Opinion ID: 377070
Heading Depth: 1
Heading Rank: 1

Heading: The Nature of Union Pacific's Interest

Text: 7 In 1862, the Union Pacific was granted a right-of-way through public lands for the construction of a railroad by the Act of Congress of July 1, 1862, ch. 120, Section 2, 12 Stat. 489. Section 2 of the Act provides: 8 And be it further enacted, That the right of way through the public lands be, and the same is hereby, granted to said company for the construction of said railroad and telegraph line; and the right, power, and authority is hereby given to said company to take from the public lands adjacent to the line of said road, earth, stone, timber, and other materials for the construction thereof; said right of way is granted to said railroad to the extent of two hundred feet in width on each side of said railroad where it may pass over the public lands, including all necessary grounds for stations, buildings, workshops, and depots, machine shops, switches, side tracks, turntables, and water stations. 9 Several decisions have construed this statute as limiting the nature of the right-of-way to something less than a fee simple absolute. By its terms, the statute explicitly grants the railroad only a right of way in the land. 10 Union Pacific relies to a great extent on the Supreme Court's construction of the nature of its right-of-way in Northern Pacific Railway v. Townsend, 190 U.S. 267, 271, 23 S.Ct. 671, 672, 47 L.Ed. 1044 (1903). In that case, the railroad's interest in constructing and operating a transcontinental railroad was held paramount to an individual's claim by adverse possession of an exclusive right to possess the land for private purposes. The right-of-way given under the 1862 Act was described as a limited fee, made on an implied condition of reverter (to the government) in the event that the company ceased to use or retain the land for (railroad) purpose(s). Id. 11 Townsend involved an individual's claim by adverse possession to the surface of land subject to the railroad's right-of-way which required no determination reaching the nature of the servient estate underlying the railroad's right-of-way. Nonetheless, the Supreme Court noted that the right-of-way was granted through the public domain and, as such, was subject to the police power of the state. Id. at 272, 23 S.Ct. at 673. It also stated that other limitations in favor of the general public upon an exclusive right of occupancy by the railroad of its right of way might be justly imposed. Id. at 272, 23 S.Ct. at 673. 12 Moreover, in United States v. Union Pacific Railroad, 353 U.S. 112, 77 S.Ct. 685, 1 L.Ed.2d 693 (1957), the Supreme Court, in construing Section 2 of the 1862 Act, held that oil and gas rights beneath Union Pacific's right-of-way were reserved to the United States because the 1862 grant was for limited railroad purposes not encompassing drilling for oil or gas. The Supreme Court also held that the reservation of mineral lands referred to in Section 3 3 of the Pacific Railroad Act of 1862 applied as well to rights-of-way granted under Section 2 of that Act, so that a railroad claiming a right-of-way pursuant to Section 2 received no right to oil and gas underlying its right-of-way. In what we consider an effort to explicate and perhaps narrow the limited fee concept, the Supreme Court stated that (t)he most that the 'limited fee' cases decided was that the railroads received all surface rights to the right of way and all rights incident to a use for railroad purposes. Id. at 119, 77 S.Ct. at 689. 13 In Rice v. United States, 479 F.2d 58 (8th Cir.), cert. denied, 414 U.S. 858, 94 S.Ct. 66, 38 L.Ed.2d 108 (1973), this court approved a decision of the district court, Rice v. United States, 348 F.Supp. 254, 256 (D.N.D.1972), describing the nature of the railroad's right-of-way as either a limited fee or an easement. In any event, it got something less than fee simple   . The sole issue before the court in Rice was the ownership of the oil and gas rights under a right-of-way owned by Northern Pacific Railroad. We affirmed the district court's finding that the United States retained title to the oil and gas rights under the railroad's right-of-way. The district court also held that the oil and gas rights were not effectively conveyed to homesteaders since the government agency issuing the homestead patent lacked the authority to convey the retained interest of the United States beneath the right-of-way. 14 In two recent decisions, Energy Transportation Systems, Inc. v. Union Pacific Railroad, 606 F.2d 934 (10th Cir. 1979), and Wyoming v. Andrus, 602 F.2d 1379 (10th Cir. 1979), the Tenth Circuit considered the nature of Union Pacific's right-of-way interest granted pursuant to Section 2 of the Act of 1862. We agree entirely with that court's characterization of the nature of Union Pacific's right-of-way. As aptly stated by the court in Energy Transportation Systems, Inc. v. Union Pacific Railroad, supra, 606 F.2d at 937: 15 (W)e are convinced, as was the trial court, that the grant to Union Pacific's predecessor pursuant to section 2 of the Pacific Railroad Act of 1862 was just what the statute said it was, the grant of the right-of-way, and did not convey title to the servient estate underlying the right-of-way. 4 16 Accordingly, we affirm the district court's determination that Union Pacific's interest in Lot 2 is limited to surface and other rights used in the construction and operation of the railroad.