Swaby v. Northern Hills Regional Railroad Auth.

Decision Date08 July 2009
Docket NumberNo. 24808.,24808.
Citation769 N.W.2d 798,2009 SD 57
PartiesJames A. SWABY; Fred K. Ening Jr.; William W. Miller and Laurel D. Miller Co-Trustees under the William W. Miller Revocable Trust 50% interest and Laurel D. Miller and William W. Miller Co-Trustees of the Laurel D. Miller Revocable Trust 50% interest; Barbara J. Spector as Trustee of the Spector Living Trust and Muriel A. Hanna as Trustee under Declaration of Trust; Elwyn J. Cole; Crook Mt. Angus Ranch, Inc.; Albert R. and Lori A. Tetreault; Brian and Heidi Janz; John and Patricia Dvorak; Bobby A. and Cindy L. Ladner; Randy G. and Lori A. Fryer; William R. and Teresa Fox; David J. Fandrick; Desperado Investments, LLC; Tracy L. and Kelly J. McDaniels; and Gerald and Edith Miles, Plaintiffs and Appellees, v. NORTHERN HILLS REGIONAL RAILROAD AUTHORITY; South Dakota Department of Transportation; South Dakota Department of Game, Fish and Parks, Defendants and Appellants, and Lawrence County, a political subdivision of the State of South Dakota; Dakota, Minnesota and Eastern Railroad Company ("DM & E"); and the Heirs, Devisees, Legatees, Executors, Administrators, or Creditors of the Following Deceased Individuals: Stephen W. Morgan and Frane E. Morgan, husband and wife; Christian G. Gralapp and Christiana Gralapp, husband and wife; Lyman D. Pettit and Hanna M. Pettit, husband and wife; Thomas S. Newman; Andrew Norine; Gottfried Burger; Richard Grenfell and Grace Grenfell, and John Lewis and Margaret Lewis, husband and wife; and all Persons Unknown who have or claim to have any interest or estate in or lien or encumbrance upon the premises described in the amended complaint, Defendants.
CourtSouth Dakota Supreme Court

Roger A. Tellinghuisen, Eric Strawn of Tellinghuisen & Gordon, PC, Spearfish, South Dakota, Attorneys for plaintiffs and appellees.

Thomas E. Brady, Dylan A. Wilde of Brady & Plumier, PC, Spearfish, South Dakota, Attorneys for defendants and appellants.

KONENKAMP, Justice.

[¶ 1.] Plaintiff landowners brought suit to quiet title to certain railroad rights of way. On cross motions for summary judgment, the circuit court quieted title in favor of the landowners. To resolve this appeal, we must interpret several 1890 deeds and the General Railroad Right-of-Way Act of 1875. We affirm in part, reverse in part, and remand.

Background

[¶ 2.] James Swaby, et al. (plaintiffs), brought a quiet title action against Northern Hills Regional Railroad Authority, et al. (NHRRA).1 Plaintiffs and NHRRA dispute title to certain property located in Lawrence County, South Dakota. The parties filed cross motions for summary judgment and submitted stipulated material facts. Those facts reveal that in 1890 several landowners executed deeds conveying a property interest in certain strips of land to the Fremont, Elkhorn and Missouri Valley Railroad Company (FEMV).2 FEMV had also obtained certain property interests in land under the General Railroad Right-of-Way Act of March 3, 1875 (1875 Act).3 The land conveyed to FEMV by the 1890 deeds or obtained by the 1875 Act will be referred to as the "Right of Way."

[¶ 3.] In May 1890, FEMV located and graded a railroad route in the Right of Way. FEMV also filed a plat and profile of its Whitewood to Deadwood, South Dakota railroad with the United States Land Office in Rapid City, South Dakota. The plat and profile were approved by the Secretary of the Interior in June 1890. In 1903, FEMV conveyed its interest in the Right of Way to the Chicago and Northwestern Railway Company (CNW).

[¶ 4.] In 1970, CNW filed an application with the Interstate Commerce Commission (ICC) entitled, "Application for a Certificate of Public Convenience and Necessity Authorizing the Abandonment of a Line of Railroad between Whitewood and Deadwood, Lawrence County, South Dakota." The ICC issued a "Certificate and Order" on May 13, 1970, and the abandonment was confirmed. CNW removed its railroad tracks and no railroad service has since been conducted over the Right of Way.

[¶ 5.] In December 1970, CNW entered into an agreement with the State of South Dakota (State) to sell to the State a portion of the Right of Way. On May 30, 1972, CNW quitclaimed its interest in the Right of Way to the State. On May 15, 1985, the State, through the South Dakota Department of Transportation (DOT), quitclaimed a portion of the Right of Way to the South Dakota Game, Fish, and Parks (GFP). On March 25, 2004, DOT quitclaimed all its remaining interest in the Right of Way to NHRRA. On June 16, 2006, Union Pacific Railroad Company quitclaimed all its interest in the Right of Way to NHRRA.4 On October 17, 2006, the Dakota, Minnesota & Eastern Railroad Corporation quitclaimed all its interest in the Right of Way to NHRRA.

[¶ 6.] Plaintiffs are the successors in interest to the original owners of the Right of Way acquired by FEMV. In their motion for summary judgment, plaintiffs asserted fee title ownership of the Right of Way based on abandonment and rights of reverter. NHRRA countered that it is the fee owner, as the successor in interest to FEMV. In considering the parties' motions, the circuit court examined the Right of Way by dividing it into three property types: property conveyed by the 1875 Act; property conveyed in 1890 by private deeds with reversionary language; and property conveyed in 1890 by private deeds without reversionary language. With respect to each type of property, the court ruled that the Right of Way had been abandoned, and thus the property reverted to the heirs and assigns of the original owners. The court quieted title in certain Right of Way land in favor of plaintiffs. The court also entered a default judgment against those who failed to answer plaintiffs' amended complaint.5

[¶ 7.] NHRRA appeals. In summary, it argues that the court erred when it quieted title in favor of plaintiffs and against NHRRA for the land conveyed by (1) the 1875 Act; (2) the 1890 deeds with reversionary language; (3) the 1890 deeds without reversionary language; and (4) the deeds that specifically excluded the Right of Way land.6

Analysis and Decision
1. The 1875 Right of Way Act

[¶ 8.] We discussed the 1875 Act in Brown v. Northern Hills Regional Railroad Authority, 2007 SD 49, 732 N.W.2d 732.

Beginning in the 1800s, Congress enacted several bills which explicitly granted public lands to railroad companies to aid the construction of a cross-country railroad. Barney [v. Burlington Northern R.R. Co.], 490 N.W.2d [726,] 729 [(SD 1992)] (citing Act of Sept. 20, 1850, 9 Stat. 466). Pursuant to these bills, "Congress gave generous land grants from the public domain to the railroads to subsidize the costs of the western expansion." Id. The expansion stretched from the 100th meridian from the middle of Nebraska to California. Id. Because of mounting public criticism, the nature of the land grants changed in 1872. Id. "[T]he House of Representatives enacted a resolution condemning its policy of outright land grant subsidies to railroads." Id. (citing Leo Sheep Co. v. United States, 440 U.S. 668, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979)). Instead, Congress began to reserve the land for homesteads and educational purposes. Id. Notwithstanding this changed policy, Congress continued to encourage the expansion of the West by enacting the 1875 Act, which authorized ROW [right of way] grants to railroads. Id. (citing 43 U.S.C. § 934).

Id. ¶ 9.

[¶ 9.] The United States issued land patents to homesteaders, passing title and ownership of certain public land to private individuals. Id. Some patents were issued subject to a railroad's right of way. Id. However, because the land patent at issue in Brown did not contain language indicating that the United States retained a reversionary interest in the right of way, we held that "whatever interest the United States retained in the ROWs [rights of way] through the 1875 Act was relinquished when land patents were issued[.]" Id. ¶ 22. The case was then remanded to determine whether the right of way had been abandoned.

[¶ 10.] Here, CNW's predecessor in interest, FEMV, acquired a right of way interest in public lands under the 1875 Act. The United States also issued land patents to certain predecessors in interest of plaintiffs.7 These land patents were subject to the railroad's right of way. But, like the land patents in Brown, the patents here do not reserve any interest in the Right of Way in the United States. Therefore, under Brown, if the Right of Way has been abandoned, plaintiffs are the fee owners as the heirs, successors, or assigns of the original property owners. See id.

[¶ 11.] Plaintiffs contend that CNW abandoned the Right of Way in 1970, when it removed the railroad tracks and facilities and never again used the Right of Way for railroad purposes. NHRRA, on the other hand, insists that despite CNW's application for abandonment with the ICC, it could not legally abandon the Right of Way "unless a specific Act of Congress would authorize such action."8 NHRRA contends that 43 U.S.C. §§ 912, 913 require this specific Act of Congress. NHRRA insists these sections apply because 43 U.S.C. § 939 gave Congress the power to amend the 1875 Act.9

[¶ 12.] In Brown, we rejected the notion that sections 912 or 913 apply when the United States issues a land patent without specifically reserving an interest in the right of way. 2007 SD 49, ¶ 22, 732 N.W.2d at 740. The facts of this case fit squarely within our holding in Brown therefore, sections 912 and 913 do not apply in this case. Nevertheless, NHRRA maintains that no abandonment can occur because a railroad cannot alienate its property interest acquired by a congressional act.10 We can find no authority to support NHRRA's assertion. Rather, based on our review of the caselaw, courts across the nation, both federal and state, have declared railroad rights of way abandoned despite the fact that the rights of way were acquired by a federal act. Se...

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