Opinion ID: 2516446
Heading Depth: 1
Heading Rank: 5

Heading: The Railroad Grants and Deed Reservations

Text: 1. The Public Domain and Federal Action The use of mineral reservations in deeds has a rich history. The federal government, state governments, Indian tribes, and private entities own reserved mineral interests in our state and nation. The nature of those reservations, whether private or governmental, is an outgrowth of the historical context in which they took place. The United States originally possessed legal title to vast lands in thirty-one states. Those states are known as the public land states. [4] In those states, including Colorado, the United States disposed of the lands over a number of years, under a variety of different laws and for a variety of purposes. Initially, the government distinguished between mineral lands and nonmineral lands. See 43 U.S.C. § 201 (1970) (repealed by the Federal Land Policy and Management Act of 1976, 90 Stat. 2743, 2789, § 7; codified at 43 U.S.C. §§ 1701-1782 (1976)). As to mineral lands, the mining laws provided for discovery and development of the minerals, but the government retained title. As to nonmineral lands, the government encouraged nonmineral uses and provided for land grants. In the early 1900s, the federal government moved toward a system of land grants with mineral reservations. See generally 43 U.S.C. §§ 161-302 (1994). Under those Acts, the United States made grants to railroads, miners, homesteaders, and states. The patents to the grantees contained mineral reservations, consistent with the Act of Congress under which the conveyance took place. For example, the Stock Raising Homestead Act of 1916 encouraged the settlement of lands then thought to be valuable primarily, if not exclusively, for ranching. See id. §§ 291-301. Those grants reserved all coal and other minerals under the terms of the Act. Id. § 299. Other grants issued under other Acts used reservations such as those at issue in this case: all coal and other minerals within or underlying said lands, or all oil, coal and other minerals. 2. The Railroad Lands The deeds at issue in this case originate from the Railroad as grantor. The Union Pacific Act of 1862, amended in 1864, granted odd-numbered sections of public land to the Railroad for every mile of track laid for the purpose of aiding the construction of a transcontinental railway. See Act of July 1, 1862, § 3, 12 Stat. 489, 492, amended by Act of July 2, 1864, ch. 216, § 4, 13 Stat. 356, 358; David Haward Bain, Empire Express, Building the First Transcontinental Railroad 115, 180 (1999). The original grant excluded all mineral lands from the conveyance, which gave rise to an assumption that the government did not intend to grant any minerals to the Railroad. The Railroad's grant was twice mortgaged, in 1867 and again in 1873. In 1880, the Union Pacific Railway Company succeeded to the Railroad's interests. In 1898, the Railroad bought the railway's grants and interests. See Union Pac. Land Resources Corp. v. Moench Inv. Co., 696 F.2d 88, 90 (10th Cir.1982). The Railroad obtained patents to the land in 1901 from the Land Department of the United States. [5] While the original Union Pacific Act of 1862 excepted all mineral lands from the land grants, the Supreme Court held that the exception refers to the determination at the time of patenting of the lands' mineral or nonmineral character, and did not affect the fee simple interest that the Railroad received with the patent. See United States v. Union Pac. R.R., 353 U.S. 112, 116, 77 S.Ct. 685, 687, 1 L.Ed.2d 693, 696 (1957). Accordingly, once the Railroad received patents on the land, a presumption arose that the patent included a fee simple title and that the Railroad then had the right to reserve mineral interests in lands granted under the Union Pacific Act. See Moench, 696 F.2d at 92. Hence, although the original grants in this case came from the federal government, the Railroad is a private grantor for purposes of analysis of the reserved mineral interest. The Railroad grants included every odd-numbered section of land between the southern and northern boundaries of Weld County for 20 miles on each side of the railroad track. See Union Pac. R.R. Co. v. Hanna, 73 Colo. 162, 163, 214 P. 550, 551 (1923)(upholding Weld County tax assessments on Railroad mineral estates), overruled on other grounds by Radke, 138 Colo. at 209-10, 334 P.2d at 1087-88 (holding that words reserving the right to prospect and to remove minerals, if found, are not ambiguous and operate as a license and not a reservation). Carpenter makes the following commentary on the Railroad deed reservations: In Colorado, so far as railroad lands are concerned, we are involved only with patents to the Union Pacific Railroad Company or its predecessors in title, and more importantly with deeds from the Union Pacific which purport to convey only the surface estate to various grantees. Although there is no consistency in the choice of words used in these deeds, normally they recite a reservation of (1) all coal, or all the coal and other minerals, or oil, coal and other minerals, (2) the right to prospect for, mine and remove the same, and (3) the right of ingress and egress, plus use of the surface for mining purposes. Carpenter, supra, at 480 (emphasis in original); see also Hanna, 73 Colo. at 164, 214 P. at 551. 3. This Case The grants and deed reservations at issue in this case, which date from 1906 to 1909, mirror Carpenter's description. Our sister jurisdictions of Wyoming, Utah, and Arizona have concluded that this language, particularly the term other minerals reserved from railroad conveyances, is conclusive in regard to the reservation of oil and gas. See Anschutz Land & Livestock Co. v. Union Pac. R.R. Co., 820 F.2d 338, 343 (10th Cir.1987) (applying Utah law); Moench, 696 F.2d at 93 (applying Wyoming law); Amoco Prod. Co. v. Guild Trust, 636 F.2d 261, 264 (10th Cir.1980) (applying Wyoming law); see also Spurlock v. Santa Fe Pac. R.R. Co., 143 Ariz. 469, 477-78, 694 P.2d 299, 308-09 (Ct. App.1984); Miller Land & Mineral Co. v. State Highway Comm'n, 757 P.2d 1001, 1002-03 (Wyo.1988). We recognize these decisions for their adoption of the majority rule that a deed reservation for other minerals reserves oil and gas. [6] These cases point out that an established rule of law is important for reliably ascertaining mineral ownership and securing capital investment for mineral production. Allowing the introduction of extrinsic evidence many decades after the deed conveyances, especially, as here, after many years of actual production of oil and gas from the properties invites uncertainty and litigation, as necessary evidence has long since disappeared or sheds no real light on the parties' individual intentions. [7] Based on our study of Colorado precedent, custom, usage, and learned commentary thereon, we hold that a deed reservation for other minerals reserves oil and gas. Here, nearly a century after the conveyances and deed reservations in this case, Landowners ask us to send this case to trial to determine whether other minerals includes oil and gas. We decline to do so. This case presents a legal question: the interpretation of typical deed language that has a long history of derivation and use in regard to oil and gas. Colorado adheres to the majority rule that a general deed reservation of other minerals reserves oil and gas. We treat this matter as one of property law and determine that precedent forecloses the question plaintiffs pose for trial. See 13 Neil E. Harl, Agricultural Law § 126.03[7][g][ii] at XXX-XXX-XX (1992) (observing that adoption of the majority oil and gas rule has such effect). As postured before the trial court, despite Landowners' protestations, the issue on summary judgment was one of law.