Radke v. Union Pac. R. Co.

Decision Date26 January 1959
Docket NumberNo. 18254,18254
Citation138 Colo. 189,334 P.2d 1077
PartiesSara Mildred RADKE and Edward F. Karr, Plaintiffs in Error, v. UNION PACIFIC RAILROAD COMPANY, Defendant in Error.
CourtColorado Supreme Court

Galligan & Foley, Denver, Morelock, Hoskins & King, Kansas City, Mo., Collins, Hughes, Martin & Pringle, Wichita, Kan., for plaintiffs in error.

Knowles & Shaw, Denver, Kreager & Sublett, Sterling, Sidley, Austin, Burgess & Smith, Chicago, Ill., for defendant in error.

Herbert E. Mann, W. A. E. Mitchell, Greeley, amici curiae.

SUTTON, Justice.

Plaintiffs in error who were plaintiffs below will be referred to herein as plaintiffs and defendant in error Union Pacific Railroad Company will be referred to as the railroad.

Plaintiffs are the owners of the NE 1/4 Section 13, T. 11 N.R. 49 W, Logan County, Colorado. This land was formerly part of Weld County, Colorado. Alleging ownership in fee simple and actual possession of the land they brought suit to remove a cloud from their title, created by a reservation of 'the exclusive right to prospect for coal and other minerals' which appeared in the deed given in 1889 by the railroad to the original grantee and plaintiffs' remote predecessor in title, who was an assignee of the original contract purchaser. The record discloses that the land was bought from the railroad under a written contract which provided for conveyance in fee simple, no mention being made therein of any reservations.

Trial was to the court which resulted in favor of the railroad. Motion for new trial was denied and the plaintiffs are here by writ of error.

Most of the evidence in the record consists of various exhibits and the trial court stated that these '* * * have been examined and considered by the Court and received for such probative value as they merit and, for the purpose of clarification of the entire record in this cause, all of such stipulations and exhibits are admitted in evidence in order that an appellate court may have before it the entire record in the event of a review of this case.'

Though seven major grounds for reversal are urged by plaintiffs, we deem it necessary to consider only one, which we state to be:

Did the Trial Court Err in Concluding as a Matter of Law That the Evidence Before It Required a Finding for Defendant?

This question is answered in the affirmative.

It appears that during the Nineteenth Century the railroad secured the land in question as part of its Congressional Land Grants. It was to sell the lands to finance its construction. On June 6, 1896, the United States House of Representatives passed a resolution calling for the issuance of patents '* * * to all lands which have been sold by said company to bona fide purchasers * * *.' Plaintiffs' land had been sold by the railroad through its trustee to a bona fide purchaser prior to 1896 and was included in the patents granted following the above resolution. The Land Grant Mortgage provided that any tract of land grant lands sold by the railroad 'shall be conveyed by the said party of the first part (the railroad) and the said trustees to the purchasers in fee simple.' The Sinking Fund Mortgage provided that conveyances executed to land grant purchasers 'shall vest in such purchaser or purchasers a perfect title in fee, free and divested of any lien or encumbrance whatsoever * * *.'

The exhibits introduced show that in 1887 in the State of Colorado the railroad began to use reservations in various forms similar to the one in question here. They continued to use the form involved here in this state until 1915. Beginning in 1902, however, in many of its deeds it also used a reservation of 'oil, coal and other minerals.' This continued until 1936.

It thus appears that the railroad itself over a long period of time made a distinction in its deed forms between 'reserved minerals' and the 'reserved right to prospect for minerals.'

It also appears that the congress at one time granted the railroad the right to reserve coal and iron; that in the instant case the purchaser took full possession of his land under his contract of purchase and had completely fulfilled his contract obligations with the railroad some ten months before the deed in question was executed. Further, that the railroad's records for many years denominated the reservation in question here as being for 'coal'. And in 1919, possibly due to its anticipated new tax liability, the railroad changed its own land records on much of its land to show it had reserved coal and 'other minerals'.

Beginning in 1920 the railroad was assessed and paid taxes on its mineral reservations possibly as a result of court action which resulted in this court's decision in Union Pacific Railroad Co. v. Hanna, 1923, 73 Colo. 162, 214 P. 550. It appears that at least since 1920 these plaintiffs and others similarly situated upon an estimated 23,254.55 acres in Logan County also have been assessed and have paid taxes on the entire value of their lands, including the minerals, because their tax notices did not contain any indication of separate ownership of the minerals or that a third person way paying the taxes thereon. Plaintiffs assert that the other Logan County acreage so taxed was all sold at the same time upon identical contract forms as their land. We note that in the Hanna case the railroad urged as a defense against any assessment that there were no known minerals under the lands there involved and therefore the reservation used had only a nominal value.

It was stipulated in plaintiffs' Exhibit F that in each county in Colorado that railroad, where taxable, has been assessed and pays the same amount of tax per acre regardless of the form of reservation which appears in its deeds for land grant lands.

It is admitted that the railroad has never attempted to lease this land or explore it in any manner for oil or gas or engage in any other mineral development. The court notes, however, that at this date the area is included within what is called the Denver-Julesburg Basin and that considerable oil and gas activity is current in the area.

The evidence before the court included the deed itself with the reservation therein. Other evidence discloses that the railroad, before the discovery of oil and gas in this area, had several times both in Colorado and Wyoming, upon request of those who received deeds with the same or similar reservations, released and quitclaimed a 'coal reservation' to clear the titles for the owners.

We need not determine whether this was a recognition by the railroad that it had no legal right to make the reservations--as contended by plaintiffs. Merger, executory contracts, and whether the reservation includes oil and gas as well as other minerals, rogether with other matters urged by plaintiffs are, for the purpose of this decision, immaterial. This, because we must first decide whether the so-called 'reservation' was a mere license, presumably valid when made, or a mineral reservation or exception from the grant. This question being solely one of law, this court is as capable of determining it as was the learned trial court and we are not bound by its conclusions thereon. See: McIntosh-Huntington Co. v. Rice, 1899, 13 Colo.App. 393, 58 P. 358; Conklin v. Shaw, 1919, 67 Colo. 169, 185 P. 661; Van Diest v. Towle, 1947, 116 Colo. 204, 179 P.2d 984, 171 A.L.R. 304.

There are many approved ways to reserve or except from a conveyance a part of the estate to be conveyed. Here the wording does not 'except coal and other minerals' nor does it read 'reserving coal and other minerals', nor does it 'except and reserve' the minerals. Here the railroad without first reserving or excepting any minerals or rights thereto provided: 'Reserving, however, to the said Union Pacific Railway Company the exclusive right to prospect for coal and other minerals within and underlying said land and to mine for and remove the same if found, and for this purpose it shall have right of way over and across said lands and space necessary for the conduct of said business thereon, without charge or liability for damage therefor.' (Emphasis supplied.)

The railroad's position is that this is a mineral reservation, not a license or lease. Further, that it is technically an exception of a vested interest not subject to loss by non-user. It points to the statement of the trial court that the reservation in dispute, when compared with the made by the Union Trust Company of New York as trustee for these lands, which read 'but subject, however, to all reservations and conditions hereinbefore contained', manifests an intention on the part of the railroad to except from the grant the title to coal and other minerals. The trial court stating:

'The reservation contained in the deed indicates an intention on the part of the railway company to remove from the premises some portion of the physical estate and not to reserve an incorporeal hereditament to apply the premises conveyed to a right of easement or license, or a mere right-of-way.'

Adams v. Henderson, 1897, 168 U.S. 573, 18 S.Ct. 179, 183, 42 L.Ed. 584, is cited as holding this to be a reservation of a vested interest under 'identical' wording. True it is that that case stated this wording was an '* * * incumbrance upon it (the land) arising from the right reserved by the railroad company, for all time, * * *.' And that the purchasers there could not be '* * * forced to take the land subject to the railroad company's right of way over it for the purpose of prospecting for and mining minerals, which may be taken off when found.' However, the facts of that case when examined, distinguished it from the case before us. It involved an attempt by sellers (who had a contract of purchase from the Union Pacific Railroad) to compel the purchasers to accept a deed to property subject to this reservation. Clearly the reservation there and here is a burden on the land. It...

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