Face Challenges Confidently

393 State v. Cemex Const. Materials South, L.L.C.

Thursday, September 3rd, 2015

Richard F. Brown

The following is not a legal opinion.  You should consult your attorney if the case may be of significance to you.
State v. Cemex Const. Materials South, L.L.C., 350 S.W.3d 396 (Tex. App.–El Paso 2011, pet. granted, judgm’t vacated w.r.m.)held that all deposits of granite, limestone, gravel, sand, and any other mineral substances of whatever kind or character having commercial value on public school lands are reserved to the State of Texas if originally conveyed pursuant to the Mining Act of 1895.  Four parcels (Section 22 and Surveys 271, 221, and 222) in El Paso County were set apart for the benefit of public schools.  The State originally conveyed the four parcels in 1900, 1906, and 1912 to predecessors of Cemex Construction Materials South, L.L.C. (“Cemex”).  All four parcels were classified as dry grazing mineral land.  Section 22 was conveyed with no mineral reservation.  Surveys 271, 221, and 222 were conveyed with a reservation of 1/16 of the minerals.  The State alleged that the State owned title to all minerals under the 1895 Land Sales Act and Title LXXI of the Mining Act of 1895.  Cemex alleged that dirt, caliche, sand, gravel, limestone, and the other materials at issue were not “minerals” reserved to the State.
The parcels were designated as public school lands, and the law in existence at the time of the original conveyances applied to their sales.   At the time of the original conveyances, the Land Sales Act of 1895 and the Mining Act of 1895 were in effect.  The Mining Act of 1895 stated that public school lands designated as containing valuable mineral deposits had to be purchased “under regulations prescribed by law . . . .”  All sales of public school lands were subject to a reservation of the mineral estate.
In analyzing and applying the law outlined above, the El Paso Court of Appeals looked to Schwarz v. State for guidance.  Schwarz also involved land designated as containing minerals that was sold pursuant to the Land Sales Act of 1895.  There, the original conveyance by the State was subject to a reservation of the mineral estate.  Over forty years after the original conveyance, the State again provided notice of the mineral estate reservation to the land owners by way of letters patent.  After another thirty-one years passed, the land owners executed a lease for the extraction of coal and lignite.  The leaseholder, Schwarz, later sought a declaration that he owned the minerals he had extracted pursuant to the lease.  Looking at the law in effect at the time of the original conveyance, the Supreme Court of Texas determined that the State retained the mineral estate.  Further clarifying the extent of the mineral estate reserved by the State, the Schwarz court held that “whatever is not unequivocally granted in clear and explicit terms is withheld and any ambiguity or obscurity in the terms of the statute, such as the term ‘the minerals,’ must be interpreted in favor of the State.”
The court in Cemex also determined that the State had reserved the minerals embraced by the Mineral Act of 1895.  In addition to the statutory mandate that only the surface estate of the four public school land parcels be sold, the court pointed out acknowledgement of the mineral estate reservations in the required affidavits and applications filed by the original grantees as part of either the original conveyance or the second conveyance.  The court held that, pursuant to Schwarz, because the State did not unequivocally grant to the purchaser anything other than the surface estate, no minerals were conveyed.  Then the court addressed Cemex’s argument that dirt, caliche, sand, gravel, limestone, and other materials were not “minerals” which the State had reserved.  Relying again on Schwarz, the court held that, because none of the materials to which Cemex claimed ownership were clearly granted by the State in the original conveyance, those items were withheld from the State’s conveyances, and any ambiguity in the terms of the statute had to be resolved in the State’s favor.  The possible ambiguities included such terms as “the minerals,” “stones valuable for ornamental or building purposes,” and “other valuable building material.”  The specific holding was that the State reserved “all deposits of granite, limestone, gravel, sand, and any other mineral substances of whatever kind or character having commercial value . . . .”
The significance of the case is the holdings which disregard the effect of express reservations of 1/16 minerals or no reservations of the minerals to reserve all minerals to the State and construe all ambiguities as to the meaning of “minerals” under the statute against the grantee.
The Texas Supreme Court’s order of March 16, 2012 states:
Cemex Construction Materials South, LLC v. The State of Texas; from El Paso County; 8th district (08‑10‑00082‑CV, 350 SW3d 396, 08‑31‑11)
First and second amended agreed motions to dismiss petition for review granted as follows:
Pursuant to Texas Rule of Appellate Procedure 56.3, without hearing oral argument or considering the merits, the Court grants the petition for review, vacates the court of appeals’ judgment, and remands the case to the trial court for rendition of judgment pursuant to the parties’ settlement agreement.
Texas Rule of Appellate Procedure 56.3 states:
Settled Cases
If a case is settled by agreement of the parties and the parties so move, the Supreme Court may grant the petition if it has not already been granted and, without hearing argument or considering the merits, render a judgment to effectuate the agreement.  The Supreme Court’s action may include setting aside the judgment of the court of appeals or the trial court without regard to the merits and remanding the case to the trial court for rendition of a judgment in accordance with the agreement.  The Supreme Court may abate the case until the lower court’s proceedings to effectuate the agreement are complete.  A severable portion of the proceeding may be disposed of if it will not prejudice the remaining parties.  In any event, the Supreme Court’s order does not vacate the court of appeals’ opinion unless the order specifically provides otherwise.  An agreement or motion cannot be conditioned on vacating the court of appeals’ opinion.  [Emphasis added].
The Supreme Court of Texas adopted the above procedure in order to preserve the public nature of an appellate court’s opinion while allowing parties to settle their disputes during the pendency of an appeal.  Upon joint motion, the Texas Supreme Court grants the petition “without reference to the merits, sets aside the judgments of the court of appeals and trial court without reference to the merits and remands the cause to the trial court for entry of judgment in accordance with the settlement agreement of the parties—the court of appeals’ opinion is not vacated.  Although the application for [petition] is granted, the precedential authority of a court of appeals opinion which is not vacated under these circumstances is equivalent to a ‘[pet.] dismissed’ case.”  Houston Cable TV, Inc. v. Inwood W. Civic Ass’n, 860 S.W.2d 72, 73 (Tex. 1993).  Here, the Texas Supreme Court, vacated the appellate court’s judgment without considering the merits, and did not expressly vacate the opinion.  Therefore, the El Paso Court of Appeal’s opinion in State v. Cemex has the same precedential authority of a petition dismissed case.