Brief Fact Summary. In this case, according to record title, the surface interest to land was held by the Plaintiff, Failoni (Plaintiff), and the mineral interest was held by the Defendant, Chicago & North Western Railway Co. (Defendant). The Plaintiff contended that because the conveyances in her chain of title did not except the mineral interest, she acquired color of title to the mineral interest which had ripened into fee ownership under a statute which provided that if a person having color of title paid all taxes legally assessed on the property for seven consecutive years the payor of such taxes will be adjudged to be the owner of the unoccupied and vacant land, which the payor holds under color of title.
Synopsis of Rule of Law. Although deeds may in certain instances provide color of title, they do not in and of themselves operate as adverse possession, or even notice thereof where the severance of the mineral and surface estates was prior to the deed providing such color of title.
Issue. Did Plaintiff acquire the fee ownership of both the surface and the mineral rights under the statute?
Held. No. Reversed and remanded, with directions to enter judgment for the Defendant in accordance with the opinion herein.
The mineral estate, inclusive of oil and gas, may be severed from the surface estate by a grant specifically of the minerals, reserving the surface, or by a grant of the surface reserving the minerals, and when that has been done, both estates are subject to independent ownership and separate taxation and both constitute “land” within the meaning of the tax title statute.
Although deeds may in certain instances provide color of title, they do not in and of themselves operate as adverse possession, or even notice thereof where the severance of the mineral and surface estates was prior to the deed providing such color of title.
To possess the mineral estate, one must actually begin removal of the ground or commit some other act which would apprise the community that such interest is in the exclusive use and enjoyment of the claiming party.
Payment of taxes by government survey description after severance of title between surface and minerals does not constitute payment of taxes within the meaning of the tax title statute. Neither the Plaintiff nor her predecessors actually removed any minerals from the land, and thus never gained possession of the mineral estate. The Plaintiff merely executed oil and gas leases, which by itself were not enough to show possession.
Discussion. This case illustrates the requirement of actual possession in order to show possession sufficient under limitation title laws such as the tax title statute in this case. Had the Plaintiff actually began mining under the land for seven consecutive years and paid taxes assessed against the mineral estate, she would have prevailed. This illustrates how adverse possession is used to protect one who has exerted dominion over the land. If the rightful owner of the mineral estate does not intervene to protect its interests once the Plaintiff starts mining, the law will not subsequently protect the rightful owner.