COLUMBIA GAS TRANSMISSION CORPORATION V. CONSOL OF KENTUCKY, INC., FORMERLY KNOWN AS CONSOLIDATION COAL COMPANY OF KENTUCKY
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AS MODIFIED: MAY 18, 2000
AMENDED: MARCH 30,200O
AMENDED: MARCH 22,200O
RENDERED: FEBRUARY 24.2000
1998-SC-0135DG
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COLUMBIA GAS1 TRANSMISSION CORPORATION
V.
ON REVIEW FROM COURT OF APPEALS
96-CA-1136
FLOYD CIRCUIT COURT NO. 93-Cl-461
CONSOL OF KENTUCKY, INC.,
FORMERLY KNOWN AS
CONSOLIDATION COAL COMPANY
OF KENTUCKY
APPELLEE
OPINION OF THE COURT BY JUSTICE COOPER
REVERSING
Columbia Gas Transmission Corporation (“TCO”)
is the owner of a natural gas
pipeline, P-66, which crosses two tracts of property now owned by Consol of Kentucky,
Inc. (formerly Consolidation Coal Company of Kentucky, Inc.), in Floyd County,
Kentucky. When Consol
decided to mine the coal beneath those tracts, it became
necessary to move P-66 to another location. With TCO’s consent, Consol relocated
P-66 to another segment of its property at its own expense. Consol then brought this
civil action in the Floyd Circuit Court to recover the expenses attendant to the
relocation. The outcome of this case depends upon whether TCO had acquired a
prescriptive easement across Consol’s property for the original right-of-way of P-66.
The Floyd Circuit Court determined that TCO had not acquired an easement and
entered judgment in favor of Consol.
The Court of Appeals affirmed. We granted
discretionary review and now reverse.
I. THE EASEMENT-GRANTING POWER.
The two tracts in question were once owned respectively by William Oney and
his wife, Sarah Oney, and by Amanda J. Martin and her husband, F. F. Martin. By
deeds dated April 6, 1903 from the Oneys and June 23, 1903 from the Martins,
Consol’s predecessor in interest, Northern Coal and Coke Company, acquired the
mineral interests beneath both tracts. In addition to the mineral estate, these broad
form deeds, commonly known as “Northern form” deeds, also conveyed:
[T]he exclusive rights-of-way for any and all railroads, tram roads, haul
roads and other ways, pipe lines, telephone and telegraph lines that may
hereafter be located on said land by the parties of the first part, their heirs,
representatives or assigns, or by the party of the second part, its
successors or assigns, or by any person or corporation with or without the
authority of either of said parties, their, or its, heirs, representatives,
successors or assigns . . . .
Citing Harry Caudill, Theirs Be the Power: The Moquls of Eastern Kentucky (U.
of III. Press 1983) and Carolyn Clay Turner and Carolyn Hay Traum, John C. C. Mavo
Cumberland Capitalist (Pikeville College Press 1983), Appellant asserts that Northern
Coal and Coke Company used its Northern form of deed to acquire mineral interests in
hundreds of thousands of acres of land in eastern Kentucky. On three occasions, our
predecessor court was called upon to interpret the meaning of the so-called “easementgranting” clause quoted above. On each occasion, the clause was held to convey to
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the grantee of the mineral estate the easement-granting power with respect to the
surface estate.
In Cornett v. Louisville & Nashville R. Co., 298 Ky. 95, 182 S.W.2d 230 (1944),
the owner of the surface estate sought to enjoin the grantee of a Northern form deed
from granting an easement to a railroad company for the construction of a commercial
railroad line across the surface of the property. The surface owner asserted that the
easement-granting clause only pertained to easements appurtenant to the mineral
estate, i.e., those easements necessary for the mining and removal of coal or other
minerals from beneath the surface of the property. The Court held that the easementgranting clause contained no such restriction and that the owner of the mineral estate
possessed the sole power to grant a railroad right-of-way easement across the surface
estate.
In Louisville & N. R. Co. v. Quillen, Ky., 242 S.W.2d 95 (1951), the railroad
sought to condemn a right-of-way across property severed by a Northern form deed.
The issue was whether the condemnation proceeds were payable to the surface owner
or to the owner of the mineral estate. It was held that the owner of the mineral estate,
as owner of the easement-granting power, was entitled to the proceeds. (During the
pendency of the litigation, the railroad purchased the right-of-way from the holder of the
mineral estate, so the upshot was that the railroad was entitled to repayment of the
condemnation proceeds which it had previously paid into court.)
In Elk Horn Coal Corp. v. Kentucky-West Virginia Gas Co., Ky., 317 S.W.2d 472
(1957), the issue was whether the owner of the mineral rights to forty-eight separate
tracts of land could enjoin the construction of a pipeline across the surface of those
tracts. The plaintiff had acquired its interest in some of the tracts by Northern form
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deeds and in others by deeds which did not contain an easement-granting clause. The
plaintiff was held entitled to relief with respect to the tracts acquired by Northern form
deeds, but not with respect to tracts acquired by other forms of deed. The opinion had
this to say about the easement-granting clause in the Northern form deeds:
The Cornett and Quillen cases clearly uphold the claim of the coal
corporation here that the mineral deeds gave it complete control over
rights of way, and negative the contention of the gas company that the
mineral deeds conveyed only appurtenant easements.
. .
The simple answer to this argument is, that the deed did not purport to
convey an easement, but rather ownership of the surface as concerned
future grants of easements. The grantee did not receive a mere
easement, but the easement-granting power.
. . .
As hereinbefore indicated in this opinion, we think the coal corporation
had complete ownership of the surface as concerns right of way uses, and
was not limited to appurtenant easements . . . .
Id. at 475, 476 (emphasis in original).
(In Elk Horn Coal, there was no claim of a prescriptive easement because the
action for injunctive relief was brought within the statutory period of limitations.)
II. THE EASEMENT CLAIM.
On September 7, 1948, Gold and Sarah Reed, successors in interest to the
Oneys, and Green Gearhart, successor in interest to the Martins, purported to convey
right-of-way easements over their properties to TCO’s predecessor in interest, United
Fuel Gas Company, for the purpose of construction and maintenance of pipeline P-66.
Construction was completed in 1949 and TCO claims that P-66 has been used to
transmit gas across the Reed and Gearhart tracts continuously since that time. On
September 19, 1989, Consol purchased the surface estates of both tracts from the
successors in interest to the Reeds and Gearhart. In 1991, Consol notified TCO of its
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intent to mine the mineral estate and demanded removal of P-66. TCO refused, Consol
relocated P-66 at its own expense, and this lawsuit ensued.
TCO admits that pursuant to the case law interpreting the easement-granting
clause contained in the Northern form deeds by which Consol’s predecessor acquired
its interest in the mineral estate from the Oneys and the Martins, the Reeds and
Gearhart had no right to grant pipeline easements across their properties, and that their
attempts to grant such easements to United Fuel Gas Company in 1948 were nullities.
However, TCO claims to have acquired a prescriptive easement across Consol’s
property as a result of its continued use of the pipeline right-of-way for forty-three years
before its attempted ouster by Consol in 1991.
The right to acquire an easement by prescription is of ancient origin and is
grounded in the common law. Hall v. McLeod,
59 Ky. (2 Mete.) 98 (1859). As with
adverse possession of a fee simple estate, a prescriptive easement can be acquired by
actual, hostile, open and notorious, exclusive, and continuous possession of the
property for the statutory period of fifteen years. KRS 413.010 (fifteen years); Riaas v.
Ketner, 299 Ky. 754, 187 S.W.2d
295 Ky. 389, 174 S.W.2d
287 (1945) (private water pipeline); Riley v. Jones,
530, 531, 532 (1943) (underground water pipeline); Pickel v.
Cornett, 285 Ky. 189, 147 S.W.2d 381, 382 (1941) (prescriptive easements generally).
The acts necessary to acquire an easement by prescription depend on the nature of the
interest to be possessed:
[T]he physical nature of the thing possessed must determine the
character of the acts necessary to impart notice that the right to use or
possess is asserted and exercised without consent, continuously, and in
open hostility to anyone’s right to interfere. For example, it is impossible
to continuously exercise the same acts of dominion over a river bank,
sand bar and its accretions as an adverse possessor could exercise over
pasture land or woodland, the area and usability of which are not affected
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by the rise and fall of a stream. Combs v. Adams et al., 282 Ky. 629, 139
S.W.2d 447. A pipe conveying water is usually laid underground, and
hence is not visible except at its inlet and outlet. Yet, if the owner of the
land which it occupies throughout its length has notice of its existence, it
could hardly be said that the right to maintain it was not adverse because
the pipe was not visible or its use apparent.
Riley v. Jones, supra, 174 S.W.2d at 532. TCO asserts that P-66 was located partially
below and partially above the surface, and that at least one metering station housing
gas-measuring devices was clearly visible on the surface for many years. However, the
Circuit Court never reached the facts supporting TCO’s claim of prescriptive
possession, but granted summary judgment to Consol on the basis of KRS 381.430.
III. THE STATUTORY TRUST.
KRS 381.430 reads as follows:
Possession of minerals and other interests in land--Effect on
possession of surface.--Wherever the mineral or other interests in or
rights appurtenant to land in this state have passed, or shall hereafter
pass, in any way, from a claimant in possession of the surface of the land,
the continuity of the possession of such mineral, interests and rights shall
not be deemed thereby to have been broken; but the possession of the
surface by the original claimant thereof, from whom such mineral,
interests or rights passed, or by those claiming through or under him, or
by virtue of a judgment against him in an action to which the holder of the
mineral, interests or rights is not a party, shall be deemed to be for the
benefit of the person, his heirs and assigns, to whom the mineral,
interests or rights have passed.
The statute was first enacted in 1906 as KS 2366a-1.
1906 Ky. Acts ch. 7 § 1.
The language of the statute has undergone some minor amendments in the intervening
ninety-four years, none of which are material to the issues in this case. In Farnsworth
v. Barret, 146 Ky. 556, 142 S.W. 1049 (1912), the statute was held to preclude a claim
of adverse possession of the mineral estate by the successor in title to the
grantor/owner of the surface estate, because the language of the statute was “merely
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declaratory of the common law . . . that possession of the surface does not give
possession of the mining rights which had been sold, but, on the contrary, presumes
that the holder of the surface was only a trustee, and held possession for the benefit of
the owner of the mineral.” Id., 142 S.W. at 1052. (See Herrel v. Porter, 8 Ky. Op. 265
(1874) for pre-existing common law.) As a result, mere possession of the surface
estate cannot constitute adverse possession of the mineral estate. Consol
posits that
the language extending the scope of KRS 381.430 to “other interests in . . land”
includes the easement-granting power conveyed by the Northern form deeds and
precludes TCO from holding the pipeline easement adversely to Consol’s easementgranting interest. However, the case of George T. Stagg Co. v. Frankfort Modes Glass
Works, 175 Ky. 330, 194 S.W. 333 (1917) holds precisely to the contrary.
Neither do we think that the provisions of section 2366a of the Kentucky
statutes (act of 1906), nor the opinion of this court in the case of
Farnsworth v. Barret, 146 Ky. 556, 142 S.W. 1049, applying that statute,
in any manner affect the questions presented by this record. That statute
has reference only to mineral rights which are natural formations, and has
nothing to do with artificial, subterranean easements, such as pipes for
the conducting of water, gas, or other like purposes.
id., 194 S.W. at 337. The artificial trust created by the statute is necessitated by the
fact that the owner of a mineral estate has no protectible interest in the surface, thus
takes no notice of conditions of the surface and has no standing to affect them.
H. Williams and C. Meyers, Oil and Gas Law, Vol. 1, Adverse Possession and Trespass
§ 224.1, at 350.2 (M. Bender 1959 & Supp. 1998). But since the easement-granting
power is an interest in the surface estate, Consol had the power to oust TCO from its
claimed easement before the expiration of the period of limitations, Elk Horn Coal Corp.
v. Kentuckv-West Virainia Gas Co., supra, thus did not need the protection of an
artificial trust.
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Regardless, the statute clearly applies only to the grantor of the mineral rights or
“those claiming through or under him.” TCO is not claiming “through or under” the 1948
owners of the surface estates. All agree that the 1948 attempted grants of easement
were nullities, because the purported grantors had no easement-granting power.
Rather, TCO is relying on its own prescriptive possession of the pipeline right-of-way for
more than the statutory period of fifteen years. In that respect, TCO can rely on the
void easements as “color of title” even though the surface owners had no authority to
grant the easements and TCO could have ascertained that fact by a proper search of
the surface owners’ chains of title. McDaniel v. Ramsey’s Adm’rs, 305 Ky. 536, 204
S.W.2d 953 (1947); Shively v. Elkhorn Coal Corp., 217 Ky. 192, 289 S.W. 262 (1926);
Shutt v. Methodist Episcopal Church, 187 Ky. 350, 218 S.W. 1020 (1920).
Having concluded that TCO’s claim is not precluded by the provisions of KRS
381.430, we reverse the judgment of the Floyd Circuit Court and the decision of the
Court of Appeals and remand this case to the Floyd Circuit Court with directions to
address the merits of TCO’s prescriptive easement claim and to enter judgment
accordingly.
Graves, Johnstone, Keller, Stumbo, JJ., concur.
Wintersheimer, J., dissents by separate opinion, with Lambert, C.J., joining that
dissent.
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COUNSEL
FOR
APPELLANT:
Shelby C. Kinkead, Jr.
Wayne F. Collier
Kinkead & Stilz
Suite 350
3120 Wall Street
Lexington, KY 40513
Harry Bruner
Corporate Counsel
Columbia Gas Transmission Corp.
P. 0. Box 1273
Charleston, WV 25325-1273
COUNSEL
FOR
APPELLEE:
D. B. Kazee
Kazee, Kinner & Chafin
119 East Court Street
P. 0. Box 700
Prestonsburg, KY 41653
Jeff A. Woods
Karen J. Greenwell
Wyatt, Tarrant & Combs
Suite 1700
Lexington Financial Center
250 West Main Street
Lexington, KY 40507
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RENDERED: FEBRUARY 24, 2000
TO BE PUBLISHED
COLUMBIA GAS TRANSMISSION CORPORATION
V.
APPELLANT
ON REVIEW FROM THE COURT OF APPEALS
96-CA- 1136
FLOYD CIRCUIT COURT NO. 93-Cl-461
CONSOL OF KENTUCKY, INC.,
FORMERLY KNOWN AS
CONSOLIDATION COAL COMPANY
OF KENTUCKY
APPELLEE
DISSENTING OPINION BY JUSTICE WINTERSHEIMER
I respectfully dissent from the majority opinion because the circuit court and
the Court of Appeals had correctly determined that factually TCO had not acquired a
prescriptive easement over the property in question. The trial judge was correct in
finding that KRS 381.430 precluded TCO from acquiring prescriptive easements
across the two tracts in question, even though it had used the property for its pipeline
for more than forty years. The statute provides that if mineral or other interests in or
rights appurtenant to land are severed from the surface of the property, the surface
owners or those claiming through them are deemed to be statutory trustees for the
benefit of the owners of the severed minerals. Consequently, the surface owners or
those claiming through them may not adversely possess any interest in the property
unless and until the statutory trust is unequivocally repudiated and the statutory
requirements for adverse possession are satisfied. See KRS 413.010; Great Western
Land Manaoement, Inc. v. Slusher, Ky., 939 S.W.2d 865 (1997).
I must agree with the Court of Appeals when it concluded that by virtue of its
claim through the surface owners, TCO’s use of the property was for the benefit of
any parties such as Consol
to whom an interest in the property, consisting of the
exclusive power to convey future right of way easements, had passed. Therefore, it
was not until the trust was repudiated by TCO in 1991, that possession of the
property became hostile to the rights of Consol. Thus TCO did not meet the 15 year
statutory requirement for adverse possession and it did not acquire prescriptive
easements across the real property. TCO should bear the costs of moving the
pipeline to another location because it never acquired any valid right to locate its
pipeline across the two tracts in question.
I would affirm the decision of the Court of Appeals and the judgment of the
circuit court.
Lambert, C.J., joins this dissenting opinion.
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COLUMBIA
GAS
TRANSMISSION
CORPORATION
APPELLANT
APPEAL FROM COURT OF APPEALS
NO. 96-CA-1136-MR
FLOYD CIRCUIT COURT NO. 93-CI-461
v.
CONSOL OF KENTUCKY, INC., Formerly
Known as Consolidation Coal Company
of Kentucky
AMENDED
APPELLEE
ORDER
This Court's order entered March 22, 2000, is amended
to reflect that the address of Harry Bruner is Columbia Gas
Transmission Corp., P. 0. Box 1273, Charleston, WV 25325-1273.
A new page 9 of the To Be Published opinion is hereby substituted
and
attached
hereto.
ENTERED: March -30, 2000.
1998-SC-0135DG
COLUMBIA GAS TRANSMISSION CORPORATION
APPELLANT
ON REVIEW FROM COURT OF APPEALS
96-CA- 1136
FLOYD CIRCUIT COURT NO. 93-Cl-461
V.
CONSOL OF KENTUCKY, INC.,
FORMERLY KNOWN AS
CONSOLIDATION COAL COMPANY
OF KENTUCKY
APPELLEE
ORDER DENYING PETITION FOR REHEARING
AND MODIFYING OPINION
The petition for rehearing filed by the Appellee, Consol of Kentucky, Inc., is
hereby denied.
On the Court’s own motion, the opinion of the Court, rendered herein on
February 24, 2000, and amended on March 22 and March 30, 2000, is modified by the
substitution of new pages 1 and 4, attached hereto, in lieu of pages 1 and 4 of the
opinion as originally rendered. Said modification does not affect the holding of the
opinion or the dissent.
All concur.
Entered: May 18, 2000.
CHIEF JUSTICE
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