” The Court is correct that in 1877, the Legislature was focused on hard rock mining. To place this statement in context, however, it must be remembered that Montana did not experience its first major oil discovery until 1913, thirty-six years later. It is not unreasonable that the Legislature did not prospectively provide for an industry that did not exist at the time, and it is reasonable to conclude that the Legislature was paying attention to the nationwide trend in the law, including Montana law, to generally classify oil as a mineral. Paragraph 25 also states that “[§ 70-30-102(33)] ... has been carried forward to the present in essentially the same form.” Clearly, however, after the Mid-Northern decision, the Legislature had no reason to amend what is now § 70-30-102(33), MCA, to include in the eminent domain laws specific provisions for land needed for roads to access oil wells, because this Court had stated unequivocally that an oil well is a mine. Based on Mid-Northern, the Legislature almost certainly concluded that adding a special provision for oil wells would be redundant.
¶48 At ¶¶ 19-20, the Court acknowledges this Court’s prior
¶49 Additionally, Mid-Northern, decided in 1922, and Rice, decided in 1930, are not the only Montana authorities to follow the oil-as-mineral standard. In Forbes v. Mid-Northern Oil Co. (1935), 100 Mont. 10, 45 P.2d 673, the Court was construing Chapters 139 and 140 of the Laws of 1927. Chapter 139 dealt with the statement of gross yields of mines and net proceeds, and how they are computed. In its discussion, the Court made no distinction between an oil well and a mine, stating, “[tjhis Act requires the operator of a mine (or oil-well) to make out and deliver to the State Board of Equalization a statement of the gross yield of the minerals from such mine ... .” Forbes, 100 Mont. at 13, 45 P.2d at 675. See also Byrne v. Fulton Oil Co. (1929), 85 Mont. 329, 278 P. 514 (construing Ch.140 of the Laws of 1927 which read “Every
¶50 It is the declared policy of this state to properly and efficiently develop our natural resources. Only a terribly strained interpretation of our laws can reach the result the Court reaches today, and I dissent.
Ross L. Malone, Jr., Oil and Gas Leases on Federal Lands, 14 Mont. L.Rev. 20, 20 (1953).
See Ozark Chemical Co. v. Jones (10th Cir. 1942), 125 F.2d 1; Carter Oil Co. v. Blair (Ala. 1951), 57 So.2d 64; U.S. v. H.G.D. & J. Mining Co. Inc. (S.D.W.Va. 1983), 561 F.Supp. 315; Standard Oil Co. of California v. Pastorino (Nev. 1978), 580 P.2d 118; Herbert Thorndike Tiffany, Tiffany on Real Property § 589 (3d ed. 1939); Robert E. Sullivan, A Survey of Oil and Gas Law in Montana as it Relates to the Oil and Gas Lease, 16 Mont.L.Rev. 1 (1955).
Reference
- Full Case Name
- McCABE PETROLEUM CORPORATION, Plaintiff, v. Easement and Right-Of-Way Across Township 12 North, Range 23 East. PMM Sections 16-19, Fergus County, Montana, N BAR RANCH, LLC, and UNKNOWN OWNERS, Defendants
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- 9 cases
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- Published