Justice, dissenting. Because I believe that there is a difference between a timber deed and a deed granting mineral rights, and because I think that Arkansas Code Annotated § 18-11-102 et seq. (1987) applies to timber land, I must respectfully dissent.
The majority opinion is premised upon the notion that a timber deed is analogous to a mineral-rights deed. Based on this assumption, the majority concludes that Ms. Bonds may not follow the procedure outlined in Ark. Code Ann. § 18-11-102 et seq. to acquire any rights to the timber identified in Mr. Carter’s timber deed. This assumption is misplaced. We have held that:
there is a broad distinction between a sale of timber and mineral rights, for the use of the former necessarily creates a burden upon the owner of the surface which is not consistent with use by the latter, whereas the use of the surface for mining purposes is only incidental and does not necessarily impair to a serious extent the enjoyment of the surface rights.
Bodcaw Lumber Co. v. Goode, 160 Ark. 48, 254 S.W. 345 (1923).
Because there is a “broad distinction” between a timber deed and a mineral-rights deed, I do not think that we can look to our previous case law involving mineral rights to determine whether Ark. Code Ann. § 18-11-102 et seq. may be used to quiet title in land that is subject to a contract for sale of merchantable timber. It appears that the question whether a property owner may perfect his title to land that is the subject of a timber deed by payment of taxes for a period of numerous consecutive years pursuant to Ark. Code Ann. § 18-11-102 et seq. is now being raised for the first time, although we have previously decided that the applicable provisions of the statutes will support the perfection of a clear title notwithstanding a record title held by the original owner of the property. See Wimberly v. Norman, 221 Ark. 319, 253 S.W.2d 222 (1952); see also Jones v. Barger, 67 Ark. App. 337, 1 S.W.3d 31 (1999).
This issue of first impression requires us to review a chancellor’s interpretation of a statutory provision. As we have stated on numerous occasions, we consider chancery cases de novo on the record. Bharodia v. Pledger, 340 Ark. 546, 11 S.W.3d 540 (2000). In City of Lowell v. M & N Mobile Home Park, 323 Ark. 332, 916 S.W.2d 95 (1996) we elaborated on this standard of review. Specifically, we explained:
In appellate review of ordinary equity cases there are two different components of the chancellor’s ruling that are considered. The appellate court will not set aside a chancellor’s finding of fact unless it is clearly erroneous. This deference is granted because of the regard the appellate court has for the chancellor’s opportunity to judge the credibility of the witnesses. However, a chancellor’s conclusion of law is not entitled to the same deference. If a chancellor erroneously applies the law and the appellant suffers prejudice, the erroneous ruling is reversed. Manifestly, a chancellor does not have better opportunity to apply the law than does the appellate court.
Id. (internal citations omitted).
In our review of the chancellor’s conclusions of law, we must also remain mindful of our standard of review for matters of statutory construction. We review issues of statutory construction de novo; it is for this court to decide what a statute means. Hodges v. Huckabee, 338 Ark. 454 , 995 S.W.2d 341 (1999). We are not bound by the decision of the trial court. Id.
I turn now for a de novo review of the chancellor’s interpretation of Ark Code Ann. § 18-11-102 et seq. On appeal, Ms. Bonds contends that timber resources are different than mineral estates and that the statutory provisions of Ark. Code Ann. § 18-11-102 et seq. anticipate gaining ownership of land by prolonged payment of taxes on land in which a timber deed was once granted. Specifically, she argues:
It is disingenuous and counterintuitive in Arkansas to suggest that land or real property — especially in a wild and unimproved or unimproved and unenclosed state for any seven year of fifteen year or more period does not also connote growing timber. For adverse claimants to possess land with timber is reasonable. Appellee distinguishes appropriately ‘mineral estates’ and ‘interests’ and the necessity that they be opened to be adversely possessed in Arkansas. However, minerals are dormant assets of the land, beneath the surface estate. They are not wasted if left undisturbed and their true economic significance (for taxation purposes and otherwise) arises at severance. Further, unopened mineral estates rarely bind surface alienability or use.
But control of the timber estate-in this case putatively for one hundred years-controls all practical surface usage and alienability of the land for a century. The timber resources, unlike unopened mineral estates, are visible, growing, and currently dominating the land’s use and value.
I agree wholeheartedly with Ms. Bonds. The conveyance by warranty deed of title to a mineral estate is not analogous to a present contract for sale of a crop, namely the merchantable timber, that is growing on the surface of the land. For example, in Bodca-w, we quoted the language used in a warranty deed that reserved mineral rights. The document stated:
Reserving to the grantor, its successors and assigns, all of the gas, oil and minerals and mineral rights in and under said land. . .if same shall be necessary for, or desired by it, its successors or assigns — such pipe lines for oil and gas and such telephone and telegraph lines and such right of way, however, not to infringe upon or interfere with any improvements upon said land without payment of a reasonable amount for damages caused thereby.
Id. (Emphasis added.) Bodcaw reflects a carving out of the mineral interest from the surface rights. That case holds that such mineral interest can be distinguished from the ownership of the title to the surface estate. The title to minerals can be retained in perpetuity while the surface owner enjoys his estate in perpetuity. Id. In Bodcaw, we also held that the separate title to the enjoyment of the minerals “is retained in perpetuity” and that:
the statute of limitations does not run against these rights unless there is an actual adverse holding which constitutes an invasion of these particular mineral rights. Such is the unanimous view in all the authorities which hold that there is a right of separation and separate conveyance.
Id. In Bodcaw, we drew a distinction between a sale of merchantable timber as contrasted with a retention of an interest in minerals in perpetuity. We also pointed out that unlike a reservation of title to minerals in perpetuity, a mere lease for the purpose of exploring for gas, and the production of the same, would allow an abandonment of the leasehold rights unless work began within a reasonable time. Id. (citing Mansfield Gas Co. v. Alexander, 97 Ark. 167, 133 S.W. 837 (1911)). There is a similar distinction between a present sale of merchantable timber and a lease of the surface for the purpose of growing timber in the future.
In contrast to the retention of rights to minerals in perpetuity, we held in Liston v. Chapman & Dewey Lumber Co., 77 Ark. 116, 91 S.W. 27 (1905) that a timber deed to merchantable timber relates only to the purchase of merchantable timber standing upon the property at the time of the conveyance, and that the holder of the timber deed only has the right to remove such merchantable timber together with the right to enter upon the land for a reasonable time to harvest his personal property. In Liston, we defined the term “merchantable” to mean “such timber as would bring the ordinary market price at the time the deed was executed.” Id.
In the case now before us, it is clear that there was no conveyance of title or lease of the surface for the purpose of growing timber. The timber deed before us was entered on June 18, 1980, and provides:
This contract and agreement made and entered into by and between Eddie Smith parties of the first part and Barry Carter parties of the second part. . . The parties of the first part have this day and by this act and in these presents grant, bargain, sell, convey, set over, transfer, and deliver unto said party of the second part, with full guarantee of title and with complete transfer and subrogation of all rights and actions of warranty against all former proprietors, the following described property towit: all the merchantable pine and hardwood timber standing, growing and being on. . .[the land].
There is no language purporting to convey any interest to Mr. Carter’s heirs and assigns. The sale conveys only a present interest in a growing crop, and does not grant a lease for a term of years. Eddie Smith contracted for the sale of “merchantable pine and hardwood timber” then standing on the land, and agreed that Mr. Carter may cut and remove the property he has purchased within one hundred years.
Faced with an unlimited time for removing timber in Liston, supra, we held that the trial court was correct in finding that “all of the timber less than eighteen inches in diameter at the stump was not merchantable in the month of April 1898, and [therefore] is the property of plaintiffs [landowners]. ” In Liston, we held that “defendant had a right to enter upon the land and remove the timber and to cut and remove all timber not less than eighteen inches at the stump.” Id. We further held that after five years “a reasonable time had not expired for cutting and removing the timber.” Finally, we observed that the “timber under eighteen inches at the stump, of the kinds named, was not merchantable” and was retained by the seller. Id.
In the case now before us, there was no language in the timber deed to create any estate for growing timber. Under the principles we established in Liston, it is clear that Ms. Bonds retained full ownership of the land together with all growing timber that was not conveyed as merchantable pine and hardwood timber on the 18th of June 1980.
In response to Mr. Carter’s motion for summary judgment, Ms. Bonds presented to the trial court an affidavit that stated that a timber deed does not convey an interest in the land. The affidavit by Teddy Reynolds addressed the distinction between the timber deed found in this case and a conveyance of an interest in the underlying real estate. Mr. Reynolds’s affidavit was not controverted. In his affidavit, Mr. Reynolds testified that:
The deed is for all the merchantable pine and hardwood timber standing, growing, and being on the property. ‘Merchantable’ is a term of art in the timber industry that has the same meaning today as it did in 1980.
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Further, a timber deed designates a transaction regarding timber to be harvested and is distinguished from a lease of surface rights for growing timber. The two concepts are not at all interchangeable and the terms are not used interchangeably in the industry.
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Whether for one or one hundred years, the Smith/Carter ‘timber deed’ sets its term only for felling, cutting, and removing the merchantable timber, not for leasing the surface rights to grow timber.
So, it seems to me that Mr. Carter only bought from Mr. Smith the timber that was upon the property and merchantable as of June 18, 1980. There is no reference or even slight hint of a lease of surface rights for timber production in this instrument.
It is clear that this issue was presented to the chancellor and that this issue was brought forward for our review. In deciding a case of first impression of the application of Ark. Code Ann. § 18-11-102 et seq. to a contract for sale of merchantable timber, we must perform a de novo review of the record, and make our own interpretation of the statute.
In so doing,, I believe that an analysis of the public policy behind collecting taxes leads to the conclusion that the failure of Mr. Carter to assess or pay taxes on standing timber, as provided by Ark. Code Ann. § 26-26-1109 (Repl. 1997), resulted in Ms. Bonds’s payment of taxes upon both the land and the timber for more than twenty years. This triggers the application of Ark. Code Ann. § 18-11-102 et seq. Here the only person paying taxes on the land and the timber was Ms. Bonds. The legislative intent was to collect taxes upon both the land and the timber. All of the taxes were paid by Ms. Bonds. Arkansas Code Annotated § 18-11-102 et seq. provides that title may be quieted in the person paying such taxes for the required statutory period.
Arkansas Code Annotated § 18-11-102 et seq. allows a person to take possession of “unimproved and unenclosed land” or “wild and unimproved land” when he pays the “taxes thereon” for at least seven years. Id. We have defined “unimproved and unenclosed land “ to mean land that is in a “state of nature,” “wild,” or “not cleared.” Fenton v. Collum, 104 Ark. 624, 150 S.W. 140 (1912).
In summary, from our cases interpreting deeds of minerals, it is well established that an. estate in perpetuity is created by a conveyance of minerals, and that this estate is independent of rights to ownership of the surface. For that reason, adverse possession of the surface does not impair the separate ownership of the mineral estate. That principle does not apply to the timber deed in this case because no leasehold or other interest in the land was ever created. Mr. Carter simply purchased merchantable pine and hardwood timber on the date of the contract. The conveyance of merchantable timber carries with the purchase the right to enter upon the land for a reasonable time for the purpose of removing what has been purchased. Provision of a limited time for cutting and removing the merchantable timber does not establish an estate in the land, and is subject to the provisions of Ark. Code Ann. § 18-11-102 et seq. whereby a clear title to the land is acquired by the payment of taxes for a period of seven or fifteen years. In order to avoid the operation of those statutory provisions, Mr. Carter had an opportunity to separately assess and pay property taxes upon his merchantable timber until he harvested his crop. This was not done. There was no separate assessment or payment of taxes upon the timber. The taxes on the merchantable timber as well as all other taxes on the land were paid by Ms. Bonds each year for more than twenty years. Payment of the taxes on unimproved land according to Ark. Code Ann. § 18-11-102 et seq. clears title to such land against claims of other interests in the property except for severed mineral estates. This is the law even when the contesting holder of title claims an interest based on record tide or other claims of title to- the land. The operation of these statutes clearly extinguishes any contractual right to enter upon the land to harvest merchantable timber purchased more than twenty years earlier.
In the case now before us, the land in dispute was approximately forty-nine acres of timberland. In his response to request for admissions, Mr. Carter admitted that this land was wild and unimproved. It is undisputed that Ms. Bonds paid the taxes on this land from 1981 to 1998. The instrument conveying all merchantable pine and hardwood timber did not include anything more than a sale of merchantable timber in existence at the time of the sale. Based on the language of Ark. Code Ann. § 18-11-102 et seq., Ms. Bonds acquired possession to any timber Mr. Carter failed to remove during the running of the statutes. Accordingly, I would hold that the chancellor’s statutory interpretation was clearly erroneous.