July 19, 2011 – Delma E. Prather, as Trustee of the Delma E. Prather Revocable Trust v. Patrick H. Lyons, Commissioner of Public Lands of the State of New Mexico and Mainline Rock & Ballast, Inc., No. 29,812

1 printed pages contain little extracted OCR body text; searchable legal-body completeness has not been established for those pages.

OCR transcription for search; preserved printed pages are authoritative

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: July 19, 2011

NO. 29,812

DELMA E. PRATHER, as Trustee of the
DELMA E. PRATHER REVOCABLE TRUST,

Plaintiff-A ppellant,
V.

PATRICK H. LYONS, Commissioner of
Public Lands of the State of New Mexioo,

Defendant- Appellee,

and

MAINLINE ROCK & BALLAST, INC.,
Defendant.

APPEAL FROM THE DISTRICT COURT OF TORRANCE COUNTY
Matthew G. Reynolds, District Judge

Comeau, Maldegen, ‘Templeman & Indall, LLP
Michael R. Comeau

Stephen J. Lauer

Sharon W. Homdeski

Santa Fe, NM

for Appellant

New Mexico State Land Office
John L. Sullivan, Associate Counsel
Santa Fe, NM
for Appellee
Brennan & Sullivan PA
Michael W. Brennan
Santa Fe, NM
for Amicus Curiae N.M. Farm & Livestock Bureau

OPINION
SUTIN, Judge.
{1} 	State trust land was originally sold in 1930 to a purchaser who bought the land
for grazing purposes. This original purchaser received a patent in 1947 and sold the
land in 1982. The land contained surface and subsurface metamorphic rock, and the
character of the surface and its use for grazing did not change from 1930 to 1982.
After the 1982 sale, the successor landowner’s lessee mined, crushed, and sold the
rock for use primarily as ballast for railroad beds and paid the landowner-lessor
royalties. In this action, Plaintiff Delma E. Prather, as trustee of the Delma E. Prather
Revocable Trust, is the successor to the original purchaser of the state trust land. She
sued Patrick H. Lyons, Commissioner of Public Lands of the State of New Mexico,
to quiet title to the rock when the Commissioner asserted ownership of the rock and
a right to royalties based on a general mineral reservation in the 1947 patent, which
we refer to in this opinion as “the mineral reservation.” After a bench trial, the district
court held for the Commissioner. Our issue is whether the rock in the state trust land
acquired by the original and successor purchasers constituted a mineral reserved to the
State under the mineral reservation.
{2} 	On appeal, Plaintiff requests that we adopt and apply the “surface destruction
doctrine” in arriving at a decision that the parties to the original 1930 purchase

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transaction did not intend the rock to be considered a mineral within the mineral
reservation. 	Relying in part on Bogle Farms, Inc. v. Baca, 1996-NMSC-051, 122
N.M. 422, 925 P.2d 1184, which states that title to state trust land should be
determined on a case-by-case basis considering the intent of the original parties and
not by a rule of property nor by conveyance by implication, the Commissioner argues
against adoption of the surface destruction doctrine and further argues that the
evidence of intent, considering the totality of circumstances, supported the district
court’s decision. In regard to the evidence, Plaintiff contends that the district court
misread critical transactional documents and that its decision was based on irrelevant
and insubstantial evidence. We hold that substantial evidence supported the district
court’s findings of fact under Bogle Farms’ required analysis of the intent of the
parties to the original sale transaction that the intent of the conveyance transaction was
that the rock was included in the reservation of “all minerals of whatsoever kind” in
the patent.
BACKGROUND
{3} 	The background recited here is largely taken from undisputed findings of fact
of the district court. There exist two purchase transactions. J.C. Shelton acquired a
fee simple interest in Section 16, Township 5 North, Range 12 East, Torrance County,
New Mexico (Section 16), pursuant to a 1930 purchase contract with the then

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Commissioner of Public Lands of the State of New Mexico. 	Ms. Prather and her
husband purchased Section 16 in 1982 from Shelton’s successor in interest and, after
her husband’s death, Ms. Prather created her trust and transferred Section 16 into her
name as trustee. Ms. Prather, as trustee of the Delma E. Prather Revocable Trust, is
Plaintiff in the present action. 	For convenience, in this opinion we refer to Ms.
Prather, individually and as trustee, and also to Mr. and Mrs. Prather, as “Plaintiff.”
We refer to Defendant Commissioner Lyons and past Commissioners of Public Lands
as “the Commissioner.” 	Pertinent documentary history relating to Shelton’s and
Plaintiff’s acquisitions of Section 16 is as follows.
{4} 	The State acquired title to Section 16 pursuant to an Act of Congress approved
June 21, 1898, called the Ferguson Act, confirmed in an Act of Congress approved
June 20, 1910, effective as of November 16, 1915, called the New Mexico Enabling
Act. See Bogle Farms, 1996-NMSC-051, ¶ 9 (reciting the history of the transfer of
land by the federal government to New Mexico when New Mexico attained statehood
to be held in trust for schools, citing the Enabling Act). Under the Ferguson Act, the
United States granted Section 16, among other lands, to the Territory of New Mexico
for the support of common schools, but excluded lands that were mineral in character.
In confirming the grant, the Enabling Act also excluded mineral lands. The district
court found that “mineral lands” is a term of art that means “lands known (at the time)

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to be more valuable for minerals and must contain minerals in sufficient quantity to
justify expenditure for their extraction[,]” and “[t]he land must also be more valuable
for mineral extraction than other uses.” Title was confirmed in Patent No. 1205336
issued by the United States on February 23, 1960.
{5} 	The district court found that in 1919 when there was a rush to obtain leases
from the State for oil and gas exploration, the State Legislature authorized the
Commissioner to classify the lands owned by the State as mineral or non-mineral.
The State Land Office (SLO) Administrative Rule No. 1, 1919, dated April 4, 1919,
designated and classified all lands of the State as mineral lands. See State ex rel. Otto
v. Field, 31 N.M. 120, 128-31, 241 P. 1027, 1030-32 (1925) (recounting the history
of Administrative Rule No. 1); see also 1912 N.M. Laws, ch. 82, § 1 (creating the
SLO). Administrative Rule No. 1 was issued to afford the State “maximum protection
from the purchase of lands as non-mineral, which may in fact be mineral lands or
subject to classification as such[.]” The district court also found that in 1925 the SLO
issued regulations requiring the State to reserve all minerals when selling state trust
lands. The district court further found that, prior to 1930, Section 16 was owned in
fee by the State, was uncultivated and was useful for pasture or grazing purposes, and
was largely composed of Pre-Cambian metamorphic rock.

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{6} 	In 	August 	1930, 	Shelton 	applied 	to 	purchase 	Section 	16 	from 	the
Commissioner. In the form application, Shelton stated that Section 16 was grazing
in character; that there was no growing timber, coal, minerals or oil and gas known
to be on the land; that Shelton intended to use the land to “graze sheep or raise cattle”;
and Shelton signed under a paragraph which read, “the land applied for herein is
essentially non-mineral land, and that this application is not made for the purpose of
obtaining title to mineral, coal, oil or gas lands fraudulently, but with the sole object
of obtaining title to the land applied for for grazing and agricultural purposes.”
According to the district court’s findings, the law required that state trust lands such
as Section 16 be sold at their “appraised true value,” and Shelton provided an
appraisal for Section 16 on a form provided by the SLO entitled “Appraisement of
Grazing and Agricultural Lands” which was sworn to and addressed to the
Commissioner. See NMSA 1978, § 19-7-9 (1981) (amended 1989 and 2009); 1910
N.M. Laws, ch. 310, § 10 (Enabling Act). In this appraisal, the appraiser answered
“no” to the question: “Is there mineral or coal on the land?” He stated that the land
was “all grazing land” and swore in a non-mineral affidavit that he was well
acquainted with the land and that:
there is not, to my knowledge, within the limits thereof, any vein or lode
of quartz or other rock in places bearing gold, silver, cinnabar, lead, tin,
or copper, or any deposit of coal; that there is not, within the limits of
said land, to my knowledge, any placer, cement, gravel, salt or other

6
valuable mineral deposits; that no portion of said land is worked for
mineral during any part of the year by any person or persons; and said
land is essentially non-mineral in character.
{7} 	In the contract for the purchase of land between Shelton and the Commissioner
that followed, dated in November 1930, Shelton agreed that the land was being
purchased “for the purpose of grazing and agriculture only.” He also agreed that:
while the land herein contracted for is believed to be essentially non-
mineral, should mineral be discovered therein it is expressly understood
and agreed that this contract is based upon the express condition that the
minerals therein shall be and are reserved in the fund or institution to
which the land belongs, together with right of way to the Commissioner,
or anyone acting under his authority, at any and all times to enter upon
said land and mine and remove the minerals therefrom without let or
hindrance.
{8} 	In 1947 the Commissioner issued Patent for State Land No. 1906, pursuant to
which he conveyed to Shelton’s widow the State’s interest in Section 16, but reserved
to the State, by way of the mineral reservation, “all minerals of whatsoever kind,
including oil and gas, in the lands so granted,” and also reserved the “right to prospect
for, mine, produce and remove the same, and perform any and all acts necessary in
connection therewith[.]” Plaintiff purchased Section 16 in 1982 for the purpose of
using it to graze cattle. The mineral reservation was noted in the chain of title. The
character of Section 16 remained unchanged from the time of Shelton’s purchase to
the time of Plaintiff’s 1982 acquisition.

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{9} 	In 1998 Plaintiff entered into a license agreement with Ralph J. Conway to
explore for quarry rock that might be suitable for railroad ballast and other
construction aggregates. Mainline Rock and Ballast, Inc. (Mainline) entered the
picture in 2003 and collected surface rocks, had this rock tested to determine if
Section 16 would be suitable for extracting rock and creating railroad ballast, sought
to secure an exclusive contract with Burlington Northern Santa Fe Railroad (BNSF)
to supply railroad ballast, had the mineral content of the rock analyzed and tested to
determine if it met BNSF’s specifications, and drilled test holes and had subsurface
samples tested. Further, after obtaining an option of Conway’s right, title, and interest
in his lease, and after exercising that option with Plaintiff’s consent, Mainline sought
and obtained a zoning change of 120 acres of Section 16 from agriculture to a special
use district to construct its quarry.
{10} 	In 2004 Plaintiff and Conway entered into a twenty-five-year lease agreement,
which stated that Plaintiff owned the subsurface mineral estate of Section 16 and
referred to mining and characterized the rock as minerals. 	Mainline constructed a
quarry and began removing rock and crushing it primarily for railroad ballast and also
for other aggregates, including mainline ballast, yard ballast, modified ballast, chips,
fines, rip-rap, surge, and roadbase. 	The district court’s findings contain a detailed
discussion and history relating to rock, natural aggregates, industrial minerals, crushed

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stone, railroad ballast, and sales of crushed stone and railroad ballast. 	Mainline
removed thousands of cubic yards of overburden and used explosives to blast the rock
out of the deposit. 	It employed ongoing testing of samples to assure that it met
BNSF’s ballast specifications. 	As of April 2009, when the court’s findings were
entered, Mainline had sold over 2.5 million tons of ballast to BNSF and over 300,000
tons of byproduct. Mainline paid full royalties to Plaintiff until representatives of the
Commissioner asserted the State’s mineral interest; following a settlement agreement
with Mainline and a Rule 5 Mining Lease issued by the Commissioner obligating
Mainline to make royalty payments to the Commissioner, Mainline reduced its royalty
payments to Plaintiff.
{11} 	Plaintiff filed a complaint against the Commissioner for declaratory judgment
and other relief and later filed an amended complaint joining Mainline as a party
defendant. 	Plaintiff sought to quiet title in Section 16 including the rock and to
recover damages as well as remission of the royalties paid to the Commissioner. The
Commissioner counterclaimed seeking to quiet title in the mineral interest in Section
16 and for other relief. The district court entered a partial final judgment in which the
court determined that the Commissioner was “the owner of all crushed stone mined,
produced[,] and sold from Section 16 . . . including, but not limited to, all crushed

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stone mined, produced[,] and sold pursuant to leases issued by Plaintiff and by the
Commissioner.” Plaintiff appeals.
{12} 	Plaintiff contends on appeal that we should adopt the surface destruction
doctrine and apply it in determining that the intent of the original parties was to
exclude the rock from the mineral reservation. 	She further contends that the
transactional documents reflecting Shelton’s purchase are at variance with the district
court’s ruling, that the court’s decision was based on irrelevant and insubstantial
evidence, and that statutes in effect at material times all buttress the conclusion that
the rock in Section 16 was not a mineral or was not intended to fall within the mineral
reservation. The rock with which we are dealing is described by Plaintiff as “common
rock,” which Plaintiff claims means rock with no particular or valuable mineral
content and rock that is just “hard and heavy.”
DISCUSSION
{13} 	All arguments attempt to provide a route for the elusive quests for (1) the
understanding of what “minerals” is intended to mean and include within the mineral
reservation, and (2) the intent of the parties to the 1930 original purchase contract as
to whether the rock was to be considered a mineral within the mineral reservation. We
preface our discussion of the parties’ arguments with a discussion of Bogle Farms’
mandated intent-of-the-original-parties test and rejection of case law establishing a

10
rule of property governing reservation of mineral rights in state trust land sales. We
also set out the district court’s findings of fact and conclusions of law in regard to
intent.
The Intent Issue: Bogle Farms and the District
Court’s Findings and Conclusions in the Present Case
{14} 	In Bogle Farms, our Supreme Court reviewed an appeal by the Commissioner
from a district court’s partial summary judgment entered in favor of twenty-six
plaintiffs who sought a declaratory judgment holding that their contracts for the
purchase of state trust lands did not reserve sand and gravel to the State. 	1996-
NMSC-051, ¶ 1. 	The district court had ruled based on collateral estoppel that the
Commissioner was precluded from arguing that the general mineral reservations in the
contracts effectively reserved the State’s interest in sand and gravel. Id. The estoppel
issue arose based on our Supreme Court’s decision in Roe v. State ex rel. State
Highway Department, 103 N.M. 517, 710 P.2d 84 (1985), overruled by Bogle Farms,
1996-NMSC-051. Bogle Farms, 1996-NMSC-051, ¶ 1. In Roe, the Court ruled that
title to sand and gravel passed to the purchaser along with the surface estate where the
purchase contracts and patents did not specifically reserve sand and gravel to the
State. 	Bogle Farms, 1996-NMSC-051, ¶ 1; Roe, 103 N.M. at 521, 710 P.2d at 88.
Before we discuss Bogle Farms further, we must discuss Roe in more detail, along

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with Burris v. State ex rel. State Highway Commission, 88 N.M. 146, 538 P.2d 418
(1975), which preceded and was overruled by Roe.
{15} 	In Burris, state land was sold to the plaintiffs by contract and a patent followed.
Id. at 146, 538 P.2d at 418. 	The purchase contract stated that the land was being
purchased for the purpose of grazing and agriculture only, and the patent reserved “to
the [S]tate . . . all minerals of whatsoever kind, including oil and gas, in the lands so
granted[.]” 	Id. at 147, 538 P.2d at 419 (internal quotation marks omitted). 	The
application to purchase stated that “the land . . . is essentially non-mineral land, and
that this application is not made for the purpose of obtaining title to mineral, including
but not limited to caliche, sand and gravel, coal, oil or gas lands fraudulently but with
the sole object of obtaining title to the surface of the land applied for.” Id. (internal
quotation marks omitted). In approaching a decision, the Court in Burris stated that
“apart from any governing statute, the issue is whether the parties intended that sand
and gravel are, or are not, to be . . . classified [as a mineral,]” a question that “is
normally resolved by the pertinent documents and the actions of the parties[.]” 	Id.
The Burris Court distinguished and did not follow State ex rel. State Highway
Commission v. Trujillo, 82 N.M. 694, 487 P.2d 122 (1971), overruled by Champlin
Petroleum Co. v. Lyman, 103 N.M. 407, 708 P.2d 319 (1985), which was decided on
a factual underpinning consisting solely of a patent that reserved to the United States

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“all the coal and other minerals in the lands” and which held that sand and gravel were
not minerals. 	Burris, 88 N.M. at 147, 538 P.2d at 419 (internal quotation marks
omitted). Burris rejected Trujillo as applicable authority because in Burris there was
“a great deal more documentation[] casting light on the intention of the parties,”
namely, the application and the contracts. Id. Relying on those documents, the Court
in Burris held “the parties intended to reserve sand and gravel,” because under the
terms of the documents, the State “expressly reserv[ed] all minerals in very clear,
unambiguous and all-inclusive language, without qualification, restriction[,] or
limitations of any kind.” Id. at 147-48, 538 P.2d at 419-20.
{16} 	Roe, an inverse condemnation action, overruled Burris. Roe, 103 N.M. at 517,
521, 710 P.2d at 84, 88. The Roe Court noted that, in Burris, the application, but not
the purchase contract, contained the words “sand and gravel.” Roe, 103 N.M. at 521,
710 P.2d at 88. 	Focusing on the application, Roe stated that “[a]n application is
merely a request to purchase, and its provisions do not affect the title to the
property[,]” and Roe concluded that whether title passed was not determined by what
was stated in the application, but was determined “by the conveyances themselves, the
purchase contract[,] and the patent.” Id. Therefore, the Court required that “[f]or the
State to reserve sand and gravel, a provision so specifying must be included in these
conveyances.” Id. The Roe Court “determine[d] that although the original applicant

1 Bogle Farms discusses seven cases, the earliest dating back to 1940. See Bd.
of Cnty. Comm’rs v. Good, 44 N.M. 495, 498, 105 P.2d 470, 472 (1940) (stating that
sand, gravel, ordinary clay, and caliche fall within the term “mineral”).
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for the [plaintiffs’] property did not apply for title to sand and gravel, such title
nevertheless passed with the surface estate since sand and gravel were not specifically
reserved by the purchase contract and patent.” Id.
{17} 	In Bogle Farms, the Court discussed Roe along with other pertinent New
Mexico cases.1 Bogle Farms, 1996-NMSC-051, ¶¶ 8-22, 33. Overruling Roe, Bogle
Farms rejected Roe’s strict definition of minerals in the general reservation clause of
the conveyance documents to exclude sand and gravel. Bogle Farms, 1996-NMSC-
051, ¶¶ 34-35. 	Bogle Farms also rejected the purchasers’ collateral estoppel, stare
decisis, and rule of property arguments favoring Roe’s ruling. Bogle Farms, 1996-
NMSC-051, ¶¶ 22, 27-33, 36.
{18} 	The Court in Bogle Farms read Roe as erroneously deciding the mineral
reservation issue based on a rule that affected title to property, thereby adopting a
“rule of property,” instead of deciding the issue based on the intention of the parties,
and the Court read Roe as erroneously permitting conveyance of title by implication.
Bogle Farms, 1996-NMSC-051, ¶¶ 30, 34-35. Bogle Farms remanded for evidentiary
proceedings given the lack of a specific mineral reservation and the need for the
district court to consider evidence outside the face of the contract to determine the

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meaning intended for the term “mineral” when the term was shown under the
circumstances to be ambiguous. Id. ¶ 35. Bogle Farms returned to Burris’ case-by-
case approach “based on the principle that in contract cases the role of the court is to
give effect to the intention of the contracting parties.” 	Bogle Farms, 1996-NMSC-
051, ¶ 22. The Court in Bogle Farms noted that “prior to Roe this Court had held in
Burris that a general mineral reservation included sand and gravel”; however, the
Court left it open for the district court on remand to determine whether the parties
intended to include sand and gravel within the term “mineral.” Bogle Farms, 1996-
NMSC-051, ¶¶ 33-35.
{19} 	Among Bogle Farms’ several statements applicable to the present case are the
following. In cases involving state trust land, the determination whether a material
or substance is included within a general mineral reservation must be done on a case-
by-case basis. Id. ¶ 22. The issue is whether the parties to the original sale transaction
intended that the State reserve the material or substance at issue. 	Id. ¶ 35. 	There
exists “a strong public interest in the protection of state land and its products, as
reflected in the Enabling Act’s requirement that no sale or other disposal [of state land
or its natural productions] shall be made for a consideration less than the [appraised
true] value.” Id. ¶ 26 (alterations in original) (internal quotation marks and citation

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omitted). And “title to state trust lands should not be conveyed by implication.” Id.
¶ 34.
{20} 	What material or substance comes within the word “minerals” in the mineral
reservation is not altogether clear. The district court in the present case determined
that the mineral reservation was ambiguous. Our Supreme Court has referred to this
ambiguity. See id. ¶¶ 20, 35 (stating that “the Roe Court may have been attempting
to resolve the ambiguity once and for all and to put to rest an issue that had given rise
to a great deal of litigation” and, further, that “[i]f there is not a specific reservation,
the trial court must look to evidence outside the face of the contract to determine the
meaning intended for the term ‘mineral’ when that term has been shown under the
circumstances to be ambiguous”); Rickelton v. Universal Constructors, Inc., 91 N.M.
479, 480, 576 P.2d 285, 286 (1978) (stating that “[w]hat the Legislature meant to be
included as a ‘mineral’ is not well defined in New Mexico” and that the Court had
“recognized that the category of ‘minerals’ is a flexible one”). Courts outside New
Mexico have referred to the ambiguity of the words “minerals” and “mineral
reservation.” 	See United States ex rel. S. Ute Indian Tribe v. Hess, 348 F.3d 1237,
1241 (10th Cir. 2003); Kinney v. Keith, 128 P.3d 297, 303 (Colo. App. 2005); Resler
v. Rogers, 139 N.W.2d 379, 382 (Minn. 1965). In the present case, rock that might
fit the description of the rock in question was not specifically mentioned in any of the

16
1930 transaction-related documents or in the 1947 patent. 	Further, there exists no
testimony of the original contracting parties.
{21} 	The district court entered several findings of fact that appear to relate to the
issue of intent. A number of findings relate to the character of the rock. The court
noted that “[t]he rock[] or crushed stone” used for railroad ballast has certain
characteristics and value, that a railroad’s easy access to a rock quarry is important,
and that as of 1915, railroad tracks, which still exist, run near Section 16, about two
miles from the quarry site ultimately constructed by Mainline. The court further noted
that “[r]ailroad ballast is the final product of certain mineral aggregates (rock) that
meet railroad specifications for density, hardness[,] and durability . . .[,] is a
construction use of the industrial material called ‘crushed stone[,]’” and that “[a]n
industrial mineral is a valuable, usually nonmetallic rock or related material that is
natural or man-made, excluding fuels, metals, and gems.”
{22} 	In further findings, the court discussed the United States Bureau of Mines’
1932-33 Minerals Yearbook that characterized crushed stone as an industrial mineral
used for railroad ballast, and the court pointed to the chapter entitled “Crushed and
Broken Stone” that stated, “[s]ince the advent of concrete[,] the crushed-stone industry
has far surpassed the dimension-stone industry in tonnage and value.” 	The court
found that, in 1932, there was no report of railroad ballast sales in New Mexico and

17
several other states, including Texas, and that “[t]he lack of reporting probably was
the result of the lack of demand for new construction caused by the Great
Depression.” However, the court also found that, as reflected in the 1947 Minerals
Yearbook, “[b]y 1947, the crushed[-]stone industry . . . had turned around . . ., [and
s]ales of crushed stone were at an all-time high,” and “[i]n New Mexico, the sale or
use by railroads of railroad ballast exceeded 300,000 short tons[.]”
{23} 	In regard to crushed-stone production after 1947, the court found that in 1980
railroad ballast and other construction aggregates and roadstone accounted for twenty-
seven percent of the total crushed stone used in construction in the United States. The
court referred to a United States Geological Survey Bulletin 1594 (1993) entitled
Natural Aggregates of the Conterminous United States stating that crushed stone and
sand and gravel are the two main sources of natural aggregates and amount to about
one-half of the mining volume in the United States. In addition, referring to what was
reported in a publication of the New Mexico Geological Society and the New Mexico
Bureau of Geology and Mineral Resources, the court noted that crushed stone was
included as a common industrial mineral, along with sand and gravel and caliche, and
that “[i]n 2003 the top nonfuel minerals in New Mexico were, by value, potash and
copper, followed by construction sand and gravel, crushed stone, and cement[.]”

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{24} 	The court entered the following further findings that relate more particularly to
intent.
62. 	The Sheltons acquired Section 16 to be used for grazing.
63. 	The Sheltons did not intend to exploit the rock deposit in
Section 16 by mining and selling the rock or leasing Section 16 for the
purpose of having the rock mined and sold.
64. 	Inclusion of the rock within the scope of the mineral
reservation in the 1930 contract and the 1947 patent, particularly where
the rock is being mined and sold commercially, serves the purposes that
the parties had in agreeing that the State would sell the land and that
[the] Sheltons would purchase it.
65. 	Mrs. Shelton’s subjective intention as to the mineral
reservation in Patent No. 1906 is unknown, but her objective intention
as evidenced by the surrounding circumstances, including her husband’s
earlier contract with the Commissioner for the acquisition of Section 16
and her subsequent use of Section 16 for grazing, was in accordance with
the State’s intention to maximize its monetary opportunities for mineral
extraction if minerals were ever to be discovered on the property.
66. 	The State’s intention in reserving all minerals of whatsoever
kind when it issued Patent No. 1906 for land that was apparently not
mineral-bearing was to maximize the State’s opportunities for royalties
to be derived from any and all minerals that might later be discovered on
Section 16.
67. 	The Commissioner . . . considered industrial minerals as
“minerals of whatsoever kind” in Patent No. 1906 given the widespread
understanding of industrial minerals as some of the most valuable
minerals in the United States for highest monetary sales from earlier in
the 20th century through the year 1947.

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68. 	In 1947, the Commissioner . . . considered crushed stone as
an industrial mineral, as it was customarily considered in the mineral
trade markets.
69. 	Based on the parties’ language in their dealings with one
another, their conduct, the objectives they sought to accomplish, and the
surrounding circumstance, the parties intended that crushed stone, an
industrial mineral, was to be considered a mineral in the 1930 Shelton
contract to purchase and one of those “minerals of whatsoever kind”
included in the State’s mineral reservation in Patent No. 1906.
70. 	The fact that surface rock was visible on Section 16 was not
the same as a determination that such rock was or was not a mineral
under the 1930 Shelton contract to purchase or under Patent No. 1906’s
mineral reservation.
71. 	The crushed stone discovered on Section 16 in 2003 as a
result of extensive on-site and laboratory testing is a mineral under the
1930 Shelton contract to purchase and one of those “minerals of
whatsoever kind” reserved by the State in Patent No. 1906.
72. 	Even if the parties disagreed as to the meaning of the term
“mineral” in the 1930 Shelton contract to purchase or the phrase
“minerals of whatsoever kind” in the 1947 patent, or if the parties’
intentions could not be determined, it is most reasonable that the term
and phrase include the industrial mineral known as crushed stone, based
on all surrounding circumstances.
After setting out the parties’ proof burdens, the district court entered the following
conclusions of law that appear to relate to intent.
5. 	Title to state trust land cannot be conveyed by implication.
. . . .
7. 	The parties need not be aware that the property has minerals
in order to create a mineral estate.

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8. 	Authority and responsibility for managing and conveying
Section 16 was vested in the Commissioner . . . pursuant to N.M. Const.,
art. XIII, § 2 and N.M. Laws 1912, ch. 82, §§ 1-2 (currently codified at
NMSA 1978, §§ 19-2-1 [(1913)] and 19-2-2[ (1963)]).
9. 	Pursuant to Section 1 of the Ferguson Act and Sections 6
and 10 of the Enabling Act, the State held title to Section 16 in trust for
the purpose of supporting common schools. The trust terms required that
“the natural products and money proceeds” of Section 16 “shall be
subject to the same trust[]” and that “[a]ll lands, leaseholds, timber[,] and
other products of land before being offered [for sale or lease] shall be
appraised at their true value, and no sale or other disposal thereof shall
be made for a consideration.” 	[(Alterations in original.)]
10. 	Because Section 16 was classified by the Commissioner as
mineral land, the Commissioner was required as a matter of state law to
issue a limited patent containing a reservation to the [S]tate of New
Mexico of all the minerals in Section 16, together with the right to the
[S]tate or its grantees, to prospect for, mine[,] and remove the same.
NMSA 1978, § 19-10-27 [(1925)].
11. 	The question of whether a state trust land patent reservation
of “all minerals of whatsoever kind, including oil and gas” may be
resolved by examining the intent of the parties to the transaction. The
intent of the parties may be determined by examining the parties’
language and conduct, the objectives they sought to accomplish, and the
surrounding circumstances.
12. 	A purchaser of [s]tate lands from the Commissioner owns
the surface and subsurface of the purchased property, save for such
minerals as are reserved, under statutory authority by the Commissioner.
13. 	Patent No. 1906’s mineral reservation was ambiguous.
Accordingly, it was incumbent upon the [c]ourt as fact-finder to resolve
the ambiguity.

21
14. 	If the parties, at the time Patent No. 1906 was issued, had the
same understanding of the mineral reservation, then that shared meaning
controls.
15. 	If the parties had a different understanding of the mineral
reservation in Patent No. 1906 at the time the patent was issued, then the
[c]ourt as fact-finder is required to give the meaning that it finds to be
most 	reasonable, 	taking 	into 	consideration 	all 	the 	circumstances,
including the intentions of the parties, the words that the parties used, the
purposes the parties sought to achieve, custom in the trade, the parties’
course of dealing, the parties’ course of performance, whether a party, at
the time the contract was entered into, knew or should have known that
the other party interpreted the term[s] differently. [(Second alteration in
original.)]
16. 	Plaintiff has not met her burden of proving her claims that
the rock at issue was not included in the reservation of “all minerals of
whatsoever kind” in Patent No. 1906.
17. 	The Commissioner has met his burden of proving his
counterclaims that the rock at issue was included in the reservation of “all
minerals of whatsoever kind” in Patent No. 1906.
Plaintiff’s Surface Destruction Doctrine and Other Arguments
{25} 	Plaintiff states that “[t]he crux of this appeal is whether New Mexico should
adopt the surface destruction doctrine.” That question is one of law, which we review
de novo. Romero v. Bd. of Cnty. Comm’rs, 2007-NMCA-004, ¶ 21, 140 N.M. 848,
149 P.3d 945; Poncho v. Bowdoin, 2006-NMCA-013, ¶ 32, 138 N.M. 857, 126 P.3d
1221. Plaintiff’s in-a-nutshell request of this Court is
to follow the lead of most other states in adopting the “surface
destruction” doctrine, which holds that, in the absence of clear contrary
intent, where materials alleged to be “minerals” are plainly visible on the

22
surface, and where the surface would have to be destroyed in order to
“mine” them, the parties could not have intended those materials to be
“minerals” because, if they were, the mineral reservation would swallow
up the grant and render it worthless.
Plaintiff cites to courts and commentators that recognize the “complex and hopeless
search for the ‘true intentions’ of the original parties” and that are critical of the
attempt “to [divine] the subjective intent of the parties” after decades have passed.
Plaintiff contends that only the objective intent of the parties to the original
transaction can be ascertained and that objective intent is to be derived from only three
relevant factors, namely: (1) the surface destruction doctrine; (2) statutes in effect at
the time of the original transaction; and (3) the circumstances at the time, including
records, documents, and actions of the parties. 	See Downstate Stone Co. v. United
States, 712 F.2d 1215, 1217-20 (7th Cir. 1983) (relying on a surface destruction
rationale and statutes and on the circumstances in considering whether a mining
company had title to quarry limestone under a mineral reservation contained in
conveyances to the United States). Plaintiff challenges as irrelevant and insubstantial
findings of fact of the district court that recite post-1947 facts, circumstances, and
publications, insofar as the court intended the findings to relate to the intent of the
original parties. Plaintiff also challenges those findings which indicate that the rock
was a mineral.

2 See cases cited infra note 3.
23
{26} 	Plaintiff describes the surface destruction doctrine as a common sense concept.
She asserts that it is not reasonable to assume or believe that a surface owner of land
who acquired the surface for grazing or agriculture would consent to a reservation of
a material or substance that obviously exists on and beneath the surface knowing that
the surface could be destroyed if the mineral owner mined the material or substance.
Plaintiff further asserts and points to photographs that she argues support the fact that
the rock covered thirty to forty percent of the surface of Section 16. Mineable rock
also existed below the surface. 	Thus, Plaintiff argues, if a reasonably objective
rancher such as Shelton, who intended to use the land for grazing, were to understand
that all of the rock, including the subsurface rock, constituted “minerals” that could
be removed by the State in a manner that would destroy the entire surface, that rancher
would not have purchased the land in the first place, since it “would nullify the grant
by destroying the agricultural usefulness of the land.”
{27} 	This surface destruction doctrine appears in one form or another in several cases
cited by Plaintiff.2 See Waring v. Foden, [1932] 1 Ch. 276, 86 A.L.R. 969, 979 (Eng.)
(stating that “the word ‘minerals’ when found in a reservation out of a grant of land
means substances exceptional in use, in value[,] and in character . . . and does not
mean the ordinary soil . . . which if reserved would practically swallow up the grant”);

24
see also Downstate Stone, 712 F.2d at 1218 (stating that “it [is] unreasonable to
assume that a party intended to reserve the surface, and at the same time convey to the
mineral owner the limestone on the surface with the right to remove it, thereby
destroying all that he had reserved”); Florman v. MEBCO Ltd. P’ship, 207 S.W.3d
593, 600, 601 (Ky. Ct. App. 2006) (holding that limestone was not a mineral at the
time of the original transaction in 1873 as well as at the time of the decision, states
that “[i]n this country it is a part of the soil, and a conveyance that reserves the
limestone with the right to remove it would reserve practically everything and grant
nothing” (internal quotation marks and citation omitted)).
{28} 	Plaintiff does not suggest that the surface destruction doctrine be applied
without regard to intent; instead, according to Plaintiff, it can be viewed as a doctrine
“designed to facilitate the [intent] inquiry mandated in Bogle Farms” and as a “proxy
for determining what the parties must have reasonably intended.” 	Plaintiff argues
based on her cited case law that application of the doctrine is triggered because (1) the
entire surface area conveyed need not be covered with the material in question before
the doctrine applies; (2) the doctrine may apply in circumstances where the
reservation is included within a patent or other instrument of conveyance issued by
a state governmental entity; and (3) widespread outcropping of the material covering
thirty to forty percent of the land together with the same rock found below the surface

25
made it apparent that mining the rock would destroy the surface and make the surface
unsuitable for grazing. Plaintiff shows that the rock is part of a fifteen- to twenty-
mile-wide geologic formation with rock outcrops that stretches from the Sangre de
Cristo Mountains on the north into Texas and Mexico on the south and that “if the
rock being removed is ‘mineral,’ the entire formation would have to be considered
‘mineral’ since the rock being removed has the same characteristics as the other rock
in the formation[.]”
{29} 	Plaintiff also urges adoption and application of the surface destruction doctrine
because, had the appraiser believed the rock was a mineral, he would have reflected
that in his appraisal and would have accounted for reduced value because of the risk
of surface destruction. Thus, Plaintiff argues, viewing intent objectively, based on the
undisputed circumstances, a reasonable person in Shelton’s position would not have
intended to purchase Section 16 without ownership of the rock, adding that “a
reasonable person in . . . Shelton’s position would not have paid valuable
consideration for Section 16 during the Great Depression had he known that [the] SLO
could destroy the surface.”
{30} 	Plaintiff points out that Bogle Farms never considered the application of the
surface destruction doctrine and because most of the parties to the original contract
were before the court and subject to cross-examination, it was not necessary for the

26
court to consider the doctrine. 	Plaintiff also argues that, in Bogle Farms, the
patentee’s application specifically referred to sand and gravel as being included as a
mineral, thus showing the purchaser’s intent that sand and gravel could be a mineral
and making the result in that case foreordained. See Bogle Farms, 1996-NMSC-051,
¶ 3. 	Plaintiff further distinguishes 	Bogle Farms 	because “live persons who
participated in the transactions in question were available to testify concerning their
intent[.]” Plaintiff complains that the district court in the present case erroneously
went beyond what 	Bogle Farms 	would allow by considering and relying on
information developed long after the original transaction—information deemed by
courts in similar cases not to be material. In addition, Plaintiff contends the Ferguson
Act did not intend to convey minerals, in that the Act provided that only non-mineral
lands were to be conveyed, and that the only possible conclusion that can be drawn
is the lands conveyed were not deemed to contain minerals, “a critical conclusion”
according to Plaintiff “since the materials now claimed to be minerals were plainly
visible.”
{31} 	Relating specifically to the transactional documents, which are (1) the
application (Pl. Ex. 1), (2) the appraisal (Pl. Ex. 2), (3) the purchase contract (Pl. Ex.
3), and (4) the patent (Pl. Ex. 4), Plaintiff not only contends that these documents
provide “further support for application of the surface destruction doctrine[,]” Plaintiff

27
also argues that the documents are at variance with the district court’s ruling, in that
“the fact that there is no evidence the parties considered whether the rock visible on
Section 16 was a mineral disclosed a binding intention not to reserve it.” Plaintiff
states that the appraisal is the more important of the four transactional documents, in
that, although the rock was visible, “the state-approved appraiser did not classify that
rock as a mineral.” Because the SLO’s appraisal form used by the appraiser called for
the appraiser to list all minerals, Plaintiff argues, the rock would have been listed had
it been regarded as a mineral. 	Further, Plaintiff argues that because no value was
independently assigned to the rock, and because the Enabling Act requires all sales of
state lands to be appraised at their “true value,” if the rock had been regarded as a
mineral, there would have been a deduction from the “true value” of the rock given
that the removal of the rock would have rendered the land useless for the
contemplated purpose of grazing. As for Shelton’s application, Plaintiff points out
that Shelton “recited that there was nothing he regarded as a mineral on the land.”
Plaintiff further shows that the patent stated that Shelton was “to have and to hold the
said premises . . . forever[,]” a concept inconsistent with any notion that material was
a mineral under the mineral reservation clause where the mineral could be removed
only by destroying the surface.

28
{32} 	Further, Plaintiff argues that Rickelton governs the present case. 	Plaintiff
contends that Rickelton addressed the precise question of “whether sand and gravel
was a reserved ‘mineral’ within [the] SLO’s patent reservation” and, according to
Plaintiff, “reached the opposite conclusion because, unlike [in] Burris, there was
nothing in the transactional documents in the record in that case where the patentee
acknowledged that sand and gravel was a mineral.” Plaintiff concludes that because
the transactional documents in the present case contained no acknowledgment by
Shelton that either rock, ballast, crushed stone, or industrial materials was a mineral,
under Rickelton, rock was not a mineral within the common and ordinary meaning of
that term in a mineral reservation and that “the undefined term ‘minerals’ does not
include rock.”
{33} 	Because Plaintiff strongly relies on Rickelton, we pause here to discuss
Rickelton’s status in New Mexico law. Plaintiff footnotes that although Bogle Farms,
1996-NMSC-051, 	¶¶ 	15-16, 	“took 	the 	opportunity 	to 	overrule, 	or 	recognize
overruling, . . . several New Mexico decisions, it left Rickelton [intact] despite
discussing it extensively.” We doubt that Rickelton is viable. The Court relied on and
felt controlled by Trujillo, a case that, Rickelton explained, held that sand and gravel
was not intended to come within the general reservation clause because it was a
material that “had no rare or exceptional character and possessed peculiar property

29
giving it special value.” Rickelton, 91 N.M. at 480-81, 576 P.2d at 286-87. Plaintiff
fails to mention that Trujillo was overruled by Champlin Petroleum, 103 N.M. at 410,
708 P.2d at 322, a point expressly made in Bogle Farms. 	See Bogle Farms, 1996-
NMSC-051, ¶ 12. 	Both Trujillo and Champlin Petroleum involved conveyances
pursuant to the Federal Stock-Raising Homestead Act. 	Champlin Petroleum, 103
N.M. at 408-10, 708 P.2d at 320-22; Trujillo, 82 N.M. at 695-97, 487 P.2d at 123-25.
Bogle Farms stated:
This Court specifically addressed whether the term “mineral” as
used in a reservation included sand and gravel for the first time in
[Trujillo, overruled by Champlin Petroleum]. Basing our holding on a
review of the Federal Stock-Raising Homestead Act, 43 U.S.C. §§ 291-
302 (1982) (repealed in part in 1976), we concluded that the federal
government did not intend to include sand and gravel within the term
“mineral” as it was used in a federal patent. Trujillo, 82 N.M. at 696-97,
487 P.2d at 124-25. 	The United States Supreme Court indirectly
overruled this conclusion in Watt v. Western Nuclear, Inc., 462 U.S. 36,
55, 103 S. Ct. 2218, 2229, 76 L.Ed.2d 400 (1983) (determining that
gravel was included within the scope of the mineral reservation
contained in a federal patent issued under the Stock-Raising Homestead
Act). 	Relying on Watt, this Court expressly overruled Trujillo in
Champlin Petroleum Co., wherein we determined that caliche was “a
mineral 	similar 	to 	sand, 	gravel, 	clay, 	and 	limestone,” 	Champlin
Petroleum Co., 103 N.M. at 409, 708 P.2d at 321, and was therefore
included within the general mineral reservation of a federal patent, id. at
410, 708 P.2d at 322.
Bogle Farms, 1996-NMSC-051, ¶ 12. 	Bogle Farms’ discussion of Rickelton and
Rickelton’s reliance on Trujillo leave Rickelton’s value as controlling or even reliable
authority in considerable doubt. 	Furthermore, Rickelton is not helpful to Plaintiff

30
because the district court’s determinations made in that case, which were affirmed,
were fact-specific and not necessarily ones that would make Rickelton controlling
precedent. See 91 N.M. at 481, 576 P.2d at 287.
{34} 	Insofar as Plaintiff attacks evidence and certain of the district court’s findings
as irrelevant or insubstantial, thereby casting doubt on the validity of the district
court’s determination relating to intent, we hold that the attacks, even assuming some
are meritorious, have no effect on our decision in this case. 	We do not base our
determinations on the findings Plaintiff challenges as irrelevant or insubstantial based
on information that came into existence after the 1947 patent. We ignore Plaintiff’s
quarrel with findings as to which Plaintiff merely sets out evidence as to the original
parties’ intent arguably favorable to Plaintiff’s position.
The Dispositive Issues of Intent and the Surface Destruction Doctrine
{35} 	Bogle Farms requires us to determine the intent of the parties to the original
sale transaction between the Commissioner and the purchaser of state trust land.
1996-NMSC-051, ¶ 14. The parties’ intent in the present case can be determined only
objectively from the original sale-related documents and surrounding circumstances.
Plaintiff does not contend that findings of fact are not supported by substantial
evidence. Plaintiff’s primary complaint is that the district court erred in not applying

31
the surface destruction doctrine and determining, based on the doctrine, that the
parties did not intend the mineral reservation to include the rock.
{36} 	Plaintiff also asserts that certain of the findings of fact on which the district
court relied were not sufficient to support a determination favoring the Commissioner
on the question “whether the parties to the original contract intended that the State
reserve sand and gravel[,]” quoting from Bogle Farms, 1996-NMSC-051, ¶ 35
(emphasis added by Plaintiff). Plaintiff’s limited attack on certain conclusions of law
as “based upon insubstantial evidence” is phrased as follows: “[T]he trial court relied
upon information developed long after the original parties entered into the contracts
at issue,” and also “relied upon other information generally deemed by the courts in
similar cases to be immaterial[.]” We dispose of this limited point easily. None of the
findings of fact to which Plaintiff refers relating to circumstances after issuance of the
patent are findings on which we rely to affirm the district court’s conclusions of law
and ultimate decision. The circumstances set out in the court’s findings of fact that
occurred after the patent was issued, although noteworthy, were not necessary for a
determination as to the intent of the parties. See Tome Land & Improvement Co. v.
Silva, 86 N.M. 87, 90, 519 P.2d 1024, 1027 (1973) (holding that a finding, even if
erroneous, was clearly immaterial and irrelevant and could be ignored as surplusage
with the remaining findings and conclusions supporting the judgment); see also

32
Quarles v. Arcega, 114 N.M. 502, 509, 841 P.2d 550, 557 (Ct. App. 1992) (“Even if
a finding of fact or conclusion is erroneous, if it is unnecessary to the court’s decision,
the mistake is not a basis for reversal.” (internal quotation marks and citation
omitted)); United Veterans Org. v. N.M. Prop. Appraisal Dep’t, 84 N.M. 114, 118,
500 P.2d 199, 203 (Ct. App. 1972) (“The making of unnecessary and superfluous
findings of fact or the presence of error in findings of fact on immaterial, irrelevant,
or purely collateral issues is harmless and non-reversible error if the judgment is
otherwise sufficiently supported.”). The circumstances set out in the court’s findings
of fact relating to circumstances that pre-date the issuance of the patent are material.
{37} 	The court’s several ultimate findings of fact that support a determination as to
intent and its conclusions of law regarding intent are based on reasonable inferences
from evidence, including findings regarding the sale-related documents and the
surrounding circumstances, from which the court could determine, objectively, that
the parties intended that the mineral reservation included the rock. 	The court’s
numerous findings of fact and conclusions of law reflect a rational and reasonable
process of distilling of the court’s findings of fact into the court’s conclusions of law
to arrive at Bogle Farms’ required-intent element. We note, in particular, the court’s
conclusions of law stating:

33
14. 	If the parties, at the time Patent No. 1906 was issued, had
the same understanding of the mineral reservation, then that shared
meaning controls.
15. 	If the parties had a different understanding of the mineral
reservation in Patent No. 1906 at the time the patent was issued, then the
[c]ourt as fact-finder is required to give the meaning that it finds to be
most 	reasonable, 	taking 	into 	consideration 	all 	the 	circumstances,
including the intentions of the parties, the words that the parties used, the
purposes the parties sought to achieve, custom in the trade, the parties’
course of dealing, the parties’ course of performance, whether a party,
at the time the contract was entered into, knew or should have known
that the other party interpreted the term[s] differently.
These conclusions of law were derived in part from findings (1) that, based on several
factors, “the parties intended that crushed stone, an industrial mineral, was to be
considered a mineral in the 1930 Shelton contract to purchase and one of those
‘minerals of whatsoever kind’ included in the State’s mineral reservation in Patent No.
1906[,]” and (2) that
[e]ven if the parties disagreed as to the meaning of the term ‘mineral’ in
the 1930 Shelton contract to purchase or the phrase ‘minerals of
whatsoever kind’ in the 1947 patent, or if the parties’ intentions could
not be determined, it is most reasonable that the term and phrase include
the industrial mineral known as crushed stone, based on all surrounding
circumstances.
{38} 	The foregoing findings of fact and conclusions of law as to intent followed the
district court’s ruling that the mineral reservation was ambiguous. The parties do not
disagree with that ruling, and we agree with the district court that the mineral
reservation was ambiguous. Except for minerals expressly mentioned, the mineral

34
reservation did not indicate what material or substance was intended to constitute a
mineral within the meaning of the mineral reservation. Although, over the years in
New Mexico, what constitutes a mineral under a mineral reservation in patents, deeds,
custom, and case law has become clear as to many, if not most, materials and
substances, some materials and substances appear to have escaped a settled
identification. Common or metamorphic rock presently rests among the unsettled.
On appeal, Plaintiff resolves the ambiguity in meaning by application of the surface
destruction doctrine as the overriding evidence of intent. The Commissioner rejects
any application of the surface destruction doctrine and resolves the ambiguity in
meaning based on the district court’s findings of fact and conclusions of law.
{39} 	The district court, of course, was required under Bogle Farms to resolve
factually the ambiguity as to whether the rock came within the mineral reservation by
ascertaining the intent of the parties. UJI 13-804 NMRA requires the district court to
determine the intentions of parties to a contract “by examining their language and
conduct, 	the 	objectives 	they 	sought 	to 	accomplish, 	and 	the 	surrounding
circumstances.” UJI 13-825 NMRA, relating to ambiguity in a contract term, tells us
that “[w]here . . . the parties at the time the contract was made had different meanings
in mind[,]” the fact-finder is to “give that meaning which [it] find[s] to be most

35
reasonable, taking into consideration all the circumstances[.]” The district court was
obviously guided by UJI 13-825.
{40} 	As we have indicated earlier in this opinion, the district court determined that
the parties intended the rock to be included in the mineral reservation, but also that if
there was disagreement in the meaning, the most reasonable meaning was that the rock
was intended to be included in the mineral reservation based on all surrounding
circumstances. These determinations were made based, among other findings of fact,
on the findings set out earlier in this opinion relating to the language in the contract
and the patent; the Sheltons’ intent and what they sought to achieve; what the status
of commercial development of rock as crushed stone and as a mineral was in the
United 	States; 	what 	the 	State 	intended in 	reserving 	minerals; 	and 	what 	the
Commissioner, in regard to crushed stone, considered as an industrial mineral based
on the custom in the mineral trade markets. Evidence in the record supports these
findings.
{41} 	Also significant to the district court, as indicated in the court’s findings, was the
involvement of state trust lands and what follows from that. New Mexico state trust
lands have purposefully been classified as mineral lands since 1919. SLO regulations
in effect at the time of the original sale transaction purposefully required that minerals
be reserved in the sale of state trust lands. The 1947 patent reserved to the State “all

36
minerals of whatsoever kind[.]” 	At all material times, the rock had significant
commercial value if it were mined, crushed, and marketed for use as railroad ballast
and other uses, which could produce revenue to the State as intended by the mineral
reservation. “The State’s intention in reserving all minerals of whatsoever kind when
it issued Patent No. 1906 for land that was apparently not mineral-bearing was to
maximize the State’s opportunities for royalties to be derived from any and all
minerals that might later be discovered on Section 16.”
{42} 	Discussions in two New Mexico Supreme Court decisions in print between
1930 and 1947 are pertinent in looking at surrounding circumstances. 	The 1925
decision in Otto related to the Enabling Act, to the 1919 SLO regulation, and to a sale
of state trust lands. Otto, 31 N.M. at 122-25, 130-31, 241 P. at 1028-29, 1031-32. In
Otto, the Court stated:
[I]t cannot be supposed that the Legislature of New Mexico, after taking
the precaution to provide in leases for reservations of minerals, oil, gas,
stone, shale, salt, timber, and all other natural products of the land to be
dealt with separately by the commissioner, intended that, when he went
to sell grazing land or agricultural land, he would be powerless to reserve
to the [S]tate and its institutions the great wealth which might flow from
a 	future 	discovery 	of 	minerals 	in 	the 	land, 	merely 	because 	the
circumstances had not permitted of his having made an adequate
exploration in order to enable him to fully determine the exact character
of the land.
Id. at 140, 241 P.2d at 1035. In relation to the disposition of lands owned by the State,
the Court in Otto agreed with “the proposition that, until patent issues, legal title

37
remains in the government and subject to investigation and determination.” Id. at 136,
241 P. at 1034. Although the context in which the foregoing statements were made
is not that in the present case, the Otto case and the statements in it were available for
the parties’ consumption up to the date of the issuance of the patent. Also in existence
during the critical period was the 1940 decision in Board of County Commissioners
v. Good, 44 N.M. 495, 498, 105 P.2d 470, 472 (1940), involving a suit filed by a
board of county commissioners to condemn lands to secure rock, sand, gravel, and
caliche for public highway construction, addressing the actual value of the materials
taken and stating that caliche rock was, “in the ordinary acceptation, a mineral simply,
as is also sand [and] gravel[.]” The Court in Good stated: “‘Mineral,’ in ordinary and
common meaning, is a comprehensive term, including every description of stone and
rock deposit, whether containing metallic or non-metallic substances.” Id. The Court
in Good permitted a valuation of the rock separate from the land itself. Id. at 499, 105
P.2d at 472.
{43} 	Particular discussions in Bogle Farms are helpful in reaching a result in the
present case. Although set in the context of our Supreme Court’s discussion in Bogle
Farms of whether the doctrine of collateral estoppel applied, we read Bogle Farms to
establish a general principle that New Mexico’s state trust lands have a status of “great
public importance” and that there exists “a strong public interest in the protection of

38
state land and its products,” a status and interest that we cannot ignore. Bogle Farms,
1996-NMSC-051, ¶¶ 23, 26; cf. Otto, 31 N.M. at 126, 241 P. at 1030 (indicating that
the case was “of great importance, not only to the litigant who seeks protection of the
right he claims, but also it is of great public interest, because there is involved the
policy and interest of the [S]tate as a trustee with respect to its school fund”). Further,
also in the collateral estoppel context, Bogle Farms states that title to state trust lands
is not to be conveyed by implication, a holding made by the Court in response to
Roe’s rule of property that, if sand and gravel were not specifically reserved, title to
those minerals passed to the purchaser. Bogle Farms, 1996-NMSC-051, ¶ 34; Roe,
103 N.M. at 521, 710 P.2d at 88. We view the foregoing statements in Bogle Farms
as intended by our Supreme Court to apply beyond the confines of its collateral
estoppel analyses.
{44} 	Turning to Plaintiff’s main argument, which is that the surface destruction
doctrine necessarily reflects the intent of the parties, in our view the doctrine
essentially espouses an intent to convey minerals by presumption. In our view, the
doctrine presumes that the parties cannot have intended and did not, therefore, intend
a conveyance of surface rights without rights to the rock. 	And it mirrors the Roe
property rule, which Bogle Farms rejected as essentially establishing a presumption
of a conveyance of minerals where the intent of the parties was not manifest. Bogle

3 Private Grantor: 	Downstate Stone, 712 F.2d 1215; W.S. Newell, Inc. v.
Randall, 373 So. 2d 1068 (Ala. 1979); Harper v. Talladega Cnty., 185 So. 2d 388
(Ala. 1966); Bambauer v. Menjoulet, 29 Cal. Rptr. 874 (Ct. App. 1963); Farrell v.
Sayre, 270 P.2d 190 (Colo. 1954) (en banc); Kinney, 128 P.3d 297; Florman, 207
S.W.3d 593; Resler, 139 N.W.2d 379; Farm Credit Bank of Tex. v. Colley, 849
S.W.2d 825 (Tex. App. 1993); Atwood v. Rodman, 355 S.W.2d 206 (Tex. Civ. App.
1962). United States as Grantor: Hess, 348 F.3d 1237; Poverty Flats Land & Cattle
Co. v. United States, 788 F.2d 676 (10th Cir. 1986).
39
Farms, 1996-NMSC-051, ¶ 34. 	We will not import the doctrine into the intent
analysis. 	Moreover, we cannot accept the view, if intended by Plaintiff, that the
doctrine itself is simply evidence to be weighed against all of the surrounding
circumstances in the process of inferring intent. Over the years, there may in fact have
been innumerable now-deceased purchasers of state trust lands who could well have
subjectively intended to purchase land for grazing purposes understanding that the
surface and sub-surface might be subject to mineral exploitation by the State. We are
not convinced that even a preponderance of such purchasers would not have
purchased their lands for grazing had they been specifically aware that some surface
material was included in a mineral reservation. Further, and significantly, none of the
surface destruction doctrine cases on which Plaintiff relies involves New Mexico state
trust lands or lands similar to our trust lands—instead, they involve purely private land
transactions or conveyances by the United States of lands dissimilar to New Mexico’s
state trust lands. 3

40
{45} 	We are aware of Plaintiff’s and Amicus Curiae New Mexico Farm and
Livestock Bureau’s arguments that substantial farm and ranch land will be at risk if
the district court is affirmed. Plaintiff states that, although this case involves only a
single section of land, “its implications are far more significant” and “could have
grave consequences[,]” in that “the practical effect of the decision below would be that
the [Commissioner and the SLO] will have the right to destroy and render useless for
agricultural and grazing purposes any portion of the millions of acres it has sold to
farmers and ranchers on the mere showing that the hard rock on their lands, which is
pervasive throughout the State, has some current economic value.” 	We are not
insensitive to these concerns. However, we do not feel a freedom to stray from the
required Bogle Farms’ intent-of-the-parties method of ascertaining the meaning of the
mineral reservation. And we cannot ignore the over-arching principles and policies
Bogle Farms enunciates in regard to conveyance of state trust lands. Nor do we feel
free to ignore Bogle Farms’ apparent rejection of a rule or doctrine that creates a
presumption or necessary implication of intent to convey minerals that in effect
overrides or diminishes the significance of surrounding circumstances that indicate an
intent to include rock within the mineral reservation. We leave it up to our Supreme
Court to consider whether Bogle Farms’ clear rule requiring a determination of the

41
intent of the parties to the original sale transaction can permit application of the
surface destruction doctrine.
{46} 	Further, Plaintiff’s and Amicus Curiae’s concerns are subject to some degree
of dilution in that Plaintiff has not pointed to any specific evidence showing a likely
and substantial risk of future harm to purchasers of state trust lands based on surface
destruction. Nor did Plaintiff show that she would be harmed based on destruction of
the surface. We think it noteworthy that state law requires the Commissioner to obtain
from lessees, such as Mainline, a bond to secure payment to the surface owner for
damage to livestock range, water, crops, or tangible improvements that may occur as
a result of the mineral lessee’s activities. NMSA 1978, §§ 19-10-26 (1979), 19-10-27
(1925); see Tidewater Associated Oil Co. v. Shipp, 59 N.M. 37, 41, 278 P.2d 571, 574
(1954) (discussing the surface owner protection provisions of 1919 and 1925 laws and
holding that a mineral lessee is similarly obligated to the surface lessee for damages
to grass, livestock, or crops). It is also noteworthy that, in obtaining a zoning change
for construction of its quarry, Mainline provided a reclamation plan in which it
represented that, “[w]hen the quarry is completed[,] the land will be suitable for
grazing and will form a basin for collecting storm water for livestock watering[.]”
The Rule 5 Mining Lease issued to Mainline states, “[l]essee has separately contracted
with the owner of the surface estate of the lands described herein, which contractual

42
arrangement . . . includes certain responsibilities relating to operations, reclamation,
surface protection[,] and damages[.]” And the district court made an unchallenged
finding that “[a]fter removal of the rock that can be removed in a commercially viable
manner, the site can be reclaimed in such a manner as to allow the pre-existing grazing
use without substantial impairment.”
{47} 	We hold that the district court did not err in determining, under Bogle Farms’
required analysis of the intent of the parties of the original sale transaction, that based
on the sale transaction documentation, including the patent, and also based on all of
the surrounding circumstances, the intent of the conveyance transaction was that the
rock was included in the reservation of “all minerals of whatsoever kind” in the patent.
CONCLUSION
{48} 	We affirm the district court’s determination that the rock in question was a
mineral within the mineral reservation in the 1947 patent relating to Section 16.
{49} 	IT IS SO ORDERED.
__________________________________
JONATHAN B. SUTIN, Judge

I CONCUR:

CYNTHIA A. FRY, Judge

MICHAEL E. VIGIL, Judge (dissenting).

43

4The transaction documents consist of: 	(1) Mr. Shelton’s August 5, 1930
application to purchase Section 16 from the State; (2) the August 5, 1930 appraisal of
Section 16; (3) the contract dated November 21, 1930, (which was signed on January
22, 1931) between Mr. Shelton and Land Commissioner James F. Hinkle setting forth
the terms of the sale of Section 16 from the State to Mr. Shelton; and (4) the August
4, 1947 patent, signed by Land Commissioner John E. Miles, conveying Section 16
to Mrs. Shelton.
44
VIGIL, Judge (dissenting).
{50} 	The extent of the mineral reservation set forth in the transaction documents is
ambiguous. 4 Thus, the question before the district court was whether the original
parties to the sale intended the surface and subsurface metamorphic rock in Section
16 to be included in the mineral reservation. The district court ruled, and the majority
agrees, that the mineral reservation includes the rock. In my view, the district court
erred in two respects: (1) it failed to take into consideration the surface destruction
doctrine as bearing on the parties’ intent at the time the contract for the purchase of
Section 16 was made; and (2) it considered irrelevant evidence and without this
evidence, its conclusion that the parties intended to include the rock in the mineral
reservation is not supported by substantial evidence. Since the majority disagrees, I
dissent.

5Roe, 103 N.M. at 521, 710 P.2d at 88.
6Burris, 88 N.M. at 147, 538 P.2d at 419.
7Rickelton, 91 N.M. at 481, 576 P.2d at 287.
45
THE HOLDING OF BOGLE FARMS
{51} 	Bogle Farms overruled the holding in Roe5 that because a purchase contract and
patent did not specifically reserve sand and gravel in a mineral reservation, title to the
sand and gravel passed to the purchaser along with the surface estate. Bogle Farms,
1996-NMSC-051, ¶ 34. 	Bogle Farms reiterated the principle laid down in Burris,6
restated in Rickelton,7 that in determining whether the general term “mineral” includes
a specific substance is resolved on a case-by-case basis. Bogle Farms, 1996-NMSC-
051, ¶ 21. “The case-by-case rule adopted in Burris is based on the principle that in
contract cases the role of the court is to give effect to the intention of the contracting
parties. The role of the court is to determine whether the parties intended to include
[the substance] within the term ‘mineral.’” Bogle Farms, 1996-NMSC-051, ¶ 22. A
case-by-case analysis is required “because the intent of parties to one contract may not
be the same as the intent of parties to another contract.” Id. Given that “[t]he polestar
of deed construction is the parties’ intent,” id. ¶ 34, Bogle Farms unambiguously
mandates:

46
[1.] 	[A]nyone purchasing land under a purchase contract or a
patent with a specific reservation would be bound by the terms of that
reservation.
[2.] 	If there is not a specific reservation, the trial court must look
to evidence outside the face of the contract to determine the meaning
intended for the term “mineral” when that term has been shown under
the circumstances to be ambiguous.
[3.] 	In those cases involving successors in interest to original
purchasers, [where the purchase was not made in reliance on Roe], . . .
the issue is whether the parties to the original contract intended that the
State reserve [the substance in question].
Id. ¶ 35.
{52} 	In this case, none of the transaction documents contain a specific reservation
of the surface and subsurface metamorphic rock in Section 16. Further, there is no
dispute that the mineral reservation in the transaction documents is ambiguous. Thus,
Bogle Farms required the district court to determine whether Mr. Shelton and
Commissioner Hinkle, as the parties to the original contract, intended the State to
reserve the surface and subsurface metamorphic rock in Section 16. 	With the
foregoing principles and requirements in mind, I now turn to each specific
disagreement I have with the majority.
REJECTION OF THE SURFACE DESTRUCTION DOCTRINE
{53} 	Mr. Shelton and Commissioner Hinkle, the parties to the original sale of Section
16, are deceased. Thus, the majority concludes, their intent “can be determined only

47
objectively from the original sale-related documents and surrounding circumstances.”
Majority Opinion ¶ 35. 	The “surrounding circumstances” clearly include the
condition of the land at the time of the sale. Since the original parties to the contract
are deceased, and the transaction documents are ambiguous, the evidence most
probative of their intent is the condition of the land at the time of the sale.
{54} 	The surface destruction doctrine requires the fact finder to engage in a critical
analysis of the land at the time of the sale. I refer to the surface destruction doctrine
to mean, as quoted by the majority in Paragraph 25, a doctrine “which holds that, in
the absence of clear contrary intent, where materials alleged to be ‘minerals’ are
plainly visible on the surface, and where the surface would have to be destroyed in
order to ‘mine’ them, the parties could not have intended those materials to be
‘minerals’ because, if they were, the mineral reservation would swallow up the grant
and render it worthless.” 	Plaintiff asked the district court to use the doctrine in
assessing the intent of the parties, but the district court refused. 	The majority
concludes this was not error, Majority Opinion ¶ 44, and I disagree.
{55} 	This area of New Mexico is part of what is called the Rocky Mountains for very
good obvious reason. The district court briefly noted the land’s physical condition in
its findings, noting that prior to 1930, Section 16 was owned in fee by the State, and
that “Section 16 is located in that part of Torrance County known as ‘Perdenal Hills’

48
and is largely composed of Pre-Cambrian metamorphic rock.” (Emphasis added.)
This finding is supported by photographs showing rocks on the surface all over
Section 16. To illustrate, two photographs introduced into evidence are attached to
this dissent. The majority also notes that Plaintiff showed that the rock is part of a
fifteen- to twenty-mile-wide geologic formation with rock outcrops that stretches from
the Sangre de Cristo Mountains on the north into Texas and Mexico on the south.
Majority Opinion ¶ 28. The district court findings and Plaintiff’s evidence establish
that the rocks in Section 16 were ubiquitous and obvious in 1930. Nevertheless, the
district court made a finding that “[t]he fact that surface rock was visible on Section
16 was not the same as a determination that such rock was or was not a mineral under
the 	1930 	Shelton 	contract 	to 	purchase 	or 	under 	Patent 	No. 	1906’s 	mineral
reservation.”
{56} 	The majority has discussed the appraisal as if the appraiser was representing
Mr. Shelton. 	Majority Opinion ¶ 6. 	The evidence suggests otherwise. 	In the
application to purchase Section 16, Mr. Shelton recites the amount he offers to pay for
the land and he also agrees to pay an additional amount of money “to defray the
expense of appraisement and advertising as per the rules of the State Land Office,
such amount to be returned to me in the event I am not the successful bidder.” The
appraisal is based on the personal knowledge of the appraiser and he does not classify

49
the rock as a mineral, notwithstanding its obvious and abundant presence on Section
16. In the 1930 contract to buy Section 16, Mr. Shelton agreed to pay the agreed upon
price for the land and he also paid an additional amount, “the same being the
payments required for the advertisement and appraisement of said land[.]” Thus, these
documents suggest on their face that the State hired the appraiser, and Mr. Shelton
simply reimbursed the State for the expense of the appraisal. 	It is therefore a fair
inference that the appraiser represented to his principal, the State, that notwithstanding
the presence and abundance of the rocks, there were no minerals on Section 16.
{57} 	The majority’s reasons for refusing to adopt the surface destruction doctrine to
facilitate the intent inquiry mandated by Bogle Farms are unconvincing. Majority
Opinion ¶¶ 44-46. The majority states that Plaintiff urges its adoption as a means of
conveying minerals by implication or by presumption in violation of Bogle Farms.
Majority Opinion ¶¶ 19, 44. I disagree. 	Bogle Farms did not consider the surface
destruction doctrine, and the statement in Bogle Farms, 1996-NMSC-051, ¶ 34, that
state trust lands should not be conveyed by implication is not a rejection of the surface
destruction doctrine. 	Rather, the statement sets forth an additional reason for
overruling Roe’s conclusion that if a substance is not specifically included in a mineral
reservation, it is excluded from the mineral reservation. Instead, the actual intent of
the parties governs, and the Bogle Farms statement does not preclude utilizing an

50
evidentiary aid such as the surface destruction doctrine to construe the intent of the
original parties to the transaction. 	In addition, the majority in wholesale fashion
rejects the significant and substantial body of cases which recognize and apply the
surface destruction doctrine on the basis that “they involve purely private land
transactions or conveyances by the United States of lands dissimilar to New Mexico’s
trust lands.” Majority Opinion ¶ 44. Noticeably absent in the wholesale rejection of
these cases is any indication that the doctrine is not a valuable and valid aid in
construing intent.
{58} 	I would adopt the surface destruction doctrine as an evidentiary tool to facilitate
the intent inquiry required by Bogle Farms. The intent of the original parties is to be
construed from the perspective of the interest the buyer desires to purchase, and the
interest the seller desires to sell. Mr. Shelton’s application to purchase Section 16
states he intends to use Section 16 to “graze sheep or raise cattle,” the appraisal states
that Section 16 is best adapted for “grazing,” and the contract, which is the only
document signed by both Mr. Shelton and Commissioner Hinkle, states that Section
16 “is being purchased for the purpose of grazing and agriculture only[.]” Thus, I
would remand this case to the district court to utilize the surface destruction doctrine
to determine whether removal of the surface and subsurface metamorphic rock
unreasonably interferes with what use the original parties intended for Section 16,

51
namely for grazing and agricultural purposes. 	If such a burden results, this is
persuasive evidence that Mr. Shelton and Commissioner Hinkle did not intend the
State to reserve the rock in the general mineral reservation.
CONSIDERATION OF IRRELEVANT EVIDENCE
{59} 	The district court findings of fact relating to whether Mr. Shelton and
Commissioner Hinkle intended to include the rock in the general mineral reservation
are, for the most part, all facts which occurred after 1930. Many of them are set forth
verbatim in the majority opinion in Paragraphs 22-24. Without these facts, there is no
basis for concluding that Mr. Shelton and Commissioner Hinkle intended to include
the rock in the general mineral reservation. For the following reasons, I submit that
the district court erred in considering these facts. Furthermore, they do not support
the district court’s findings of intent, because they are irrelevant.
{60} 	Commissioner Hinkle agreed to sell Section 16 to Mr. Shelton, and they entered
into a contract, dated November 21, 1930. Under the contract, Commissioner Hinkle
agreed to convey a fee simple interest in Section 16 to Mr. Shelton upon payment of
the purchase price in full subject to the following reservations and conditions:
[T]hat this land is being purchased for the purpose of grazing and
agriculture only; that while the land herein contracted for is believed to
be essentially non-mineral land, should mineral be discovered therein it
is expressly understood and agreed that this contract is based upon the
express condition that the minerals therein shall be and are reserved to
the fund or institution to which the land belongs, together with right of

52
way to the Commissioner, or any one acting under his authority, at any
and all times to enter upon said land and mine and remove the minerals
therefrom without let or hindrance.
The land was paid for, and on behalf of the State, Commissioner Miles issued a patent
to Mr. Shelton’s widow on August 19, 1947. The patent conveys a fee simple estate
to Section 16, but reserves to the State:
all minerals of whatsoever kind, including oil and gas, in the lands so
granted, and to it, or persons authorized by it, the right to prospect for,
mine, produce and remove the same, and perform any and all acts
necessary in connection therewith, upon compliance with the conditions
and subject to the limitations of the laws of the State of New Mexico[.]
{61} 	As set forth in this dissent, there are two general mineral reservations in this
case: the mineral reservation in the 1930 contract between Commissioner Hinkle and
Mr. Shelton, and the mineral reservation in the 1947 patent issued to Mr. Shelton’s
widow by Commissioner Miles. As quoted above, the 1930 contract first states that
the land contracted for “is believed to be essentially non-mineral.” With this preface,
the contract then provides, “should mineral be discovered” on Section 16, such
minerals “are reserved.” On the other hand, the 1947 patent in the broadest language
states that “all minerals of whatsoever kind” are reserved. The documents are not only
separated by almost seventeen years, they are signed by different commissioners. The
differences between the two reservation clauses are material, and the majority does not

53
determine which mineral reservation applies. 	I conclude, however, that the 1930
general mineral reservation is the one which is applicable.
{62} 	The contract between the parties defines what the purchaser (Mr. Shelton)
agreed to buy and what the seller (the State) agreed to sell. The function of the patent
is to convey the legal title which the parties agreed upon, not to change the contract
made by the parties. See Bogle Farms, 1996-NMSC-051, ¶ 4 (noting that purchasers
buying land from the Commissioner of Public Lands under installment contracts
received patents from the Commissioner transferring legal title after fulfilling their
contractual payment obligations); Jensen v. State Highway Comm’n, 97 N.M. 630,
631, 642 P.2d 1089, 1090 (1982) (stating that the provisions of the purchase contract
determine whether a substance is reserved to the State, and if the State desires to
reserve a substance, “it may do so by specific reservations in the purchase contract”);
cf. Deaton v. Gutierrez, 2004-NMCA-043, ¶ 14, 135 N.M. 423, 89 P.3d 672 (stating
that until the Bureau of Land Management issued a patent to the land, title remained
in the United States). 	Bogle Farms itself was a declaratory judgment brought by
original purchasers and successors in interest to land sold by the Commissioner of
Public Lands under installment contracts. 	1996-NMSC-051, ¶ 3. 	The plaintiffs
alleged that the general mineral reservation of their purchase contracts did not include

54
sand and gravel, and they sought a declaratory judgment that their patents could not
include a specific reservation of sand and gravel. Id. ¶ 5.
{63} 	I therefore conclude that the applicable mineral reservation at issue in this case
is the one contained in the 1930 contract between Commissioner Hinkle and Mr.
Shelton. The district court failed to relate the post-1930 findings of fact back to the
intent Mr. Shelton and Commissioner Hinkle had when they signed the 1930 contract.
Thus, Finding of Fact No. 69 is not supported by substantial evidence. This finding,
which the majority refers to in Paragraph 37, and relies on in Paragraphs 38-39 in
affirming the judgment states:
Based on the parties’ language in their dealings with one another, their
conduct, the objectives they sought to accomplish, and the surrounding
circumstance the parties intended that the crushed stone, an industrial
mineral, was to be considered a mineral in the 1930 Shelton contract to
purchase and one of those “minerals of whatsoever kind” included in the
State’s mineral reservation in Patent No. 1906.
Further, assuming the district court could, consistent with Bogle Farms, determine the
most reasonable meaning of the general mineral reservation if Mr. Shelton and
Commissioner Hinkle had different meanings in mind, Finding of Fact No. 72 fails
for the same reason. Finding of Fact No. 72 states:
Even if the parties disagreed as to the meaning of the term “mineral” in
the 1930 Shelton contract to purchase or the phrase “minerals of
whatsoever kind’ in the 1947 patent, or if the parties” intentions could
not be determined, it is most reasonable that the term and phrase include

55
the industrial mineral known as crushed stone, based on all surrounding
circumstances.
{64} 	The majority asserts that it does not rely on any findings made by the district
court after the patent was issued in 1947, and then it fails to specifically identify what
those findings are. Majority Opinion ¶¶ 36-37. I submit that the applicable date for
determining intent is as of the 1930 contract and not the 1947 patent.
{65} 	When one considers only those findings which are contemporary with, or
precede 1930, they do not support a finding that Mr. Shelton and Commissioner
Hinkle intended to include the rock in the general mineral reservation. 	For this
additional reason, I dissent.
CONCLUSION
{66} 	I would reverse and remand to the district court to consider the surface
destruction doctrine as evidence of the parties’ intent, and not to consider the
post-1930 evidence unless it is shown to be indicative of the parties’ intent in signing
the purchase contract in 1930. Since the majority disagrees, I dissent.
__________________________________
MICHAEL E. VIGIL, Judge