#23989-rev & rem-JKM
2007 SD 49
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
CHARLES W. BROWN, Plaintiff and Appellant,
v.
NORTHERN HILLS REGIONAL
RAILROAD AUTHORITY and STATE
OF SOUTH DAKOTA, Defendants and Appellees.
KARL E. EISENBACHER; DOUGLAS R.
HAYES; KRISTI JO HAYES; JOHN R.
MILLER; JEAN MILLER; STRAWBERRY
HILL MINING COMPANY; MAURICE
HOFFMAN; LAWRENCE COUNTY,
a political subdivision of the State of
South Dakota; and all persons unknown
who have or claim to have any interest
or estate in or encumbrance upon the
premise described in the Complaint
or any part thereof, Defendants.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
LAWRENCE COUNTY, SOUTH DAKOTA
* * * *
HONORABLE WARREN G. JOHNSON
Judge
* * * *
KENNETH R. DEWELL of
Johnson Eiesland Law Offices Attorneys for plaintiff
Rapid City, South Dakota and appellant.
THOMAS E. BRADY of
Brady Pluimer, P.C. Attorneys for defendants
Spearfish, South Dakota and appellees.
* * * *
ARGUED ON NOVEMBER 28, 2006
OPINION FILED 05/16/07
#23989
MEIERHENRY, Justice
[¶1.] Charles W. Brown sued Northern Hills Regional Railroad Authority, et
al. (NHRRA) to quiet title to a railroad right-of-way (ROW) running across his land
in Lawrence County, South Dakota. Both the railroad ROW and Brown’s land
originally were grants from the federal government.
[¶2.] The railroad ROW was established by the General Railroad Right-of-
Way Act of 1875 (1875 Act) (codified at 43 USC § 934), which granted right-of-way
corridors across public lands to several railroads including the Fremont, Elkhorn,
and Missouri Valley Railroad Company (FEMV). Under the provisions of the 1875
Act, FEMV filed a plat and profile of a railroad from Whitewood to Deadwood,
South Dakota in the United States Land Office in Rapid City, South Dakota on May
27, 1890. FEMV subsequently conveyed its ROW to Chicago and Northwestern
Railway Company (C&NW) by an indenture dated February 28, 1903.
[¶3.] Brown’s land was transferred from the United States of America by
homestead patents in 1918 and 1919 under the Homestead Act of 1862. 1 The
patents granted the land to the homesteaders subject only to water rights and
ditches or canals. The patents specifically reserved these rights as follows:
NOW KNOW YE, That there is, therefore, granted by the
United States unto the said claimant the tract of land above
described: TO HAVE AND TO HOLD the said tract of land, with
1. On February 4, 1918, a portion of the land encompassing the ROW was
conveyed to William P. Stowers under the Homestead Act of 1862. Likewise
on January 11, 1919, another portion of the land encompassing the ROW was
conveyed to John Bonshack by a patent. At all times relevant to this
litigation, Brown had legal title to both portions of the patent land originally
conveyed to Bonshack and Stowers.
-1-
#23989
the appurtenances thereof, unto the said claimant and to the
heirs and assigns of the said claimant forever; subject to any
vested and accrued water rights for mining, agricultural,
manufacturing, or other purposes, and rights to ditches and
reservoirs used in connection with such water rights, as may be
recognized and acknowledged by the local customs, laws, and
decisions of courts; and there is reserved from the lands
hereby granted, a right of way thereon for ditches or
canals constructed by the authority of the United States.
(emphasis added).
[¶4.] Early in the 1970s, C&NW decided to discontinue operating a railroad
on the ROW traversing the Brown land. Accordingly on February 19, 1970, C&NW
filed an Application for Abandonment with the Interstate Commerce Commission
(ICC), which the ICC approved the following year. The ICC issued a certificate and
order declaring that “the present and future public convenience and necessity
permit the abandonment” of the portion of the ROW requested by C&NW. The ICC
finalized the abandonment on January 18, 1971. All of the tracks were removed
and the ROW area has not been used or maintained by C&NW or any other entity
since 1971.
[¶5.] On May 30, 1972, C&NW quitclaimed any rights in the ROW to the
State of South Dakota for $5000. Thirteen years later in 1985, the State
quitclaimed its rights to the ROW to South Dakota Game, Fish and Parks (GF&P).
Sixteen years later on May 23, 2003, GF&P transferred the ROW to NHRRA. 2
2. When securing an easement over his property for a neighbor, Brown
attempted to use the former ROW as part of a legal description. However, he
was informed by the Lawrence County Register of Deeds that the ROW did
not exist and Lawrence County refused to acknowledge this former ROW for
any platting or boundary purposes. Brown subsequently traveled to
Washington, D.C. to recover the complete ICC abandonment file for the
(continued . . .)
-2-
#23989
[¶6.] Brown instituted an action to quiet title in June of 2004. 3 Brown
claimed that when C&NW ceased using the ROW for railroad services, the ROW
was extinguished. The trial court, relying on Barney v. Burlington N. R.R. Co.,
applied the Abandoned Railroad Right of Way Act of 1922 (1922 Act) (codified at 43
USC § 912), and concluded that C&NW had not officially abandoned the ROW. 490
NW2d 726 (SD 1992). Following a hearing on cross-motions for summary judgment,
the trial court entered an order granting NHRRA, SDDOT and GF&P’s Motions for
Summary Judgment. Brown raises the following issues on appeal.
ISSUES
1. Does 43 USC § 912 apply to this action?
2. If 43 USC § 912 does apply, were all of the requirements met for
abandonment in 1970-1971?
3. If 43 USC § 912 does not apply, has the ROW been abandoned in
fact and in law under settled federal and state law?
STANDARD OF REVIEW
[¶7.] Our standard of review for a grant of summary judgment is well
settled. “[W]e decide only whether genuine issues of material fact exist and
___________________
(. . . continued)
C&NW ROW that crossed his property. Brown learned that C&NW had
completed the abandonment with the ICC, but had failed to comply with 43
USC § 912, which requires either a declaration or decree of abandonment by
a court of competent jurisdiction or an act of Congress.
3. Brown named the following defendants in his complaint: NHRRA, State of
South Dakota, Karl E. Eisenbacher, Douglas H. Hayes, Kristi Jo Hayes, John
R. Miller, Jean Miller, Strawberry Hill Mining Company, Maurice Hoffman,
Lawrence County, and all persons unknown who have or claim to have any
interest or estate in or encumbrance upon the premises described in the
Complaint, or any part thereof.
-3-
#23989
whether the law was correctly applied.” Johns v. Black Hills Power, Inc., 2006 SD
85, ¶4, 722 NW2d 554, 556. If we find any legal basis to support the trial court’s
decision, we affirm. Id. When the facts are undisputed, as in the present case, our
review is limited to whether the trial court correctly applied the law. Id.
ANALYSIS
[¶8.] Brown does not dispute NHRRA’s claim that the 1875 Act established
a ROW in favor of the railroad. 4 The provision in the 1875 Act which established
the railroad easements across public lands provided as follows:
The right of way through the public lands of the United States is
granted to any railroad company duly organized under the laws
of any State or Territory, except the District of Columbia, or by
the Congress of the United States, which shall have filed with
the Secretary of the Interior a copy of its articles of
incorporation, and due proofs of its organization under the same,
to the extent of one hundred feet on each side of the central line
of said road; also the right to take, from the public lands
adjacent to the line of said road, material, earth, stone, and
timber necessary for the construction of said railroad; also
ground adjacent to such right of way for station buildings,
depots, machine shops, side tracks, turnouts, and water
stations, not to exceed in amount twenty acres for each station,
to the extent of one station for each ten miles of its road.
43 USC § 934. Brown acknowledges that the ROW’s encumbrance on the land
remains until the ROW is extinguished. Brown’s basic argument is that the ROW
was extinguished when C&NW stopped using the ROW for railroad purposes.
Brown argues that 43 USC § 912 does not apply to the facts of this case because it
was not in effect in 1918 and 1919 when the government patents conveyed the
4. NHRAA argues that 43 USC § 937 supports its argument that the United
States intended to retain an interest in the railroad ROWs. However,
NHRAA fails to cite any statutory language or authority to support this
argument.
-4-
#23989
property to Brown’s predecessors without reserving an interest in the ROWs.
Brown argues that we should adopt the reasoning of two recent federal court
decisions, which determined that because the land patents were conveyed prior to
the enactment of 43 USC § 912, common law abandonment applies. See Beres v.
U.S., 64 FedCl 403 (FedCl 2005); Hash v. U.S., 403 F3d 1308 (FedCir 2005). Thus,
Brown argues that our analysis should center on the language of the original patent
and the 1875 Act rather than the language of 43 USC § 912.
a. Background of Land Grants to Railroads and the 1875 Act
[¶9.] Beginning in the 1800s, Congress enacted several bills which explicitly
granted public lands to railroad companies to aid the construction of a cross-country
railroad. Barney, 490 NW2d at 729 (citing Act of Sept. 20, 1850, 9 Stat 466).
Pursuant to these bills, “Congress gave generous land grants from the public
domain to the railroads to subsidize the costs of the western expansion.” Id. The
expansion stretched from the 100th meridian from the middle of Nebraska to
California. Id. Because of mounting public criticism, the nature of the land grants
changed in 1872. Id. “[T]he House of Representatives enacted a resolution
condemning its policy of outright land grant subsidies to railroads.” Id. (citing Leo
Sheep Co. v. U.S., 440 US 668, 99 SCt 1403, 59 LEd2d 677 (1979). Instead,
Congress began to reserve the land for homesteads and educational purposes. Id.
Notwithstanding this changed policy, Congress continued to encourage the
expansion of the West by enacting the 1875 Act, which authorized ROW grants to
railroads. Id. (citing 43 USC § 934). The United States Supreme Court later
concluded that ROWs, granted under the 1875 Act, gave the railroad companies
-5-
#23989
easements, not fee interests, across public lands. Great N. R.R. Co. v. U.S., 315 US
262, 273-74, 62 SCt 529, 533-34, 86 LEd 836 (1942). The United States then
transferred much of the underlying lands to homesteaders and others, subject to the
railroads’ ROWs. In the present case, the FEMV Railroad Company was granted a
ROW under the 1875 Act. Also, in 1918 and 1919, Brown’s predecessor in interest
took the land subject to the ROW.
[¶10.] After use of the railway system declined in the early 1920s, Congress
enacted statutes to distribute “all right, title, interest, and estate of the United
States” in the ROWs to the fee owner of the underlying land when railroads ceased
using the ROWs. 43 USC § 912. Section 912 provided for the continuation of the
ROW if “embraced in a public highway legally established within one year after the
date of said decree or forfeiture or abandonment.” 5 Id.
5. The relevant portion of section 912 provides:
Whenever public lands of the United States have been or may be
granted to any railroad company for use as a right of way for its
railroad or as sites for railroad structures of any kind, and use
and occupancy of said lands for such purposes has ceased or
shall hereafter cease, whether by forfeiture or by abandonment
by said railroad company declared or decreed by a court of
competent jurisdiction or by Act of Congress, then and
thereupon all right, title, interest, and estate of the United
States in said lands shall, except such part thereof as may be
embraced in a public highway legally established within one
year after the date of said decree or forfeiture or abandonment
be transferred to and vested in any person, firm, or corporation,
assigns, or successors in title and interest to whom or to which
title of the United States may have been or may be granted,
conveying or purporting to convey the whole of the legal
subdivision or subdivisions traversed or occupied by such
railroad or railroad structures of any kind. . . .
-6-
#23989
b. Recent Federal Case Law
[¶11.] In two recent cases cited by Brown, federal courts have determined
that the federal government failed to retain a reversionary interest in the railroad
ROWs authorized in the 1875 Act. Beres, 64 FedCl 403; Hash, 403 F3d 1308. In
Beres, landowners brought suit against the United States alleging that the
government had effectuated an uncompensated taking when it sought to convert an
abandoned railroad ROW into a recreational trail pursuant to 16 USC § 1247(d). 64
FedCl at 407. The court concluded that this was a compensable taking under the
Fifth Amendment because the United States had failed to retain a reversionary
interest in the ROW both under the 1875 Act and again when it conveyed the
adjoining land by patent with no reservation of such interest. Id. at 428.
[¶12.] The government in Beres argued that easements created by the 1875
Act were tantamount to fee ownership. See id. at 411. The court rejected this
argument and concluded that the interests were merely common law easements.
Id. at 427. Recognizing that “nothing passes but what is conveyed in clear and
explicit language,” the court emphasized the following language from the United
States Supreme Court: “the property interest granted in the rights-of-way ‘through
the public lands’ to the railroads was ‘only an easement.’ ‘[T]he Act of March 3,
1875. . . clearly grants only an easement, and not a fee. . . . [T]he right granted is
one of use and occupancy only.’” Id. (quoting Great N. R.R. Co., 315 US at 271-72,
62 SCt at 532, 86 LEd 836).
[¶13.] The Beres court emphasized that the landowners’ successors in interest
had derived title from a land patent. The court noted that a land patent that is
-7-
#23989
“regular in form and for whose issuance there is statutory authority is so binding on
the government that a purchaser from the patentee need make no investigation as
to the details of its issuance the legal title has passed and the patent is conclusive
against the government. The [government] loses its jurisdiction over the land as
soon as a valid patent is issued.” Id. at 417 (quoting U.S. v. Eaton Shale Co., 433
FSupp 1256, 1267 (DColo 1977) (alteration in the original). The land patent to
Beres’ land failed to reserve an interest by the United States. Id. Consequently,
the court concluded that the United States failed to retain an interest in the ROW.
The court reasoned as follows:
[T]he United States Supreme Court recognizes the sanctity of
land transfers, and has expressed reluctance to interfere with
land rights in which no reservations were present when
conferred, stating that: “Generations of land patents have
issued without any express reservation of the right now claimed
by the Government. . . . [W]e are unwilling to upset settled
expectations to accommodate some ill defined power to construct
public thoroughfares without compensation.”
Id. (quoting Leo Sheep Co., 440 US at 687-88, 99 SCt at 1414, 59 LEd2d 677).
[¶14.] The government based its argument on the language of the 1875 Act
and on the subsequent enactment of the 1922 Act, 43 USC § 912, which the
government claimed demonstrated Congress’ intent to retain a reversionary interest
in the ROWs. Id. at 416-19. In regard to the language of the 1875 Act, the court
concluded as follows:
There are no words included in the 1875 Act to indicate that the
railroad receives anything other than a right-of-way, in the
nature of the right to traverse, as those words would be
understood by a reasonable person. The concept of a
reversionary right in the future is not included or even
intimated in the 1875 Act. Nor is there in the 1875 Act any
indication that the right transferred to the railroad is in the
-8-
#23989
nature of a fee. Furthermore, the 1875 Act contains no
restrictions on future fee simple transfers of the public land
through which the railroad right-of-way is granted to other
government or private parties by the United States.
Id. at 416. As to the subsequently passed 1922 legislation embodied in 43 USC §
912, the court noted that “‘the views of a subsequent Congress form a hazardous
basis for inferring the intent of an earlier one.’” Id. at 416 (quoting U.S. v. Price,
361 US 304, 313, 80 SCt 326, 332, 4 LE2d 334 (1960)). After examining the
language of section 912, the court rejected the government’s argument and offered
the following interpretation of the federal statute:
The 1922 Act [43 USC § 912] was restating the obvious
conclusion regarding the language of the 1875 Act and other
right-of-way statutes that, in the absence of additional language,
a right-of-way through public lands allowed for a limited use
and did not reserve any fee type interests or reversionary rights
as part of that right-of-way. It would appear that the language
of the 1922 Act was intended to address, clarify, and resolve
issues created by the imprecise language employed by the courts
on this subject in the early part of the twentieth century. . . . In
the alternative, it has been suggested that the 1922 Act applied
only to pre-1871 grants to railroad companies because prior to
that date railroad companies were issued outright land grants,
as opposed to the right-of-way granted to railroad companies
after that date.
Id. at 419 (citing Great N. R.R. Co., 315 US at 279, 62 SCt at 536, 86 LEd 836).
Because the government failed to demonstrate that the United States retained a
reversionary interest in the ROW, the court concluded that the United States’
conversion of the ROW into a public trail constituted a taking which required
compensation. Id. at 428.
[¶15.] Similarly, in Hash, the United States Court of Appeals, Federal
Circuit, examined whether the railway’s abandonment and subsequent conversion
-9-
#23989
of a ROW to a public trail constituted a compensable taking. 403 F3d at 1318. The
government argued that various enactments, decisions, and current policy showed
that the government had not intended to relinquish ownership of the land
underlying the ROW. Id. at 1315. However, the court concluded that the
landowners had originally received their land subject only to the railway’s easement
and the government had failed to retain an interest in the ROW. Id. at 1318.
Although the government argued that national policy favored government
ownership of land for environmental and conservation purposes, the court noted
that “the property rights of these early landowners [were] governed by the law in
effect at the time they acquired their land.” Id. at 1315.
[¶16.] The government also argued in Hash that it retained a reversionary
interest and cited section 912 as support. Id. at 1318. However, the court disagreed
and concluded that section 912 simply “requires the United States to convey any
rights it may have, to the patentee of the land traversed by the abandoned right-of-
way; it does not say what rights the United States had after the land patent was
granted.” Id. The court concluded that “[n]either section 912 nor 913 purported to
establish governmental ownership of land that had been granted to homesteaders
subject to a right-of-way easement.” Id. Accordingly, the court held that the United
States failed to reserve an interest in the ROWs when it issued land patents to the
adjoining lands without a specific reservation of an ownership interest in the
previously granted ROWs. Id. Accordingly, the conversion of these ROWs to public
trails constituted a taking. Id.
-10-
#23989
c. Barney v. Burlington N. R.R. Co.
[¶17.] NHRAA argues that our holding in Barney controls and that Beres and
Hash are distinguishable. The question in Barney was whether the State’s
conversion of a railroad ROW into a recreational trail constituted a compensable
taking. 490 NW2d at 728. We held it was not a taking. Id. Barney centered on
whether the United States had retained a reversionary interest in easements
granted to the railroad under the 1875 Act; and if so, whether the easements had
been abandoned under section 912. Id. at 729. Our takings analysis relied on
statutory interpretation and congressional intent. See id. at 728-30. The language
of the land patents or whether the patents reserved an interest to the ROWs was
not considered or addressed in Barney.
[¶18.] In Barney, landowners claimed that the ROWs granted by the United
States to railroads under the 1875 Act were common law easements which
automatically extinguished and reverted to the underlying landowners when they
ceased to be used for railroad purposes and were not subject to the provisions of
section 912. 6 Id. at 728. We rejected the landowners’ argument that the 1875 Act
established common law easements. Id. at 729. We stated:
The easement granted by Congress is an easement subject to the
intentions and specifications of Congress; it is not a common law
easement. Congress could pre-empt or override common-law
rules regarding easements, reversions, or other traditional
property interests. In other words, even if the 1875 Act granted
only an easement, it does not necessarily follow that Congress
would or did not intend to retain an interest in that easement. . .
6. The landowners’ predecessors in title had acquired the land from the United
States via land patent. See Barney, 490 NW2d at 727. However, this fact is
not discussed in our analysis.
-11-
#23989
. The precise nature of that retained interest need not be shoe-
horned into any specific category cognizable under the rules of
property law.
Id. (quoting State of Idaho v. Oregon Short Line R. Co. (Idaho I), 617 FSupp 207,
212 (DIdaho 1985)).
[¶19.] In rejecting the landowners’ argument, we examined the Congressional
Record that accompanied the enactment of section 912, and concluded that “[i]t is
clear from the legislative history that Congress assumed it possessed some type of
reversionary or other interest in the railroad rights-of-ways.” Id. at 730. We
reasoned that section 912 and related statutes would be rendered null if we were to
find them inapplicable to 1875 Act ROWs because “they were specifically enacted to
dispose of the United States’ retained interest in 1875 Act rights-of-way.” Id. at 731
(quoting Idaho I, 617 FSupp at 212). Accordingly, we determined that the United
States retained a reversionary interest in the ROW and applied section 912. Id.
[¶20.] Today, taking into consideration the language of the patent, we revisit
our rationale in Barney and our determination that the United States retained a
reversionary interest in an 1875 Act railroad ROW. Under the facts of the case
before us, we reach a contrary conclusion based upon the clear language of the
homestead patents. By the declaration of the patent, the federal government
reserved no interest in the ROW to which section 912 could apply. Any reference by
Congress to reversionary interests by subsequent enactments does not change the
United States’ initial divestment of its interest by patent. This conclusion also
conforms to the analysis of the more recent federal cases of Beres and Hash. 64
FedCl 403; 403 F3d 1308. It also more closely follows the Supreme Court decisions
-12-
#23989
in Great N. R.R. Co. (stating that the property right created in the railroad right-of-
way was only an easement granting use and occupancy, but no fee interest) and Leo
Sheep Co. (expressing unwillingness to interfere with land rights in which no
reservations were present when conferred). 315 US at 273-74, 62 SCt at 533-34, 86
LEd 836; 440 US at 687-88, 99 SCt at 1414, 59 LEd2d 677. To the extent that this
holding conflicts with Barney, Barney is overruled.
d. Conclusion
[¶21.] We find Beres and Hash to be the more persuasive authorities. These
federal cases recognize the significant role a land patent plays in establishing title
to property. “A patent to land, issued by the United States under authority of law,
is the highest evidence of title, something upon which the holder can rely for peace
and security in his possession.” Nichols v. Rysavy, 610 FSupp 1245, 1254 (DSD
1985). The United States Supreme Court has stated that “when a patent issues in
accordance with governing statutes, all title and control of the land passes from the
United States.” Swendig v. Washington Water Power Co., 265 US 322, 331, 44 SCt
496, 499, 68 LEd 1036 (1924) (citing U.S. v. Schurz, 102 US 378, 396, 26 LEd 167
(1880)). Our holding today recognizes the “special need for certainty and
predictability where land titles are concerned. . . .” Leo Sheep Co., 440 US at 687,
99 SCt at 1413, 59 LEd2d 677.
[¶22.] We need not decide what interest, if any, the United States retained
pursuant to the 1875 Act. Rather, our holding today is limited to the facts of this
case. Therefore, whatever interest the United States retained in the ROWs through
the 1875 Act was relinquished when land patents were issued without reserving a
-13-
#23989
right in the ROWs. While NHRAA argues that we should follow the rationale in
Barney, we decline to do so. Although section 912 and related legislation suggest
that Congress “assumed” or “intended” to retain a reversionary interest in the
ROWs, these statutes were passed after Congress passed the legislation
establishing the ROWs and after the land patents were issued to Brown’s
predecessors. Legislative goals change over the years; therefore, the “[r]esort to
using subsequent congressional activity of any variety to interpret earlier
legislation should be cautiously approached. . . .” Beres, 64 FedCl at 416.
Consequently, we agree with Brown that the language of section 912 does not apply.
The determining factor in this case is the language of the patent. The patent
reserved no interest in the ROW on behalf of the United States and the circuit court
erred when it applied section 912 to determine whether the ROW had been
abandoned. Accordingly, we remand to the circuit court for a determination of
abandonment in conformity with this opinion.
[¶23.] Reversed and remanded.
[¶24.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and
ZINTER, Justices, concur.
-14-