Chicago & N.W. Transp. Co. v. Pedersen

• Decision Date: 14 November 1977
• Docket Number: No. 75-702,75-702
• Citation: 259 N.W.2d 316,80 Wis.2d 566
• Parties: CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY and Chicago, Milwaukee, St. Paul and Pacific Railroad Company, Respondents, v. Earl H. PEDERSEN, Register of Deeds in and for Bayfield County, Wisconsin, and Victor A. Miller, Attorney General of Wisconsin, and all other officers similarly situated in and of this state and those acting under said officers, Appellants.
• Court: Wisconsin Supreme Court

Page 316

259 N.W.2d 316

80 Wis.2d 566

CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY and Chicago, Milwaukee, St. Paul and Pacific Railroad Company, Respondents, v. Earl H. PEDERSEN, Register of Deeds in and for Bayfield County, Wisconsin, and Victor A. Miller, Attorney General of Wisconsin, and all other officers similarly situated in and of this state and those acting under said officers, Appellants.

No. 75-702.

Supreme Court of Wisconsin.

Argued Oct. 4, 1977.

Decided Nov. 14, 1977.

Bronson C. La Follette, Atty. Gen., Thomas J. Balistreri, Asst. Atty. Gen., on brief, for appellant, Attorney General.

Thomas P. Fox, Dist. Atty. of Bayfield County, for appellant, Earl H. Pedersen, with oral argument by Thomas J. Balistreri, Milwaukee.

Roger S. Bessey (argued), Terry E. Johnson and Borgelt, Powell, Peterson & Frauen, S. C., Milwaukee, on brief, for respondents.

DAY, Justice.

This is an appeal from a declaratory judgment in which the trial court held secs. 700.30 and 893.075, Stats. (Ch. 260, L.1973) unconstitutional and enjoined all Wisconsin county registers of deeds from carrying out the provisions of the act. We affirm the judgment of the trial court.

Sec. 700.30, Stats., at issue here, reads as follows:

"700.30 Mineral Rights. (1) Any person, other than the surface fee owner, who claims title to mineral rights in land arising from an instrument other than a lease from the surface fee owner of 10 years' duration or less which by its terms is in full force and effect, shall record his claim with the register of deeds of the county in which the land is situated. The claim shall describe the reserved rights and the land in which the rights are claimed. The register of deeds shall record the claim in a register of mineral rights and the claimant shall pay the recording fee under s. 59.57. In addition, the claimant shall thereafter pay an annual registration fee of 15 cents per acre or fraction thereof with a minimum fee of $2 for each single description registered on the lands wherein such mineral rights are claimed. Failure to register any claim of mineral rights shall result in reversion of such rights to the surface fee owner. Failure to pay the registration fee within 3 years of the annual due date shall cause all rights to revert to the surface fee owner.

"(2) Any claim of mineral rights separate from surface fee ownership arising from an instrument other than a lease from the surface fee owner of 10 years' duration or less which by its terms is in full force and effect, and recorded prior to December 31, 1974, shall be void and all rights under such claim shall revert to the surface fee owner unless such claim is recorded prior to December 31, 1977, as provided in this section. Claims of mineral rights separate from surface fee ownership arising from instruments recorded after December 31, 1974, must be recorded as provided in this section within 3 years of the date of recording the instrument creating or reserving such rights; failure to record such claims shall void such claims, which shall then revert to the surface fee owner.

"(3) Mineral rights, other than mineral rights claimed by the surface fee owner of record, may not be claimed unless based on a recorded instrument which shall be specifically referred to in the registration of such rights required by this section.

"(4) Of the annual registration fee, one-third shall go to the county in which the land is located, one-third to the municipality in which the land is located and the remaining one-third to the geological and natural history survey to be used for identification and evaluation of mineral resources of the state. The register of deeds shall collect such payments and maintain records sufficient to identify delinquencies in payments and he shall turn the payments over to the county treasurer who shall forward the payments to those entitled to them under this subsection no later than February 28 of the year following the due date.

"(5) Municipalities and counties shall register all lands owned by them on which they claim mineral rights but shall not be required to pay a fee. Lessees of mineral rights on lands owned by counties or municipalities shall be required to pay the fee under sub. (1).

"(6) If the fee under this section is not paid on or before the due date of December 31 of each year, it will be subject to the interest rate under s. 71.13(1) accruing from the preceding December 1."

Sec. 893.075, Stats. reads as follows:

"893.075 Adverse Possession Of Mineral Rights Defined. Adverse possession of the land as defined in this chapter shall be deemed to include adverse possession of all mineral rights not registered under s. 700.30.

"Section 2. Effective Date. The first registration fee under this act shall be paid for the year 1974 and shall be paid not later than December 31, 1974. On enactment hereof, the attorney general shall promptly commence an action seeking a declaratory judgment regarding the constitutionality of this act."

Sec. 700.30, Stats. requires persons, other than surface fee owners and lessees holding leases of less than ten years, who claim title to mineral rights in land, to record their claims and pay a recording fee. Non-exempt claimants are also required to pay an annual registration fee of fifteen cents for each acre of mineral rights claimed. Failure to record claims of mineral rights or pay the annual registration fee results in reversion of the mineral rights to the surface fee owner.

The plaintiff-respondent railroad companies (hereinafter plaintiffs) claim in excess of 250,000 acres of severed mineral rights in Wisconsin, including claims in Bayfield county. The plaintiffs started a declaratory judgment action to have the statutes declared unconstitutional and to have their enforcement enjoined.

Following a hearing, the trial court issued a memorandum opinion holding the statutes were unconstitutional as violating the due process and equal protection clauses of the United States Constitution, and the uniformity of taxation clause of the Wisconsin Constitution.

Judgment was entered January 12, 1976 declaring Ch. 260 of the Laws of 1973 unconstitutional in its entirety and permanently enjoining the defendant-respondent registers of deeds (hereinafter defendants) from carrying out its provisions.

We hold that sec. 700.30, Stats., is unconstitutional because its enforcement provisions deny procedural and substantive due process. ¹ The enforcement provisions in the statute are not severable from the statute as a whole so the entire statute fails. ²

Sec. 700.30, Stats. provides that owners of severed mineral rights may lose those rights to the surface owners under a number of circumstances more fully described below.

Mineral rights are an interest in land which may be created or transferred as any other estate in land. Gillett and another v. Treganza, 6 Wis. 343, 348 (1858); Ganter and others v. Atkinson and others, 35 Wis. 48, 51 (1874).

Where the mineral right is severed from the surface fee

". . . it has been held to be property, distinct from the land itself vendible, inheritable and taxable." Elder v. Wood, 208 U.S. 226, 232, 28 S.Ct. 263, 264, 52 L.Ed. 464 (1908).

Before a person may be deprived of property, that person has a right to a hearing. The requirements of the hearing will vary from case to case depending on the nature of the right or property threatened, but the hearing must allow for consideration of facts essential to the decision. Bell v. Burson, 402 U.S. 535, 540-542, 91 S.Ct. 1586, 29 L.Ed. 90 (1971).

In this case, the plaintiffs' mineral rights will revert to the surface owner if they are not registered or taxes are not paid on them. At the least, the plaintiffs must have a hearing where they can question the determination of the register of deeds that the registration has not been done or that the taxes have not been paid.

Implicit in the right to a hearing is adequate notice of the hearing. Personal service is always sufficient notice. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313, 70 S.Ct. 652, 94 L.Ed. 865 (1950). Where a person's location is known or easily ascertainable personal service is also required. Shroeder v. City of New York, 371 U.S. 208, 212, 213, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962). But for, ". . . persons missing or unknown, employment of an indirect and even a probably futile means of notification is all that the situation permits . . ." For such persons publication is adequate notice. Mullane, supra, at 339 U.S. 306, 317, 70 S.Ct. at 658.

In an in rem proceeding for the collection of property taxes the standards for the required notice are less stringent. In Devitt v. Milwaukee, 261 Wis. 276, 52 N.W.2d 872 (1952), the City of Milwaukee adopted an ordinance in conformity with sec. 75.521, Stats. which allowed for the enforcement of property taxes by an in rem action where tax certificates remained unpaid for over three years. The procedure set out in the act required that a petition of foreclosure be filed with the circuit court and that the petition would have the same effect as a lis pendens. A copy of the petition would be sent by registered mail to the last known addresses of owners and mortgagees and notice of the petition would appear in the city newspaper with the largest circulation once a week for three weeks. In deciding that the procedure complied with due process, this court stated that,

"The process of taxation does not require the same kind of notice as is required in a suit at law, or even in proceedings for taking private property under the power of eminent domain." Devitt, supra, at 261 Wis. 276, 52 N.W.2d at 873, quoting from Bell's Gap R. Co. v. Pennsylvania, 134 U.S. 232, 239, 10 S.Ct. 533, 33 L.Ed. 892 (1890).

The payment of the fees under sec. 700.30, Stats. is a tax. The fees raise revenues beyond what is necessary to the administration of the registration scheme. Sec. 700.30(4), Stats. provides that...