APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA D.C. Civil No. 74-0103 Erie
Before Seitz, Chief Judge, Rosenn, Circuit Judge, and Shapiro, District Judge.*fn*
This appeal asks us to determine whether a government condemnation of a surface tract of land constituted a taking of the subsurface mineral estates so as to entitle the subsurface owners to monetary compensation. The trial court submitted the issue to a jury which awarded damages to the subsurface owners. We conclude it was error to allow the jury to determine the damages to the subsurface estates under the terms of the declaration of taking and reverse that portion of the district court's judgment.
The United States acquired certain lands for the Allegheny National Forest in Warren County, Pennsylvania by condemnation. The federal interest in acquiring the land as stated in the declaration of taking is to promote and protect the navigation of streams, production of timber, and development and management of adequate outdoor recreation resources in connection with the Allegheny Reservoir Project. The land which is the subject of this dispute was not held in fee by any one owner. In addition to the surface landowners, there were several owners of subsurface mineral interests, most importantly oil and gas. Some of the subsurface mineral owners also had interests in the surface. Included among the subsurface owners are the defendants in this case.*fn1 There is no issue as to the Government's statutory authority to take the land; the question is whether the taking of the surface, reserving a right of access for mining the subsurface limited by government regulations, constitutes a taking of the subsurface mineral interests and therefore entitles owners of such interests to compensation.
The Government's declaration of taking and its complaint exempt from the condemnation any interest in coal, oil, gas or other minerals which are held by parties who have no other connected interest in the land other than a record title to coal, oil, gas, or other minerals. Individuals with any interest in coal, gas, or other minerals who also owned any additional interest in the fee were left with their mineral interests, subject, however, to the constraint that their right to enter upon the land to mine conform to the rules and regulations of the Secretary of Agriculture governing mining in the National Forest. The crucial portion of the declaration of taking provides:
Tract 961 : The estate to be taken is the fee simple title, subject, however, to existing easements for public roads and highways, public utilities, railroads, and pipelines; the reservation in the owners thereof, their successors or assigns of all coal, oil, gas and other minerals not outstanding of record in third parties together with the right to enter upon the land and prospect for, mine, and remove the same in accordance with the rules and regulations of the Secretary of Agriculture dated April 30, 1963, a copy of which is attached hereto as Schedule C; and the exception of all coal, oil, gas, and minerals outstanding of record in third parties.
The effect of the declaration of taking is to exempt from the condemnation all record title to subsurface minerals.
The known owners of any interests in the fee surface were duly served with notice of condemnation, including those with both mineral and surface interests. The record owners who held only mineral interests were not served.*fn2 However, the owners of only the mineral interests appeared and asserted that they were entitled to compensation because the taking of the surface estate and the imposition of the Secretary's mining rules on surface owners amounted in effect to a taking of their subsurface oil and gas interests.
The United States filed a motion entitled: "Plaintiff's Motion for Determination By the Court of the Estate Taken and To Dismiss Certain Defendants as Unnecessarily Joined." The Government claimed the interests of the mineral owners were exempt from the taking by the specific terms of the declaration. The district court concluded that the language of the declaration of taking was unclear and conducted a hearing as to the effect of the Secretary's rules on the subsurface interests. After the hearing, the court stated that subsurface rights were affected and submitted the issue of damages to the jury. By special verdict, the jury awarded $321,355 for the surface lands*fn3 and $485,812 as compensation for the taking of the subsurface interests. The Government, in these condemnation proceedings, appeals the award for the subsurface interests on the ground that the question of damages should not have been presented to the jury because there was not a taking of the subsurface estates.
Pennsylvania law recognizes that there may be three separate estates in land: the surface, the right of support, and the subsurface mineral rights. Pennsylvania Bank and Trust Co., Youngsville Branch v. Dickey, 232 Pa.Super. 224, 335 A.2d 483, 485 (1975); Smith v. Glen Alden Coal Co., 347 Pa. 290, 32 A.2d 227 (1943). There may be situations where interests in a piece of land may be severed and owned by different persons. In Duquesne Natural Gas Co. v. Fefolt, 203 Pa.Super. 102, 198 A.2d 608, 610 (1964), the Superior Court, quoting from the lower court, stated:
The right of property in natural gas and oil ordinarily belongs to the owner of the land. The oil and gas are a part of the land so long as they are on it or in it or are subject to control therein. In other words, they are part of the land while they are in place. They can be severed from ownership of the surface by grant or exception as separate corporeal rights. Accordingly, they may be the subject of a sale, separate and apart from the surface and from any minerals beneath it; they belong to the owner in fee, or his grantee, as long as they remain part of his property, although use of them is not possible until they are ...