McCoy v. Lowrie

Hill, J.

This is an action to quiet title to mineral rights in one hundred sixty acres of land (NW-¼, Section 15, Township 38 North, Range 42 East, W. M.) in the Metaline mining district in Pend Oreille county, Washington. The trial court found for the plaintiffs and entered judgment accordingly. The defendants appeal.

The defendants are the heirs of Frank C. Allen and Cordelia M. Allen, his wife. Mr. Allen received and recorded a patent from the United States government in 1912, covering the land in question. In 1919, he and Mrs. Allen conveyed the land to the lone Lumber & Pole Co., a corporation, by a deed (recorded the same year) containing the following reservation:

“The parties of the first part [Frank C. Allen and Cordelia M. Allen, his wife] reserve unto themselves, their heirs and assigns forever all minerals upon or in said lands together with the right to enter thereupon for the purpose of exploring for the same and for the purpose of mining and removing the same.”

The lone Lumber & Pole Co. conveyed the land to John E. McCoy in 1923 by a bargain and sale deed, without reservations or exceptions of any kind. The trial court found that *26McCoy had no actual knowledge of the minerals reservation in the deed from the Allens until 1936, when he found that deed while going through some of the old records of the lone Lumber & Pole Co.

There has never been a request for segregation of the surface and mineral rights in the NW-¼ of Section 15, Township 38 North, Range 42 East, W. M., for taxation purposes; consequently, both prior and subsequent to the deed from Frank C. Allen and his wife to the lone Lumber & Pole Co., all taxes have been assessed and levied thereon as a unit.

The taxes paid by the McCoys fall into three different ■chronological divisions. (1) The trial court found that from January 31, 1923, until the year 1932 the taxes were paid “each year before the same became due.” (While the finding that the taxes were paid “each year before the same became due” is not challenged, we find no evidence on that point. The tax statements for the years 1923 to 1930 are not in evidence, and McCoy’s testimony was only that the taxes were paid for those years. The taxes for 1931, then payable in 1932, were not paid until November 29, 1937.) (2) From 1932 through 1939, the taxes were permitted to become delinquent; the taxes for four years were paid November 29, 1937, and for another four years on September 25, 1939. (3) Beginning with 1940 and continuing through 1951, the taxes were paid each year before they became due.

The reservation of the mineral rights in the deed from Frank C. Allen and Cordelia M. Allen constituted a severance of title to the mineral rights and title to the surface. Where there has been such a severance, possession of the surface by the owner is not adverse to the owner of the minerals below it. Foss v. Central Pac. R. Co., 9 Cal. App. (2d) 117, 49 P. (2d) 292 (1935); Deruy v. Noah, 199 Okla. 230, 185 P. (2d) 189 (1947); Calvat v. Juhan, 119 Colo. 561, 206 P. (2d) 600 (1949); 1 Thompson on Real Property (Perm. ed.) 116, Mines and Minerals, § 92.

Where there has been such a severance, title by adverse possession can be acquired to the mineral rights, but all the essential elements of adverse possession must exist *27as in the ordinary case of title to real property by adverse possession. The exploration for minerals and mining operations relied upon to establish those essential elements must be open, notorious, continuous and hostile, and under color of title where that is required. Uphoff v. Trustees of Tufts College, 351 Ill. 146, 184 N. E. 213, 93 A. L. R. 1224 (1932); Deruy v. Noah, supra; see note, “Acquisition of title to mines or minerals by adverse possession,” 93 A. L. R. 1232; 1 Thompson on Real Property, supra.

The evidence shows that, beginning in 1948, two brothers by the name of Rushmeier, under an agreement with the McCoys, did certain development work on the land here in question and on land in close proximity thereto that might well be sufficient to evidence the beginning of an adverse possession by the McCoys so far as the mineral rights are concerned; but it is unnecessary to decide that point, since that activity has not continued for a sufficient period to enable the McCoys to claim any title to the mineral rights based on adverse possession.

Since the McCoys have acquired no title to the mineral rights by adverse possession, they must perforce rely upon a somewhat unusual statute applicable only to vacant and unoccupied lands enacted in 1893, which requires no element of adverse possession but merely color of title and the payment of taxes for seven successive years, and which, in so far as here material, reads as follows:

“Every person having color of title made in good faith to vacant and unoccupied land, who shall pay all taxes legally assessed thereon for seven successive years, shall be deemed and adjudged to be the legal owner of such vacant and unoccupied land to the extent and according to the purport of his paper title. ...” RCW 7.28.080; cf. Rem. Rev. Stat., § 789.

The findings of the trial court as to the use and occupation of the premises are found in two findings, which we quote verbatim:

“That from January 31, 1923 the plaintiffs [respondents], in good faith, claimed said land and paid all taxes assessed upon said real estate each year before the same became due until the year 1932 and that during said period they en*28tered into possession of said property to the extent that a logging camp was built thereon, and they caused to be removed cedar logs from said property, claiming said property in its entirety; that in the year 1932 the entire property was burned over and the timber thereon substantially destroyed.” Finding of fact IV.

“That the real estate in question, except for the cutting of cedar timber, was vacant and unoccupied land. That since about 1935 or 1936 the plaintiffs have from time to time caused cedar timber on the said land to be cut for fence posts, and have, through employees, occupied the said land for said purposes at various periods, from the year 1936 to the present time; that about 1936 one of their employees explored for mineral and found mineral on adjoining land, which was owned by the plaintiffs, and in July of 1943 a party who had purchased cedar timber from the plaintiffs located minerals upon the Northwest Quarter of Section 15 and gave samples of said minerals to the plaintiff John E. McCoy, who forwarded the same to Washington State College for analysis.” Finding of fact VI.

The following testimony by John E. McCoy concerning the period prior to the fire in 1931 or 1932 is significant:

“Q. During the period you owned this land, did you occupy it at any time with buildings or with crews or your-' self? I am referring to the northwest quarter of 15. A. Yes, we had a camp on there. Q. When did you have the camp? A. Well, it was prior to the fire. It must have been along in— right after the lone Lumber & Pole Company built it. They built a camp there. Q. The fire you say was in the early 30’s? A. 1931.”

And in his cross-examination the following question was asked and answer given:

“Q. Speaking of this northwest quarter, you said you had a camp on it. You mean a lumber camp? A. A lumber camp, that is right.”

His testimony concerning the use made of the property from 1931 to 1938 was as follows:

“Q. Did any person occupy that land between 1931 and 1948 when the Rushmeiers went on? A. Oh, there was cedar makers in there. Q. Were they living on it or just working on it? A. Working on it. Q. And working for whom? A. Me. Q. How often were they on there? A. Well, during the *29summer months they were there quite often. Q. When the cedar makers were not on it, what was its condition with regard to anyone occupying it, living on it or being on it? Was it vacant? A. Yes.”

Mr. McCoy testified that the Rushmeiers went on the property in 1948 and erected buildings, put in a shaft, did road work, etc.

Our conclusion, based upon our examination of the record and the trial court’s findings, is that the quarter section involved in this case was not vacant and unoccupied land during the periods referred to in the findings; actually, the only period during which this quarter section was vacant and unoccupied, within the intendment of RCW 7.28.080 (cf. Rem. Rev. Stat., § 789), was the few years immediately following the fire which swept over the property in 1931 or 1932, and during that period the taxes were not paid in successive years. We have on several occasions held that payment of taxes “for seven successive years” means payment each year for seven successive years, and that the payment of accumulated delinquent taxes does not meet the requirements of the statute. Brownstin v. Brelle, 193 Wash. 553, 76 P. (2d) 613 (1938), and cases there cited.

Our analysis of the facts and the law applicable thereto convinces us that the McCoys have not acquired, by virtue of RCW 7.28.080, any new title to the NW-1^ of Section 15, Township 38 North, Range 42 East, W. M., in so far as the surface rights are concerned, for the following reasons:

(a) Because their deed from the lone Lumber & Pole Co. vested in them the uncontested legal title to the surface rights. An instrument which actually passes title does not provide color of title, as specified in RCW 7.28.080, because the term “color of title,” as we have defined it, means “that which is a semblance or appearance of title, but is not title in fact nor in law” (Bassett v. Spokane, 98 Wash. 654, 168 Pac. 478 (1917)) and implies that a valid title has not passed. Crowder v. Doe, 162 Ala. 151, 50 So. 230, 136 Am. St. 17 (1909); Baber v. Baber, 121 Va. 740, 94 S. E. 209 (1917); Blacksburg Mining & Mfg. Co. v. Bell, 125 Va. 565, 100 S. E. 806 (1919); Shutt v. Methodist Episcopal *30Church, 187 Ky. 350, 218 S. W. 1020 (1920); Barnesville v. Stafford, 161 Ga. 588, 131 S. E. 487, 43 A. L. R. 1045 (1926); Gooch v. Citizens & Southern Nat. Bank, 196 Ga. 322, 26 S. E. (2d) 727 (1943); 1 Am. Jur. 894, 898, Adverse Possession, §§ 185, 190; 2 C. J. S. 583, Adverse Possession, § 64.

(b) Because the McCoys did not pay the taxes on the land for any seven successive years, either prior to 1932 or subsequent to 1938, during which the surface was vacant and unoccupied within the purview of the statute relied upon. (The McCoys rely exclusively on the statute cited and claim no rights by adverse possession under RCW 7.28-.070 (cf. Rem. Rev. Stat., § 788); .hence the case of Philadelphia Mortgage & Trust Co. v. Palmer, 32 Wash. 455, 73 Pac. 501 (1903), is of no assistance to them.)

Neither have the McCoys acquired, by virtue of RCW 7.28.080, any title to the mineral rights in the NW-)4 of Section 15, Township 38 North, Range 42 East, W.M. Assuming that the form of the deed from the lone Lumber & Pole Co. to John E. McCoy would provide color of title so for as the mineral rights are concerned because it was in a form which, in the absence of a severance, would have conveyed the mineral rights with the surface rights, and assuming, further, that “vacant and unoccupied land,” as used in RCW 7.28.080, also means “vacant and unoccupied mineral rights,” the McCoys nevertheless have never paid any taxes on the minerals or mineral rights. They argue to the contrary, insisting that, because they have paid all the taxes levied on the NW-¼ of Section 15, Township 38 North, Range 42 East, W.M., they must have paid the taxes on the minerals, because RCW 84.04.090 (cf. Rem. Rev. Stat., §11108), defining “real property” for taxation purposes, states that it includes “the land itself” and “all substances in and under the same.”

This contention is answered in a case decided very recently by the supreme court of Colorado, i.e., Mitchell v. Espinosa, 243 P. (2d) (Colo.) 412 (1952). The Colorado taxing statute defining “real property” for.taxation purposes and referred to in the opinion is quite similar .to *31our own, and real property thereunder includes lands, minerals, and quarries in and under the land. The question presented, as stated by the court, was:

“Where a reservation of oil rights is contained in a deed to land which is thereafter assessed for taxes without change or recognition of the severance of the reserved oil interest; where the owner of said reserved oil interest took no action to cause it to be assessed; and where no assessment was made on said severed oil interest; will a tax deed issued for unpaid taxes accruing subsequent to the date of execution and recording of the deed under which the severance of oil interests was effected, convey to the grantee in the treasurer’s deed the oil rights theretofore severed and reserved?”

The answer was negative, for the reason that there had never been a valid tax on the reserved oil rights. As the court said:

“Where a separate and distinct estate consisting of ‘mines, minerals and quarries in and under’ specific land is created by reservation thereof, a sufficient description of this property for assessment purposes requires specific reference to the severed estate. Thus there must be in the assessment a sufficient description of the estate in oil, such as ‘all oil and gas beneath and underlying’ the specific quarter section of land, or other description of the surface property, before it can be held that severed oil rights have been assessed for the payment of taxes.”

The court further said:

“We are satisfied that where oil or mineral rights have been severed from real estate and are owned by persons other than those who hold the surface rights, a failure on the part of the owners to report the mineral rights to the assessor will not supply the essential requirement of an assesssment of those severed rights as a condition precedent to a valid tax deed covering said severed interest in land. In the instant case we are concerned with whether any valid assessment ever was made on the severed oil interest. If no valid assessment was made, no valid tax sale of that property could be had. Identification of the person who was at fault for the lack of a valid assessment is 'of no importance.”

*32There is also a recent Arkansas decision under a comparable statute. We quote 3 Ark. Stat. 1947 (Anno.), § 37-102:

“Uninproved [unimproved] and uninclosed land shall be deemed and held to be in possession of the person who pays the taxes thereon if he have color of title thereto, but no person shall be entitled to invoke the benefit of this act [section] unless he and those under whom he claims shall have paid such taxes for at least seven [7] years in succession, and not less than three [3] of such payments must be made subsequent to the passage of this act.”

While the wording varies somewhat from that of RCW 7:28.030, it will be noted that all that is required to create a jzew title to unimproved land is color of title and payment of taxes for seven years in succession, which is deemed to be possession. The supreme court of that state, construing the effect of the payment of the taxes where there had been a severance but no segregation of the mineral and surface rights for tax purposes, said:

“The twenty-acre tract was wild and unimproved; and plaintiffs claimed that they .had paid taxes on the land for more than seven years, and thereby sought to claim the minerals by limitations under § 37-102, Ark. Stats. Such claim is without avail. This suit does not involve the surface rights of the twenty acres: it involves only the min- ■ erais; and the taxes paid by the plaintiffs were the general— or land—taxes. . . . Thus, the plaintiffs’ payment of general taxes after 1937 would not constitute adverse possession of the minerals,- any more than possession of the surface would have supported a claim of adverse possession against the owner of the minerals. We have repeatedly stated that possession of the surface is not adverse to the owner of the constructively severed minerals.” Buckner v. Wright, 218 Ark. 448, 236 S. W. (2d) 720 (1951).

See, also, Jones v. Brown, 211 Ark. 164, 199 S. W. (2d) 973 (1947); and Claybrooke v. Barnes, 180 Ark. 678, 22 S. W. (2d) 390; 67 A. L. R. 1436 (1929), where the court said that, where there has been a severance of the surface and mineral rights,

“. . . the minerals underlying a tract of land are not lost by failure to pay taxes thereon unless there is a separate assessment of taxes against them.”

*33We are in accord with the law as laid down in the Colorado and Arkansas cases cited.

The McCoys having at all times since 1923 had the uncontested legal title to the surface rights of the NW-% of Section 15, Township 38 North, Range 42 East, W. M., they have, by the payment of the taxes levied on that quarter section, done only what the law requires them to do to protect their own title, and they have gained no new title to either the surface rights or the mineral rights. The Allen heirs must be disseised to lose their right to the minerals, and there has been no disseisin by act or statute except to the extent that H. McKay Allen may have conveyed his interest in the mineral rights by his quitclaim deed of November 30,1950, as to which we express no opinion.

So much of the judgment appealed from as purports to quiet title in John E. McCoy and Marjorie McCoy, his wife, to the minerals upon or in the NW-% of Section 15, Township 38 North, Range 42 East, W. M., against the heirs of Frank C; Allen and Cordelia M. Allen, his wife, and as awards to the McCoys a judgment for costs, is set aside, and the cause is remanded to the superior court with instructions to award such- relief to the Allen heirs on their cross-complaint as the facts and the law warrant, including a judgment for costs.

Mallery, Hamley, Donworth, Finley, Weaver, and Olson, JJ., concur.