# Appendix — Spurlock v. Santa Fe Pacific Railroad > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0148%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1985 - **Citation:** 472 U.S. 1032 ## Text y) Fe OR. Oe Oe Me ten*, oF i. 621608 ES —— APR 29 1985 ALEXANDER L. STEVAS. IN THE CLERK Supreme Court of the United Stafes OCTOBER TERM, 1984 RANSOM THEODORE SPURLOCK, et al., Petitioners, Vv. SANTA FE PACIFIC RAILROAD COMPANY AND KERR-MCGEE CORPORATION, Respondents. APPENDICES TO PETITION FOR A WRIT OF CERTIORARI TO THE COURT OF APPEALS OF THE STATE OF ARIZONA \ BRENT N. RUSHFORTH * JUDITH A. MATHER Dow, LOHNES & ALBERTSON 1255 23rd Street, N.W. Washington, D.C. 20037 (202) 857-2714 JACK E. EVANS JACK E. EVANS, LTD. 73 North Country Club Drive Phoenix, Arizona 85014 (602) 266-5752 Counsel for Petitioners April 29, 1985 * Counsel of Record TA A SIGS: TiS RS SO AT LI DE EEE ET, TEE ERIE ATC EE EI EEE AEST IE WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 TABLE OF CONTENTS APPENDIX A Opinion of the Court of Appeals of the State of pe Ra ee en mn Le ae APPENDIX B Judgments of the Superior Court of Arizona, Apache County, May 234, 1968 ..............205.220....:...... APPENDIX C Order of the Supreme Court of the State of Ari- zona (Denying Petition for Review), January 29, OSE Se ERO OE PEPER TRE ONT I UT: FRINGED Sc oe She VOR APPENDIX D Order of the Supreme Court of the Siate of Ari- zona (Denying Petition to Recall Mancate and Mo- tion for Reconsideration of Order Denying Petition foe Mavine), TAPE GB, BO iiss APPENDIX E Order of the Supreme Court of the State of Arizona (Denying Motion for Reconsideration), PL Sts II sek basses ee res DE RE a APPENDIX i Constitutional Provisions and Statutes Involved.... APPENDIX G Minutes of the Meeting of the Board of Directors of Santa Fe Pacific Railroad Company, September EE ASS EN (AOS eee ley aes ree REAL eee dS APPENDIX H Minutes of the Meeting of the Board of Directors of Santa Fe Pacific Railroad Company, May 6, RAST etna AER OR LORD ONE Dnreeme ne ROM eet PIF Page la 32a 65a 66a 68a 69a 98a ii TABLE OF CONTENTS—Continued APPENDIX I Indenture between Santa Fe Pacific Railroad Com- pany and Santa Fe Pacific Development Company, BNE Fh, TID hist incised da sesariahiccenlnsainwia ie ttbarwiacenens APPENDIX J Indenture between Santa Fe Pacific Railroad Com- pany and The Atchison, Topeka and Santa Fe Rail- way Company, duly 1, 10068 ...006............................ APPENDIX K Indenture between Santa Fe Pacific Development Company and Santa Fe Pacific Railroad Company, Mesh 23, FROe ke ieclaeeeon Page 97a 109a la APPENDIX A IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE 1 CA-CIV 6938 DEPARTMENT C RANSOM THEODORE SPURLOCK and VERNIE MARIA SPuUR- LOCK, his wife; and CHARLES PATRICK SPURLOCK and NANCY JENEEN SPURLOCK, his wife, Plaintiffs-A ppellees, | V. SANTA FE PACIFIC RAILROAD COMPANY, a corporation; and KERR-MCGEE CORPORATION, a Delaware corpora- tion, Defendants-A ppellants. Appeal from the Superior Court of Apache County Cause Nos. C-4779, 4910, 4936, 4961, 4949, and 4998 (consolidated ) The Honorable Paul G. Rosenblatt, Judge AFFIRMED IN PART; REVERSED IN PART [Filed Oct. 18, 1984] Jack EK. Evans, Ltd., by Jack E. Evans, Attorneys for Plaintiffs-Appellees, Phoenix. Fennemore, Craig, von Ammon, Udall & Powers, P.C., by Philip E. von Ammon, Donald R. Gilbert and Tim- 2a othy Berg, Attorneys for Defendant-Appellant Santa Fe Pacific Railroad Company, Phoenix. Martori, Meyer, Hendricks & Victor, P.C., by Robert L. Palmer, Ron Kilgard and James A. Bush, Attorneys for Defendant-Appellant Kerr-McGee Corporation, Phoe- nix. OPINION MEYERSON, Judge I. NATURE OF THE ACTION The issues involved in this appeal arise from an action filed by Ransom and Vernie Spurlock and Charles and Nancy Spurlock (hereinafter collectively referred to as Spurlock) charging the defendants-appellants with the conversion of helium extracted from deposits underlying lands owned by Spurlock. The conversion charges against defendant Santa Fe Pacific Railroad Company (Santa Fe Pacific) were based on the extraction of helium ‘from underneath Spurlock’s lands by various third parties who had leased mineral rights from Santa Fe Pacific. Santa Fe Pacific pre- viously owned all of the ranch lands involved and claimed ownership of the underlying helium and other substances by reason of a mineral reservation in its original convey- ances to Spurlock’s predecessors in title. In addition to requesting damages for the conversion of helium, Spur- lock also sought to quiet title to the helium as against Santa Fe Pacific. The conversion charges against de- fendant Kerr-McGee Corporation (Kerr-McGee) were based on the purchase of the raw helium gas by Kerr- McGee from Santa Fe Pacific’s mineral lessees for proc- essing at a plant constructed by Kerr-McGee for that purpose. After the filing of the Spurlock action for conversion of the helium, Santa Fe Pacific filed separate actions 3a against Spurlock seeking to quiet Santa Fe Pacific’s title under the mineral reservation clause to nitrogen, potash, petrified wood and industrial clay. Subsequently, Spur- lock also filed a quiet title action against Santa Fe Pa- cific relating to sand and gravel on the lands involved. As to the sand and gravel, Santa Fe Pacific did not claim ownership by reason of ihe mineral reservation clause, but rather claimed a nonexclusive right to take gravel and ballast for railroad purposes pursuant to a different provision contained in the deeds to Spurlock’s predecessors in title. These actions were all consolidated in the trial court proceedings. After the denial by the trial judge of various motions and cross-motions for summary judgment, the consoli- dated matters eventually proceeded to trial before a jury.’ An extended trial lasting approximately eight months was held, and eventually judgments were en- tered in favor of Spurlock and against Santa Fe Pacific and Kerr-McGee on virtually all issues. These judg- ments quieted title in favor of Spurlock and against Santa Fe Pacific as to all of the substances in issue, with an award to Spurlock of attorney’s fees on the quiet title issues. On the conversion claim, judgment was entered against Santa Fe Pacific in the amount of $664,502 for compen- satory damages and in the amount of $20,000,000 for punitive damages. The judgment against Kerr-McGee on the conversion claim was in the amount of $250,305 for compensatory damages and $487,732 for punitive dam- ages. Spurlock was also awarded pre-judgment interest on the compensatory damages awards. Attorney’s fees were awarded to Spurlock in the amount of $525,000 against Santa Fe Pacific and $325,000 against Kerr- McGee. 1 As to the quiet title claims, the jury’s function was advisory only. 4a Many issues have been raised in this appeal by Santa Fe Pacific and Kerr-McGee, and we will not attempt in this preliminary overview to state these issues individ- ually or to set forth in detail the complete factual back- ground necessary for their resolution. However, a prin- cipal issue involves the trial judge’s refusal to grant judgment as a matter of law in favor of Santa Fe Pa- cific and Kerr-McGee under the mineral reservation clause. Other issues concern alleged misconduct of coun- sel for Spurlock; the trial judge’s legal conclusions re- garding the corporate nonexistence of Santa Fe Pacific; the trial judge’s conclusion that the mineral reservation clause was void in its entirety; the sufficiency of the evi- dence to support the amount of compensatory damages awarded; and the amount and propriety of an award for punitive damages in an action for conversion of miner- als in place. In light of our holding that judgment as a matter of law should have been rendered in favor of Santa Fe Pacific and Kerr-McGee (on all claims except sand and gravel), we need not reach every issue raised by appellants. II. THE MINERAL RESERVATION A. Factual Background Prior to 1946, Santa Fe Pacific was the owner in fee simple of virtually all of the lawsuit lands. Most of these lands were acquired by Santa Fe Pacific under patents issued by the United States. The remainder of these lands was acquired by warranty deed from the New Mexico and Arizona Land Company. Santa Fe Pacific leased almost all of this property for grazing purposes. During 1945 and 1946, Santa Fe Pacific decided to sell many of its land holdings and offered the lands for sale to its grazing lessees. Each of these offers was made by a letter from E. O. Hemenway, the land commissioner of Santa Fe Pacific, to the grazing lessee, and each letter 5a stated that Santa Fe Pacific intended to “retain all minerals.” Under this program, in three separate transactions, Santa Fe Pacific conveyed what became the lawsuit lands to others. In 1946, Santa Fe Pacific conveyed by war- ranty deed 864.35 acres to Grace Porter. In 1947, Santa Fe Pacific contracted to sell some 76,000 acres of its hold- ings to Cowden Livestock Company and approximately 37,000 acres to the partnership of Spurlock & Wetzler. In September of 1951, Santa Fe Pacific issued warranty deeds to Cowden Livestock Company and Spurlock & Wetzler. Each of the three warranty deeds contained an identical reservation. See Secticn II.B., infra. In 1950, non-combustible helium-bearing gas was dis- covered in the “Pinta Dome,” an ares 4o the west of the lawsuit lands and the Spurlock ranch. Kerr-McGee and others began to explore for and develop this helium- bearing gas. By 1959-60, exploration efforts expanded to the east into an area on the Spurlock ranch known as Navajo Springs, which was largely land subject to the Santa Fe Pacific mineral reservation. Beginning in 1959, Santa Fe Pacific entered into mineral leases for portions of the lawsuit lands with persons interested in exploring for and producing helium gas. In 1960, helium-bearing gas deposits were discovered under the lawsuit lands. B. Law of Other Jurisdictions The primary issue in this case is whether a deed res- ervation of “all oil, gas, coal and minerals whatsover, already found or which may hereafter be found, upon or under said lands”? includes the disputed substances of 2 The reservation, in its entirety, is as follows: Grantor expressly reserves and excepts all oil, gas, coal and minerals whatsoever, already found or which may hereafter be found, upon or under said lands, with the right to prospect for, mine and remove the same, and to use so much of the surface of said lands as shall be necessary and convenient for shafts, 6a helium, nitrogen, potash, petrified wood, and industrial clay. Although we find no Arizona cases construing such a reservation, similar provisions have been the source of extensive litigation in other jurisdictions. All jurisdictions agree that in construing deeds, the court’s role is to give effect to the intent of the contract- ing parties. E.g., Shulansky v. Michaels, 14 Ariz. App. 402, 405, 484 P.2d 14, 17 (1971). If the instrument is unambiguous, the intent of the parties must be discerned from the four corners of of the document. £.g., Pass v. Stephens, 22 Ariz. 461, 466, 198 P. 712, 714 (1921). If, however, the instrument is ambiguous, then extrinsic evidence of intent is admissible. Jd., 198 P. at 714. But beyond agreeing on these basic principles of con- struction, courts have adopted varying approaches to as- certain what substances the parties intended to include in a general mineral reservation. Courts have focused their analysis on the proper definition of “mineral” with widely divergent results. Because of the importance of this issue in Arizona, we believe it appropriate to sum- marize some of the common approaches used in other jurisdictions. Some courts find the term mineral* to be inherently (and always) ambiguous and admit extrinsic evidence to determine the parties’ intent. In Colorado, for ex- ample, extrinsic evidence is admissible to show what the word mineral means “in the vernacular of the mining world, the commercial world and [to] landowners at the time of the grant, and whether the particular substance wells, tanks, pipe lines, rights of way, railroad tracks, storage purposes, and other and different structures and purposes necessary and convenient for the digging, drilling and working of any mines or wells which may be operated on said lands. 3 Throughout this opinion the term “mineral” will be used to refer to general mineral reservations regardless of the precise terminology employed. Courts have not differentiated among reser- vations of “all minerals,” “minerals,” “minerals of whatever kind,” “all minerals whatsoever,” etc. 7a was so regarded as a mineral.” Morrison v. Socolofsky, 43 Colo. App. 212, 213, 600 P.2d 121, 122 (1979) (quot- ing Farrell ». Sayre, 129 Colo. 368, 373, 270 P.2d 190, 193 (1954)). Thus, in determining whether gravel was included within a reservation of “oil, gas and other min- erals,” the Morrison court concluded that evidence re- garding the geological location of gravel with respect to the surface, the impact on the surface of extracting the gravel deposits, the nature of the use of the surface estate, and testimony of geologists-consultants in the gravel industry and of agricultural lenders and land- owners on the common meaning of the term mineral at the time of the conveyance, were all properly admissible as bearing on the parties’ intent. Jd. at 214, 600 P.2d at 122. Likewise the Arkansas courts find the term mineral to be ambiguous and require the admission of extrinsic evidence as to whether the substance at issue would be cousidered a mineral in the common commercial speech and usage at the time of the conveyance. See, e.9., Thomas v. Markham & Brown, Inc., 353 F. Supp. 498 (E.D. Ark. 1973) (pulaskite stone not considered a min- eral at the time of the conveyance) ; Middleton v. West- ern Coal & Mining Co., 241 F. Supp. 407 (W.D. Ark. 1965) (“other minerals” does not include oil and gas). A second general approach used by many jurisdictions is to find the term mineral to be unambiguous. Urder this view, a grant or reservation containing the word mineral is found to completely sever the mineral estate from the surface estate. Amoco Prod. Co. v. Guild Trust, 636 F.2d 261, 265 (10th Cir. 1980), cert. denied, 452 U.S. 967, 101 S. Ct. 3128, 69 L. Ed. 2d 981 (1981) (oil and gas are minerals). In Union Pac. Land Re- sources Corp. v. Moench Inv. Co., 696 F.2d 88 (10th Cir. 1982), cert. denied, US. , 103 S. Ct. 1776, 76 L. Ed. 2d 348 (1983), the court found a reservation in a conveyance by the Union Pacific Railroad Company, a 8a successor to a federally-chartered corporation, to be un- ambiguous. The deed reserved to the railroad all “coal and other minerals.” Applying Wyoming law, the court found the term minerals was unambiguous and included oil and gas. Id. at 98. Other courts use the doctrine of ejusdem generis to make the term unambiguous.’ Allen v. Farmers Union Co-Op. Royalty Co., 588 P.2d 204 (Okla. 1975). Despite the lack of ambiguity, many of these courts still admit extrinsic evidence to ascertain whether the substance at issue is commercially valuable, commonly regarded as a mineral, and/or whether extraction of the substance would result in surface destruction. For ex- ample, in Geothermal Kinetics, Inc. v. Union Oil Co., 75 Cal. App. 3d 56, 141 Cal. Rptr. 879 (1977), the court found the reservation of “all minerals” reflected the general intent to reserve “those commercially valuable, underground, physical resources of the property.” Id. at 62, 141 Cal. Rptr. at 882. The court described the expectation of the parties as being that the enjoyment of the mineral estate “would not destroy the surface estate and would involve resources distinct from the sur- face soil.” Id., 141 Cal. Rptr. at 882. The trial court found that the “mining” of geothermal steam would not substantially destroy the surface of the property. Id. at 61, 141 Cal. Rptr. at 881-82. Some of these jurisdictions determine that all com- mercially valuable substances that are commonly under- stood to be within the technical and/or practical mean- 4 Ejusdem generis is essentially a rule of construction whereby the term minerals is limited to substances of the same species as minerals previously enumerated. Thus, a lease of “natural gas, petroleum and other mineral substances” would include only those minerals related to oil and gas in nature. Wulf v. Shultz, 211 Kan. 724, 508 P.2d 896 (1973). Some courts that determine the term mineral is ambiguous also employ ejusdem generis to define what substances are within a general mineral reservation. See Keller v. Ely, 192 Kan. 698, 391 P.2d 182 (1964). 9a ings of the term mineral are included in a general min- eral reservation, even though development of these sub- stances would result in surface destruction. See, e.g., Moser v. United States Steel Corp., No. B-9735 (Tex. Sup. Ct. June 27, 1984); New Mexico & Ariz. Land Co. v. Elkins, 187 F. Supp. 767 (D.N.M.), appeal dismissed, 239 F.2d 645 (10th Cir. 1956). But other courts re- fuse to include substances whose extraction would result in surface destruction or which possess no distinguishing characteristics from the surface itself. E.g., Wulf v. Shultz. Perhaps because of the disparate results produced by the above approaches, some courts have concluded that the term mineral may be ambiguous or unambiguous de- pending upon the circumstances of the case. Thus, in Kansas, a reservation of “all of the oil, gas and other minerals in and under, and that may be produced from” the land was ambiguous as to commercial clay, Hans »v. Great Bend Brick & Tile Co., 172 Kan. 478, 241 P.2d 475 (1952); but a lease of “natural gas, petroleum and other mineral substances” unambiguously excluded lime- stone, coal, clay, gypsum, gravel, rock and dirt under the doctrine of ejusdem generis. Wulf v. Shultz. In Ken- tucky, a reservation of all local and mineral rights un- ambiguously includes oil and gas, Kentucky-West Vir- ginia Gas Co. v. Browning, 521 S.W.2d 516 (Ky. App. 1975), but a reservation of minerals, vil, and gas is ambiguous with respect to clay and sandstone constitut- ing about 75% of the subsurface. Cumberland Mineral Co. v. United States, 518 F.2d 1399 (Ct. Cl. 1975). Finally, some courts rely on legislative inter*+ or rules of construction to determnie the extent of a mineral res- ervation. E.g., Watt v. Western Nuclear, Inc., U.S. , 103 S. Ct. 2218, 76 L. Ed. 2d 400 (1983) (the term minerals under the Stock-Raising Homestead Act of 1916 includes gravel). California courts have utilized state legislation regulating mineral and geothermal resources 10a to aid in the interpretation of the term mineral. Pariani v. State, 105 Cal. App. 3d 923, 164 Cal. Rptr. 683 (1980). In Colorado and Washington, grants are to be construed against the grantor. Bell Petroleum Co. v. Cross V. Cattle Co., 492 P.2d 80 (Colo. App. 1971); Weyerhaeuser Co. v. Burlington Northern, Inc., 15 Wash. App. 314, 549 P.2d 54 (1976). North Dakota has a statute requiring reservations of certain substances to be specifically and separately set forth in the instrument. MacMaster v. Onstad, 86 N.W.2d 36 (N.D. 1957). And in a very recent decision, Division Two of this court held that pantano clay was a mineral within the con- templation of Arizona’s mineral leasing laws. Tanner Cos. v. Arizona State Land Dept., 2 CA-CIV 4798 (Ariz. App. July 18, 1984). This holding is of little assistance in the case before us because it concerns the authority of the land department to lease state lands for mineral exploration—a case involving the department’s power un- der an extensive statutory scheme. See also State Land Dept. v. Tucson Rock & Sand Co., 107 Ariz. 74, 481 P.2d 867 (1971). C. Critique of Other Jurisdictions Each of the above approaches has its drawbacks. Ju- risdiction utilizing the same general approach reach different conclusions as to what substances are minerals. Inconsistent results are even produced within a single jurisdiction. E.g., compare United States v. 1,253.14 Acres of Land, 455 F.2d 1177 (10th Cir. 1972) (under Colorado Law, “all minerals” includes sand and gravel) with Morrison v. Socolofsky, 43 Colo. App. 212, 600 P.2d 121 (1979) (reservation of “other minerals” did not include gravel). Courts that hold mineral to be an ambiguous term are often thrust into a complex and hopeless search for the “true intentions” of the original contracting parties. With the passage of decades and a series of mesne con- lla veyances, this task can be impossible.” And, as many courts have noted, attempting to discover the parties’ specific intent regarding a substance that was unknown to anyone at the time of the original conveyance is anti- logical. E.g., Northern Nat. Gas Co. v. Grounds, 441 F.2d 704, 714 (10th Cir.), cert. denied, 404 U.S. 951, 92 S. Ct. 268, 30 L. Ed. 2d 267 (1971). The most con- sistent results produced by these cases are title uncer- tainty and the need to litigate each mineral reservation to determine what substances it encompasses.® “[T]he 5 The difficulties inherent in this approach are highlighted by the facts of this case. The land which is the subject of this law- suit was initially held by Santa Fe Pacific. The land was conveyed in three separate transactions to Spurlock’s predecessors. Spurlock eventually succeeded to the titles in all three transactions. The negotiations for these transactions were handled by E. O. Hemenway on behalf of Santa Fe Pacific. He negotiated with Grace Porter about the sale to her; with Ray Cowden about the sale to Cowden Livestock Company; and with J. C. Wetzler about the sale to Spurlock & Wetzler. Mr. Hemenway and Mrs. Porter died before the commencement of these proceedings. The difficulty in ascertaining the intent of the parties in the three transactions is apparent. Two of the principals are deceased. The remaining participants in the transactions were asked to testify as to their intent about events transpiring almost forty years ago. Much of the trial time was consumed by testimony con- cerning the intent of the parties to the three conveyances. ® The trial court reasoned that minerals is an ambiguous term because “[t]jaking minerals from the general trichotomy of animal, vegetable or mineral, it means everything which is not animal or vegetable.” Applying this logic, Spurlock argues that the reserva- tion therefore consumes the grant and invalidates it. The trial court’s approach was repudiated by the United States Supreme Court over eighty years ago. [T]he scientific division of all matter into the animal, vege- table, or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom, and therefore could not be excepted from the grant without being destructive of it. Northern Pac. Ry. Co. v. Soderberg, 188 U.S. 526, 530, 23 S. Ct. 365, 367, 47 L. Ed. 575, 581 (1903). To apply the rule enunciated 12a courts ultimately determine the meaning of the word ‘minerals,’ and all too often the only reliable rule ap- pears to be that the word ‘minerals’ means what the courts say it means.” Reeves, The Meaning of the Word “Minerals,” 54 N.D.L. Rev. 419, 482 (1978). To hold the term ‘other minerals’ ambiguous as a matter of law appears at first glance to be a laud- able attempt by the courts to give effect to the intentions of the grantor. However, this assumes that the grantor had a specific and identifiable in- tent that can be discovered. The discovery of the grantor’s intent, particularly in a remote transaction, is difficult. The problem with the ambiguity ap- proach is that it creates instant uncertainty about any conveyance using ‘other minerals’ or ‘all min- erals.’ It is almost impossible for an outsider or prospective purchaser to detemine what was granted or reserved. The effect of this approach is to en- courage or increase the amount of litigation to determine the scope of the grant or reservation. Comment, A Proposal for the Construction of “Other Minerals” in Idaho, 18 Idaho L. Rev. 97, 104 (1982) (Comment). To alleviate these problems, many courts find the term minerals to be unambiguous. Under this approach title uncertainty is minimized and courts are able to avoid the tortuous process of attempting to discover the parties’ specific intent. See, e.g., Moser v. United States Steel Corp., No. B-9735 (Tex. Sup. Ct. June 27, 1984). The policy considerations in favor of this interpre- tation are considerable. An established rule of law provides a reliable means of ascertaining mineral ownership. This certainty is important because of by the trial court would result in the reservation consuming the conveyance, a result certainly not intended by the parties. Thus, the animal, mineral, vegetable approach is not correct. ae A no AA eos BK hehe til 13a the heavy investment of capital required to develop petroleum and other mineral resources. Without an established rule of law, the courts would necessarily be called upon to interpret numerous reservations. This is evident from the series of cases that result in states following Arkansas authority. With every new technology that develops a use for a particular gas or hard rock mineral, resort is made to the courts. Conservation of judicial resources is another valuable advantage of [this] rule. Amoco Prod. Co. v. Guild Trust, 686 F.2d 261, 265 (10th Cir. 1980), cert. denied, 452 U.S. 967, 101 S. Ct. 3123, 69 L. Ed. 2d 981 (1981) (quoting Amoco Prod. Co. v. Guild Trust, 461 F. Supp. 279, 288 (D. Wyo. 1978) ). This approach, however, is not always free from diffi- culty. In jurisdictions which attempt to narrowly define minerals as only those substances whose extraction does not result in surface destruction, courts must still ex- amine scientific and geological evidence to determine the mineral composition of the land and the impact of min- eral production on the surface estate. Downstate Stone Co. v. United States, 712 F.2d 1215 (7th Cir. 1988). Courts employing a legal standard of those substances “technically or commonly understood” to be minerals may have to admit evidence of custom or usage. See, e.g., New Mexico & Ariz. Land. Co. v. Elkins, 137 F. Supp. 767 (D.N.M.), appeal dismissed, 239 F.2d 645 (10th Cir. 1956). Furthermore, the unambiguous approach may result in “ignoring the intent of parties which might have been discovered through diligent examination of extrinsic evi- dence.” Comment at 101. This problem is exacerbated in jurisdictions employing ejusdem generis to arbitrarily and often artificially limit the substances included within 14a the term mineral.” Allen v. Farmers Union Co-op. Roy- alty Co., 588 P.2d 204 (Okla. 1975) (reservation of “all oil, gas & mineral rights” does not include copper, silver, gold or any other metallic ores under ejusdem generis) ; Hammett Oi Co. v. Gypsy Oil Co., 95 Okla. 235, 218 P. 501 (1921) (“oil and gas” does not include casing head gas). D. Conclusion 1. Ownership On balance, however, we believe the better reasoned approach is to treat the term minerals as unambiguous. Thus, it becomes the court’s duty to determine the extent of a general reservation as a matter of law, without resorting to extrinsic evidence to try to establish any unexpressed, subjective intent of the parties. In this con- text, we believe a reservation of “all minerals whatso- ever” reflects a general intent of the parties to sever the surface estate from the underlying mineral estate. May- nard v. McHenry, 271 Ky. 642, 113 S.W.2d 13 (1938). It indicates that the parties intended to create two dis- tinct, co-existing, and individualy valuable estates. Thus, the grantor retains ownership of all commercially valu- able substances separate from the soil, while the grantee assumes ownership of a surface that has value in its use and enjoyment. See Watt v. Western Nuclear, Inc., —— US. : , 103 S. Ct. 2218, 2226-29, 76 L. Ed. 2d 4900, (1983). The grantor further retains owner- ship of mineral substances that are unknown at the time of the conveyance. Northern Natural Gas Co. v. Grounds, 441 F.2d 704 (10th Cir.), cert. denied, 404 U.S. 951, 92 7A related problem with the use of ejusdem generis is the diffi- culty some courts have in determining what is the common char- acteristic among the minerals enumerated in order to apply the doctrine to disputed substances. See, e.g., Western Dev. Co. v. Nell, 4 Utah 2d 112, 288 P.2d 452 (1955); see generally Comment at 107-08. 15a S. Ct. 268, 30 L. Ed. 2d 267 (1971). This approach is consistent with the views expresed by the leading com- mentators. As Professor Eugene Kuntz observed: When a general grant or reservation is made of all minerals without qualifying language, it should be apparent that the parties intended to sever the entire mineral estate from the surface estate, leaving the respective owners of each estate with an estate which is enjoyable in a special manner. The manner of enjoyment of the mineral estate is through extrac- tion and removal of substances from the earth, whereas the enjoyment of such substances as are necessary for the use of the surface, and these re- spective modes of enjoyment should be taken into account in arriving at the proper subject matter of each estate. The severance of ‘minerals’ generally should be construed to sever from the surface owner- ship all substances presently valuable in themselves, apart from their location in the earth, whether their presence is known or not known, and all substances which become valuable through the development of the arts and sciences, and that nothing presently or prospectively valuable as extracted substances would be intended to be excluded from the mineral estate. 1 E. Kuntz, A Treatise on the Law of Oil and Gas § 13.3 at 305-06 (1962) ; Comment, The Meaning of “Minerals” in Grants and Reservations, 30 Rocky Mtn. L. Rev. 3438, 357 (1958); see generally R. Pruitt, Mineral Terms— Some Problems in Their Use and Definition, 11 Rocky Mtn. Min. L. Inst. 1 (1966). 2. Surface Destruction Ownership of the mineral estate, however, is not the only issue which must be addressed in construing a min- eral reservation. We must also determine what rights the mineral owner possesses to develop his estate. We l6a recognize that in order for both the surface and mineral estates to co-exist and retain their individual value, some accommodation between the respective owners is neces- sary. In general, the owner of the mineral estate possesses the incidental right of entering, occupying, and utilizing the surface to explore for and develop the underlying minerals. 58 C.J.S. Mines and Mineral § 159 (1948). If the grant or reservation specifically authorizes surface destruction by the mineral owner, then courts should give effect to this intention.’ Rarely, however, is such a right expressly conferred in the conveying instrument. Never- theless, the court should examine the four corners of the document and give effect to any specific provisions regu- lating the use of the surface estate by the mineral owner. See Reeves, The Meaning of the Word “Min- erals,” 54 N.D.L. Rev. 419, 442, 450-53 (1978); Mac- Master v. Onsiad, 86 N.W.2d 36 (N.D. 1957). In the absence of such provisions, the court should focus its analysis on the substances reserved or granted. With respect to minerals specified in the conveyance or minerals commercially known to exist at the time of the conveyance, reasonable destruction of the surface estate is permissible. Christman v. Emineth, 212 N.W.2d 543 (N.D. 1973). The enumeration of such minerals indi- cates a specific intent on the part of the contracting parties that these substances would be fully developed. In essence, the surface owner knew of and agreed to this burden on his estate. It is logical to assume that parties intending to sever the mineral from the surface estate would contemplate some surface destruction in the de- velopment of substances which were commonly known to be commercialiy valuable minerals ai the time of the con- 8 The reservation in this case grants Santa Fe Pacific the express right to use the surface for “digging, drilling and working of any mines or wells.” See Section IV. B., infra. EEE 17a veyance. Schwarz v. State, 658 S.W.2d 822 (Tex. App. 1983). However, no such specific intent can be found with respect to substances which were unknown or had no commercial value at the time of the conveyance. See, ¢.g., Pariani v. State, 105 Cal. App. 3d 923, 930, 164 Cal. Rptr. at 683, 687 (1980); Northern Natural Gas Co. v. Grounds, 441 F.2d at 714. The holder of the mineral estate owns such substances, but his development of these resources must not substantially interfere with the sur- face owner’s estate. Only in this way can the general intention of the parties to create and enjoy two co- existing, individually valuable estates be given effect. Many jurisdictions have recognized that the mineral owner’s rights to develop his estate are limited when they infringe upon the surface owner’s use and enjoyment of the land itself. Generally, courts solve this conflict by determining that the term minerals excludes substances whose extraction would destroy the surface. For ex- ample, in Farrell v. Sayre, 129 Colo. 368, 270 P.2d 190 (1954), the Supreme Court of Colorado refused to in- clude sand and gravel in a reservation of “all mineral and mineral rights.” Emphasizing that most of the surface was composed of sand and gravel, the court con- cluded that the contracting parties could not have in- tended to, in effect, “nullify the grant.” Such a result would be tantamount to saying that the grantor retained the entire estate, the deed served no useful purpose, and the grantee received nothing. Jd. at 372-73, 270 P.2d at 192. See also Downstate Stone Co. v. United States, 712 F.2d 1215 (7th Cir. 1983) (limestone); Christensen v. Chromalloy Am. Corp., —— Nev. , 656 P.2d 844 (1983) (barite); New Mexico and Arizona Land Co. v. Elkins Ranch, Inc., No. 74-285 (D.N.M. Dec. 3, 1974) (limestone) ; State Land Bd. v. State Dept. of Fish & 18a Game, 17 Utah 2d 287, 408 P.2d 707 (1965) (sand and gravel).° While this approach protects the surface owner’s estate, it is not necessarily an equitable solution to the problem. By refusing to include such substances in the definition of mineral, ownership of such commercially valuable de- posits passes to the surface owner. The surface owner himself is then free to extract and commercially produce the substance. This result appears to contravene the parties’ original intention that the grantor retain the ownership and profit potential of the mineral resources. Comment, The Meaning of “Minerals” in Grants o 7% Reservations, 30 Rocky Mtn. L. Rev. 348, 351 (195s’. The Supreme Court of Alabama distinguished between the ownership itself of a mineral and the incidental rights of the mineral owner to utilize the surface to produce it in Bibby v. Bunch, 176 Ala. 585, 58 So. 916 (1912). Recognizing that shale was a mineral and its ownership was retained by the grantor under a reservation of “all minerals and mining rights,” the court nonetheless re- fused to allow shale extraction because of the resultant surface destruction. Jd. at 588, 58 So. at 917-18. The court concluded that while the mineral owner had the righ’, to some reasonable use of the surface to procure underlying minerals, that right was subservient to the rights of the surfa* owner to have his estate main- tained in its natura: condition. Jd. at 589, 58 So. at 917. See also New Mexico and Ariz. Land Co. v. Elkins, 137 F. Supp. 767, 773 (D.N.M.), appeal dismissed, 239 F.2d ® Indeed, concern for surface destruction is paramount in the minds of many courts which are called upon to interpret mineral reservations. In our view, the issue of surface destruction is more properly examined as an adjunct to the question of how the mineral estate owner is to exercise his right of ownership. To consider surface destruction as an element of the ownership issue results in inconsistent and varying results which are evidenced in the many reported decisions. et eS ee kas mine 9 Finite we tStheeht SRST i “oe 19a 645 (10th Cir. 1956) (finding uranium and thorium to be minerals, but reserving to the surface owner a cause of action against the mineral owner for destruction of his surface interests) ; Moser v. United States Steel Corp., No. B-9735, slip op. at 7 (Tex. Sup. Ct. June 27, 1984). We believe the distinction drawn by the Bibby court is a critical one. It comports with the general intention of the parties to sever the mineral from the surface estate. It gives ownership of commercially valuable substances distinct from the soil to the mineral owner. Yet it also recognizes that rights incidental to that mineral ownership are not unlimited. Thus, as to unspecified minerals, not known to be commercially valuable at the time of the con- veyance, the mineral estate owner must not destroy or substantially interfere with the surface owner’s right to use and enjoy his land by the mining or taking of minerals. In the present case, only the issue of ownership rights under the general mineral reservation is before us.’° Issues relating to the effect of extraction of the disputed substances upon the surface estate have not been briefed or argued before this court. Nor do the judgments below purport to rule on these matters. Accordingly, we do not believe it appropriate for this court to speculate as to whether or not production of any minerals would sub- stantially interfere with the surface estate. 3. Holding Under the principles expressed herein, we hold that the term minerals as used in this reservation is un- ambiguous. A reservation of “all oil, gas, coal and min- erals whatsoever, already found or which may hereafter be found” indicates the parties’ general intention to 10 Santa Fe Pacific did not claim ownership of sand and gravel under the general mineral reservation either in the trial court or on appeal. Ownership of sand and gravel was claimed under another provision in the conveyance. This issue is addressed separately. 20a sever the mineral from the surface estate. No specific intent to limit this reservation is found within other provisions of the deeds nor is contrary extrinsic evidence of intent admissible to vary its effectiveness. As a matter of law, we hold that helium,” nitrogen potash, industrial clay, and petrified wood are minerals and that Santa Fe Pacific retained ownership of them under the general mineral reservation. See supra note 2. All are inorganic, commercially valuable substances which are distinct from the soil itself. As we have previ- ously discussed, the fact that the original contracting parties may have been unaware of the existence or value of these minerals at the time of the conveyance is ir- relevant to the question of ownership.” With respect to sand and gravel, Santa Fe Pacific claims title by virtue of another reservation in the deeds. This reservation permitted Santa Fe Pacific to come upon the surface and take sand and gravel for “railroad purposes.” Because specific mention is made of “gravel and ballast,” the foregoing discussion concern- ing the general mineral reservation is not applicable to these substances. The trial court found that Santa Fe Pacific “has abandoned any right it may have had to take sand and gravel for railroad purposes.” Santa Fe Pacific has not raised on appeal any issue concerning error with regard to this finding. Thus, the trial court’s judgment quieting title to the sand and gravel i: favor of Spurlock is affirmed. 11 Even if we had not determined that the reservation completely severed the subsurface estate in favor of Santa Fe Pacific, the use of the term “gas” in the reservation would reserve the helium and nitrogen in favor of the railroad. Northern Natural Gas Co. v. Grounds, 441 F.2d at 715; Navajo Tribe of Indians v. United States, 364 F.2d 320 (Ct. Cl. 1966). 12 Ag discussed herein, this knowledge is only relevant to the mineral owner’s rights to burden the surface estate in the course of developing and producing these mineral. Saree PN. AA Ne P.M Mec * 2la Ill. DE JURE AND DE FACTO DISSOLUTION; ULTRA VIRES All of the judgments in this consolidated action recite that the reservation clause in the deeds from Santa Fe Pacific to Spurlock’s predecessors in interest “is void and unenforceable.” This ruling is apparently based upon the trial court’s conclusion that Santa Fe Pacific was de jure and de facto dissolved and that the conveyances were therefore ultra vires acts. Immediately after the jury verdicts were read the trial judge stated: THE COURT: So that we leave the courtroom in a position to carry on the post-verdict proceedings, the Court will now enter a ruling on the corporate existence of Santa Fe, and it is the Court’s finding that Santa Fe Pacific was de jure and de facto dissolved; that the acts of the defendants were ultra vires, consistent with all of the theories propounded by plaintiffs, Spurlocks. MR. GILBERT: Would you give that ruling again? I missed part of that. THE COURT: I had indicated that the Court found that Santa Fe Pacific was de jure and de facto dissolved, that the acts were therefore ultra vires— MR. GILBERT: What acts, Your Honor? THE COURT: To the extent that they involved any issue in this lawsuit. If there are theories con- sistent with that that I’ve overlooked in that simple statement of findings, they would also be adopted. The trial court’s ruling was apparently based upon Spur- lock’s contention that Santa Fe Pacific had been de jure and de facto dissolved at the time it conveyed the law- suit lands to Spurlock’s predecessors in interest. Spur- lock also argued successfully to the trial court that pur- suant to a 1902 federal law, Act of June 27, 1902, ch. 22a 1159, 32 Stat. 405 (1902 Act), Santa Fe Pacific was required to convey the lawsuit lands to the Atchison, To- peka and Santa Fe Railway Company. Thus, Spurlock contends that since Santa Fe Pacific was not empowered to retain title to these lands under the 1902 Act, it could not have been the legal owner of these lands when it subsequently conveyed them te Spurlock’s predecessors." Alternatively, Spurlock argues that Santa Fe Pacific’s continued ownership of these lands and/or its convey- ances to Spurlock’s predecessors were ultra vires acts under the terms of the 1902 Act. We find it unneces- sary, however, to decipher historical events which trans- pired eighty years ago because we conclude that Spurlock may not challenge the legal existence of Santa Fe Pacific nor complain that the conveyances were ultra vires. A. De Jure Dissolution The power of Congress to charter corporations to ef- fectuate its lawful purposes is well established. McCul- loch v. Maryland, 4 Wheat. (U.S.) 316, 4 L. Ed. 579 (1819). Congress, in exercising those powers, has in- corporated railroad corporations, including the Santa Fe Pacific. Act of March 3, 1897, ch. 374, 29 Stat. 622. Furthermore, “Congress has not only the power to create a corporation to facilitate the performance of govern- mental functions, but has the power to protect the opera- tions thus validly authorized.” Pittman v. Home Owners’ Loan Corp., 308 U.S. 21, 32-33, 60 S. Ct. 15, 18, 84 L. Ed. 11, 16 (1939). “[A] power to create implies a power to preserve. ... [A] power to destroy, if wielded by a 13 Exhibits admitted at trial establish that in 1903, Santa Fe Pacific actually conveyed its railroad operating properties to the Atchison, Topeka & Santa Fe Railway Company and ‘ts land grant lands to the Santa Fe Pacific Development Company. Ia 1904, the Santa Fe Pacific Development Company conveyed the lawsuit lands back to Santa Fe Pacific. Spurlock refers to certain fraudulent transfers by Santa Fe Pacific, but we find nothing in the record to sustain that contention. Se a ener ee eee nee Sent, ee tee eo be Se oath Be ee i RE aa 23a different hand, is hostile to, and incompatible with these powers to create and to preserve.” McCulloch v. Mary- land, 4 Wheat. (U.S.) at 426, 4 L. Ed. at 606. The respective supremacies of the state and national governments in their particular spheres must be observed in regard to their power to create and destroy corpora- tions. Neither may terminate the existence of a corpora- tion of the other. State ex rel. Wilcox v. Curtis, 35 Conn. 374, 378 (1868). Therefore, “no court can declare a forfeiture of franchise or a dissolution of a corporation except the courts of the jurisdiction which created it.” J. Beale, The Law of Foreign Corporations § 821 (1904). The state courts must, therefore, look to federal law to determine whether a national, congressionally incorpo- rated corporation, has been dissolved de jure. See gen- erally 16A W. Fletcher, Cyclopedia of the Law of Private Corporations § 7971 (rev. perm. ed. 1979) (Fletcher). Spurlock has been unable to point to any federal en- actment which revokes the corporate charter of Santa Fe Pacific. Instead, Spurlock argues that de jure dissolution is effectively accomplished by the 1902 Act. We disagree with Spurlock’s strained interpretation of this legislation. The act authorized Santa Fe Pacific to sell or lease its railroad and other property, including all rights, powers, privileges, grants, and franchises, to the Atchison, Topeka and Santa Fe Railway Company, a corporation of the State of Kansas, its successors and assigns; but such pur- chaser or lessee shall take, hold, and use the railroad and property sold or leased subject to all duties, ob- ligations, condilions, and restrictions relating thereto which at the time of such sale or lease shall be bind- ing upon said Senta Fe Pacific Railroad Company as fully as though such sale or lease had not been made; and thereupon such purchaser or lessee shall have and enjoy all rights, powers, privileges, grants, 24a and franchises relating to said railroad and prop- erty; or any part thereof, that were conferred by Congress upon said Santa Fe Pacific Railroad Com- pany.... 82 Stat. at 405. The 1902 Act authorizes Santa Fe Pa- cific to transfer its railroad and properties to the Atchi- son, Topeka and Santa Fe Railway Company. The Act does not dissolve Santa Fe Pacific. Nor do we believe it appropriate for the trial court or this court to con- jure an unexpressed congressional intent to nullify the corporate existence of the very corporation whose powers Congress was expressly clarifying. B. De Facto Dissolution Spurlock has argued that Santa Fe Pacific is de facto dissolved by virtue of its failure to exercise the rights accorded to it by its articles, or the federal act creating it. This contention is legally and factually unsound. First, Spurlock has pointed to nothing in the federal law creating Santa Fe Pacific which would even remotely suggest that its corporate existence could be challenged in the state courts. Indeed, the power to dissolve a cor- poration must find its authority in the law of the sover- eign creating the corporation. As in Section III.A., supra, we find no federal authority granting to the states the power to dissolve Santa Fe Pacific. Second, even if Congress had given the states the power to dissolve Santa Fe Pacific, the facts in this case would not sanction the exercise of that power. De facto dissolution, in contrast to de jure dissolution, is largely a question of fact. The issue is what acts will give rise to a proper determination of corporate nonuse such tha’ a court may declare such corporation de facto dissolved. The mere fact that a corporation has stopped doing business does not necessarily constitute a de facto dissolution. Greenville Nat'l Exch. Bank v. Nussbaum, earner enteral 25a 154 S.W.2d 672, 674 (Tex. App. 1941). A corporation may cease to exist for all practical purposes, and yet not be dissolved as a matter of law. See Eastern Grain Elevator Corp. v. McGowan, 95 F. Supp. 40 (W.D.N.Y. 1950). A corporation does not pass out of existence be- cause it has become insolvent or has lost its property and ceased to carry on business. Lucas v. Swan, 67 F.2d 106 (4th Cir. 1933). And finally, the mere transfer of corporate assets is not sufficient to work a dissolution. E.g., Hunn v. United States, 60 F.2d 430 (8th Cir. 1932). Only a “total voluntary abandonment of its fran- chise [charter]” is sufficient to work a de facto dissolu- tion. Id. at 432. Contrary to Spurlock’s contention, the evidence in this case indicates that Santa Fe Pacific has actively engaged in business from 1897 to the present. Letters, leases and other documents both from and to employees of Santa Fe Pacific evidence the ongoing business of Santa Fe Pacific in the 1940’s and 1950’s. Santa Fe Pacific offered into evidence minutes of several directors’ and stockholders’ meetings which reflect that the company was engaging in business. Similarly, the United States continued to recog- nize the existence of Santa Fe by issuing patents to it which are in evidence in this case. Further, since 1904, Santa Fe Pacific has been in- volved in many litigated cases relating to its land grant holdings. Its existence has never been questioned in these suits. See, e.g., United States v. Santa Fe Pac. R., 314 U.S. 339, 62 S. Ct. 248, 86 L. Ed. 260 (1941); Santa Fe Pac. R. Co. v. Work, 267 U.S. 511, 45 S. Ct. 400, 69 L. Ed. 764 (1925); Santa Fe Pac. R. Co. v. Cord, 14 . Ariz. App. 254, 482 P.2d 503, cert. denied, 404 U.S. 912, ) 92 S. Ct. 229, 30 L. Ed. 2d 185 (1971). In New Mexico . ex rel. Caledonian Coal Co. v. Baker, 196 U.S. 482, 25 S. Ct. 375, 49 L. Ed. 540 (1905), the United States Su- reme Court discussed the fact that Santa Fe Pacific had conveyed away its railroad property and was in the busi- ie a en ae 26a ness of administering its land grants. Nothing in the opinion states that there was anything improper about this arrangement or that Santa Fe Pacific had ceased to be an existing corporation. Thus, we can see no fac- tual basis for the trial court’s ruling that Santa Fe Pacific has been dissolved de facto. Finally, even if inactivity by Santa Fe Pacific could somehow constitute de facto dissolution, Spurlock would be estopped from denying the company’s corporate ex- istence. First, in each complaint, Spurlock alleged that Santa Fe Pacific is an existing corporation. One who sues a corporation as such or who has pleaded that an opposing party is a corporation, has elected to treat that party as a corporation and cannot deny its corporate existence. 8 Fletcher § 3944; see also American Zinc Prods. Co. v. Sanders, 175 Ark. 133, 142, 298 S.W. 857, 860 (1927). Second, Spurlock and his predecessors have dealt with Santa Fe Pacific since the early 1940’s as an existing corporation by entering into contracts and leases with Santa Fe Pacific, accepting deeds from Santa Fe Pacific and dealing with Santa Fe Pacific’s lessees and accept- ing surface damages from them. Parties who contract with or otherwise deal with an entity as a corporation are estopped from denying the corporate existence of that entity in a subsequent lawsuit. Exum Walker, M.D. P.C., Pension Trust v. Joanna M. Knox & Assocs. Inc., 132 Ga. App. 12, 13, 207 S.E.2d 570, 572 (1974); see As- sociated Students v. Arizona Board of Regents, 120 Ariz. 100, 103, 584 P.2d 564, 567 (App. 1978). C. Ultra Vires Acts The trial judge ruled that because Santa Fe Pacific was de jure or de facto dissolved, the conveyances to Spurlock’s predecessors in title were ultra vires. But the trial court’s holding is a non sequitur. An ultra vires act is one outside the corporation’s power as found directly Se ae a eee | : | | i : ; 27a or impliedly in its articles of incorporation. See Lurie v. Arizona Fertilizer & Chem. Co., 101 Ariz. 482, 421 P.2d 330 (1966). Thus, in order for a corporation to perform an ultra vires act it must necessarily exist. Having concluded that Santa Fe Pacific had been dis- solved, it was logically impossible for the trial court to conclude that “therefore” its conveyances of the lawsuit lands were ultra vires. In any event, Spurlock has no standing to raise a claim that the conveyance by Santa Fe Pacific were ultra vires. “[F]ederal corporations derive their existence and powers from acts of Congress, and ordinarily, proceed- ings to question the right of such corporations to exercise the corporate franchise or powers should be undertaken by the United States.” 5 Fletcher § 2336. See, e.g., First Nat’l Bank v. Missouri, 263 U.S. 640, 660, 44 S. Ct. 213, 216, 68 L. Ed. 486, 494 (1924). In summary, we conclude that (1) Congress has not dissolved Santa Fe Pacific; (2) Santa Fe Pacific is not de facto dissolved; and (3) Spurlock may not complain that the conveyances of the lawsuit lands by Santa Fe Pacific were ultra vires. IV. ADVERSE POSSESSION AND RULES AGAINST PERPETUITIES A. Adverse Possession Santa Fe Pacific contends, as an alternative basis for reversal, that it acquired title to certain of the minerals by adverse possession. In light of the holding in Section II., supra, we need not reach this contention. Spurlock argues, however, that regardless of how the mineral res- ervation is construed the judgments should be sustained because he acquired title to the mineral estate by adverse possession. We disagree. After the surface estate has been severed from the underlying mineral estate, title to the minerals cannot be 28a acquired by adverse possession of the surface alone. See generally Annot., 35 A.L.R.2d 124, 154-55 (1954). Adverse possession requires an actual and visible appro- priation of the mineral estate, commenced and continued under a claim of right inconsistent with and hostile to the claim of another. A.R.S. § 12-521(A). Where there has been a severance of the mineral and surface estate, such as in this case, “title by adverse possession can be acquired to the mineral rights, but all the essential ele- ments of adverse possession must exist .... The explora- tion for minerals and mining operations . . . must be open, notorious, continuous and hostile.’ McCoy v. Lowrie, 42 Wash. 2d 24, 26-27, 253 P.2d 415, 417 (1953). See Lehfeldt v. Adams, 130 Mont. 395, 303 P.2d 934 (1956). Mining for domestic purposes is insufficient to establish the requisite elements of adverse possession. Mountain Mission School, Inc. v. Buchanan Realty Corp., 207 Va. 518, 151 S.E.2d 403 (1966). Similarly, the occasional taking of minerals, White v. McNabb, 140 Ky. 828, 131 S.W. 1021 (App. 1910), or taking from “time to time,” Central Trust Co. v. Harless, 108 W. Va. 618, 152 S.E. 209 (1930), are likewise insufficient. Turning to the facts of this case, it is clear that as to the disputed minerals, Spurlock did not acquire title by adverse possession. First, with respect to helium, nitrogen and potash, Spurlock does not contend that he produced these minerals or gained title to them through adverse possession. Second, with respect to industrial clay and petrified wood, there is some evidence that Spurlock has taken these minerals off the land. This evidence shows, however, that the taking by Spurlock was intermittent and erratic and not of a sufficiently continuous nature to establish title by adverse possession. 14 Spurlock contends that because the deed conveyances of the lawsuit lands were void, his claim of title to the surface estate is predicated upon the doctrine of adverse possession. But this con- tention has been rejected. See Section III., supra. 29a B. Rule Against Perpetuities In light of our holding that title to the disputed sub- stances lies with Santa Fe Pacific, it is also necessary to address the propriety of the trial court’s ruling that Santa Fe Pacific’s reserved right to use the surface to locate and remove minerals is in reality a repurchase option which violates the rule against perpetuities and the rule against unreasonable restraints on alienation. Each of the deeds conveying the lawsuit lands to Spur- lock’s precedessors provided that Santa Fe Pacific re- served the right: [T]o use so much of the surface . . . as shall be necessary and convenient for shafts, wells, tanks, pipe lines, rights of way, railroad tracks, storage purposes, and other and different structures and pur- poses necessary and convenient for the digging, drill- ing and working of any mines or wells which may be operated on said lands. Grantor, or its successors or assigns, will pay to Grantee, or the legal repre- sentatives, heirs, successors or assigns of Grantee, a fixed price per acre for the surface of all lands appropriated under this exception and reservation, which price shall be equal to the average price per acre paid for all the lands above described, together with the fair value of the buildings and permanent improvements, if any, on the land the surface of which is so appropriated. If the parties cannot agree upon such fair value it shall be fixed by three ap- praisers, of whom each party shall appoint one and the two so appointed shall appoint the third. Little time need be spent in establishing that the fore going does not violate the rule against perpetuities or any rule prohibiting unreasonable restraints on aliena- tion. The reservation merely states what would otherwise be an implied right to reasonably use the surface in order al 30a to obtain “enjoyment” of the mineral estate. See Keviile v. Hollister Co., 29 Cal. App. 3d 203, 105 Cal. Rptr. 238 (1972). In short, the reservation is simply not an option to repurchase the fee title of the surface owner, as claimed by Spurlock, but rather merely a provision for compensation to the surface owner for the reserved right of use incidental to the mineral reservation. | V. CONCLUSION In conclusion, we hold that the mineral reservation is unambiguous and reflects the intent of the parties to completely sever the mineral estate from the surface estate. Thus, helium, nitrogen, potash, industrial clay and petrified wood are part of the mineral estate and have been reserved by Santa Fe Pacific.° With respect to sand and gravel, however, the trial court found that Santa Fe Pacific had abandoned its claim of ownership. Because Santa Fe Pacific has not disputed that ruling on appeal, the judgment granting title to the sand and gravel in Spurlock is affirmed. We further hold that the trial court erred in ruling that the deed reservation was void in its entirety because Santa Fe Pacific was dissolved de jure or de facto or that the conveyances were ultra vires. Additionally, Spurlock has not acquired the mineral estate by adverse possession. Furthermore, Santa Fe Pacific’s reserved right to use the surface for mining activities does not violate the rule against perpetuities nor does it constitute an unreasonable restraint on alienation. 15 Santa Fe Pacific has filed a motion for an award of attorney’s fees “incurred in that portion of the underlying action in the Superior Court relating” to its claim of title to the helium. Santa Fe Pacific’s claim for fees is based upon A.R.S. § 12-1103(B). We need not decide whether a prevailing defendant-counterclaimant in a quiet title action is entitled to fees because even if Santa Fe Pacific could establish its entitlement to fees, in the exercise of our discretion we would decline to award it fees. 3la Accordingly, we reserve the lower court’s judgments quieting title to helium, nitrogen, potash, industrial clay and petrified wood in Spurlock. We reverse the judg- ments of conversion against Santa Fe Pacific and Kerr- McGee. We affirm the judgment quieting title in sand and rock to Spurlock. On remand, the trial court is directed to enter judgments quieting title to helium, nitrogen, potash, industrial clay and petrified wood in Santa Fe Pacific. /s/ Bruce Meyerson BRUCE MEYERSON ' Judge CONCURRING: /s/ Levi Ray Haire LEVI RAY HAIRE Presiding Judge /3/ William E. Eubank WILLIAM E. EUBANK Judge 5 ; : ; | liieesineiaiiieeiians well 32a APPENDIX B SUPERIOR COURT OF ARIZONA APACHE COUNTY Nos. 4779 4910 4936 4961 4949 4998 RANSOM THEODORE SPURLOCK and VERNIE MARIA SPUR- LOCK, his wife; and CHARLES PATRICK SPURLOCK and NANCY JENEEN SPUPLOCK, his wife, Plaintiffs, vs. SANTA FE PACIFIC RAILROAD COMPANY, a corporation; and KERR-MCGEE CORPORATION, a Delaware corporation, Defendants. JUDGMENT (4779) (Helium) The plaintiffs, Ransom Theodore Spurlock and Vernie Maria Spurlock, his wife; and Charles Patrick Spurlock and Nancy Jeneen Spurlock his wife (‘Spurlocks”) brought this action against Santa Fe Pacific Railroad Company (“Santa Fe’) and Kerr-McGee Corporation (“Kerr-McGee’’) to quiet title to the helium located on or beneath the land owned by the Spurlocks which land 33a is located in Apache County, Arizona and is specifically described on the attached Exhibit A which is incorporated herein by reference thereto and to recover damages for the helium removed from the Exhibit A land. Among the many issues presented was the interpreta- tion and effect of a reservation clause which appeared in the deeds executed by Santa Fe to the Spurlocks’ prede- cessors in interest, to wit: Cowden Livestock Company, Grace Porter, and the partnership of Spurlock and Wetzler taken in the name of R.C. Spurlock and Georg- anna Spurlock which reservation clause appears on the attached Exhibit B. The Court ruled on August 22, 1977 that the re-entry clause contained in the first paragraph of the reserva- tion clause set forth on Exhibit B violated the common law rule against restraints upon alienation and the rule against perpetuities. After an eight month jury trial the Court submitted written interrogatories to the jury pursuant to Rule 39(1) ARCP on advisory issues and general verdict forms on the nonadvisory issues. The Court reserved unto itself certain legal issues concerning the validity and enforceability of the reservation clause on the an- nexed Exhibit B. The advisory issues submitted to the jury related to whether the parties to the transactions between Santa Fe and the persons and entities from whom the Spur- locks had acquired the Exhibit A land by mesne con- veyances, to wit: Cowden Livestock Company, Grace Porter and the partnership of Spurlock and Wetzler taken in the name of R.C. Spurlock and Georganna Spur- lock, (“Spurlocks’ predecessors in interest”) had a gen- eral or specific intent that Santa Fe was to be the owner of the helium located on or beneath the land described on the annexed Exhibit A and whether there existed a custom and usage under which a reservation of “all oil, 34a gas, coal and minerals whatsoever” reserved unto Santa Fe the helium located on or beneath the lands described on the annexed Exhibit A. On June 20, 1981, the jury determined in response to the written interrogatories that while the parties to the transactions between Santa Fe and the Spurlocks’ prede- cessors in interest did not have a mutually agreed upon specific intent regarding Santa Fe’s ownership of the helium the parties did have a general intent that Santa Fe was not the owner of the helium. The jury further found, in its answers to written interrogatories, that the terms used in the reservation clause, Exhibit B, were terms for which there was a custom and usage and that the custom and usage existed both in 1947 and 1951, being the dates of the transac- tions between Santa Fe and the Spurlocks’ predecessors in interest. Further, the jury found, in response to writ- ten interrogatories, that the custom and usage was ap- plicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest. Finally, the jury found, in the answers to written interrogatories, that under the custom and usage which existed a reservation of “all oil, gas, coal and minerals whatsoever,” could not reserve unto Santa Fe the helium located on or beneath the Exhibit A land. The jury returned a general verdict quieting title to the helium located on or beneath the Exhibit A land in the Spurlocks and assessed damages in the amount of Six Hundred Sixty-Four Thousand Five Hundred Two Dollars ($664,502.00) and punitive damages in the amount of Twenty Million Dollars ($20,000,000.00) against Santa Fe and damages in the amount of Two Hundred Fifty Thousand Three Hundred Five Dollars ($250,305.000) and punitive damages in the amount of Four Hundred Eighty-Seven Thousand Seven Hundred Thirty-Two Dollars ($487,732.00) against Kerr-McGee. After the jury returned its answers to interrogatories and its general verdict, the Court then ruled upon legal eee 35a issues affecting the validity and enforceability of the reservation clause (Exhibit B) in its entirety. The effect of the Court’s ruling on those issues was that the reservation clause is, as a matter of law, void and un- enforceable in its entirety. After the jury returned its verdict the Spurlocks filed a motion for prejudgment interest on the actual damages assessed against Santa Fe and Kerr-McGee. On Septem- ber 30, 1981, the Court granted the Spurlocks’ motion for prejudgment interest in the amount of Three Hundred Twenty-Seven Thousand Seven Hundred Thirty-Five Dol- lars ($327,735.00) as against Sante Fe and in the amount of One Hundred Twenty-Three Thousand Nine Hundred One Dollars ($123,901.00) as against Kerr-McGee. The Court further ruled that the prejudgment interest awarded by the Court would not be subject to post judgment interest . The Spurlocks, after the jury returned the verdict, moved to add Santa Fe Industries, Inc., (‘Industries’), a corporation, as a defendant for the purpose of entering judgment against it upon the ground that Santa Fe was merely an operating division and the alter ego of In- dustries. Industries had been previously joined as a de- fendant pursuant to an order of the Court dated June 27, 1980. However, the Court thereafter granted Indus- tries’ motion to dismiss it from the action before the trial commenced. The Court ruled on September 30, 1981, that the Court’s prior ruling dismissing Industries would not have been entered if the Court had then possessed the knowledge of the relationship between Industries and Santa Fe that was developed during the trial of the case. Further, the Court ruled that Santa Fe was the alter ego of Industries and that Industries had received a fraud- ulent transfer from Santa Fe but that Industries could not be added as a defendant for the entry of judgment. On September 30, 1981, the Court entered an order finding that the advisory answers to the interrogatories 36a submitted to the jury pursuant to Rule 39(1) ARCP were either consistent with, or not inconsistent with the Court’s findings on the same issues of fact and entered an order adopting the answers. Also, on September 30, 1981, the Court further entered an order that the answers of the jury to the written interrogatories were not inconsistent with the general verdict on the non advisory issues and directed the entry of judgment thereon. More than twenty (20) days prior to bringing the ac- tion to quiet the title to the helium, the Spurlocks had requested Santa Fe and Kerr-McGee to execute a quit claim deed thereto and tendered to each of Santa Fe and Kerr-McGee Five Dollars ($5.00) for execution and de- livery of the deed in compliance with A.R.S. § 12-1103.B., but each of Santa Fe and Kerr-McGee refused to execute the quit claim deed. After the trial of the case, the Spur- locks filed a motion for an award of attorney’s fees pur- suant to A.R.S. § 12-1103.B. The Court ordered an evi- dentiary hearing to determine whether the Spurlocks were entitled to attorney’s fees and the amount thereof. After the evidentiary hearing the Court read and considered ex- tensive memoranda filed by the Spurlocks, Kerr-McGee and Santa Fe. The Court then ruled that the Spurlocks were entitled to attorney’s fees in the amount of Four Hundred Thousand Dollars ($400,000.00) as against Santa Fe and Three Hundred Twenty-Five Thousand Dollars ($325,000.00) as against Kerr-McGee. Now, therefore, the Court having heard and seen all of the evidence, and having heard and considered all of the arguments of counsel, and having read and considered all of the briefs and memoranda submitted by the parties and being fully advised in the premises: IT IS ORDERED, ADJUDGED AND DECREED that the reservation clause which is set forth on the annexed Exhibit B and which appears in the deeds to the Exhibit A land from Santa Fe to the Spurlocks’ predecessors in interest is void and unenforceable in its entirety; and, 37a IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the parties to the deeds between Santa Fe and the Spurlocks’ predecessors in interest had a mutually agreed upon general intent as to which of them would own the helium located on or beneath the land described on Exhibit A and that the intended owner of the helium was not Santa Fe; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the terms used in the reservation clause con- tained in the deeds between Santa Fe and the Spurlocks’ predecessors in interest were terms for which there was a custom and usage, which custom and usage existed both in 1947 and in 1951, and further, that the custom and us- age was applicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest; and, further that a reservation of “all oil, gas, coal and minerals whatsoever” did not reserve title to the helium located on or beneath the land described on the attached Exhibit A; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the rights of reentry contained in the first paragraph of the reservation clause (Exhibit B) contained in the deeds from Santa Fe to the Spurlocks’ predecessors in interest violated the rule against restraints upon aliena- tion and the rule against perpetuities; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that Santa Fe is the alter ego of Industries and there were fraudulent transfers of property from Santa Fe to Industries; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the Spurlocks are the owners of all of the helium located on or beneath the lands described on the an- nexed Exhibit A and the title to said helium is hereby quieted in the Spurlocks and that Kerr-McGee and Santa Fe have no estate, title, or interest therein, and that the title to the helium in or under the land described on the 38a annexed Exhibit A is owned by the Spurlocks free and clear of any claim or claims whatsoever of Kerr-McGee or Santa Fe and each of Kerr-McGee and Santa Fe, and any persons claiming by, under or through them, are barred and forever estopped from claiming or having any estate, title, interest, lien or right in or to the helium in or under said land adverse to the Spurlocks; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the plaintiffs Spurlocks have and recover judgment against the defendant Santa Fe in the sum of Six Hundred Sixty-Four Thousand Five Hundred Two Dollars ($664,502.00) as and for actual damages; and the sum of Twenty Million Dollars ($20,000,000.00) as and for punitive damages, together with interest on the fore- going sums at the highest legal rate from June 20, 1981, until paid, together with the Spurlocks’ costs incurred herein and attorney’s fees in the amount of Four Hun- dred Thousand Dollars ($400,000.00), with the costs and attorney’s fees to bear interest at the highest legal rate from the date of this judgment until paid; plus the sum of Three Hundred Twenty-Seven Thousand Seven Hun- dred Thirty-Five Dollars ($327,735.00) as and for pre- judgment interest, which sum shall not bear interest; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that plaintiffs Spurlocks have and recover judg- ment against the Defendant Kerr-McGee in the sum of Two Hundred Fifty Thousand Three Hundred Five Dol- lars ($250,305.00) as and for actual damages, and the sum of Four Hundred Eighty-Seven Thousand Seven Hun- dred Thirty-Two Dollars ($487,732.00) as and for puni- tive damages, together with interest on the foregoing sums at the highest legal rate from June 20, 1981, until paid, together with the Spurlocks’ costs incurred herein and attorney’s fees in the amount of Three Hundred Twenty-Five Thousand Dollars ($325,000.00) with the costs and attorney’s fees to bear interest at the highest 39a legal rate from the date of this judgment until paid; plus prejudgment interest in the amount of One Hundred Twenty-Three Thousand Nine Hundred One Dollars ($123,901.00), which sum shall not bear interest. IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that judgment is awarded in favor of Santa Fe and Kerr-McGee and against the Spurlocks on Counts Three, Four, Five, Six and Seven of the Spurlocks’ Fourth Amended Complaint. The Court expressly determining herewith that there is no just reason for delay, the Court herewith expressly di- rects entry of the foregoing Judgment. DONE IN OPEN COURT this 24 day of May, 1982. /s/ Paul G. Rosenblatt THE HONORABLE PAUL G. ROSENBLATT Judge of the Superior Court 40a EXHIBIT “A” PROPERTY DESCRIPTION: PARCEL NO. 1: Lots 1, 2, 3, 4, 5, and 6; the North- east quarter of the Southwest quarter; the Southeast quarter of the Northwest quarter; the Southwest quarter of the Northeast quarter and the North half of the South- east quarter of the Northeast quarter of Section 6, Town- ship 17 North, Range 27 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. PAR( .L NO. 2: All of Sections 1, 3, 5, 7, 9, 11, 18, 15 and 17 and 19; the West half of the West half of Section 29, and all of Section 31, Township 18 North, Range 27 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. PARCEL NO. 8: Sections 1, 3, 4, 5, 6, 7, and 18 lying North of the Puerco Rim, in Township 18 North, Range 28 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. PARCEL NO. 4: All of Sections 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 28, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34 and 35, in Township 19 North, Range 27 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. PARCEL NO. 5: All of Sections 6, 7, and Southwest quarter of the Southeast quarter of Section 8, all of Sec- tions 13, 14, 15, 17, 18, 19, 21, 23, 24, 25, 27, 28, 29, 30, 31, 33, 34, and 35, Township 19 North, Range 28 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. PARCEL NO. 6: All of Section 1; the South half of Sec- tion 2; all of Section 3, EXCEPTING THEREFROM a strip of land 400 feet in width adjoining the Southeastly line of the 200 foot wide right of way of the Atchison, Topeka and Santa Fe Railway Company, extending across eas ee ie nen 1h Sins an NIN CN 4la said Section; all of Section 9, EXCEPTING THERE- FROM a strip of land 400 feet in width adjoining the Southeasterly line of the 200 foot wide right of way of the Atchison, Topeka and Santa Fe Railway Company, and a strip of land 100 feet in width adjoining the North- westerly line of the said 200 foot wide right of way of the Atchison, Topeka and Santa Fe Railway Company across the North half of said Section; all of Sections 10, 11, 12, 13, 14, and 15; all of Section 17, EXCEPTING THERE- FROM all of the triangular portion of the Northwest quarter of said Section 17 lying Northwest of the North- westerly line of the 200 foot wide right of way of the Atchison, Topeka and Santa Fe Railway Company; the East half of the Southeast quarter of the Northwest quar- ter; the North half of the Northeast quarter; and the Northwest quarter of the Southwest quarter of Section 18, Township 20 North, Range 27 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. EXCEPT all those portions of Section 18 describes as follows: The original 200 foot right of way of the Atchi- son, Topeka and Santa Fe Railroad; and EXCEPT a 100 foot strip of land adjoining the North- westerly line of the Atchison, Topeka and Santa Fe Rail- way Company’s 200 foot wide right of way and extend- ing across the North half of the Northeast quarter of said Section 18; and EXCEPT that portion of Lot 3 (Northwest quarter of the Southwest quarter) of said Section 18, lying be- tween said Northwesterly line of 200 foot right of way and a line drawn parallel from the Northeast corner of said Lot 3 to a point in the West line of said Lot, distant 200 feet Northwesterly at right angles from said 200 foot right of way, All of Sections 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34 and 35, all in Township 20 North, Range 27 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. 42a EXCEPT a strip of land 306 feet in width situated in the Northwest quarter of the Northwest quarter of Sec- tion 18, Township 20 North, Range 27 East of the Gila and Salt River Base and Meridian, Apache County, State of Arizona, lying within the right of way of the relocated Holbrook-Lupton Interstate Highway. Said strip of land lying 210 feet on the northwesterly side of and 96 feet on the Southeasterly side of the following described East- bound center line of said highway: BEGINNING at the point of intersection of the East- bound center line of the relocated Holbrock-Lupton In- terstate Highway with the West line of Section 28, at approximate Highway Engineer’s Station 825+-05, from whence the Northwest corner of said Section 28 bears Northerly approximately 520 feet; thence North 67 de- grees 09 minutes 00 seconds East traversing said Sec- tion 28 and Sections 21, 22 and 23 approximately 12,678 feet, to a point lying in said Section 25 at Highway En- gineer’s Station P.C. 951+83.34; thence Northeasterly along a 0 degrees 12 minute curve, concave to the North- west, a distance of 7808.34 feet, to Highway Engineer’s Station P.T. 1029+-91.68; thence North 51 degrees 32 minutes 00 seconds East traversing Section 13, a dis- tance of 3356.42 feet, to a point on the East line of said Section 13, at Highway Engineer’s Station P.O.T. 1063+-48.1, from whence the Northeast corner thereof bears Northerly 53.4 feet; thence continuing North 51 degrees 32 minutes 00 seconds East traversing Sections 18 and 7, a distance of 6914.3 feet, to a poirt on the East line of said Section 7, at Highway Engineer’s Station P.O.T. 1432+-62.4, from whence the Norsheast corner thereof bears Northerly 1231.3 feet. PARCEL NO. 7: All of Section 31, Township 20 North, Range 28 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. PARCEL NO. 8: All of Section 10, containing 640.00 acres, section 12, containing 640.00 acres and section 43a 14, containing 540.00 acres in Township 20 North, Range 26 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. PARCEL NO. 9: Section 7, containing 626.10 acres, and Lots 1, 2, 3, N-'4 NE-14, and E-% NW-1, Section 18, less original 200 foot right of way of the Atchison, Topeka and Santa Fe Railway Company, also less a 100 foot strip of land adjoining the northwesterly line of the Atehison, Topeka and Santa Fe Railway Company’s said 200 foot wide right of way and extending across the north half of the northeast quarter of said section 18, containing an area of 5.20 acres, more or less, and also less that portion of Lot 3 of said Section 18 lying be- tween said northwesterly line of 200 foot right of way and a line drawn from the northeast corner of said Lot 3 to a point in the west line of said lot distant 200 feet northwesterly at right angles from said 200 foot right of way, containing an area of 5.00 acres more or less, containing 238.25 acres. Containing in the aggregate eight hundred sixty-four and thirty-five hundredths (864.35) acres, more or less. Township 20 North, Range 27 East of the Gila and Salt River Base and Meridian, Apache County, Arizona. 44a EXHIBIT B Grantor expressly reserves and excepts all oil, gas, coal and minerals whatsoever, already found or which may hereafter be found, upon or under said lands, with the right to prospect for, mine and remove the same, and to use so much of the surface of said lands as shall be neces- sary and convenient for shafts, wells, tanks, pipe lines, rights of way, railroad tracks, storage purposes, and other and different structures and purposes necessary and con- venient for the digging, drilling and working of any mines or wells which may be operated on said lands. Grantor, or its successors or assigns, will pay to Grantee, or the legal representatives, heirs, successors or assigns of Grantee, a fixed price per acre for the surface of all lands appropriated under this exception and reservation, which price shall be equal to the average price per acre paid for all the lands above described, together with the fair value of the buildings and permanent improvements, if any, on the land the surface of which is so appropriated. If the parties cannot agree upon such fair value it shall be fixed by three appraisers, of whom each party shall appoint one and the two so appointed shall appoint the third. This conveyance is made subject to and upon condition that in the event that Grantor, or its successors or as- signs, or The Atchison, Topeka and Santa Fe Railway Company, or its successors or assigns, or any railroad company at least a majority of whose stock it owns, may any time hereafter desire to construct across the premises hereinabove described, any railroad tracks, telegraph and telephone lines, or other electric wire lines, oil or water pipe lines, roadways, ditches, flumes or aqueducts, or to operate on said premises gravel and ballast pits and quar- ries and take material therefrom for railroad purposes, the right of way for any such tracks, telegraph, telephone or other electric wire lines, pipe lines, roadways, ditches, flumes and aqueducts, of sufficient width for the proper Mai eel Dentin naa th 45a protection, maintenance and operation thereof, and the land necessary and convenient for the operation of such gravel and ballast pits and quarries and the taking of material therefrom for railroad purposes, may be appro- priated by any such Company desiring to construct such tracks, wire lines, pipe lines, roadways, ditches, flumes or aqueducts, or to operate such gravel and ballast pits and quarries, upon such Company paying or offering to pay to Grantee, or the legal representatives, heirs, successors or assigns of Grantee, a fixed price per acre for the land so appropriated, which price shall be equal to the average price per acre paid for all the land above described, to- gether with the fair value of all buildings and permanent improvements constructed upon the land so appropriated; and Grantee, or the legal representatives, heirs, suc- cessors or assigns of Grantee, will convey to such Company such appropriated right of way upon demand and tender of payment as aforesaid. 46a SUPERIOR COURT OF ARIZONA APACHE COUNTY Nos. 4779 4910 4936 4961 4949 4998 RANSOM THEODORE SPURLOCK and VERNIE MARIA SPUR- LOCK, his wife; and CHARLES PATRICK SPURLOCK and NANCY JENEEN SPURLOCK, his wife, Plaintiffs, vs. SANTA FE PACIFIC RAILROAD COMPANY, an corporation, Defendant. JUDGMENT (4998) (Sand and Gravel) The plaintiffs, Ransom Theodore Spurlock and Vernie Maria Spurlock, his wife; and Charles Patrick Spurlock and Nancy Jeneen Spurlock, his wife (“Spurlocks’’) brought an action against Santa Fe Pacific Railroad Com- pany (“Santa Fe’) to quiet title to the sand and gravel located on or beneath the land owned by the Spurlocks which land is located in Apache County, Arizona and is specifically described on the attached Exhibit A which is incorporated herein by reference thereto. Among the many legal and factual issues presented was the interpretation and effect of a reservation clause which 47a appeared in the deeds executed by Santa Fe to the Spur- locks’ predecessors in interest, to wit: Cowden Live- stock Company, Grace Porter, and the partnership of Spurlock and Wetzler taken in the name of R.C. Spur- lock and Georganna Spurlock which reservation clause appears on the attached Exhibit B. Santa Fe admitted that the only interest it claimed in the sand and gravel located on the Exhibit A land was the right to take sand and gravel for railroad purposes under the second paragraph of the reservation clause on Exhibit B. After an eight month jury trial the Court submitted a written interrogatory to the jury pursuant to Rule 39 (1) ARCP on the advisory issue and general verdict forms. The Court reserved unto itself certain legal issues con- cerning the validity and enforceability of the reserva- tion clause on the annexed Exhibit B. inate > nla inant The advisory issue submitted to the jury related to whether Santa Fe had abandoned any right it may have had under the reservation clause, Exhibit B, to take sand and gravel for railroad purposes from the Exhibit A land. On June 20, 1981, the jury determined in response to the written interrogatory that Santa Fe had abandoned any right it may have had to take sand and gravel for railroad purposes. The jury returned a general verdict quieting title to the sand and gravel located on or beneath the Exhibit A land in the Spurlocks. After the jury returned its answer to the interrogatory and its general verdict the Court then ruled upon legal issues affecting the validity and enforceability of the res- ervation clause (Exhibit B) in its entirety. The effect of the Court’s ruling on those issues was that the reserva- tion clause is, as a matter of law, void and unenforce- 48a able in its entirety. The Court further ruled on September 30, 1981, that Santa Fe was the alter ego of Santa Fe Industries, its parent company, and that Santa Fe In- dustries received fraudulent transfer from Santa Fe. On September 30, 1981, the Court entered an order finding that the advisory answer to the interrogatory submitted to the jury pursuant to Rule 39(1) ARCP was either consistent with, or not inconsistent with the Court’s finding on the same issue of fact and entered an order adopt.ng the answer. Also, on September 30, 1981, the Court further entered an order that the answer of the jury to the written interrogatory was not inconsistent with the general verdict and directed the entry of judg- ment thereon, More than twenty (20) days prior to bringing the ac- tion to quiet the title to the sand and gravel and Spur- locks had requested Santa Fe to execute a quit claim deed thereto and tendered to Santa Fe Five Dollars ($5.00) for execution and delivery of the deed in com- pliance with A.R.S. § 12-1103.B but Santa Fe refused to execute the quit claim deed. After the trial of the case the Spurlocks filed a motion for the award of attorney’s fees pursuant to A.R.S. § 12-1103.B. The Court ordered an evidentiary hearing to determine whether the Spur- locks were entitled to attorney’s fees and the amount thereof. After the evidentiary hearing the Court read and considered extensive memoranda filed by the Spurlocks and Santa Fe. The Court then ruled that the Spurlocks were entitled to attorney’s fees in the amount of One Hundred Twenty-Five Thousand Dollars ($125,000.00). Now, therefore, the Court having heard and seen all of the evidence, and having heard and considered all of the arguments of counsel, and having read and considered all of the briefs and memoranda submitted by the parties and being fully advised in the prernises: IT IS ORDERED, ADJUDGED AND DECREED that the reservation clause which is set forth in the annexed 49a Exhibit B and which appears in the deeds to the Exhibit A land from Santa Fe to the Spurlocks’ predecessors in interest is void and unenforceable in its entirety; and IT IS FURTHERED ORDERED, ADJUDGED AND DECREED that Santa Fe has abandoned any right it may have had to take sand and gravel for railroad pur- poses; and IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the Spurlocks are the owners of all of the sand and gravel located on or beneath the land described on the annexed Exhibit A and the title to such sand and gravel is hereby quieted in the Spurlocks and Santa Fe has no estate, title or interest therein, and the title to the sand and gravel in or under the land described in the attached Exhibit A is owned by the Spurlocks and any persons claiming by, under or through it, are barred and forever estopped from claiming or having any estate, title, interest or right in or to the sand and gravel in or under said land adverse to the Spurlocks. IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the Spurlocks have and recover judgment against Santa Fe in the sum of One Hundred Twenty- Five Thousand Dollars ($125,000.00) as and for attor- ney’s fees, together with interest thereon at the rate of ten percent (10%) per annum from the date of this judgment. IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the Spurlocks have and recover from Santa Fe all of their costs. The Court expressly determining herewith that there is no just reason for delay expressly directs entry of the foregoing judgment. DONE IN OPEN COURT this 24 day of May, 1982. /s/ Paul G. Rosenblatt THE HONORABLE PAUL G. ROSENBLATT Judge of the Superior Court 50a SUPERIOR COURT OF ARIZONA APACHE COUNTY Nos. 4779 4910 4936 4961 4949 4998 SANTA FE PACIFIC RAILROAD COMPANY, a corporation, Plaintiff, and Counterdefendant, vs. RANSOM THEODORE SPURLOCK and VERNIE MARIA SPUR- LOCK, his wife; and CHARLES PATRICK SPURLOCK and ' NANCY JENEEN SPURLOCK, his wife, Defendants and Counterclaimants. JUDGMENT (4910) (Nitrogen) The plaintiff and counterdefendant, Santa Fe Pacific Railroad Company (“Santa Fe’) brought an action to quiet title to the nitrogen located on or beneath land owned by the defendants and counterclaimants, Ransom Theodore Spurlock and Vernie Maria Spurlock, his wife; and Charles Patrick Spurlock and Nancy Jeneen Spur- lock, his wife, (“Spurlocks”) which land is located in Apache County, Arizona and is specifically described on iP a a 1 la 5la the attached Exhibit A which is incorporated herein by reference thereto. The Spurlocks, in their counterclaim, sought to have the title to the nitrogen quieted in them. Among the many legal and factual issues presented was the interpretation and effect of a reservation clause which appeared in the deeds executed by Santa Fe to the Spurlocks’ predecessors in interest which reservation clause appears on the attached Exhibit B. The Court ruled on August 22, 1977 that the re-entry claus: contained in the first paragraph of the reserva- tion clause set forth on Exhibit B violated the common law rule against restraints upon alienation and the rule against perpetuities. After an eight month jury trial the Court submitted written interrogatories to the jury pursuant to Rule 39(1) ARCP on advisory issues and general verdict forms. The Court reserved unto itself certain legal issues concerning the validity and enforceability of the reserva- tion clause on the annexed Exhibit B. The interrogatories submitted to the jury related to whether the parties to the transactions between Santa Fe and the persons and entities from whom the Spurlocks had acquired the Exhibit A land by mesne conveyances, to-wit: Cowden Livestock Company, Grace Porter and the partnership of Spurlock and Wetzler taken in the name of R.C. Spurlock and Georganna Spurlock, (“Spur- locks’ predecessors in interest’) had a general or specific intent that Santa Fe was to be the owner of the nitrogen located on or beneath the land described on the annexed Exhibit A and whether there existed a custom and usage under which a reservation of “all oil, gas, coal and minerals whatsoever” reserved unto Santa Fe the nitro- gen located on or beneath the lands described on the annexed Exhibit A. On June 20, 1981 the jury determined in response to the written interrogatories that the parties to the trans- 52a actions between Santa Fe and the Spurlocks’ predecessors in interest had no mutually agreed upon specific intent as to which of them would own the nitrogen but did have general intent that Santa Fe was not to own the nitrogen located on or beneath the Exhibit A land. The jury further found, in its answers to written interrogatories, that the terms used in the reservation clause, Exhibit B, were terms for which there was a custom and usage and that the custom and usage existed both in 1947 and 1951, being the date of the agreements for sale and the deeds between Santa Fe and the Spur- locks’ predecessors in interest. Further, the jury found, in response to the written interrogatories, that the cus- tom and usage was applicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest. Finally, the jury found, in the answers to written in- terrogatories that under the custom and usage which existed a reservation of “all oil, gas, coal and minerals whatsoever” could not reserve unto Santa Fe the nitro- gen located on or beneath the Exhibit A land. The jury returned a general verdict quieting title to the nitrogen located on or beneath the Exhibit A land in the Spurlocks. After the jury returned its answers to interrogatories and its general verdict the Court then ruled upon legal issues affecting the validity and enforceability of the reservation clause (Exhibit B) in its entirety. The effect of the Court’s ruling on those issues was that the reserva- tion clause is, as a matter of law, void and unenforce- able in its entirety. On September 30, 1981 the Court entered an order finding that the advisory answers to the interrogatories submitted to the jury pursuant to Rule 39(1) ARCP were either consistent with, or not inconsistent with the Court’s findings on the same issues of fact and entered 53a an order adopting the answers. Also, on September 30, 1981 the Court further entered an order that the answers of the jury to the written interrogatories were not in- consistent with the general verdict and directed the entry of judgment thereon. Now, therefore, the Court having heard and seen all of the evidence, and having heard and considered all of the arguments of counsel and having read and considered all of the briefs and memorandum submitted by the parties and being fully advised in the premises: IT IS ORDERED, ADJUDGED AND DECREED that the reservation clause which is set forth on the annexed Exhibit B and which appears in the deeds to the Exhibit A land from Santa Fe to the Spurlocks’ predecessors in interest, is void and unenforceable in its entirety; and, IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the parties to the deeds between Santa Fe and the Spurlocks’ predecessors in interest had a mutually agreed upon general intent as to which of them would own the nitrogen located on or beneath the land described on Exhibit A and that the intended owner of the nitrogen was not Santa Fe; and, IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the terms used in the reservation clause contained in the deeds between Santa Fe and the Spur- locks predecessors in interest were terms for which there was a custom and usage, which custom and usage existed both in 1947 and in 1951, and further, that the custom and usage was applicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest; and, further that a reservation of “all oil, gas, coal and minerals whatsoever” did not reserve title to the nitrogen located on or beneath the land described on the attached Exhibit A; and, IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the right of re-entry contained in the 54a first paragraph of the reservation clause (Exhibit B) contained in the deeds from Santa Fe to the Spurlocks’ predecessors in interest violated the common law rule against restraints upon alienation and the rule against perpetuities and, is therefore, void; and, IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Spurlocks are the owners of all of the nitrogen located on or beneath the land described on the annexed Exhibit A and the title to such nitrogen is hereby quieted in the Spurlocks and Santa Fe has no estate, title or interest therein, and the title to the nitro- gen in or under the land described on the attached Exhibit A is owned by the Spurlocks free and clear of any claim or claims whatsoever of Santa Fe, and any persons claiming by, under or through it, are barred and forever estopped from claiming or having any estate, title, interest, or right in or to the nitrogen in or under said land adverse to the Spurlocks. IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Spurlocks are awarded their costs herein. The Court expressly determining herewith that there is no just reasons for delay expressly directs entry of the foregoing judgment. DONE IN OPEN COURT this 24 day of May, 1982. /s/ Paul G. Rosenblatt PAUL G. ROSENBLATT Judge of Superior Court 55a IN THE SUPERIOR COURT OF THE STATE OF ARIZONA IN AND FOR THE COUNTY OF APACHE Nos. 4779 4910 4936 4949 4961 4998 SANTA FE PACIFIC RAILROAD COMPANY, a corporation, Plaintiff /Counterdefendant, VS. RANSOM THEODORE SPURLOCK and VERNIE MARIA SPuUR- LOCK, his wife; and CHARLES PATRICK SPURLOCK and NANCY JENEEN SPURLOCK, his wife, Defendants/Counterclaimants. JUDGMENT (4949) (Petrified Wood ) The Plaintiff/Counterdefendant, SANTA FE PA- CIFIC RAILROAD COMPANY (“Santa Fe”) brought an action to quiet title to the petrified wood located on or beneath land owned by the Defendants/Counterclaimants, RANSOM THEODORE SPURLOCK and VERNIE MARIA SPURLOCK, his wife; and CHARLES PAT- RICK SPURLOCK and NANCY JENEEN SPURLOCK, his wife, (“Spurlocks”)' which land is located in Apache 56a County, Arizona, and is specifically described on the attached Exhibit A which is incorporated herein by reference thereto. The Spurlocks, in their Counterclaim, sought to have the title to the petrified wood quieted to them. Among t’ 2 many legal and factual issues presented was the interpretation and effect of a reservation clause which appeared in the deeds executed by Santa Fe to the Spur- locks’ predecessors in interest which reservation clause appears on the attached Exhibit B. The Court ruled on August 22, 1977, that the re-entry clause contained in the first paragraph of the reserva- tion clause set forth in Exhibit B violated the common law rule against restraints upon alienation and the rule against perpetuities. After an eight month jury trial, the Court submitted written interrogatories to the jury, pursuant to Rule 39(1) Arizona Rules of Civil Procedure, on advisory issues and general verdict forms. The Court reserved unto itself certain legal issues concerning the validity and enforceability of the reservation clause on the an- nexed Exhibit B. The advisory issues submitted to the jury related to whether the parties to the transactions between Santa Fe ana the persons and entities from whom the Spurlocks had acquired the Exhibit A land by mesne conveyance, to-wit: Cowden Livestock Company, Grace Porter and the partnership of Spurlock and Wetzler taken in the name of R. C. Spurlock and Georganna Spurlock, (“Spur- locks’ predecessors in interest”) had a general or specific intent that Santa Fe was to be the owner of the petrified wood located on or beneath the land described in the annexed Exhibit A and whether there existed a custom and usage under which a reservation of “all oil, gas, coal and minerals whatsoever” reserved unto Santa Fe the petrified wood located on or beneath the land described on the annexed Exhibit A. Milt MO aa Be the ee TT ee 57a On June 20, 1981, the jury determined in response to the written interrogatories that the parties to the trans- actions between Santa Fe and the Spurlocks’ predecessors in interest had a mutually agreed upon specific intent that Santa Fe was not to own the petrified wood located on or beneath the Exhibit A land. The jury further found, in its answers to written interrogatories, that the terms used in the reservation clause, Exhibit B, were terms for which there was a custom and usage and that the custom and usage existed both in 1947 and 1951, being the dates of the agreements for sale and the deeds between Santa Fe and the Spur- locks’ predecessors in interest. Further, the jury found, in response to the written interrogatories, that the cus- tom and usage was applicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest. Finally, the jury found in the answers to written inter- rogatories that under the custom and usage which existed a reservation of “all oil, gas, coal and minerals whatso- ever” could not reserve unto Santa Fe the petrified wood located on or beneath the Exhibit A land. The jury returned a general verdict quieting title to the petrified wood located on or beneath the Exhibit A land in the Spurlocks. After the jury returned its answers to interrogatories and its general verdict, the Court then ruled upon legal issues affecting the validity and enforceability of the reservation clause (Exhibit B) in its entirety. The effect of the Court’s ruling on those issues was that the reserva- tion clause is, as a matter of law, void and unenforceable in its entirety. On September 30, 1981, the Court entered an Order finding that the advisory answers to the interrogatories submitted to the jury pursuant to Rule 39(1), Arizona Rules of Civil Procedure, were either consistent with, or not inconsistent with the Court’s findings on the same 58a issues of fact and entered an Order adopting the answers. Also, on September 30, 1981, the Court further entered an Order that the answers of the jury to the written interrogatories were not inconsistent with the general verdict and directed the entry of judgment thereon. Now, therefore, the Court having heard and seen all of the evidence, and having heard and considered all of the arguments of counsel, and having read and considered all of the briefs and memoranda submitted by the: par- ties, and being fully advised in the premises: IT IS ORDERED, ADJUDGED AND DECREED that the reservation clause which is set forth on the annexed Exhibit B and which appears in the deeds to the Exhibit A land from Santa Fe, to the Spurlocks’ predecessors in interest, is void and unenforceable in its entirety; and IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the parties to the deeds between Santa Fe and the Spurlocks’ predecessors in interest had a mutually agreed upon specific intent as to which of them would own the petrified wood located on or beneath the land described on Exhibit A and that the intended own- ers of the petrified wood was not Santa Fe; and IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the terms used in the reservation clause contained in the deeds between Santa Fe and the Spur- locks’ predecessors in interest were terms for which there was a custom and usage, which custom and usage existed both in 1947 and 1951, and further, that the custom and usage was applicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest; and, un- der such custom and usage, a reservation of “all oil, gas, coal and minerals whatsoever” did not reserve title to the petrified wood located on or beneath the land de- scribed on the attached Exhibit A; and IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the right of reentry contained in the ye 59a first paragraph of the reservation clause (Exhibit B) contained in the decds from Santa Fe to the Spurlocks’ predecessors in interest violated the common law rule against restraints upon alienation and the rule against perpetuities and, is therefore void; and, IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Spurlocks are the owners of all of the petrified wood located on or beneath the land de- scribed on the annexed Exhibit A and the title to such petrified wood is hereby quieted in the Spurlocks and Santa Fe has no estate, title or interest therein, and the title to the petrified wood in or under the land described in the attached Exhibit A is owned by the Spurlocks free and clear of any claim or claims whatsoever of Santa Fe and any persons claiming by, under or through it, are barred and forever estopped from claiming or having any estate, title, interest, or right in or to the petrified wood in or under said land adverse to the Spurlocks. IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Spurlocks are awarded their costs incurred herein. The Court expressly determining herewith that there is no just reason for delay expressly di ects entry of the foregoing Judgment. DONE IN OPEN COURT this 24 day of May, 1982. /s/ Paul G. Rosenblatt THE HONORABLE PAUL G. ROSENBLATT Judge of the Superior Court 60a SUPERIOR COURT OF ARIZONA APACHE COUNTY Nos. 4779 4910 4936 4949 4961 4998 SANTA FE PACIFIC RAILROAD COMPANY, a corporation, Plaintiff and Counterdefendant, vs. RANSOM THEODORE SPURLOCK and VERNIE MARIA SPUR- LOCK, his wife; and CHARLES PATRICK SPURLOCK and NANCY JENEEN SPURLOCK, his wife, Defendants and Counterclaimants. , JUDGMENT (4961) (Clay) The plaintiff and counterdefendant, Santa Fe Pacific Railroad Company (“Santa Fe”) brought an action to quiet title to the clay located on or beneath the land owned by the defendants and counterclaimants, Ransom Theodore Spurlock and Vernie Maria Spurlock, his wife; and Charles Patrick ‘Spurlock and Nancy Jeneen Spur- lock, his wife, (“Spurlocks”) which land is located in Apache County, Avizona and is specifically described on the attached Exhibit A which is incorporated herein by reference thereto. The Spurlocks, in their counterclaim, sought to have the title to the clay quieted in them. 6la Among the many legal and factual issues presented was the interpretation and effect of a reservation clause which appeared in the deeds executed by Santa Fe to the Spur- locks’ predecessors in interest which reservation clause appears on the attached Exhibit B. The Court ruled on August 22, 1977, that the re entry clause contained in the first paragraph of the reser- vation clause set forth in Exhibit B violated the common law rule against restraints upon alienation and the rule against perpetuities. After an eight month jury trial the Court submitted written interrogatories to the jury: pursuant to Rule 39(1) ARCP on advisory issues ind general verdict forms. The Court reserved unto itself certain legal issues concerning the validity and enforceability of the reservation clause on the annexed Exhibit B. The interrogatories submitted to the jury related to whether the parties to the transactions between Santa Fe and the persons and entities from whom the Spur- locks had acquired the Exhibit A land by mesne convey- ances, to-wit: Cowden Livestock Company, Grace Porter and the partnership of Spurlock and Wetzler taken in the name of R. C. Spurlock and Georganna Spurlock, (“Spur- locks’ predecessors in interest”) had a general or specific intent that Santa Fe was to be the owner of the clay located on or beneath the land described on the annexed Exhibit A and whether there existed a custom and usage under which a reservation of “all oil, gas, coal and min- erals whatsoever” reserved unto Santa Fe the clay located on or beneath the land described on the annexed Exhibit A. On June 20, 1981, the jury determined in response to the written interrogatories that the parties to the trans- actions between Santa Fe and the Spurlocks’ predecessors in interest had a mutually agreed upon specific intent 62a that Santa Fe was not to own the clay located on or be- neath the Exhibit A land. The jury further found, in its answers to written in- terrogatories, that the terms used in the reservation clause, Exhibit B, were terms for which there was a custom and usage and that the custom and usage existed both in 1947 and 1951, being the date of the agreement for sale and the deeds between Santa Fe and the Spur- locks’ predecessors in interest. Further the jury found, in response to the written interrogatories, that the custom and usage was applicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest. Finally, the jury found, in the answers to written inter- rogatories, that under the custom and usage which existed a reservation of “all oil, gas, coal and minerals whatso- ever” could not reserve unto Santa Fe the clay located on or beneath the Exhibit A land. The jury returned a general verdict quieting title to the clay located on or beneath the Exhibit A land in the Spurlocks. After the jury returned its answers to interrogatories and its general verdict the Court then ruled upon legal issues affecting the validity and enforceability of the reser- vation clause (Exhibit B) in its entirety. The effect of the Court’s ruling on those issues was that the reservation clause is, as a matter of law, void and unenforceable in its entirety. On September 30, 1981 the Court entered an order finding that the advisory answers to the interrogatories submitted to the jury pursuant to Rule 39/1) ARCP were either consistent with, or not inconsistent with the Court’s findings on the same issues of fact and entered an order adopting the answers. Also, on September 30, 1981, the Court further entered an order that the answers to the jury to the written interrogatories were not incon- sistent with the general verdict and directed the entry of judgment thereon. 63a Now, therefore, the Court having heard and seen all of the evidence, and having heard and considered all of the arguments of counsel and having read and considered all of the briefs and memoranda submitted by the parties and being fully advised in the premises: IT IS ORDERED, ADJUDGED AND DECREED that the reservation clause which is set forth on the annexed Exhibit B and which appears in the deeds to the Exhibit A land from Santa Fe to the Spurlocks’ predecessors in in- terest is void and unenforceable in its entirety; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the parties to the deeds between Santa Fe and the Spurlocks’ predecessors in interest had a mutually agreed upon specific intent as to which of them would own the clay located on or beneath the land described on Exhibit A and that the intended owner of the clay was not Santa Fe; and, IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the terms used in the reservation clause con- tained in the deeds between Santa Fe and the Spurlocks’ predecessors in interest were terms for which there was a custom and usage, which custom and usage existed both in 1947 and in 1951, and further, that the custom and usage was applicable to the transactions between Santa Fe and the Spurlocks’ predecessors in interest; and, fur- ther that a reservation of “all oil, gas, coal and minerals whatsoever” did not reserve title to the clay located on or beneath the land described on the attached Exhibit A; and IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the right of re-entry contained in the first paragraph of the reservation clause (Exhibit B) con- tained in the deeds from Santa Fe to the Spurlocks’ prede- cessors in interest violated the common law rule against restraints upon alienation and the rule against perpetui- ties and, is therefore, void; and, 64a IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the Spurlocks are the owners of all of the clay located on or beneath the land described on the annexed Exhibit A and the title to such clay is hereby quieted in the Spurlocks and Santa Fe has no estate, title or interest therein, and the title to the clay in or under the land described in the attached Exhibit A is owned by the Spurlocks free and clear of any claim or claims what- soever of Santa Fe and any persons claiming by, under or through it, are barred and forever estopped from claiming or having any estate, title, interest, or right in or to the clay in or under said land adverse to the Spurlocks. IT IS FURTHER ORDERED, ADJUDGED AND DE- CREED that the Spurlocks are awarded their costs in- curred herein. The Court expressly determined herewith that there is no just reason for delay expressly directs entry of the foregoing judgment. DONE IN OPEN COURT this 24 day of May, 1982. /3/ Paul G. Rosenblatt PAUL G. ROSENBLATT Judge of Superior Court 65a APPENDIX C [SEAL] SUPREME COURT STATE OF ARIZONA 201 - West Wing Capitol Building (602) 255-4536 Phoenix 85007 January 30, 1985 RE: SPURLOCK et ux et al vs. SANTA FE PACIFIC RAIL- ROAD COMPANY et al Supreme Court No. 17849-PR Court of Appeals No. 1 CA-CIV 6938 Apache County Nos. C-4779, C-4910, C-4936, C-4961, C-4949 & C-4998 (Consolidated) GREETINGS: The following action was taken by the Supreme Court of the State of Arizona on January 29, 1985, in regard to the above-referenced cause: “ORDERED: Petition for Review — DENIED. Justices Gordon and Cameron did not participate in the determination of this matter.” Record returned to the Court of Appeals, Division One, Phoenix, this 30th day of January, 1985. S. ALAN Cook, Clerk To: Jack E. Evans, Esq. Philip E. von Ammon, Esq., Donald R. Gilbert, Esq., and Timothy Berg, Esq., Fennemore, Craig, von Ammon, Udall & Powers Robert L. Palmer, Esq., Ronald Kilgard, Esq., and James A. Bush, Esq., Martori, Meyer, Hendricks & Victor Glen D. Clark, Clerk, Court of Appeals, Division One eh 66a APPENDIX D ee [SEAL] | SUPREME COURT STATE OF ARIZONA 201 - West Wing Capitol Building (602) 255-4536 Phoenix 85007 March 6, 1985 Bid Fi RE: SPURLOCK vs. SANTA FE PACIFIC RAILROAD COMPANY et al Supreme Court No. 17849-PR Court of Appeals No. CA-CIV 6938 Apache County Nos. C-4779, C-4910, C-4936, C-4961, C-4949 & C-4998 (Consolidated ) GREETINGS: The following action was taken by the Supreme Court of the State of Arizona on March 5, 1985, in regard to the above-referenced cause: “ORDERED: Petition to Recall Mandate — DENIED. FURTHER ORDERED: Motion for Permission to file Motion for Reconsideration of Order Denying Petition for Review — DENIED. 4 FURTHER ORDERED: Motion for Reconsidera- tion —= DENIED as moot. Justice Feldman voting to grant petition to recall mandate. Justices Gordon and Cameron did not participate in the determination of this matter.” 67a S. ALAN Cook, Clerk To: Jack E. Evans, Esq., Jack E. Evans, Ltd. Philip EL. von Ammon, Esq., Donald R. Gilbert, Esq., and Timothy Berg, Esq., Fennemore, Craig, von Ammon, Udall & Powers Robert L. Palmer, Esq., Ronald Kilgard, Esq., and James A. Bush, Esq., Martori, Meyer Hendricks & Victor eh 68a APPENDIX E [SEAL] SUPREME COURT STATE OF ARIZONA 201 - West Wing Capitol Building (602) 255-4536 Phoenix 85007 27 March 1985 RE: SPURLOCK et al vs. SANTA FE PACIFIC RAILROAD COMPANY et al Supreme Court No. 17849-PR Court of Appeals No. 1 CA-CIC 6938 Apache County Nos. C-4779, 4910, 4936, 4961, 4949 & 4998 (Consolidated ) GREETINGS: The following action was taken by the Supreme Court of the State of Arizona on March 26, 1985, in regard to the above-referenced cause: “ORDERED: Motion for Reconsideration = DENIED. Justices Gordon and Cameron did not participate in the determination of this matter.” S. ALAN Cook, Clerk To: Jack E. Evans, Esa. Philip E. von Ammon, Esq., Donald R. Gilbert, Esq., and Timothy Berg, Esq., Fennemore, Craig, von Ammon, Udall & Powers Robert L. Palmer, Esq., Ronald Kilgard, Esq., and James A. Bush, Esq., Martori, Meyer, Hendricks & Victor pgk tae RRM AN Nell cles Seatac Date ara) a hele ele al ahh he Mie 69a APPENDIX F CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVED Section 1 of the Fourteenth Amendment to the Con- stitution of the United States provides: Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immu- nities of citizens of the United States; nor shall any State deprive any person of life, liberty, or prop- erty, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. The Act of Congress of July 27, 1866, ch. 278, 14 Stat. 292, provides: CHAP. CCLXXVIII.—An Act granting Lands to aid in the Construction of a Railroad and Telegraph Line from the States of Missouri and Arkansas to the Pacific Coast. Be it enacted by the Senate and House of Representa- tives of the United States of America in Congress as- sembled, That John B. Brown, [et al.] * * *; and all such other persons who shall or may be associated with them, and their successors, are hereby created and erected into a body corporate and politic, in deed and in law, by the name, style, and title of the “Atlantic and Pacific Railroad Company,” and by that name shall have perpetual succession, and shall be able to sue and be sued, plead and be impleaded, defend and be defended, in all courts of law and equity within the United States, 70a and may make and have a common seal. And said cor- poration is hereby authorized and empowered to lay out, locate, and construct, furnish, maintain, and enjoy, a continuous railroad and telegraph line, with the appurte- nances, namely: Beginning at or near the town of Springfield, in the State of Missouri, thence to the west- ern boundary line of said State, and thence by the most eligible railroad route as shall be determined by said company to a point on the Canadian River, thence to the town of Albuquerque, on the River Del Norte, and thence, by way of the Agua Frio, or other suitable pass, to the head-waters of the Colorado Chiquito, and thence, along the thirty-fifth parallel of latitude, as near as may be found most suitable for a railway route, to the Colorado River, at such point as may be be selected by said com- pany for crossing; thence by the most practicable and eligible route, to the Pacific. The said company shall have the right to construct a branch from the point at which the road strikes the Canadian River eastwardly, along the most suitable route as selected, to a point in the western boundary line of Arkansas, at or near the town of Van Buren. And the said company is hereby vested with all the powers, privileges, and immunities neces- sary to carry into effect the purposes of this act, as herein set forth. The capital stock of said company shall consist of one million shares of one hundred dollars each, which shall in all respects be deemed personal property, and shall be transferable in such manner as the laws of said corporation shall provide. The persons hereinbefore named are hereby appointed commissioners, and shall be called the board of commissioners of the “Atlantic and Pacific Railroad Company,” and fifteen shall constitute a quorum for the transaction of business. The first meet- ing of said board of commissioners shall be held at the Turner Hall, in the city of Saint Louis, on the first day of October, anno Domini eighteen hundred and sixty-six, or at such time within three months thereafter as any ten commissioners herein named from Missouri shall ein lt te ih eee ee ee ee a 7Tla appoint, notice of which shall be given by them to the other commissioners by publishing said notice in at least one daily newspaper in the cities of Boston, New York, Cincinnati, Saint Louis, Memphis, and Nashville, once a week for at least four weeks previous ‘o the day of meet- ing. Said board shall organize by the choice from its number of a president, vice-president, secretary, and treasurer, and they shall require from said treasurer such bonds as may be deemed proper, and may from time to time increase the amount thereof, as they may deem proper. The secretary shall be sworn to the faithful per- formance of his duties, and such oath shall be entered upon the records of the company, signed by him, and the oath verified thereon. The president and secretary of said boards shall, in like manner, call [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0148%3A2. Public record. Not legal advice.