Lead Opinion
OPINION
We granted allowance of appeal to consider whether a deed executed in 1881, which reserved to the grantor the subsurface and removal rights of “one-half [of] the minerals and Petroleum Oils” contained beneath the subject property, includes within the reservation any natural gas contained within the shale formation beneath the subject land known as the Marcellus Shale Formation.
I.
Appellants in this matter, John and Mary Josephine Butler, own 244 acres of land in Susquehanna County. Appellants’ predecessors in title obtained the land in fee simple by deed in 1881 from Charles Powers. The deed contained the following reservation:
[O]ne-half the minerals and Petroleum Oils to said Charles Powers his heirs and assigns forever together with all and singular the buildings, water courses, ways, waters, water courses, rights, liberties, privileges, hereditaments, and appurtenances, whatsoever there unto belonging or in any wise appertaining and the reversions and remainders rents issues and profits thereof; And also all the estate right, title interest property claimed and demand whatsoever there unto belonging or in any wise appertaining in law equity or otherwise however of in to or out of the same.
Id. at 37.
On July 20, 2009, Appellants filed a complaint to quiet title in the Susquehanna County Court of Common Pleas, alleging ownership of the property in fee simple and ownership, through adverse possession, of all (as opposed to one-half) of the minerals and petroleum oils contained beneath the property. The Estate of Charles Powers and his heirs and assigns were originally named as defendants. After some initial difficulty in locating representatives of the estate, on September 21, 2009, William and Craig Pritchard (Appel-lees) surfaced as rightful heirs to the Powers’ Estate. Eventually, Appellees filed a motion for declaratory judgment, seeking a holding from the trial court that the deed reservation included one-half of all natural gas located within any Marcellus shale
The trial court agreed with Appellants, sustained the demurrer, and denied Appel-lees’ request for declaratory relief. The court noted that Pennsylvania law has long recognized a rebuttable presumption that “if, in connection with a conveyance of land, there is a reservation or an exception of ‘minerals’ without any specific mention of natural gas or oil, ... the word ‘minerals’ was not intended by the parties to include natural gas or oil.” Highland,
Appellees appealed to the Superior Court, a panel of which reversed in a published opinion. Butler,
The Superior Court in this case found that because of the Hoge II decision, the trial court erred in sustaining Appellants’ demurrer based upon Dunham and Highland without first conducting an evidentia-ry hearing to determine whether: Marcel-lus shale natural gas constitutes that which is contemplated by the Dunham Rule; Marcellus shale itself is a mineral; and Marcellus shale is similar to coal so that the Hoge II holding should apply to this case, resulting in Appellees owning one-half of the natural gas rights because of the situs of the gas in shale. Id. In effect, the remand order directed the trial court to consider whether the Hoge II Court’s logic vis-a-vis coalbed gas and coal scientifically and legally applied to natural gas contained within the Marcellus Shale. Appellants petitioned this Court for allowance
In interpreting a deed reservation for “minerals,” whether the Superior Court erred in remanding the case for the introduction of scientific and historic evidence about the Marcellus [SJhale and the natural gas contained therein, despite the fact that the Supreme Court of Pennsylvania has held (1) a rebuttable presumption exists that parties intend the term “minerals” to include only metallic substances, and (2) only the parties’ intent can rebut the presumption to include non-metallic substances.
Butler v. Powers Estate,
II.
(A) The Dunham Rule and its Progeny
Before delving into the parties’ arguments, we find it prudent to recount the history of the Dunham Rule to facilitate a full understanding of the issues before us. While Dunham was decided in 1882, the doctrine for which that case has become well-known has its genesis in the 1886 decision of Gibson v. Tyson,
A year later, this Court reaffirmed the holding of Gibson that contracts such as those presented in deed reservation cases should be examined from a non-scientific viewpoint. Schuylkill Nav. Co. v. Moore,
With the notion that the common-man comprehension of terms included in contracts should be used, this Court in Dun-ham examined an 1870 deed, which reserved to the grantor “all the timber suitable for sawing; also all minerals,” to determine whether the reservation included oil within the term “all minerals.” Dunham,
The Court followed the lead of Gibson and Moore and held that a common understanding of the word “minerals” should be used. The Court resolved that, should the scientific construction of the term mineral, ie., anything inorganic, be used, the term would be as “extensive as the grant, hence work[ing] its own destruction.” Id. Accordingly, using the common understanding of mankind, the court determined that oil is not a mineral pursuant to the framework laid by the Gibson Court that minerals are of a metallic nature. Thus, for the deed reservation to include oil, it must specifically be included within the clause.
This Court next encountered a deed reservation and the Dunham Rule in Silver v. Bush,
The Court then cited, and approved, the Dunham holding vis-a-vis petroleum oil: that the general consensus of non-scientists was that oil is not a mineral because it is not metallic in nature. Id. It then held, albeit in conclusory fashion, the same concerning natural gas: “a fortiori, natural gas would not be so included.” Id. The Court concluded that the Dunham Rule has been a rule of property law upon which many Pennsylvania lands of title rest and, therefore, absent clear and convincing intent by the parties to the contrary, the deed reservation did not include oil or natural gas. Id. at 833-34.
Shortly thereafter, this Court again reaffirmed Dunham, and indeed Silver, in Preston v. S. Penn Oil Co.,
Forty years later, this Court again considered the Dunham Rule in Bundy v. Myers,
First, we again recognized that as oil and gas production expanded throughout the country, other states had come to differing results concerning the status of oil and gas as minerals vis-a-vis deed reservations. Id. at 726. Echoing the Silver and Preston Courts, however, our Court stated that the Dunham Rule had now been Pennsylvania law for seventy years and remained a viable and well-established rule of property not to be disturbed. Id. For purposes of the deed reservation in question, then, “[i]f the oil and gas were intended to be included in the ‘minerals’ reserved, then why was the oil expressly reserved? Expressio unius est exclusio alterius.” Id.
Our extensive examination of the Dun-ham Rule concluded in 1960 in Highland v. Commonwealth,
If, in connection with a conveyance of land, there is a reservation or an exception of ‘minerals’ without any specific mention of natural gas or oil, a presumption, rebuttable in nature, arises that the word ‘minerals’ was not intended by the parties to include natural gas or oil. [ ... ] To rebut the presumption [ ... ] there must be clear and convincing evidence that the parties intended to include natural gas or oil within [minerals].
Id. at 398-99.
The Court did so while recognizing, as did its predecessors, that mankind generally divided all known matter into three categories — animal, vegetable, and mineral — and that petroleum and natural gas are unquestionably minerals under that broad categorization. Id. at 398. Nonetheless, we reaffirmed that for deed reservations we must assume, absent evidence to the contrary, that mineral is a term of “general language, and presumably is intended in the ordinary popular sense which it bears among English speaking people,” ie., metallic substances and not oil and gas. Id. Thus, the Dunham Rule, a well-established and relied upon rule of property, continues to bind all situations in which a deed reservation does not expressly include oil or natural gas within the reservation. Id. at 398-99. Indeed, such a conclusion was demanded by the longstanding jurisprudence of this Commonwealth concerning property law: “A rule of property long acquiesced in should not be overthrown except for compelling reasons of public policy or the imperative
(B) United States Steel Corp. v. Hoge
As noted, the Superior Court in this case found the Dunham progeny did not end the analysis because of Hoge II. Thus, we turn next to that decision. In the late 1970s, a question was raised concerning so-called “coalbed gas,” which is a combination of methane, ethane, propane and other gases. Within the coal mining and natural gas industries, coalbed gas, which is found within crevices and empty pockets in coal seams and commonly known among miners as “firedamp,” bears “little if any distinction [from] the gas found in oil-and-gas-bearing sands (natural gas).” U.S. Steel Corp. v. Hoge,
In the 1970s, various landowners in Greene County obtained deeds to tracts of land that, through a single predecessor, had already relinquished all rights to the coal contained within the Pittsburgh Coal Seam underlying the surface of the subject properties to U.S. Steel. Id. at 163. U.S. Steel also possessed “the right of ventilation and drainage and the access to the mines for men and materials.” Id. at 164 n. 3. The landowners retained, however, “the right to drill and operate through said coal for oil and gas without being held liable for any damages.” Id. at 164. In 1977 and 1978, two related events occurred: U.S. Steel began operations of its Cumberland Mine in Greene County to remove the coal contained beneath the landowners’ property pursuant to the coal reservations, and the landowners began drilling wells through the property “for the express purpose of recovering coalbed gas contained” within the subject coal seam. Id. The landowners utilized the process of hydrofracturing to obtain the coalbed gas.
U.S. Steel appealed to the Superior Court, arguing that the coal and coalbed gas were essentially different aspects of the same substance; thus, to the extent U.S. Steel owned the coal, it also owned the coalbed gas.
U.S. Steel pursued a further appeal to this Court, which reversed the Superior Court’s decision. Without discussing or, indeed, even citing to the merits of the Dunham Rule, this Court began its analysis by noting that “[g]as is a mineral, though not commonly spoken of as such, ... [and therefore] necessarily belongs to the owner in fee, so long as it remains part of the property....” Hoge II,
In so holding, however, the Hoge II Court went on to make some critical distinctions concerning the unique nature of coalbed gas. It noted that the commercial exploitation of coalbed gas was “very limited and sporadic” because it was generally viewed as a dangerous waste product of coal mining, which had to be vented from a coal seam to allow the coal to be safely mined. Id. at 1384. This Court therefore questioned why the landowners’ predecessor would retain the right to a waste product with well-known explosive and dangerous predispositions? Id. at 1385. The answer, in this Court’s opinion, was in the language of the deed reservations themselves, which explicitly left to the surface owners the unfettered right to all of the oil and gas below the severed coal seam.
We find implicit in the reservation of the right to drill through the severed coal seam for “oil and gas” a recognition of the parties that the gas was that which was generally known to be commercially exploitable. It strains credulity to think that the grantor intended to reserve the right to extract a valueless waste product with the attendant potential responsibility for damages resulting from its dangerous nature.
Id.
III
Based on the foregoing, we now turn to the parties’ primary arguments in this case. Appellants, advocating for the reversal of the Superior Court’s remand order and reinstatement of the trial court’s judgment, rely exclusively on the Dunham Rule and its consistent application for over one hundred years that natural gas is not included within a deed reservation without either (1) being explicitly contemplated within the reservation; or (2) clear and convincing parol evidence that the parties intended for natural gas to be included within the deed reservation, despite only a general reservation of minerals. As far back as Gibson, minerals have been defined in the law for private deed reservation purposes as those substances which are metallic in nature. Appellants note that the metallic character of the subject material constituted the common understanding of minerals to laypersons in the
From this premise, Appellants next point to the obvious: because “natural gas” is contained nowhere in the deed reservation, there was no explicit contemplation that the Powers’ Estate would retain the right to one-half of the subsurface natural gas. Accordingly, Appellees bear the burden of proving, by clear and convincing evidence, that it was the intent of the parties executing the deed in 1881 that natural gas be contemplated within the deed reservation. Harkening back to Gibson and Dunham, Appellants argue that those courts were clear that the deed reservations are to be construed consistent with that which was understood by ordinary people at the time the deed was executed. Thus, before even considering any potential interpretation of the deed reservation, Appellants challenge the remand order by the Superior Court because scientific evidence as to what Marcellus shale is and is not considered presently would have no bearing on Appellees’ burden of proving, by clear and convincing evidence, that the common-persons who executed the deed in 1881 would have contemplated and understood Marcellus shale, and therefore the gas contained within it, to be a mineral.
Finally, Appellants submit that even if scientific evidence is relevant, the Superior Court still erred in granting a remand because, contrary to Appellees’ assertion before the Superior Court, natural gas found in the Marcellus Shale is not “unconventional and different” from natural gas found in any other geological formation or geographic region. According to the United States Energy Information Administration, natural gas and all shale gas are one and the same substance; it is the manner of drilling and production that is different. Indeed, shale gas is merely natural gas that has been trapped by the shale rock formation from reaching the sandy, higher levels in the ground. See Appellant’s Brief at 22-23 (citing U.S. Energy Info. Agency, Energy in Brief: What is shale gas and why is it important?, available at http:// www.eia.gov/energy_in_brief/article/about^ shale_gas.cfm (last updated Dec. 5, 2012)). The trapping of the natural gas by shale rock forces gas drillers to employ hydrof-racturing to obtain the gas. See supra note 3. Thus, in Appellant’s view, the Superior Court erred in ordering an evidentiary hearing concerning whether Marcellus shale gas and natural gas are different substances because, as an uncontestable matter of fact, they are the same. Accordingly, in summation Appellants assert that Hoge II cannot apply, as this case concerns exclusively natural gas and without (1) an express designation of natural gas within the deed reservation, or (2) clear and convincing evidence through parol evidence that the parties in 1881 intended to include natural gas within the reservation, the Dunham Rule controls and Appellees are not entitled to any natural gas rights.
Appellees respond, first, by pointing to the plain language of the deed reservation, which reserved “one-half the minerals and Petroleum Oils ... together with all ... appurtenances, ... issues and profits thereof....” In an argument that was not raised below, Appellees contend that natural gas is an appurtenance, issue, or profit of petroleum oil, and thus is included within the plain language of the deed reserva
Appellees further question whether the Dunham Rule is applicable to this appeal in a general sense, because the deed in this case was signed in 1881, one year before this Court announced the decision in Dun-ham. Even more broadly, Appellees question the continued vitality of the Dunham Rule, because various Pennsylvania statutes such as the Municipalities Planning Code, the Hoge II opinion, decisions from other jurisdictions, and written authorities contemporary to 1881 all state generally that natural gas is a mineral. Under this reasoning, and regardless of the viability of the “natural gas as an appurtenance of petroleum oil” argument, Appellees urge us to hold the Dunham Rule inapplicable to this case. Either way, in Appellee’s view, natural gas is specifically contemplated by the deed reservation.
Alternatively, Appellees argue that Hoge II stands for the proposition that “he who owns the shale owns the gas,” and thus controls this case. Appellees’ Brief at 22 (citing Hoge II,
Appellants filed a reply brief, challenging three specific parts of Appellees’ argument. First, Appellants contend that any argument relating to the “appurtenance, issue, and profits of petroleum oil” portion of the deed reservation is waived pursuant to Rule 302 of the Rules of Appellate Procedure (“Issues not raised in the lower court are waived and cannot be raised for the first time on appeal.”). Appellants aver that Appellees bore the burden in the trial court of proving, by clear and convincing evidence, that natural gas was included in the deed reservation and, failing to make the “natural gas is an appurtenance of petroleum oil” argument in the trial court forecloses their ability to make the same contentions before this Court. Ap-pellees’ argument in the trial court focused solely on the “mineral” portion of the deed reservation, and therefore they cannot raise the separate appurtenance argument for the first time here.
Second, in Appellants’ view, whether natural gas is a mineral under certain statutory sections is irrelevant to this case, which strictly involves common property law. Appellants note that recently this Court in Huntley & Huntley, Inc. v. Borough of Oakmont,
IV.
We agree with Appellants that the appurtenance argument raised by Appel-lees has been waived, the Dunham Rule remains viable and controlling, Hoge II is distinguishable and inapplicable, and the Superior Court erred in ordering a remand for scientific evidence concerning the nature of the gas contained within the Mar-cellus Shale.
A
Initially, as noted above, we agree with Appellants that Appellees’ contention that Marcellus shale natural gas, or indeed natural gas in general, is an “appurtenance, issue or profit, or substance out of’ petroleum oil, and therefore contemplated by the plain language of the deed reservation, is waived. Relevant to the issues presented in this appeal, Appellees based their motion for declaratory judgment in the trial court on three distinct arguments: the Dunham Rule is no longer viable in Pennsylvania; Marcellus shale natural gas is a mineral; and/or Marcellus shale is a mineral, and therefore the gas contained within it is contemplated by the deed reservation pursuant to Hoge II. See Brief on Behalf of Defendants in Support of Motion of Declaratory Judgment (filed Nov. 4, 2009), found at Reproduced Record 51a. Nowhere in the motion itself (which consists of a mere six paragraphs) or the more substantive brief in support thereof is the appurtenance argument raised, made, or even insinuated.
As can be expected, the trial court did not reference or discuss the appurtenance argument in its opinion denying the motion for declaratory judgment. Moreover, Ap-pellees did not raise the appurtenance discussion in their appellants’ brief to the Superior Court, nor did that tribunal address the issue. Accordingly, the issue of whether natural gas is an appurtenance, issue or profit, or substance out of petroleum oil is waived and is not before our Court for disposition. Pa.R.A.P. 302(a) (“Issues not raised in the lower court are waived and cannot be raised for the first time on appeal.”); Oliver v. City of Pgh.,
B.
We thus turn to the continuing viability of the Dunham Rule, and we reaffirm that the rule continues to be the law of Pennsylvania. First, as has been related herein, this Court has never explicitly questioned the vitality of the Dunham Rule. Like the Silver Court did in 1906, we recognize that the Dunham Rule has now been an unaltered, unwavering rule of property law for 131 years; indeed its origins actually date back to the Gibson decision, placing the rule’s age at 177 years. As noted by this Court in Highland, “[a] rule of property long acquiesced in should not be overthrown except for compelling reasons of public policy or the imperative demands of justice.”
C.
We next examine whether the Dunham Rule applies to this appeal, and, readily hold that it does. At the outset, we note the obvious: the term “natural gas” is contained nowhere in the plain language of the deed reservation. Under the Dunham Rule, then, the burden is on Appellees to plead and prove, by clear and convincing parol evidence, that the intent of the parties when executing the deed in 1881 was to include natural gas within the reservation. Highland,
The Dunham Rule is clear, dating back to Gibson, that the common, layperson understanding of what is and is not a mineral is the only acceptable construction of a private deed. Notwithstanding different interpretations proffered by other jurisdictions, the rule in Pennsylvania is that natural gas and oil simply are not minerals because they are not of a metallic nature, as the common person would understand minerals. Gibson,
Of course, in 1881, the law of Pennsylvania was Gibson and Moore, supra pp. 889-90, which clearly stated' two overarching principles: (1) anything of a non-metallic nature would not be considered a mineral for private deed purposes; Gibson,
D.
Finally, we disagree with the Superior Court that because the natural gas at issue in this case is contained within the Marcellus Shale, the Hoge II decision and its statement that “such gas as is present in coal must necessarily belong to the owner of the coal” become relevant or controlling. First, consistent with the above analysis supra Part IV.B-C, we reject any insinuation by Appellee that Hoge II limited or overruled the Dunham Rule by stating that “gas is a mineral.” Hoge II,
Concerning the Hoge II decision itself, the deed reservation at issue there concerned coal rights and the related right of ventilation of coalbed gas. This distinction between Hoge II, the Dunham line of cases, and the instant appeal is critical for several reasons. First, the right of venti
Lastly, the situs of Marcellus shale natural gas and the methods needed and utilized to extract that gas do not support deviation from a Dunham analysis. While we recognize that hydrofracturing methods are employed to obtain both coalbed gas and Marcellus shale natural gas, the basis of the Dunham Rule lies in the common understanding of the substance itself, not the means used to bring those substances to the surface. See Gibson,
Y.
Therefore, under the Dunham Rule, the trial court correctly concluded on the aver-ments of record that Marcellus shale natural gas was not contemplated by the private deed reservation presented in this case. Accordingly, we reverse the order of the Superior Court and reinstate the order of the Susquehanna County Court of Common Pleas sustaining Appellants’ preliminary objection.
Jurisdiction relinquished.
Chief Justice CASTILLE, Justice SAYLOR and EAKIN, Justice TODD and Justice McCAFFERY join the opinion.
Justice SAYLOR files a concurring opinion.
Notes
. In general, shale gas is a term used to define natural gas that has become trapped
. "The express mention of one thing excludes all others.”
. As accurately stated' by the Hoge I Court, and as will be relevant to the case sub judice,
Hydraulic fracturing or hydrofracturing is the use of fluids under pressure, which fluids are forced into the well hole causing the fracturing of the target stratum. With the hydrofracturing of coal beds the fractures in the coal vein serve as conduits or channels through which the gas may flow from the coal seam to the well’s shaft.
Id. at 164 n. 5.
. Apparently, the landowners did not appeal the trial court’s decision prohibiting the use of hydrofracturing methods.
. Parenthetically, Appellants also note that the Hoge decisions contained a further distinguishing factor: the deed reservation there specifically contemplated the coal and ventilation of coalbed gas. No such reservation of any shale and the gas contained therein exists in the deed under scrutiny in this case.
. Appellees contend that Mareellus shale contains various quantities of iron ore, therefore rendering Mareellus shale, ipso facto, a mineral.
. In examining the order of a trial court sustaining a preliminary objection in the form of a demurrer, we must consider all well-pleaded facts set forth in the complaint (here, captioned as a motion for declaratory relief) and all fairly-deducible inferences therefrom, in a light most favorable to Appellees as the non-moving party. Seebold v. Prison Health Srvs., Inc.,
. We further note that this Court has treated oil and natural gas as separate substances for purposes of private deeds. See, e.g., Highland,
. In light of Gibson and Moore being controlling jurisprudence in 1881 when the deed herein was executed, we have no difficulty in rejecting Appellees' averment that the Dun-ham Rule does not apply to this case simply because Dunham was decided in 1882. We further note that the deed considered in Dun-ham was executed in 1870.
. Moreover, the Hoge II Court cited to the Dunham decision for a general pronouncement of the rules of deed and contract construction. Presumably, had this Court wished to overrule or limit the Dunham Rule, it would have not cited to the Dunham opinion for this proposition.
. This is not to say that natural gas cannot be extremely dangerous and volatile. The critical point is how coalbed gas was commonly understood when the deeds in Hoge were executed.
Concurrence Opinion
CONCURRING OPINION
I join the majority opinion.
That said, I find the original, nineteenth-century rationale for the Dunham Rule to be cryptic, conclusory, and highly debatable. Cf. Murray v. Allard,
Finally, I note that, in terms of modern conveyances, the parties certainly have the ability to negate the impact of the Dun-ham decision by making their intentions clear on the face of the written instrumentation. This lessens the need for this Court to consider fashioning a new, prospective rule.
. In this regard, on account of Dunham's shortcomings, I find the “rule of property law” denominator more accurate than a characterization of Dunham as a sustainable effort to assess the actual intentions of the parties to a conveyance. Accord 1A Summers Oil and Gas § 7:16 (3d ed.2012) (explaining that the Pennsylvania post -Dunham decisions have "adhered to that view, not so much because the court was sure that in its ordinary sense the term ‘minerals’ did not include oil and gas, but because the previous ■ decision had become a rule of law on which land titles in that state were based”).