Thomas v. Union Pacific Railroad Company

139 F. Supp. 588, 6 Oil & Gas Rep. 1157, 1956 U.S. Dist. LEXIS 3658
CourtDistrict Court, D. Colorado
DecidedMarch 27, 1956
DocketCiv. 5110
StatusPublished
Cited by6 cases

This text of 139 F. Supp. 588 (Thomas v. Union Pacific Railroad Company) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thomas v. Union Pacific Railroad Company, 139 F. Supp. 588, 6 Oil & Gas Rep. 1157, 1956 U.S. Dist. LEXIS 3658 (D. Colo. 1956).

Opinion

ROGERS, District Judge.

The ultimate question presented by the issues drawn between the defendant’s Motion to Dismiss and the Complaint of some score of plaintiffs, concerns the relative rights of the plaintiffs who seek leases for oil and gas under the Mineral Lands Leasing Act of February 25, 1920, as amended, 30 U.S.C.A. § 181 et seq. on the one hand, and the defendant Union Pacific Railroad Company which has reserved all oil, coal and other minerals in land conveyed by the United States of America to’ the defendant or its predecessors in title pursuant to Acts of Congress of July 2, 1864, July 3, 1866 and the Joint Resolution of Congress of March 3, 1869, known as the “Railroad Grants”, on the other hand.

Inasmuch as the Motion to Dismiss is dispositive of the cause, it is necessary that the pleadings be set forth in some degree of detail. Jurisdiction of the Court is sought pursuant to the provisions of Title 28 U.S.C. § 1331, as the purported action of the plaintiffs is in rem between citizens of the United States, the matters and things in controversy, exclusive of interest and cost exceed the sum of $3,000, and the action involves the construction and effect of certain Congressional Acts, the Railroad Grant Acts above-mentioned, and the Federal Leasing Act. Each plaintiff claims lands in Adams County, State and District of Colorado, alleged to be available for Federal Oil and Gas Leases pursuant to the Mineral Lands Leasing Act of February 25, 1920, as amended, supra.

The Complaint alleges that the defendant Union Pacific Railroad Company obtained patent to said lands from the President of the United States, and that its patents contained the following restrictive clauses:

“Now know ye, that the United States of America, in consideration of the premises and pursuant to the said Acts of Congress, have given and granted and by these presents do give and grant unto the said ‘the Union Pacific Land Company’ and to its assigns the tracts of lands listed as aforesaid and described in the foregoing. Yet excluding and excepting from the transfer by these Presents ‘all mineral lands should any be found to exist in the tracts described in the foregoing but this *590 exclusion and exception according to the terms of the statute, shall not be construed to include coal and iron lands.’ ”

It is then alleged that the defendant acquired said lands either directly by said patents or by mesne conveyances from the grantee of the respective patents, and has since, by divers deeds conveyed the surface thereof to settlers, containing the following reservations for the benefit of the defendant Railroad:

“Excepting and Reserving: First all oil, coal and other minerals within or underlying said lands.
“Second: The exclusive right to prospect in and upon said land for oil, coal and other minerals within or underlying said lands, or which may be supposed to be therein, and to mine from and remove from said land, all oil, coal and other minerals which may be found thereon by anyone.
“Third: The right of ingress, egress and regress upon said land to prospect for, mine and remove any and all such oil, coal and other minerals, and the right to use so much of said lands as may be necessary or convenient for the right of way to and from said prospect places or mines and for road and approaches thereto or for removal therefrom of oil, coal, mineral, machinery or other material.”

It is thereupon alleged that the defendant Railroad, by virtue of said Acts of Congress and patents, obtained title solely to such coal and iron as might be found within said lands, and at the time of deeding the surface thereof, had no right, title or interest in or to any oil, gas, or any other minerals “should any be found” therein. Plaintiffs allege that oil, gas and petroleum, including oil shales and kindred petroleum deposits on, in and under the public domain were “minerals” subject to placer mining location and patented under the Mining Laws of the United States; that the Act of Congress of February 25, 1920, as amended, withdrew all oil, gas and petroleum, the property of the United States, from location and patent and placed the same within the exclusive jurisdiction of the Department of the Interior, to be administered and leased to qualified persons by the Secretary of the Interior, as trustee thereof for the benefit of the people of the United States. Plaintiffs further allege that the defendant Railroad Company has leased the lands in question to others for prospecting for and producing therefrom such oil and gas as may be found therein, to the exclusive benefit of the defendant by reason of royalties to be paid from the same as sold for public commercial use and consumption, and that defendant has no right, title or interest therein, and that any and all oil and gas leases so made and outstanding are ultra vires and void.

Plaintiffs state that the defendant Railroad, having no right, title or interest in said oil and gas, is unjustly and illegally enriching itself at the expense of the United States of America, the sovereign owner thereof, and that defendant holds title to and possession of said oil and gas as an equitable trust for the benefit of those legally entitled to prospect for and recover the same.

Plaintiffs thereupon state that each is willing, ready and able to take and perform all the terms and conditions of their lease offers to the Federal Government for the development of said land, are able and willing to advance the rental required by the Government as a condition precedent to said lease, to give such bonds as Federal regulations require, and to pay royalties as specified by the Department of the Interior for similar lands.

It is alleged that the written offers of each of the plaintiffs were made to the Secretary of the Interior, and that as consolidated appeals, the same were heard by the Secretary, and by him rejected by Decision No. 71498, the following headnotes of said Decision being set forth in the Complaint:

“When the Department has issued a patent to a railroad under its grant, title vests in the railroad and *591 the Department has' no further jurisdiction over the patented lands and must reject offers to lease for oil and gas covering such lands.
“An unrestricted patent to a railroad under its grant includes the title to the surface of the land and the mineral deposits under it.
“A clause in a patent of railroad grant lands which purports to except all mineral lands is void.”

The remedies sought by the plaintiffs are:

First, that the Land Office decision rejecting the offers of the plaintiffs be reversed;

Second, that the defendant Railroad be declared to hold the oil and gas content of the lands in trust for the benefit of these plaintiffs; that all outstanding leases be held null and void;

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Related

Hamilton v. Noble Energy, Inc.
220 P.3d 1010 (Colorado Court of Appeals, 2009)
Osborne v. Hammit
377 F. Supp. 977 (D. Nevada, 1964)
Thomas v. Union Pacific Railroad
239 F.2d 641 (Tenth Circuit, 1956)
Sewell Thomas v. Union Pacific Railroad Company
239 F.2d 641 (Tenth Circuit, 1956)

Cite This Page — Counsel Stack

Bluebook (online)
139 F. Supp. 588, 6 Oil & Gas Rep. 1157, 1956 U.S. Dist. LEXIS 3658, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-v-union-pacific-railroad-company-cod-1956.