Mineral Ownership Under Railroad Rights-of-way
| Publication year | 1983 |
| Pages | 1652 |
1983, October, Pg. 1652. Mineral Ownership Under Railroad Rights-of-Way
A typical problem facing a title attorney may be similar to the following:
The attorney, when determining which party owns the minerals in Blackacre and applying general concepts of property law, would conclude that the minerals must be owned by either A or B, depending on the specific language of the interest conveyed to A. O could not possibly own any minerals since O conveyed away all ownership rights to either A or B However, suppose the specific facts of the above example are as follows: the United States conveys to Railroad A a right-of-way for as long as the land is used for railroad purposes Subsequently, the United States grants a patent to Landowner B covering lands through which the right-of-way runs. The patent reserves no minerals to the United States nor mentions the right-of-way previously granted to Railroad A. Under these circumstances, the minerals under the right-of-way are probably owned by the United StatesO owns Blackacre in fee simple. O conveys to A an interest less than fee simple in Blackacre, retaining a right of reversion. Subsequently, O conveys all right, title and interest in Blackacre to B, without any reservation or exception.(fn1)
The purpose of this article is to trace the history of grants of railroad rights-of-way and the case law determining ownership of minerals under these rights-of-way in an effort to clarify the apparent inconsistencies with general property law concepts.
Prior to 1871, Congress sought to stimulate the construction of railroads through the uninhabited territories of the western frontier by granting specific railroads a right-of-way over the public lands and a land grant of the odd-numbered sections through which the right-of-way ran.(fn2) The transcontinental railroad was completed in 1869. Between 1871 and 1875, the need and justification for financial incentives to railroads diminished, resulting in a series of railroad rights-of-way grants to specific railroads without the accompanying grant of odd-numbered sections.(fn3)
In 1875, to obviate the need for Congressional authorization to individual railroads, Congress adopted the General Railroad Right-of-Way Act of 1875 ("1875 Act"),(fn4) which granted a right-of-way through public lands to the extent of 100 feet on each side of the central line of the railroad. No public lands were granted as financial inducement for construction of the line. However, the railroads were granted the right to take the material, earth, stone and timber necessary for the construction of the railroad from the public lands adjacent to the line. Adjacent ground also was granted for stations, depots, machine shops, side tracks, turn-outs and water stations, not to exceed twenty acres for each station, to the extent of one station for each ten miles of track.(fn5)
In construing the nature of railroad rights-of-way prior to 1871, the U.S. Supreme Court initially considered the grant to be more than a mere easement. In Northern Pacific Railway v. Townsend,(fn6) the court held a railroad's interest paramount to a claim of an adverse possessor. The court described the right-of-way as a "limited fee, made on an implied condition of reverter in the event that the company ceased to use or retain the land for [railroad] purposes,"(fn7) However, it failed to describe the parameters of a "limited fee" and did not specifically address the issue of ownership of the minerals in and under the right-of-way.
Based on this limited fee concept, the railroads argued that the grant of a right-of-way included a grant of the minerals underlying the right-of-way. This argument was soundly defeated in Great Northern Railway Co. v. U.S.(fn8) In construing a right-of-way grant pursuant to the 1875 Act, the U.S. Supreme Court held that the railroad was granted an easement only, not a "limited fee," and...
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