## Facts

- In 1881, Charles Powers conveyed land in Susquehanna County, Pennsylvania, to predecessors of John E. Butler and Mary Josephine Butler.
- The 1881 deed reserved to Powers “one-half [of] the minerals and Petroleum Oils” beneath the property.
- After development of the Marcellus Shale became commercially significant, the Butlers filed a quiet title action seeking a declaration that they owned all subsurface rights, including natural gas, because the reservation did not expressly mention gas.
- The Powers Estate and heirs contended the reservation of “minerals” included the Marcellus Shale formation and, by extension, the natural gas contained within it.
- The trial court applied Pennsylvania’s Dunham rule and held the reservation did not include natural gas because the deed did not clearly reserve it.
- The Superior Court reversed and ordered an evidentiary hearing with expert scientific testimony regarding whether shale gas is “conventional” gas, whether shale is a “mineral,” and whether ownership of shale implies ownership of the gas in it.
- The Pennsylvania Supreme Court granted review to decide whether the 1881 reservation encompassed natural gas in the Marcellus Shale and whether scientific evidence was necessary to construe the deed.

## Issues

1. Whether an 1881 reservation of “one-half [of] the minerals and Petroleum Oils” includes natural gas contained in the Marcellus Shale.
2. Whether courts may require expert scientific testimony about shale and shale gas to interpret such a deed reservation, or must apply the Dunham rule as a settled rule of property construction.

## Decision

- The Pennsylvania Supreme Court reversed the Superior Court and reinstated the trial court’s order.
- The Court held the Superior Court erred by remanding for an evidentiary hearing with expert scientific testimony.
- Applying the Dunham rule, the Court concluded that a reservation of “minerals,” without clear language reserving natural gas, does not include natural gas, including gas associated with the Marcellus Shale.
- The Butlers, as surface owners, retained title to the natural gas because the 1881 reservation did not expressly include it.

## Legal Principles

- In Pennsylvania, under the Dunham rule, an unqualified reservation or grant of “minerals” is presumed not to include oil or natural gas absent clear deed language to the contrary.
- The Dunham rule operates as a long-settled rule of property construction grounded in common usage at the time of the instrument, not a case-by-case scientific classification of substances as “minerals.”
- Deeds are construed to effectuate the parties’ intent as of execution, based on the words used and their ordinary meaning in that period.
- A court should not require modern geological or scientific testimony to determine whether shale or shale gas falls within “minerals” when controlling Pennsylvania precedent supplies the interpretive rule.
- Reliance interests and stability in property titles support continued application of established interpretive rules for mineral and oil-and-gas reservations.

## Conclusion

The Pennsylvania Supreme Court held that an 1881 deed reservation of “one-half [of] the minerals and Petroleum Oils” did not reserve natural gas in the Marcellus Shale because the deed did not clearly mention gas, and the court rejected the need for expert scientific evidence in construing the reservation under the Dunham rule.


Butler v. Charles Powers Estate ex rel. Warren, 65 A.3d 885 (Pa. 2013)