CHAPTER 11 AN OVERVIEW OF MINERAL TITLE EXAMINATION PRACTICE
| Jurisdiction | United States |
(Nov 1977)
AN OVERVIEW OF MINERAL TITLE EXAMINATION PRACTICE
Van Cott, Bagley, Cornwall & McCarthy
Salt Lake City, Utah
INTRODUCTION
The purposes of this paper are to discuss some of the special characteristics of mineral titles, including the requirements of mineral land use, and to discuss some of the practical aspects of and approaches to the examination of mineral titles. Certain problems relating to the role of the attorney in a mineral title examination practice are also considered.
Many of the examples used in the paper relate to unpatented mining claims. The attorney involved in examining title to such claims must work with a number of different kinds of land records and, no matter how meticulous the title search and knowledgeable the title attorney, the title report he produces may tell very little about whether any property rights have in fact been created. Unpatented claims serve, therefore, as a rather extreme example of some of the problems and concerns confronting the mineral title examiner.
This paper will not tell the reader what records to examine in the preparation of a mineral title report, nor will it tell the reader how those records are organized, or what they contain. Those subjects have been treated elsewhere1 and will be dealt with further in other portions of the Mineral Title Examination Institute.
The paper is written from the point of view of the private practitioner working in the natural resources area. Hopefully, however, much of what is said will also be of benefit to in-house attorneys and other mineral title examiners.
SPECIAL CHARACTERISTICS OF MINERAL TITLES
There are certain special characteristics of mineral titles that result from the mining laws, the requirements of mineral land use, and the public record systems that have been developed to show the status of public lands and the title to mining claims. In a sense, the problem facing the mineral title examiner is that he must be concerned about the usual land records plus additional records, all of which tell him less about title to the subject property and the right to use that property than is generally the case in a non-mineral situation.
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Obviously, the mineral title examiner must be concerned about all the things that are of concern to any other title examiner. He must deal with the same types of public records and their legal significance. He must be knowledgeable in the same bodies of law; he is faced with the same array of potential title problems, and he must deal with the same types of restrictions on use, such as zoning and land use planning. However, the mineral title examiner must be concerned with a number of additional factors. In many cases he must examine additional types of public records which have a different legal significance and which are organized in a much different way than the usual land records. He must be knowledgeable in additional bodies of law and he is faced with an additional array of potential title problems. He must also be concerned with additional classes of restrictions on use. Once all the relevant records have been examined, and all the title problems have been identified, two fundamental questions may remain unanswered. The examiner may not know whether "title" to the minerals in place carries with it the rights required to develop and extract those minerals and in the case of unpatented mining claims, the examiner probably will not even know whether any property rights have in fact been created.
A typical example illustrating the first point might be a situation involving fee lands where the surface and mineral estates had been severed by a deed which contained the language "reserving to the grantor all coal." There may be an unbroken chain of title from the sovereign to the present owner of the coal. The examiner might conclude, nevertheless, that mere title to the coal in place was of little value standing alone and that the would-be purchaser of this title must bargain with others to obtain the additional property rights required to develop, extract, and market the coal inasmuch as the parties to the deed failed to address such matters as rights of ingress and egress, and rights to use the surface for purposes related to the development of the coal. The law might provide that title to the coal in place carried with it by implication the rights "fairly necessary" to the enjoyment of the reserved title to coal.2 However, the extent of those implied rights could be very uncertain and, in any event, could be inadequate in the context of a particular project.3
Yet another example would be a transaction involving unpatented mining claims situated in a National Recreation Area or in an area under consideration for wilderness designation. No matter how good the paper title to the claims might appear,
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no assessment of the ownership of those claims would be complete which did not consider the land use requirements of mining those claims and the legal and practical restrictions imposed by virtue of their location in such an area.
The point relating to unpatented mining claims is illustrated by this example. Suppose that an examination of the appropriate federal records indicated that certain unpatented mining claims were located on ground open to mineral entry upon the relevant dates and that there were no use restrictions or other problems revealed by such records. Suppose further that the records in the county recorder's office showed a clean chain of title from the original locators and that all the notices of location, proofs of labor, and other documents were in proper order. An examination of all these records will not enable the examiner to determine whether there are any actual property rights associated with the paper title, or whether the owner of this paper title has any right to occupy and use the ground in question. Ordinarily a title examiner can find some document which is conclusive evidence of the creation of a property right.4 This is not true in the case of unpatented mining claims. The records examined will not ordinarily reveal whether the ground in question was subject to valid senior claims, whether the locator performed the necessary discovery work, whether the locator followed the prescribed location procedures, or whether the locator had a discovery of a valuable mineral.
These special characteristics of mineral titles play an important part in defining the role of the mineral title examiner, the proper approach to a particular mineral title project, and the scope of title report that a particular project requires. Obviously, the mineral title examiner must be experienced in the techniques of examining and interpreting the different types of records. It is even more important, however, that he be sensitive to the land use requirements associated with the development of mineral rights in a given situation. An essential part of the mineral title attorney's task is to bring these requirements and restraints thereon into perspective as part of the overall title picture.
THE SCOPE OF A MINERAL TITLE EXAMINATION
A mineral title examination can range in scope from the most cursory examination of one type of title record to a
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comprehensive examination of all available title records and of the ground itself. Different situations call for a different scope of examination and result in different types of title reports.
I would caution those involved in mineral title examinations to be...
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