Jackson v. Burlington Northern Inc.

NO. 83-87

I N T E SUPREME C U T O T E STATE O Y N A A
H O R F H F OTN

1983

ALICE E. JACKSON, e t a l . ,

P l a i n t i f f s and Respondents,

VS .
BURLINGTON N R H R I N C . ,
OT EN e t al.,

Defendant and A p p e l l a n t ,

and

T E STATE O M N A A
H F O T N ,

I n t e r v e n o r and Respondent.

Appeal from: D i s t r i c t C o u r t o f t h e Seventh J u d i c i a l D i s t r i c t ,
I n and f o r t h e County of Richland
Honorable R. C. McDonouah, Judge p r e s i d i n g .

Counsel of Record:

For A p p e l l a n t :

Gary H. P e t e r s o n a r g u e d , Enqlewood, Colorado

For Respondents:

-Habedank, Cumminq & B e s t , Sidney, Montana
Thomas R. Balvorson a r g u e d , S i d e q , Montana

For I n t e r v e n o r :

David Woodgerd, S p e c i a l A s s i s t a n t A t t o r n e y G e n e r a l , argued
Helena, Montana

Submitted: June 3 , 1 9 83
~ecided- J u l y 21, 1983

Filed: JUL 21 1983
5
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- Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of
the Court.
The Seventh Judicial District Court, in and of the State
of Montana, entered an order quieting title to certain
property situated in Richland County, Montana, in plaintiffs,
Alice E. Jackson, et al., (the Jacksons) . Defendant
Burlington Northern, Inc., (BN) appeals. We affirm.
A question of first impression is presented to this
Court, viz., whether a severed mineral estate bordering a
navigable waterway is subject to the doctrines of accretion
and/or erosion?
The term "accretion" describes (1) a process by which
land is formed by imperceptible degrees upon the bank of a
river or stream, either by accumulation of material or by
recession of the stream, (also called reliction) and (2) a
rule of law which establishes that lands created by such
process belong to the owner of the bank, sometimes referred
to as the riparian owner, or his grantee, absent exception or
reservation. 7 Powell on Real Property, 607-611; 78
Arn.Jur.2dI Waters, $$406,411. Erosion is the process by
which the action of water gradually washes away land
bordering on a stream; the doctrine of erosion recogizes that
a riparian owner loses title to lands subjected to such a
process. Ibid.
BN's predecessor in interest received a patent from the
United States Government in 1864 which included Lots 1-5 and
the E$ of Section 25, Township 23 North (T23N), Range 59 East
(R59E), M.P.M., Richland County, Montana. This grant
represented all of Section 25 but the bed of the Yellowstone
River which traversed its western edge.
In 1905, Lot 5, which then consisted of 1.81 acres
located west of the Yellowstone River, was transferred to
William and John Meadors, with a reservation of coal and iron
interests. In 1918 the reserved mineral interests were
quitclaimed to the Meadors. The Jacksons succeeded to the
Meadors' interest in Lot 5.
Surface ownership of Lots 1-4 was transferred by three
deeds in 1938 to three separate groups of grantees; mineral
rights were expressly excepted and reserved by BN's
precedessors in interest. Thus, the mineral estate for Lots
1-4 was effectively severed from the surface estates. Later
BN acquired ownership of the severed mineral estate.
Since 1884, when the original survey of Sections 25 and
26, T23N, R59E, was done, the Yellowstone River has become

narrower and has moved eastward. Exhibit J, a rendition of
which is included in Appendix I, depicts that movement by
detailing a composite of the 1884 survey and a 1975 survey of
those sections. As a result of the River's movement, there
are now approximately 159 acres lying west of the River in
Section 25. (See Diagram, Appendix I)
On August 16, 1979, the Jacksons commenced this action
to quiet title to that part of Section 25 which lies west of
the Yellowstone River. They specifically claimed ownership in
Lot 5 and the accretion thereto. BN claimed ownership of all
mineral interests in Section 25, excepting Lot 5 and the bed
of the Yellowstone River as surveyed in 1884. Thus, both
parties claimed ownership of the mineral interests underlying
the cross-hatched area on Exhibit J. (Appendix I)
The State of Montana intervened when it determined that
its interests would be adversely affected were the court to
adopt BN's theory that severed mineral estates bordering
navigable waterways are not subject to accretion or erosion.
The State claims ownership of the riverbed adjacent to the
subject property.
Further explanation of the interests claimed by the
remaining parties is not essential. It will suffice to note
that (1) Holly Sugar Corporation owns 2/33rd interest in the
mineral rights on Lot 5; (2) Shell Oil Company holds
exploration and development rights in Section 25 by virtue of
several leases with the parties and the State of Montana; and
(3) on April 20, 1976, Shell Oil brought in a producing oil
well on the Northwest quarter (NW%) of Section 25, east of
the Yellowstone River.
In the first instance, BN filed a motion for summary
judgment, which was denied. BN appealed, and this Court
dismissed the appeal without prejudice. Jackson v.
Burlington Northern, Inc. (1982), Mont . , 652 P.2d
223, 39 St.Rep. 1998. The cause was returned to the District
Court, whereupon motions for summary judgment were filed by
the Jacksons and Holly Sugar Corporation. Additionally the
parties stipulated:
"(1) That the Yellowstone River in Section 25,
Township Twenty-three North (T23N), Range
Fifty-nine East (R59E), M.P.M., Richland County,
Montana, is a navigable river.
"(2) That the movement of the Yellowstone River in
Section 25, T23N, R59E, MPM, Richland County,
Montana, during all times material to this cause of
action, was accretive in nature."
On January 14, 1983, the District Court entered its
findings of fact, conclusions of law, opinion, and order
granting summary judgment in favor of the Jacksons and Holly
Sugar Corporation.
Judge McDonough concluded that:
(1) the movement of the Yellowstone River at all times
material was accretive rather than avulsive in nature;
(2) a riparian owner has a vested right to accreted and
future accreted land, inherent in his ownership of his
original property;
(3) a riparian owner cannot be divested of such right
as to minerals situated within the accreted land by reason of
a prior exception of minerals by the owner across the river.
 e
In part, Judge McDonough relied on Nilsgn v. Tenneco Oil Co.
(Okla. 1980), 614 P. 2d 36, which held that a severed mineral
estate could be increased by accretion and diminished by
erosion.
e
Apparently Nilsgn is the only case that expressly
decides the issue before this Court.
e
BN contends that we should reject the rule of Nilsyn and
hold that the boundaries of a severed mineral estate
bordering a navigable stream become fixed as of the date of
severance. Thus, whatever impact may be had on a surface
estate, a severed mineral estate could be neither increased
or decreased as a result of processes of accretion or
erosion.
We expressly reject the rule proffered by BN and adopt
e
the rule of Nils$n.
In 1895 the rule established by both the Legislature and
this Court, was that the State owned the land below navigable
waterways. Sec. 1091, Civ. C. 1895, re-enacted at Section
70-1-202, MCA, (1981); Gibson v. Kelly (1895), 15 Mont. 417,
39 P. 517. Having recognized the word "land" includes not
only the surface but also everything under it and over it,
Gas Products Co. v. Rankin (19221, 63 Mont 372, 389, 207 P.
993, 997, it necessarily follows that the State owns the
mineral rights below navigable steams.
Were this Court to adopt the rule proposed by BN, the
State's ownership interests would not correspond to gradual
changes in the course of a waterway but be subject to the
caprice of a riparian owner who opts to sever his surface
estate from his mineral estate. Under BN's rule the
perimeters of state ownership would be necessarily
constricted as of any particular severance date.
Furthermore, development of privately owned minerals
underlying navigable waterways could interfere with the
public's right to navigate, whether for commercial or
recreational purposes.
An illustration employed by the States' counsel during
oral argument ably reveals the consequences of adopting BN's
e
rule, as opposed to the rule of ~ i l s ~ n .
The following diagram depicts a change of course in a
navigable stream whereby the stream gradually moves toward
the bank of a severed mineral owner and away from the bank of
a non-severed mineral owner. (See illustration below)

Under BN's proposed rule, the boundary of the severed
mineral estate would be fixed in accordance with the low
water mark along the western edge of the old stream channel.
The western boundary of the non-severed mineral estate would
initially coincide with the low water mark on the east bank
of the stream.
As the stream moved westward over time, the western
boundary of the non-severed mineral estate would
correspondingly shift, until such point the east bank of the
new stream channel intersected the west bank of the old
stream channel. At that point, the common boundary between
the severed and non-severed mineral estates would coincide
with the west bank of the old stream channel.
Consequences of such a rule are manifest. First, the
non-severed mineral owner would hold incongruent surface and
mineral estates, despite his intentions or the intent of his
grantors. In accordance with the doctrine of accretion,
recognized in Montana by statute and case law, section
70-18-201, MCA, and the cases following Bode v. Rollwitz
(1921), 60 Mont. 481, 491, 199 P. 688, 691, the surface
estate would extend to the eastern bank of the new stream
channel; however, the non-severed mineral estate would only
extend to the west bank of the old stream channel.
Furthermore, the resulting incongruity would not be evident
from examination of the chain of title to the affected
properties.
Secondly, the State would be divested of its ownership
in the land underlying that part of the new stream channel
which lies west of the boundary line for severance purposes.
Such a result is clearly contrary to the mandate of Section
70-1-202, MCA, (1981).
Additionally, under BN1s rule, mineral estate boundaries
would be difficult to determine. Critical to application of
the proposed rule would be establishment of the course of a
navigable waterway as of the date a mineral estate is severed
from a surface estate. Such information may not be
accessible. The instant matter provides a good example of
the difficulty inherent in such a rule.
As shown by Exhibit J, BN claims ownership of a mineral
estate which includes that portion of the W+ of Section 25
which lay east of the Yellowstone River as it flowed in 1884.
The record is devoid of any evidence tending to prove the
course of the Yellowstone River as of the date(s) BN1s
predecessor in interest severed the mineral estate from the
surface estate. According to BN's brief, severance occurred
September, 1938. Thus, BN propounds a rule which defies
application given the state of the record at the time of the
various motions for summary judgment. We would surmise that
a 1938 survey of the subject properties was not readily
available, and that other owners of severed mineral estates
might have like difficulties locating surveys which
correspond with pertinent severance dates.
We believe the District Court acted wisely in adopting
the rule of Nilsgn.
e We hold that a severed mineral estate is
subject to the doctrines of accretion and erosion, and that
prior exception by a riparian owner on one side of a
navigable waterway will not work to divest either the State
or another riparian owner of its (his) ownership in lands
underlying navigable waterways or minerals situated in
accreted lands.
Affirmed.

We concur:

Chief Justice \

Hon. Frank Davis, District Judge,
sitting in place of Mr. Justice
L.C. Gulbrandson
 HON. FRANK DAVIS, D i s t r i c t J u d g e , s i t t i n g i n p l a c e of

MR. JUSTICE L . C . GULBRANDSON, DISSENTS.

I dissent.

T h i s c a s e i s n o t o n l y one of f i r s t i m p r e s s i o n i n Montana;
i t a p p a r e n t l y i s o n l y one of two i n t h e e n t i r e s c o p e of

Anglo-American law.
The m a j o r i t y o p i n i o n h a s d i s p o s e d of t h i s i m p o r t a n t c a s e

p r i m a r i l y on a r e a l and a n i m a g i n a t i v e p e r i p h e r a l i s s u e r a i s e d

by t h e I n t e r v e n o r S t a t e , e . g . , t h e o w n e r s h i p of t h e s t r e a m

bed o f a n a v i g a b l e s t r e a m . I s a y "imagined" b e c a u s e t h e

o p i n i o n a c t u a l l y i n j e c t s a r e c r e a t i o n a l c o n c e p t of n a v i g a -

b i l i t y which, a t l e a s t up u n t i l now, h a s never been d e t e r m i n e d

by t h i s C o u r t .

I t seems t o m e t h a t it i s t h e d u t y of t h i s C o u r t t o

b a l a n c e t h e a d m i t t e d i n t e r e s t of t h e S t a t e w i t h t h e more

fundamental i s s u e of t h e l o n g h e l d c o n c e p t of t h e n a t u r e of

a severed mineral i n t e r e s t . That concept i s s o w e l l s e t t l e d
t h a t it i s n o t g o i n g t o d i s a p p e a r b e c a u s e t h e m a j o r i t y h a s

f a i l e d t o address it. Instead, t h i s decision, i n m opinion,
y
w i l l have a d e v a s t a t i n g impact on e x i s t i n g c o n t r a c t u a l o b l i g a -
t i o n s involving severed mineral i n t e r e s t s . The problems a r e

g o i n g t o be unending. T h i s Court i s l o s i n g t h e o p p o r t u n i t y
t o e s t a b l i s h a needed p r e c e d e n t i n an a r e a s o v i t a l t o t h i s

S t a t e ' s i m p o r t a n t mining i n d u s t r y and t h e t h o u s a n d s of l a n d -

owners who have o p t e d , a s h a s t h e Defendant h e r e , t o r e t a i n a

v a l u a b l e p r o p e r t y r i g h t by s e v e r a n c e .
I t h a s l o n g been t h e law i n t h i s S t a t e t h a t m i n e r a l

i n t e r e s t s of a l l t y p e s c o u l d be s e g r e g a t e d , b o t h i n whole and
i n p a r t , from t h e f e e s i m p l e e s t a t e . The p r a c t i c e i s a common
o n e , a v a l u a b l e p r o p e r t y r i g h t , and t h e s u b j e c t of t h o u s a n d s

of c o n t r a c t s , l e a s e s and r e l a t e d a g r e e m e n t s . Johnson v .

Unknown H e i r s , 1 4 0 Mont. Stokes v.

T u- t , 134 Mont. 250, 328 P.2d 1096 ( 1 9 5 8 ) ; Voyta v . C l o n t s ,
-t v e
134 Mont. 250, 328 P.2d 655 ( 1 9 5 8 ) ; I n r e Hume's E s t a t e , 128

Mont. 223, 272 P.2d 999 ( 1 9 5 4 ) ; R i s t v . Toole County, 117

Mont. 426, 159 P.2d 340 ( 1 9 4 5 ) ; K r u t z f e l d v . Stephenson, 86
-
Mont. 463, 2 8 4 P. 553 ( 1 9 3 0 ) ; B r o d e r i c k v . Stephenson

C o n s o l i d a t e d O i l Co., 88 Mont.

The m a j o r i t y i s a d o p t i n g as t h e -law of t h i s S t a t e , a

d i v i d e d C o u r t ' s d e c i s i o n from Oklahoma ( N i l s e n v . Tenneco O i l

Company, 614 P.2d 36, 1 9 8 0 ) . I n m judgment,
y t h i s precedent

i s a weak r e e d f o r t h i s C o u r t t o r e l y upon. The t r i a l C o u r t

i n Oklahoma had h e l d t h a t once a m i n e r a l e s t a t e had been

s e v e r e d , t i t l e t o t h a t e s t a t e c o u l d n o t be l o s t by a c c r e t i o n .

The t r i a l C o u r t was r e v e r s e d ; b u t i n a w e l l r e a s o n e d , s c h o l a r l y

d i s s e n t by two J u s t i c e s , t h e d i s s e n t e r s had t h i s ' t o s a y , which

i s most a p p l i c a b l e t o t h i s Montana c a s e :

"These e s t a t e s a r e a s s e p a r a t e a s t h e f i n g e r s of t h e
hand, o r a s two p a r c e l s of l a n d . (Emphasis s u p p l i e d . )

I would n o t do v i o l e n c e t o t h e common law d o c t r i n e o f
accretion. I t p r o t e c t s t h e r i g h t of t h e r i p a r i a n o r
l i t o r a l owner t o t h e a c c u m u l a t i o n of p r e c i o u s m e t a l s
o r s t o n e s on t h e bank of t h e s t r e a m a s w e l l a s h i s
r i g h t t o t h e a l l u v i a l s o i l i t s e l f . But n o t s o ,
s e p a r a t e m i n e r a l e s t a t e s such a s o i l and g a s t h a t
a r e l o c k e d deep i n t h e bowels of t h e e a r t h , f o r t h e y
a r e separate fingers, parcels o r e s t a t e s i n t h e land.

I would a l s o make i t c l e a r t h a t s e v e r e d m i n e r a l i n -
t e r e s t s may never i n c r e a s e t h e i r i n t e r e s t by t h e
p r o c e s s of a c c r e t i o n . "

The N i l s e n r a t i o n a l e which t h i s C o u r t i s a d o p t i n g was r e -

j e c t e d by t h r e e o t h e r Oklahoma J u s t i c e s i n t h e l a t e r c a s e of

E l l i s v. Union O i l Company of C a l . , (Oklahoma

1981). T h i s l a t e r c a s e i n v o l v e d o t h e r i s s u e s , b u t when i t

r e f e r r e d t o t h e Nilsen decision, t h r e e of t h e J u s t i c e s could

n o t r e s i s t t h e o p p o r t u n i t y t o c r i t i c i z e i t , a s t h e y s h o u l d have.

I t s h o u l d a l s o be p o i n t e d o u t t h a t t h e r e i s a n u n a d d r e s s e d

i s s u e i n t h e c a s e a t b a r t h a t was n o t b e f o r e t h e Oklahoma

Court i n Nilsen. Montana h a s l o n g r e c o g n i z e d t h a t w h i l e un-

e x t r a c t e d m i n e r a l s a r e n o t t a x a b l e , t h e r e s e r v a t i o n of a r i g h t
t o e n t e r upon t h e s u r f a c e t o e x p l o r e i s a t a x a b l e i n t e r e s t .

Hurley v . N o r t h e r n P a c i f i c Railway C o . , 153 Mont. 1 9 9 , 455

P.2d 321 ( 1 9 6 9 ) ; L e h f e l d t v . Adams, 130 Mont. 395, 303 P.2d

934 ( 1 9 5 6 ) ; C r a n s t o n v . M u s s e l s h e l l County, 156 Mont. 288,

483 P.2d 289 ( 1 9 7 1 ) ; N o r t h e r n P a c i f i c Ry. Co. v . M u s s e l s h e l l

County, 54 Mont. 9 6 , 169 P . 53 ( 1 9 1 7 ) . The Defendant,

B u r l i n g t o n N o r t h e r n , and i t s p r e d e c e s s o r s have p a i d such

t a x e s on t h e p r o p e r t y i n v o l v e d i n t h i s a c t i o n . T h i s Montana

r u l e of a s e p a r a t e t a x a b l e e n t i t y seems t o c o n f i r m t h e l o n g

h e l d s e p a r a t e and d i s t i n c t e s t a t e c o n c e p t and, i n m o p i n i o n ,
y

s h o u l d have been c o n s i d e r e d by t h i s C o u r t .

F i n a l l y , t h e N i l s e n r a t i o n a l e s h o u l d be viewed i n t h e

l i g h t of a d e c i s i o n from a s a t e l l i t e c r a d l e of Anglo-American

law, t h e Q u e e n ' s Bench C o u r t of A l b e r t a , Canada. A l a k e bed

had d r i e d up. Both t h e landowner and t h e Crown c l a i m e d own-

e r s h i p of t h e m i n e r a l s b e n e a t h i t . The o w n e r ' s t h e o r y was

t h a t t h e d r i e d up s u r f a c e a c c r e t e d t o him under t h e common l a w

d o c t r i n e , and t h a t i n c l u d e d t h e m i n e r a l s . The Q u e e n ' s C o u r t

agreed, but said:

" I f t h e Crown wished t o r e t a i n i t s m i n e r a l s w h i l e
t h e l a k e was p r e s e n t it c o u l d have t a k e n t h e s e p a r a t e
t i t l e t o t h o s e mines and m i n e r a l s and d i s p o s e d of
them a s i t saw f i t . ' ' Re E l i a s o n and N o r t h e r n A l t a
Land R e g i s t r a t i o n D i s t r i c t , 115 D . L . R . 3d 360, 6
W.W,R. 361 ( A l b e r t a Court of Queen's Bench, 1980)

I n summary, I would r e v e r s e t h e t r i a l C o u r t , a d o p t t h e
g e n e r a l common law d o c t r i n e of a c c r e t i o n , b u t e x c e p t from t h a t

d o c t r i n e a previously severed mineral e s t a t e . The common law

r u l e of a c c r e t i o n was n e v e r i n t e n d e d t o a p p l y t o a s e v e r e d
m i n e r a l e s t a t e , and t h e m a j o r i t y o p i n i o n c i t e s no a u t h o r i t y

t o t h e c o n t r a r y o t h e r t h a n t h e q u e s t i o n a b l e and c r i t i c i z e d

Nilsen.
 The S t a t e ' s i n t e r e s t s , r e a l and f a n c i e d , s h o u l d b e
s u b o r d i n a t e t o t h e s e s e v e r e d and v e s t e d e s t a t e s .

& . D a v i skt r i c t
&, D i st
Frank M Judae,
2 .

s i t t i n g i n place of
M r . J u s t i c e L. C . Gulbrandson