[ISBA RealEstate] Mineral Rights
<realestate@iabar.org>
Wednesday November 08, 2017 08:46


On its face, section 614.17 does appear to bar actions brought by holders of defunct mineral interests.
But may I second Mr. Cassady's caution.  Compared to other states, Iowa's authority is very murky.

Originally only common law dealt with mining interests in general.
One early case--Beatty v. Gregory, 17 Iowa 109 (1864)--suggests that mineral *licenses* are cut off.
 
Chief Justice Dillon delivered what appears to be Iowa's seminal discussion of mineral rights termination:
"Whether the interest of the plaintiffs had ever been forfeited, terminated or abandoned, was one of fact for the jury, to be determined by them from the evidence under proper instructions. This question, the plaintiffs, by their instructions (all of which were refused), sought to get before the jury. And whatever may be our opinion upon the evidence, as it now stands, as to the abandonment of their right by the plaintiffs, we are clear that they had the right, under our statute and practice, to have this question distinctly submitted to, and decided by, the jury. In considering, therefore, whether the case ought to be reversed for error in the above charge, we must assume that the plaintiffs took possession with the consent of Bonson, expended money and labor on the faith of such consent, and that their right had never been forfeited or abandoned. On this assumption, it is our opinion that they would have such an interest in real estate as would entitle them to bring an action in this form to recover it, and thus be restored to their crevice or diggings. Such being our opinion, upon the general principles of justice and law, let us now take a brief view of the authorities to see whether this opinion is in harmony with adjudged cases. The general rule is, that ejectment will lie for anything of which the sheriff can deliver possession. Therefore, it may be maintained for corporeal, but not for incorporeal hereditaments. Adams on Eject., ch. 2, pp. 18, 20, and cases. As applicable to mines and mining interests, this distinction results from the above rule: a privilege to dig, not amounting to an actual demise of the mines, as an incorporeal hereditament, and, consequently, ejectment will not lie. Doe, ex dem. Hanley v. Wood, 2 B. & Ald., 724; Lord Mountjoy's Case, 4 Leon., 147; S. C., Godbolt, 17; Cheatam v. Williamson, 4 East, 469; Crocker v. Fothergill, 2 B. & Ald., 661, judgment of HOLROYD, J.; and see Wilkinson v. Proud, 11 M. & W., 33; and Stoughton v. Leigh, 1 Taunt., 402. And especially under the above authorities is this so, where such license is not exclusive and does not oust the grantor of his rights.
"But a distinction, in many cases, is drawn between an unopened and an open mine. And the books abound with cases, from a very early period, which decide that *117 ejectment will lie for mines, though another has the surface. We refer to the following: Comyn v. Kinyto, Cro. Jac., 150. In Whithingham v. Andrews, 1 Salk., 255, “it was not questioned (citing Cro. Jac., 150), that ejectment lies of a coal mine;” S. C., Carth., 277, S. P.; Comyn v. Wheatley, Noy, 121; and see Lewis v. Branthwaite, 2 B. & Ald., 437; Bainb. on Mines, 493, 494; Collier on Mines, 18 (top); Adams on Eject., 20 (marg.); Doe. ex dem. Hanley v. Wood, 2 B. & Ald., 724, and cases cited supra. Many of these cases, while holding that ejectment lies for an open mine, throw no light upon the question as to the interest in the plaintiff necessary to maintain the action. On this subject, Mr. Adams is of opinion (Eject., page 20, marg.) that “when a grant of mines is so worded as not to operate as an actual demise, but only license to dig, search for, and take metals and mineral within a certain district, it seems that a party claiming, under such a grant, and who shall open and work, and be in actual possession of, any mines, may, if ousted, maintain ejectment with respect to them; but he cannot maintain ejectment, either in respect of mines within the district” (i. e., lying within the bounds of his privilege), “which he has not opened, or which, having opened, he has abandoned.” See, also, Bainb. on Mines, 494; Collier on Mines, 18. We are satisfied that this rule is a reasonable one, and we adopt it as being the law."

Notice that the Supreme Court indicated court action would be needed to terminate a **licensee who actually operated a mine**.
But "we adopt [] as being the law" a position that an *unopened* mine claimant *may not maintain* an action against the surface owner.
Sounds rather like section 614.17...
But Beatty does not aid us in determining whether or not **ownership of an out-and-out conveyance or reservation of mineral interests**, but not used, can be terminated by operation of law.

Almost all of Iowa's extant case law dealing with severed mineral interests in land arises during the pre-WWII coal mining era.
Within this time period appears the only other decision, that I can find, dealing with abandonment or nonuser of mineral rights.
Bremhorst v. Phillips Coal Co., 202 Iowa 1251, 211 N.W. 898 (1927).
"When the minerals and the surface are owned by the same party, as is ordinarily true, the adverse possession of the surface is also an adverse possession of the minerals, but, when the ownership or possession is severed, the situation is different. See Wallace v. Elm Grove Coal Co., 58 W. Va. 449, 52 S. E. 485, 6 Ann. Cas. 140; Black Warrior Coal Co., v. West et al., 170 Ala. 346, 54 So. 200."

Facts in Bremhorst did not involve nonuser or abandonment.  It sheds no light upon any trigger events or time passage necessary to terminate mineral rights.
 
Neighboring states for the most part enjoy the benefit of legislative requirements for public registration of severed mineral claims, and provisions for cutting off unused claims.
Similar to, but broader than, Code Chapter 557C.
See, for example, these references from the Northwestern Digest:
Michigan (Dormant Minerals Act, MCL sections 554.291 et seq.); Van Slooten v. Larsen, 86 Mich. App. 437, 272 N.W.2d 675 (1978), aff'd 410 Mich. 21, 299 N.W.3d 704, 16 A.L.R.4th 1005, app. dism'd 455 U.S. 901, 102 S.Ct. 1242, 71 L.Ed.2d 440.
Minnesota (Minerals Registration Act MS sections 93.52, 93.55); Contos v. Herbst, 278 N.W.2d 732, (Minn. 1979); app. dism'd Prest v. Herbst, 444 U.S. 804, 100 S.Ct. 24, 62 L.Ed.2d 17 
Nebraska (RRS 1943 sections 57-228 to 57-231); Monahan Cattle Co. v. Goodwin, 201 Neb. 845, 272 N.W.2d 774 (1978)
Wisconsin (WS section 700.30--now repealed, see series 893); Chicago & N.W. Transp. Co. v. Pedersen, 80 Wis.2d 566, 259 N.W.2d 316 (1977)

North Dakota's Supreme Court has rendered many decisions, notes for which support Mr. Cassady's statements.

South Dakota's Supreme Court encountered a case where a landowner filed an affidavit of possession under a marketable title statute. 
The Court ruled that the affidavit *did not cut off* a severed mineral reservation, due to the filer's having failed to wait the statutorily-prescribed length of time before filing was allowed.
Tvedt v. Bork, 414 N.W.2d 11 (S.D. 1987):
"Contrary to the trial court's findings, however, the affidavit filed by Bork pursuant to SDCL 43-30-8.1 in 1981 did not have the effect of vesting Bork with the severed mineral interests. Affidavits of possession filed pursuant to this statute must also satisfy SDCL 43-30-7, which is referred to in section 8.1. According to section -7:
 "No such affidavits of possession may be filed as to any lands ****before the expiration of twenty-three years from recording of deed of conveyance or other instrument of conveyance under which title is claimed;****... to any land as to which claim under the provisions of S 43-30-5 has been filed."   [emphasis by the Court]
"Thus, an affidavit of possession is intended to show possession for twenty-three years from the date of recording of the original conveyance. Also SDCL 43-30-8 provides in part that, "[w]hen an affidavit has been filed and recorded as provided in Sec. 43-30-7 ... [it] shall be prima facie evidence of the facts therein stated, for the purpose of this chapter. [emphasis added]" The obvious purpose of "this chapter" is to provide some evidence of marketable title and not to transfer existing valid interests.
"Marketable title acts with provisions similar to South Dakota's protect record title holders from ancient title claims or defects if the record title holder has an unbroken chain of title starting with some "root of title". See e.g. Presbytery of Southeast Iowa v. Harris, 226 N.W.2d 232 (Iowa 1975); P. Bayse, Clearing Land Titles Secs. 171-174, 176, 182 (1970); L. Simes & C. Taylor, The Improvement of Conveyancing by Legislation 3-5 (1960); W. Barnett, Marketable Title Acts--Panacea or Pandemonium, 53 Cornell L.Q. 45, 52 (1967); R. Poulston, Legislation, Existing & Proposed, Concerning Marketability of Mineral Titles, 7 Land & Water L.Rev. 73, 75 (1972); Annotation, Construction and Effect of "Marketable Record Title" Statutes, 31 A.L.R.4th 11 (1984). In the case of mineral interests, their severance creates a separate estate and the "root title" to the mineral interests is the recorded instrument or conveyance severing the minerals. In this case, it was the deed recorded in 1968 that severed the minerals by reserving them for Tvedt's predecessors in title, his parents. See SDCL 43-28-17 (defining conveyance); Northern Pacific Ry. Co. v. Advance Realty Co., 78 N.W.2d 705 (N.D.1956). The deed reserving the minerals is then the "deed of conveyance or other instrument of conveyance under which title is claimed [to the mineral interests]," SDCL 43-30-7. The twenty-three years is measured from the date of recording of this conveyance before an affidavit of possession pursuant to sections -7, -8, and -8.1 can take effect. See Northern Pacific Ry. Co., supra; Sims & Taylor, supra at 59 (comparing and distinguishing the effect of affidavits of possession, etc., from instruments of conveyance). Even then, prima facie evidence is rebuttable. SDCL 43-30-8. Marketable title acts operate to extinguish ancient title claims and defects, and not to cut off existing interests before the running of the twenty-three year period from "root title". Therefore, Bork's filing of an affidavit pursuant to section -7, but before the running of twenty-three years from the time the minerals were severed in 1968, could not have the effect of cutting off a severed mineral interest and vesting it in Bork. Consequently, the trial court incorrectly concluded that Bork's affidavit of possession vested him with the severed mineral interests."

I see an interesting implication here--that the affidavit *might have cut off* the mineral interest *if it had been timely filed*, i.e., *after* the statutorily fixed filing-bar time had run.

All this said: We still don't know what Iowa would do.
I think that the Courts should favor marketable title and taxation of property to its full value.
Both of those public policy goals are aided by allowing termination of dormant mineral interests.
Of course, "public policy" usually provides only the weakest of arguments.

David Hanson
Hofmeyer & Hanson PC
Fayette, Iowa


----- Original Message -----
From: "Jason Cassady" <realestate@iabar.org>
To: realestate@iabar.org
Sent: Tuesday, November 7, 2017 8:10:40 PM
Subject: RE: [ISBA RealEstate]  Mineral Rights

I would be cautious about relying on 614.17 with respect to "mineral rights".  While I've never researched in Iowa, in the states where I have researched it, "mineral rights" and "mineral interests" are synonymous terms, and are a group of sticks in the fee simple absolute bundle of sticks (this is often found in old case law).  Indeed, if you look up "mineral right" in Black's it sends you to "mineral interest".  The Iowa Supreme Court long ago recognized the right to own mineral interests and surface interests separately in fee.  See Stewart v. Chadwick, 8 Clarke 463 (Iowa 1859).  Mineral interests are owned in fee in their own they can be taxed, mortgaged, leased, further severed into additional subsects, and otherwise dealt with (as one would deal with real property) separately from the remaining fee simple estate.

To that end, whether 614.17 applies raises two questions in my mind, would the Iowa courts deem possession of the surface as possession of the severed mineral interests and if so, what is the purpose of Chapter 557C.

As I have posted on this list before, at least one other state's supreme court (North Dakota, which has many similar real property laws) has held that a record titleholder of the surface (or surface and part of the mineral interests) in possession does not "possess" the severed mineral interests, and thus a curative statute relying upon possession could not wipe out the severed mineral owner's interests.  Thus, the curative statutes in that state did not apply.  In such a vein, it is possible an Iowa court would hold that 614.17 does not apply to severed mineral interests.

Further, if 614.17 (first passed in 1951) were sufficient to "wipe out" the ownership of a mineral owner, there would have been no need for Chapter 557C to have been passed in 1991 (providing for a lapse of ownership in coal interests if not preserved of record), or for the off and on discussion on this list serve (and bills proposed in the legislature) for a similar statute for all other mineral interests.  Note also that the timeframe in Chapter 557C is 20 years (not 10 years).

Accordingly, I would recommend extreme caution against relying upon 614.17 with respect to severed "mineral rights".

Jason

Jason R.S. Cassady | Attorney | Fredrikson & Byron, P.A. | 200 South Sixth Street, Suite 4000 | Minneapolis, MN 55402 | 612.492.7361 (direct phone) | 612.492.7000 (main phone) | 612.492.7077 (fax) | My Web Bio<http://www.fredlaw.com/our_people/jason_rs_cassady/> | Download vCard<http://www.fredlaw.com/our_people/jason_rs_cassady/vcard/>
________________________________
From: realestate-owner@iabar.org [realestate-owner@iabar.org] on behalf of Andrew Mahoney [realestate@iabar.org]
Sent: Tuesday, November 07, 2017 4:13 PM
To: realestate@iabar.org
Subject: RE: [ISBA RealEstate] Mineral Rights
Ok I'll see how this code section applies, thanks all!

Andrew

From: realestate-owner@iabar.org [mailto:realestate-owner@iabar.org] On Behalf Of Jim Nervig
Sent: Tuesday, November 7, 2017 11:57 AM
To: realestate@iabar.org
Subject: Re: [ISBA RealEstate] Mineral Rights

Andrew:

Iowa Code section 614.17 provides that "[a]n action based upon a claim arising or existing prior to January 1, 1980,  shall not be maintained, either at law or in equity, in any court to recover real estate in this state or to recover or establish any interest in or claim to real estate, legal or equitable, against the holder of the record title to the real estate in possession . . . unless the claimant . . . within one year after July 1, 1991, files . . . a statement in writing, which is duly acknowledged, definitely describing the real estate involved, the nature and extent of the right or interest claimed, and stating the facts upon which the claim is based." Does 614.17 apply to the facts of your case? If so, and if no statement was recorded within one year after July 1, 1991, then would the mineral rights interest be rendered unenforceable and no longer valid by the statute of limitations?

Jim Nervig

Brick Gentry P.C.
6701 Westown Parkway, Suite 100
West Des Moines, Iowa 50266
Phone: 515-274-1450
Fax: 515-274-1488
jim.nervig@brickgentrylaw.com<mailto:jim.nervig@brickgentrylaw.com>

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On Nov 7, 2017, at 11:30 AM, Andrew Mahoney <realestate@iabar.org<mailto:realestate@iabar.org>> wrote:

I have a client that is selling some property but it turns out that a sibling of his ancestors possessed ½ interest in mineral rights for the land.  It appears that the mineral rights were just forgotten about and they haven't been addressed in about 40 years or so.  Now the descendants of the sibling, whom the mineral rights would have passed to, all reside in Canada.  We would have some difficulty contacting them to relay the situation.  We might have a way (or two) of clearing up the objection but, in case the other avenue doesn't come through, I am wondering if anyone has any suggestions as to clearing title.  Would a quiet title action clear that up or is there another solution someone has in mind?

Thanks everyone,

Andrew L. Mahoney
Kozlowski Law Group, LLC
314 N. 4th Street
Burlington, Iowa 52601
Ph: 319-753-6201
Fax: 319-754-8471
E-mail: andrew@kozlawllc.com<mailto:andrew@kozlawllc.com>
Website: kozlawllc.com<http://kozlawllc.com/>

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