United States v. 287.89 Acres of Land (241 F. Supp. 456, 1965)

MARSH, District Judge.

On May 29, 1962, plaintiff filed its complaint to condemn, inter alia, the following tracts of land in which the title to the underlying clay was owned in fee simple by Harbison-Walker Refractories Company (Harbison), a defendant in this non-jury trial:

“(1) The fee simple title to Tract 503 containing 11.99 acres in Greenwood Township, Clearfield County, Pennsylvania; subject to existing easements for public roads and highways, public utilities, railroads and pipelines.

“(2) The fee simple title to Tract 504 containing 3.42 acres in the aforesaid township, county and state; subject to existing easements for public roads and highways, public utilities, railroads, and pipelines, reserving, however, to the owner or the owners of any interest therein, including third-party lessees, their heirs, executors, administrators and assigns, all clay and coal in and under said lands with full rights of ingress and egress for exploration, development, production and removal of said clay and coal which may be produced from said land; provided that the said clay and coal so reserved are subordinated to the prior right of the United States to flood and submerge the land as may be necessary in the construction, operation and maintenance of the project, and provided that any exploration or development of such rights shall be subject to Federal and State laws with respect to pollution of waters of the reservoir; provided further that the District Engineer, U. S. Army Engineer District, Baltimore, or his duly authorized representatives shall approve in furtherance of the exploration and/or development of such reserved interests, the type of and location(s) of any structure(s) and/or appurtenances thereto now existing or to be erected or constructed in connection with such exploration and/or development; said structures and/or appurtenances thereto shall not create floatable debris.”

On the same day, the Declaration of Taking was filed, and judgment of condemnation was entered requiring the owners to surrender possession immediately.

These tracts were required in connection with the construction and establishment of the Curwensville Reservoir Project in the West Branch of the Susquehanna River Basin.

The condemned Tracts 503 and 504 are portions of a larger tract containing 52.53 acres. The clay contained in the larger tract was conveyed in fee, along with other properties, to Harbison by deed (Ex. 1) of North American Refractories Company in 1930. The consideration for all the properties described in the deed was over $500,000.00 (T., pp. 51-52). The portion of the price allocated to the clay in the 52.53-acre tract is not known (T., pp. 51-52).

In addition to all the clay contained in the 52.53-acre tract, the following mining rights were conveyed to Harbison:

“[T]he right of ingress, egress and regress to explore for, dig, remove and carry away .the same, with the right on the part of the Grantee to build necessary roads, railroads, airshafts, slopes or other structures as may be necessary in the course of proper mining to dig, remove and transport the said clay of said described property; with release on the part of the first party for damages to the surface or to the water thereupon or thereunder that may be caused by the mining and removal of said coal and other minerals in a proper manner.

“Together, also, with the right on the part of the Grantee to haul underneath the demised property, clay from other lands, free of charge, but this right shall not extend to any haulage or wheelage over the surface as above described except that from the drift mouth or drift mouths as they are constructed upon the demised premises, the Grantee shall have the right of way over the surface directly to the railway for the purpose of transporting said clay to the railway, this shall be confined to right of way from drifts as they may be necessary and opened for the removal of the minerals from the Watts land.”

The evidence showed that the fee simple title to the 52.53-acre tract, except the clay and subject to the aforesaid mining rights, was vested in Vem I. Shuss.

Preston C. Mitchell, vice-president of Harbison in charge of mining, testified that the market value of the 52.53-acre tract on the date of condemnation and unaffected by it was $26,850.00; that the fair market value of said acreage after condemnation and as affected by it was the sum of $1,380.00; the difference of $25,470.00 being the total damage for the taking.

William Yost, a registered mining engineer, called by the Government, was of the opinion that it was economically infeasible now or in the foreseeable future to remove the clay underlying the condemned tracts of land In 1958 and 1959, prior to the condemnation, this witness had been employed by the Corps of Engineers to make a study and report “of the valuation or the effect of taking of the minerals of the basin of the West Branch of the Susquehanna River by the Curwensville Reservoir and its effect on the economy of the area.” (T., p. 113.) The study and report were not introduced into evidence.

R. T. Bromfield, a mining engineer and real estate broker, relying on the opinion of Mr. Yost, testified that the market value of the 52.53-acre tract prior to the taking was $5,612.50, and that the market value thereafter was $3,894.50. Of the $1,718.00 difference in value, he allocated $1,359.00 and $359 00 as the total damages for Tract 503 and Tract 504, respectively.

It was stipulated between the parties that the value of the condemned land in Tracts 503 and 504, excluding the clay, was $1,000.00 (T., pp. 156-158). Subtracting this amount from the aforesaid opinions of total damages for the condemned land and clay would leave as just compensation for the condemned clay alone $24,470.00 in Mr. Mitchell’s opinion, and $718.00 in Mr. Bromfield’s opinion.

Mr. Bromfield was also of the opinion that there was no severance damage (T., p. 143). Harbison disclaimed any severance damage (T., p. 76).

Neither witness was aware of any sales of clay land in Clearfield County sinee 1930. Mr. Mitchell participated in a sale of a developed clay vein in Fayette County in 1963. There unquestionably is a demand for flint and plastic clay for the manufacture of fire brick and house brick in the Clearfield area and elsewhere. However, it seems that the refractory companies for some time past instead of purchasing the clay veins have leased them at prices varying from 15 cents to 25 cents per ton (T., p. 72). It was not shown that the companies who mine the raw clay sell it in a competitive market; evidently they use it in their own refractory plants, as does Harbison.

The 52.53-acre tract is bounded on its southerly side by the West Branch of the Susquehanna River and is approximately two miles up the river from the village of Lumber City. Rights of way of the New York Central Railroad and a state highway traversed the land near the river and have been relocated (Exs. 2, 3). This tract is mainly mountaintop land with scrub oak, scrub pine and some good timber growing thereon.®

Tract 504 contains 3.42 acres, is bounded on the south by the West Branch of the Susquehanna River, and on the north by the old right-of-way of the railroad. The elevation of the river is 1185 feet above sea level (T., p. 32). From the river’s edge the land is level for about 100 feet and then rises abruptly and steeply to the old railroad right-of-way. The flint clay outcrops at the river’s edge. The clay and mining rights in Tract 504 were reserved to Harbison. Although the quantity, quality, and extent of the clay in this tract were not established, the condemnation imposed restrictions upon the mining rights which would likely affect adversely the market value of the reserved clay.

Tract 503, containing 11.99 acres, lies to the north of Tract 504. It contains substantially all of the flint clay in the 52.53-acre tract suitable for manufactui - ing fire clay (T., p. 52; Ex. 2). Rising steeply from the old right-of-way of the railroad and the highway, it reaches elevations of over 1355 feet (Ex. 3).

At the time of condemnation there were two veins of clay in Tract 503. The softer, plastic clay, known as Kittanning clay, outcropped at or near the right-of-way of the old highway at an elevation in excess of 1250 feet above sea level. The depth of the Kittanning vein ranges from zero at outcrop to 250 feet throughout the 37 acres remaining of the 52.53-acre tract. This vein is approximately 7 feet thick and, prior to the taking, part of it could have been strip mined at outcrop and the remainder could have been deep mined (T., pp. 16, 43). The quality and quantity of the Kittanning clay in the remaining 37 acres were not established, probably because Harbison is not seeking severance damage (T., p. 76).

The flint clay vein under Tract 503 is about 80 feet deeper than the Kittanning vein and corresponds approximately to the low water mark of the river. This vein is not consistent and regular, but is found only in pots (T., pp. 52, 93). Flint clay is the more valuable of the two types of clay. The bulk of the flint clay under the 52.53-acre tract is in Tract 503 (T.s p. 52). Out of 11 test holes which were core drilled by Harbison’s predecessor, only 3 disclosed flint clay under Tract 503 which is suitable for manufacturing refractories.

Drill hole 2 disclosed flint clay 2 feet 6 inches thick having a P.C.E. of 32-33.

Drill hole 4 disclosed flint clay 7 feet thick having a P.C.E. of 32-34.

Drill hole 3 disclosed flint clay 1 foot thick having a P.C.E. of 33. However, the clay in the area within a radius of 100 feet from this hole