Pickens v. Adams

Mr. Justice Bristow

delivered the opinion of the court:

The appellant, W. W. Adams, is the grantee of a tax deed to the minerals underlying certain land in Franklin County. The appellees, former owners of this severed mineral estate, filed an application in the county court of Franklin County, seeking a reconveyance of said property pursuant to sections 255, 256, and 257 of the Revenue Act of 1939, as amended, herein referred to as the Re-conveyance Act. (Ill. Rev. Stat. 1951, chap. 120, pars. 736-738.) The county court ordered the reconveyance, and a freehold being involved, the appellant appeals directly to this court.

In their application for reconveyance, filed October 21, 1951, the twenty-four appellees alleged, in substance, as follows: (1) that they were the owners of the minerals, including oil and gas, underlying certain described land in Franklin County; (2) that the appellant was the grantee of a tax deed dated October 15, 1948, duly recorded, conveying said minerals; (3) that neither the appellant, nor anyone claiming under said tax deed, is in possession of said property; (4) that neither the appellant, nor anyone claiming under said tax deed, had instituted proceedings in good faith to take possession within one year after the date of the deed; (5) that on August 16, 1951, the appellees, through their agent, tendered to appellant $1486.52, based on an estimate prepared by the county clerk of amounts expended by the appellant on the tax sale, subsequent taxes paid, interest at 7 per cent per annum, statutory fees and costs, and at the same time demanded reconveyance; (6) that the appellant refused said tender and refused to re-convey; and (7) that the affidavit of tender was filed with the county clerk as provided by statute.

The appellees asked that the court order the amount of the tender be deposited with the county treasurer for the benefit of the appellant, direct the sheriff or master in chancery to reconvey said premises in the name of the appellant, and fine him in accordance with the provisions of the statute.

The appellant filed a motion to dismiss the application, which alleged that the act in question could not and was not intended to apply to a tax title to minerals, including coal, oil and gas, underlying land; that if the statute should be construed as applicable to minerals it was unconstitutional and in violation of the due process clause of the fourteenth amendment of the Federal constitution and section 2 of article II of the Illinois constitution; and that the act so construed would also be contrary to section 22 of article IV of the Illinois constitution.

The court overruled the motion to dismiss. The appellant then filed an answer, admitting that he was grantee of the tax deed, that the tender had been made, and that he refused the tender. But he denied the other averments of the application. As a part of his answer, the appellant also filed by way of affirmative defenses the points raised in his motion to dismiss and further alleged that the act, if construed as applicable to underground minerals, was so vague, indefinite and uncertain as to render it unconstitutional and void.

Said statutory provisions, originally enacted in 1909 and now incorporated into the Revenue Act of 1939 as sections 255, 256, and 257, are as follows:

Ҥ 255. Whenever the grantee of a tax deed to real estate, or any one claiming thereunder, shall not be in possession or occupation of said premises so claimed and shall not take or institute proceedings in good faith to take possession within one year after the date of the first tax deed under his alleged tax title, or whenever the grantee of a tax deed to real estate or any one claiming thereunder shall suffer the same to be forfeited to the State or again sold for taxes or special assessments before he has completed the payment of all taxes and special assessments legally assessed thereon for seven consecutive years, then it shall be lawful for the owner of said real estate or his agent or attorney to pay or tender said tax title holder the amount of moneys paid out and expended by said tax title holder upon said sale with seven per cent (7%) interest per annum thereon, together with subsequent taxes and special assessments paid and the statutory fees and costs incurred, and that upon such payment or tender the said tax title holder shall reconvey the premises aforesaid to the owner thereof. The amount of such tender may be based upon an estimate prepared by the county clerk. * * *

Ҥ 256. Any tax title holder failing or refusing to re-convey said premises to the owner thereof on demand after payment or tender of the amounts due, as provided for in section 255 of this Act, shall be fined a sum not less than fifty dollars ($50.00) and not more than two hundred dollars ($200.00) for each offense. One-half of said fine shall go to said property owner and one-half to the county.

Ҥ 257. Upon affidavit or proof of tender being made, as provided by section 255 of this Act, the county court, in the same proceeding wherein the sale upon which said deed issued, may order, upon the service of such notice as the court shall direct, the amount of said tender to be deposited with the county treasurer and that the sheriff or any master in chancery in said county shall, in the name of the holder of such title, reconvey the premises to the owner thereof.

“Whenever the tax purchaser makes application to withdraw moneys deposited with the county treasurer he shall deliver to the county treasurer a reconveyance of said tax title to the owner who made said deposit.”

Evidence presented to the trial court disclosed the following: The property in question is the mineral estate underlying about 700 acres of land in Franklin County. It is described in the tax deed to the appellant by thirteen parcels containing from 37 to 100 acres each, and the plat introduced shows that the parcels adjoin one another in such a way as to produce a large, highly irregular-shaped piece of property. Prior to the time the appellant obtained his tax deed, appellee Pickens was the owner of the solid minerals under the land, and the other appellees were the owners as tenants in common of the oil and gas. The appellees owned the minerals only, and their property was assessed and taxed separately from the surface estate. The tax deed in question conveys only the underlying minerals to the appellant. As of the time of the hearing, the appellant, a resident of Denver, Colorado, had brought no legal or equitable action of any kind to take possession of the property, nor had he or anyone else ever endeavored to reduce the minerals to possession by drilling for oil and gas or digging for coal or other minerals. The tender was made by the appellees and refused by the appellant, as alleged, and the amount of the tender is not questioned as insufficient.

The appellant further introduced the testimony of a land man for various oil companies who testified that in the 48 counties of the State where oil and gas are produced the average is two dry holes for every producer; that in “wildcat” territory, the average is one producer to thirty dry holes; that the acreage in question is “wildcat and that the' cost of drilling a well in the area is about $12,000. Subject to objection by appellees as to relevancy, it was stipulated that to justify a new coal mine in Franklin County in 1948 and later years at least 2000 acres in a compact, solid block would be needed and that the cost involved in sinking a shaft and equipping a new mine would be more than $500,000.

The appellant relies in substance upon three propositions for reversal, as follows:

(1) Because of the physical and economic impossibility or impracticability of taking actual possession of a mineral estate and because an action for possession thereof (ejectment) allegedly will not lie, the Reconveyance Act does not apply to mineral estates held under tax deed, the holder of said tax deed being in constructive possession thereof.

(2) If construed as applying to mineral estates, the Reconveyance Act is void because its provisions are vague, indefinite and uncertain.

(3) If construed as applying to mineral estates, the Reconveyance Act is unconstitutional as violating the due process clauses of the State and Federal constitutions and as class legislation.

The appellees in their brief argue the case on the premise that the sole question presented is the constitutionality of the Reconveyance Act, and in substance says: (1) The possession contemplated by the legislature was actual possession, and that ejectment or a suit to remove cloud or quiet title will lie as to a mineral estate; (2) that the law favors redemptions from forfeitures; (3) that by statute severed minerals are a separate taxable estate in real estate;

(4) that the legislature, under its plenary power to classify property for taxation, has properly adopted a classification of real estate which must be considered as including minerals under the constitutional provision requiring uniformity as to class; (5) that the judiciary cannot encroach upon the legislative domain; and (6) the appellant is getting just what he purchased, the fee in the property subject to the right of redemption.

In approaching the issues in this case, the general policy favoring redemption from forfeitures should be kept in mind. Elmhurst State Bank v. Stone, 346 Ill. 157; Skach v. Sykora, 6 Ill. 2d 215.

It is hornbook law in this State, as well as statutory law, that the owner of a separate mineral estate has a freehold estate in real estate separate from the surface estate to which all the usual rights and incidents of ownership of realty attach, including the burden of separate assessment and taxation. It follows that the owner of a: mineral estate is entitled to all the usual remedies at law and in equity for the protection of those rights. McConnell v. Pierce, 210 Ill. 627.

The legislature, under its plenary power to uniformly classify property for purposes of taxation, (Const. art. IX, sec. 1,) has adopted revenue statutes applying to taxation of real estate generally, providing for assessment, collection, forfeiture, tax sales, tax deeds, and redemption thereof, with no separate classification between surface, whole, and mineral interests.

Historically there have been no presumptions as to the validity or invalidity of tax deeds because of the many technical statutory prerequisites to their issuance. It is clearly recognized that a tax deed gives the holder color of title and right to reimbursement on redemption.

Under the Reconveyance Act here in question the holder of a tax title to real estate is given an option of two courses to follow within one year of the date of issue of the tax deed in which to bar redemption rights: (a) institute a suit to recover possession if he wishes to rely upon the validity of his tax deed; or (b) take possession in such manner as to assert his ownership. Thus the statute imposes the burden of affirmative action on the part of a tax title holder in either of two manners in order to bar redemption rights.

Appellant suggests that the possessory action of ejectment will not lie on behalf of the owner of a mineral estate, particularly as regards oil and gas because of their fugacious character, citing Watford Oil and Gas Co. v. Shipman, 233 Ill. 9. There it was said that a grant of oil and gas passes nothing which can be the subject of an ejectment or other real action. In Jilek v. Chicago, Wilmington & Franklin Coal Co. 382 Ill. 241, the Watford case was distinguished by the fact that it did not involve a severance of the surface and mineral estates in land but only an oil and gas lease by which the owner of land granted lessee the whole of premises for the purpose of drilling and operating for oil and gas. Such a lease grants a privilege to enter and prospect but does not give any title to the oil and gas until such products are found. Although the Watford case is a correct decision of the factual issue there presented, it is no authority for the proposition that the owner of a separate mineral estate in land may not have the usual legal remedies, including ejectment, to protect his interest. The difference in factual situations between an oil and gas lease of the usual type and a deed conveying minerals was further emphasized in People ex rel. Hargrave v. Phillips, 394 Ill. 119, where it was held that though an oil and gas lease did not create a separate taxable estate yet a mineral deed did. This court has also recognized the right of an owner of an undivided interest in a separate mineral estate to partition. (McConnell v. Pierce, 210 Ill. 627.) It seems to be generally recognized in this State and elsewhere, that the owner of a mineral interest in lands may have an action in ejectment though the claimant may have no title to the surface of the soil (18 Am. Jur., p. 17, par. 13) or he may have a suit to quiet title (44 Am. Jur., p. 9, par. 8). Although oil and gas as such are incapable of ownership because of their fugacious character until actually found and produced, (Triger v. Carter Oil Co. 372 Ill. 182; Poe v. Ulrey, 233 Ill. 56,) yet a deed to minerals carries not only title to solid minerals but also what is necessary to acquire title to or possession of fugacious minerals, meaning the right to enter, explore and reduce them to possession. Jilek v. Chicago, Wilmington & Franklin Coal Co., 382 Ill. 241.

The Jilek case further held that there can be no adverse possession of the mineral estate by the owner of the surface estate, even though the latter holds an instrument which purports to constitute color of title to the whole estate in the land. This followed an earlier decision that possession of the surface does not carry possession of the minerals and that nonuser or abandonment of the mineral interest does not operate to terminate that estate. (Uphoff v. Trustees of Tufts College, 351 Ill. 146.) This follows the general principle, applied to limitations cases involving mineral estates separate from the surface, that possession of the surface, unaccompanied by any acts of dominion over the minerals, does not constitute adverse possession, but that, at the least, solid minerals must actually be removed from the ground or oil and gas actually produced in order to have adverse possession thereof. Catlin Coal Co. v. Lloyd, 180 Ill. 398; Renfro v. Hanon, 297 Ill. 353; Kinder v. LaSalle County Carbon Coal Co. 301 Ill. 362; Summers, The Law of Oil & Gas, vol. 1A, sec. 138, pp. 307, 315-320.

An analysis of the foregoing cases indicates that the paramount title holder is never an adverse claimant and is never required to have more than constructive possession which follows and passes from grantee to grantee of such paramount title. Such possession is sufficient until challenged by superior title or supplanted by actual possession in an adverse claimant. Actual possession becomes of controlling importance where an adverse claim is asserted to the paramount title.

From the foregoing authorities the conclusion seems inescapable that the owner of a separate mineral estate has the right to bring an ejectment suit based on his claimed superior title to protect his freehold interest in real estate the same as the owner of the surface or the entire land, and that the owner of the paramount title must be considered as in constructive possession thereof unless and until an actual adverse possession thereof is taken by a third party claimant. The Reconveyance Act, by imposing the alternative of two affirmative acts on a tax title holder in order to bar redemption rights, puts such tax title holder in the same comparable position as a claimant by adverse possession or adverse title; that is, he must take actual possession of the mineral interest, or bring a real action in reliance on the superiority of his title to eject the claimed paramount owner from his constructive possession. If such actual possession of minerals, solid or fugacious, is required of adverse claimants, it cannot be unreasonable to require it of tax title claimants.

The tax deed to appellant conveying the minerals had the effect of vesting in him title in fee to the entire mineral estate subject, however, to any redemption provided by law, as the deed recites. He did not receive an absolute, indefeasible fee, but only such interest as the county clerk could convey. (Bowers v. Glos, 346 Ill. 623.) He would retain his title unless and until divested of it by order of the county court and the making of a deed by the sheriff or master in chancery as provided in the Reconveyance Act. (Layman v. Langlois, 274 Ill. 559.) The act does not operate to extinguish his tax title, but merely imposes on him the necessity of taking actual possession or instituting a proceeding to secure possession within the time provided. (Bowers v. Glos, 346 Ill. 623.) Failing in either affirmative action, he is still entitled to his statutory redemption fees with interest before being divested of title, and thus has lost nothing.

Appellant contends that if the act is construed as applying to a mineral estate its provisions are so vague, indefinite and uncertain as to render it unconstitutional and void. He relies on the rule that where statutes either forbid or require the doing of an act in terms so vague that men of common intelligence must necessarily guess at their meaning and differ as to their application, they do not constitute due process of law, citing Missouri Pacific Railroad Co. v. Commerce Com. ex rel. Brotherhood of Railroad Trainmen, 401 Ill. 241; Krebs v. Thompson, 387 Ill. 160; Boshuizen v. Thompson & Taylor Co. 360 Ill. 160; Parks v. Libby-Owens-Ford Glass Co. 360 Ill. 130. The essence of the appellant’s argument in this respect is that the act furnishes no guide as to what the owner of the minerals must do or how far he shall go in taking possession of the mineral estate; that the act furnishes no guide as to how many producing oil or gas wells shall be drilled or how many dry holes sunk, nor as to where exploration shall take place on the 700 acres, whether in one place or many. The same reasoning is advanced as to coal and solid minerals.

There does not appear to be any ambiguity in the language of the Reconveyance Act, and therefore no problem of construction. The word “possession” as used in the act has a well defined and well understood meaning in the law. In Gage v. Hampton, 127 Ill. 87, at p. 94, it is said “It is not necessary that a man should live on property in order to obtain or hold possession of it. Possession of land may be acquired and held in different modes, — by enclosure, by cultivation, by the erection of buildings or other improvements, or, in fact, by any use that clearly indicates an appropriation to the use of the person claiming to hold the property.” To constitute possession the land must be appropriated to the individual use in such a manner as to apprise the community or neighborhood that it is in the exclusive use and enjoyment of the person so appropriating it. (Travers v. McElvain, 181 Ill. 382, 387.) These statements as to the rule and concept of possession were made in cases dealing with the surface estate. However, from the cases of Catlin Coal Co. v. Lloyd, 180 Ill. 398; Renfro v. Hanon, 297 Ill. 353; Kinder v. LaSalle County Carbon Coal Co. 301 Ill. 362; Uphoff v. Trustees of Tufts College, 351 Ill. 146; and Jilek v. Chicago, Wilmington & Franklin Coal Co. 382 Ill. 241, all hereinbefore referred to, the same rule was, in effect, applied with equal force to the separate mineral estate underlying lands, insofar as adverse possession thereof was concerned. Each of those cases requires some act of dominion over the minerals themselves to be asserted in order to create an adverse possession thereof. In the light of these past decisions, some of which existed at the time of adoption of this act, it seems to be inconsistent and illogical to say that actual possession of minerals is necessary in cases involving the Limitations Act and to say that the statutory provisions for “possession” of minerals under the Reconveyance Act are unreasonable and that the legislature did not mean what it clearly and unambiguously said. To so hold in this case would by implication destroy the basis of the decisions in the limitations cases above cited. The claimant of the separate mineral estate underlying lands must know that in order to possess himself thereof he must do or perform such acts as clearly indicate an appropriation of the property and estate to his use. This, by the very nature of the property or estate, may involve drilling or sinking a shaft but there is nothing doubtful or uncertain about what has to be done. Nor is there any uncertainty about where he must drill or dig since his separate mineral estate is coextensive with the surface and extends throughout the area. There is nothing in the language of the Reconveyance Act itself which renders its meaning vague, indefinite or uncertain as applied to the underlying mineral estate in land. No question arises in this case as to whether the acts of the appellant were sufficient to constitute possession as that term is understood in the law, since the record clearly shows that nothing whatever was done by him to avail himself of the property conveyed by the tax deed. The contention of appellant in this respect, in our opinion, is without merit.

Appellant further contends that the Reconveyance Act, if applicable to tax titles to minerals, is unconstitutional because it has the effect of granting special and exclusive privileges in violation of section 22 of article IV of the constitution and violates due process because it lacks uniformity and does not affect alike each member of the community of the same class. Such contention is based on the argument that the tax title owner of the surface estate or the whole land can readily and easily take actual possession of the property within the year provided in the act and at little expense, whereas the tax title owner of a mineral estate can take actual possession thereof only with difficulty and at great expense; that the effect is discrimination in favor of the former and against the latter; that a further effect is discrimination in favor of the former owner, prior to tax sale, of minerals, and against the former owner of surface lands because the tax title owner of surface land can easily comply with the act and perfect his title, whereas the tax title owner of the mineral estate cannot comply or attempt to comply with the act except at fantastic expense, which means that the owner of minerals can almost surely redeem under the act, whereas the former owner of the surface or whole land does not have the same likelihood of redemption.

The fallacy of this argument stems from the proposition stated at the start of this opinion that when there has been a severance of the surface estate from the mineral estate the law recognizes and protects two separate estates in the land. Each constitutes a freehold estate in real property and each may be separately assessed and taxed. The revenue laws of this State, of which the act here in issue is a part, must operate uniformly upon all property of the same kind or class, here the general class being real estate, under section 1 of article IX of the constitution. To adopt appellant’s contention in this respect would be to deny owners of mineral estates in land their statutory right of redemption which is given by the legislature to all owners of real estate and would give the act here in question an unconstitutional effect. As an illustration, A owns the surface to Blackacre and B owns the minerals under Black-acre. Each estate is classified as real estate, each is taxed separately, each becomes delinquent and a tax deed on each is issued. The tax title purchasers of each fail to take possession or to institute proceedings in good faith within one year as required by the act. Thereafter A is granted the right to redeem under the Reconveyance Act and B is denied the right to redeem under the same act. Not only is such result contrary to the general policy of the law to favor redemptions from tax sales, but such result would be contrary to the constitutional mandate of uniformity as to class.

The Reconveyance Act is in nature a redemption statute and forms a part of the revenue laws of this State. It is a part of the procedure set up in connection with the collection of taxes which the legislature has the power to enact and the tax buyer’s title is subject to the statute when he makes his purchase. (Bowers v. Glos, 346 Ill. 623; Elmhurst State Bank v. Stone, 346 Ill. 157.) The act must operate uniformly upon all of the class subjected to taxation by the act — that is, real estate both below the surface as well as that upon it. To hold otherwise would overthrow all the well established rules as to the nature of the mineral estate, its incidents and appurtenant rights heretofore established by the court. We cannot hold that a mineral estate is like all other real estate in every particular except when its redemption from tax title is involved.

Appellant’s argument in substance is merely that because of the inherent difficulty of possessing himself of that which he voluntarily bought at tax sale and to which he later received a tax deed, he should be excused from compliance with the act; that because the surface tax title holder can comply more readily and with less expense, the two stand on a different footing and the law cannot apply alike to both without being unconstitutional. Such a difference may exist in fact, but that does not confer upon this court the right to function as a legislature and revise the revenue laws. No one purchases a mineral estate in lands without full knowledge that to possess and enjoy it he must one day delve into the earth for it. He knows when he buys that such can be done only at considerable expense and great effort. This is true whether he buys at a tax sale or direct from the owner. Appellant was apprised of these basic facts when he purchased the minerals under the lands in question. He is presumed to know the provisions of the statute requiring him to- be in possession or to bring an action in good faith for possession within one year of the date of his deed. The act operated as a factor conditioning his purchase as much as the nature of the property he bought. Bowers v. Glos, 346 Ill. 623.

Accordingly, the order of the County Court of Franklin County directing reconveyance to appellees is affirmed.

Order affirmed.