How does one gain mineral rights if they’re not granted in a land title?

[mofugly13]

One day, I would like to buy a spot of land in gold country. How would I know if mineral rights come with the property? If mineral rights are not conveyed with the property, how does someone go about finding out who owns the rights and what could be done about getting them?

 

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[Clay Diggins]

Clay,

Bear with me here…
Let's narrow the discussion down to one scenerio.

Consider the following:
"When the owner of the entire estate in land conveys it by ordinary form of deed containing no exception or reservation, his grantee acquires the same title which his grantor had, and such title includes all minerals."
(Harris v. Currie Tex. 1943)

Lets just get to the meat of the question here.

First the quote you gave was from a Texas court adjudicating the rights to a Texas State land patent. Not public lands or a federal land grant. This case does not apply to the discussion because Texas never had any federal or public lands. Texas is not a public land state. Texas cases and law regarding land really only apply to Texas. In the future avoid Texas land decisions unless you are discussing Texas land laws.

That being said the part you quoted could have been said about Federal land patents but it still doesn't apply to the situation you proposed. The reason being is that you propose to sell half a patent to another individual. Just like it says in your quote selling half of a patent requires, at the very least, that the remainder be reserved to the original owner and excepted from the sale.

By selling a portion of a patent you are always in a position of excepting your remainder rights from the sale. The only way to transfer a patent without having a remainder or exception is to assign the whole of the patent to another person. That's what the court in Harris v. Currie was saying.

You aren't going to find any exceptions to the rule that portions of a patent are transferred by a descriptive title. The buyer has to know what rights they are getting and they have no way of knowing what rights you have left to offer until a title description describing exactly what is being sold is created. The title describes what you are buying, not the original patent. A warranty deed is the sellers guarantee that what you bought was exactly what is described - no more and no less. If it's not described in the deed or title you didn't buy it.

Heavy Pans

 

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[IMAUDIGGER]

Lets just get to the meat of the question here.

First the quote you gave was from a Texas court adjudicating the rights to a Texas State land patent. Not public lands or a federal land grant. This case does not apply to the discussion because Texas never had any federal or public lands. Texas is not a public land state. Texas cases and law regarding land really only apply to Texas. In the future avoid Texas land decisions unless you are discussing Texas land laws.

That being said the part you quoted could have been said about Federal land patents but it still doesn't apply to the situation you proposed. The reason being is that you propose to sell half a patent to another individual. Just like it says in your quote selling half of a patent requires, at the very least, that the remainder be reserved to the original owner and excepted from the sale.

By selling a portion of a patent you are always in a position of excepting your remainder rights from the sale. The only way to transfer a patent without having a remainder or exception is to assign the whole of the patent to another person. That's what the court in Harris v. Currie was saying.

You aren't going to find any exceptions to the rule that portions of a patent are transferred by a descriptive title. The buyer has to know what rights they are getting and they have no way of knowing what rights you have left to offer until a title description describing exactly what is being sold is created. The title describes what you are buying, not the original patent. A warranty deed is the sellers guarantee that what you bought was exactly what is described - no more and no less. If it's not described in the deed or title you didn't buy it.

Heavy Pans

Let me absorb what your saying, think about it some and get back to you on Tuesday of next week? Already relaxing after work and have a long weekend ahead of me (little relaxing, some detecting, some dove hunting, some labor). Enjoy your weekend.

Lastly pertaining to the OP’s question about getting mineral rights back, research “Dormant Mineral Rights”. It appears there is possibly a solution in a narrow range of situations depending on what state your in.

 

[IMAUDIGGER]

Clay, I’ll add this.

When we are talking about rights, the grantee has zero ability to describe what they are buying. The grantor is responsible for clearly describing what does and doesn’t go with the land transfer. I.E. “I’m transferring to you” “Your getting the surface rights BUT not the mineral estate...I’m keeping that (severing it)” Right?

That’s why the deed should be construed in the grantee’s favor.

Let’s add the following to the hypothetical:

* YOU sell the remainder of your land to JOE via a fee simple title deed which is recorded at the courthouse.
* The deed has no reference to the mineral estate.
* The deed has no exceptions or reservations.

What happens to that “bundle of patent rights” now that they were never mentioned?

Do they pass to YOUR heirs despite there being no clear intention?

Does JOE mysteriously obtain YOUR rights and MINE because they are tied to the only original remainder of the patent?

Do they revert to the public?

Do they become extinguished?

OR is it more equitable that they went with the fee simple title purchase of the land because they were never severed?

Please provide a court case cite and I will try to do the same.

 

[IMAUDIGGER]

This discussion has been good because it has forced me to research my general understanding regarding real estate transfers. This is such an interesting subject that I made some time last night to gather my thoughts and read some statutes.

I disagree with your statements that "if it's not described in the deed or title, you didn't buy it."

State laws regarding transfer of real property are (supposed to be) based on common law and should at least be loosely based on some broadly accepted principles (that probably originate from ancient times).

APPURTENANCE: "That which belongs to something else; an adjunct; an appendage; something annexed to another thing more worthy as principle, and which passes as incident to it; as a right of way or other easement to land; an outhouse, barn, garden, orchard, to a house.."

The mineral rights are considered appurtenant to the land, real property, and run with the land unless severed via. a legal document.

FEE SIMPLE: "all the property in thing referred to or the largest estate therein which person may have."
Alternatively: "Fee simple signifies a pure fee;...It is the largest estate and most extensive interest that can be enjoyed in land."

When a person acquires a fee simple grant deed, they can assume they are getting the largest estate the seller owns, including all appurtenances. A grantor cannot except or reserve appurtenances just by not mentioning them. **This is an important basic principle.**
---------------
California Civil Code Sec. 1069 INTERPRETATION AGAINST GRANTOR, a grant is to be interpreted in favor of the grantee, except that a reservation in any grant, and every grant by a public officer or body, as such, to a private party, is to be interpreted in favor of the grantor."

This is pretty clear. "a reservation in a grant" means you have to write down your reservations in the conveyance instrument. Silence does nothing to reserve or except an appurtenance from transfer.
---------------
Florida Stat. 689.10 WORDS OF LIMITATION AND THE WORDS "FEE SIMPLE" DISPENCED WITH. Where any real estate has heretofore been conveyed or granted or shall hereafter be conveyed or granted without there being used in said deed or conveyance or grant any words of limitation, such as heirs or successors, or similar words, such conveyance or grant, whether heretofore made or hereafter made, shall be construed to vest the fee simple title or other whole estate of interest which the grantor had power to dispose of at the that time in real estate conveyed or granted, unless a contrary intention shall appear in the deed, conveyance or grant.

Again very clear…assumed fee simple title and appurtenances are assumed to run with the land unless the contrary is shown in the deed.
------------------
When you obtain fee simple title, you ARE getting things not described in the deed or title - you are getting the appurtenances. Once the mineral rights have been severed (again via. a legal document) they are no longer considered an appurtenance and must be treated separately.

Additionally, warranty deeds and title insurance are not an ownership requirement. That’s something lending institutions have required. It’s optional.

My understanding of patents is that the government has given you a fee simple grant, which includes all appurtenances (unless reserved on the face of the grant). EDITED: Title is not guaranteed

I believe this is real property subject to the same laws governing transfer of real property that were described above.

If you can show me specific common law or a statute that treats the initial transfer of patented land differently than every other real estate transfer, it would help me understand better what you are saying.

 

[IMAUDIGGER]

Additional appurtenances that can be bound to the land and transferred in fee:
The right to have water flow undiminished and undisturbed.
The right of flooding land.
The right to take minerals, water, wood, fish, game, ect.
The right of pasture.
The right to use a wall as a party wall.

If fee title is granted, all available rights automatically transfer unless specifically excepted or reserved on the face of the grant deed.

 

[Mackaydon]

Back in the day......and here in California, I would request the title company to do a search for the mineral rights on certain properties. If those rights existed and were held by the landowner, I would request the title company issue to me a specific Endorsement to my Title Policy quaranteeing my interest in the mineral rights once I owed the property. If the landowner didn't owe the mineral rights, the title company would search the records to tell me who did hold the rights. I could then go ahead with the purchase of the property SUBJECT TO obtaining the mineral rights from the rights owner--within a stated period of time.
Don...

 

[IMAUDIGGER]

Back in the day......and here in California, I would request the title company to do a search for the mineral rights on certain properties. If those rights existed and were held by the landowner, I would request the title company issue to me a specific Endorsement to my Title Policy quaranteeing my interest in the mineral rights once I owed the property. If the landowner didn't owe the mineral rights, the title company would search the records to tell me who did hold the rights. I could then go ahead with the purchase of the property SUBJECT TO obtaining the mineral rights from the rights owner--within a stated period of time.
Don...

Don, did you ever have a purchase that reverted back because you were unable to obtain the mineral rights?

The termination of dormant mineral rights is an interesting way to go about getting
Severed mineral rights back. Wasn’t aware of that possibility until now.

 

[Nitric]

I'm trying to follow along but.....You guys are WAY over my head. Some smart people on here!!!

I was told for AL, and I have no idea if it's true, I also know you guys are talking about Western states, that the deed will say if it was sold. If it's not stated on the deed that they were sold then it's assumed that it's still with the land.

I know the eastern states may be different. I'm trying to follow along for my own curiosity and got lost in language.

 

[IMAUDIGGER]

I'm trying to follow along but.....You guys are WAY over my head. Some smart people on here!!!

I was told for AL, and I have no idea if it's true, I also know you guys are talking about Western states, that the deed will say if it was sold. If it's not stated on the deed that they were sold then it's assumed that it's still with the land.

I know the eastern states may be different. I'm trying to follow along for my own curiosity and got lost in language.

As with most things in the United States the correct answer is probably “It depends”
I know there are a handful of states that use the Torrens System which I’m not familiar with other than property is not transferred by deed, rather it is registered with the government.

But here in Calif. If it came with the patent and was never separated..say by being sold, it’s likely still attached to the land. Title companies usually include mineral rights in their long list of things that are not insured.

EDIT: Knowing Clay Diggings, at some point he will probably provide a more clearly understandable overview. I just hope he realizes he has misunderstood a few things. Heck maybe he will find out he actually DOES own his mineral rights!! WINK I know I own mine.

 

[Clay Diggins]

As with most things in the United States the correct answer is probably “It depends”
I know there are a handful of states that use the Torrens System which I’m not familiar with other than property is not transferred by deed, rather it is registered with the government.

But here in Calif. If it came with the patent and was never separated..say by being sold, it’s likely still attached to the land. Title companies usually include mineral rights in their long list of things that are not insured.

Ah... California law. That makes things a bit easier to explain. What follows is a California Supreme Court case dealing quite directly with the issue of fee transfer of minerals and the fact that if it's not in the deed you don't know if you own it or not. When the buyer complained that the purchase should have included the minerals he was instructed that it was his job to search the public record to discover what was being offered for sale. The royalty interest in the minerals had already been sold by the previous owner.

Callahan v. Martin

We are of the view that an assignment made by an owner in fee transferring an undivided interest in oil rights in his land is an assignment of an interest in real property, and enforceable against a grantee of the fee in the general estate. It follows that recordation of such an assignment of oil rights imparts constructive notice to a subsequent grantee of the fee in the general estate. In the case herein Callahan procured a guaranty of title, which described title as vested in him, but listed the assignment to the Martins as an encumbrance. It was stipulated at the trial that this guaranty "was received by Mr. Callahan at the time of the delivery of the deed by Tracey [Callahan's grantor] to Callahan". Since the Tracey- Callahan deed is dated June 6, 1929, and recorded June 24, 1929, and the guaranty is dated June 27, 1929, it is to be inferred that the guaranty of title was not delivered to Callahan until after the recordation of the deed to him. While it is probable that he had actual notice of the assignment to the Martins, prior to recordation of the deed to him, in the absence of any evidence on the point except this stipulation, we prefer to rest [3 Cal. 2d 114] our conclusion on the premise that recordation of said assignment charged him with constructive notice thereof.

And that was all the court had to say to the buyer of the fee. His claims were dismissed because essentially he should have known better. The rest of the case deals with the actual rights to the mineral estate portion of the property as between the royalty owner and the lessee.

This is why a full title abstract is a really really good idea when buying property fee simple. Very much like a quitclaim the fee simple deed doesn't convey anything to the buyer but what the seller owned at the time they sold it. Due diligence is essential. A full title abstract should be your first step when considering a fee simple purchase. Both fee simple and quitclaim are "pig in a poke" situations. If you don't look in the barrel personally you don't know whether you bought a pig or a pile of dead cats.

When a seller provides you with statements as to the extent of what's being offered for sale you can sue for the value lost if they lied. When the seller only offers you fee simple there is no assurance that most of the use and benefits of the property aren't already sold, leased or encumbered.

Heavy Pans

 

[Nitric]

I liked post # 29 Before the edit. I have nothing against anyone and don't have enough knowledge in the subject to argue it or take sides. I've learned a lot from everyone. And any information that I've ever gotten from Claydiggins was correct.

Just wanted to ad that....I'm not any side, just liked the post because it was a response to mine with some info. not the Dig on Diggins!

 

[Nitric]

Ah... California law. That makes things a bit easier to explain. What follows is a California Supreme Court case dealing quite directly with the issue of fee transfer of minerals and the fact that if it's not in the deed you don't know if you own it or not. When the buyer complained that the purchase should have included the minerals he was instructed that it was his job to search the public record to discover what was being offered for sale. The royalty interest in the minerals had already been sold by the previous owner.

Callahan v. Martin


And that was all the court had to say to the buyer of the fee. His claims were dismissed because essentially he should have known better. The rest of the case deals with the actual rights to the mineral estate portion of the property as between the royalty owner and the lessee.

This is why a full title abstract is a really really good idea when buying property fee simple. Very much like a quitclaim the fee simple deed doesn't convey anything to the buyer but what the seller owned at the time they sold it. Due diligence is essential. A full title abstract should be your first step when considering a fee simple purchase. Both fee simple and quitclaim are "pig in a poke" situations. If you don't look in the barrel personally you don't know whether you bought a pig or a pile of dead cats.

When a seller provides you with statements as to the extent of what's being offered for sale you can sue for the value lost if they lied. When the seller only offers you fee simple there is no assurance that most of the use and benefits of the property aren't already sold, leased or encumbered.

Heavy Pans

This is the reason why Tittle and deed searches are done? I have a deed to a piece of land that I do not actually own, in a sense, I know it's sketchy. Long story short. I had a written piece of paper, an attorney made a deed, and I fled it with the court. NOW, prove that I don't own it or challenge it in court to correct that situation. It cost me $35 at attorney and $10 bucks to file. It throws a heck of a road block. Or cost to someone. I did it to protect what was mine. And I had to file to create a "record". At least that was my thinking

I can sell that, An agent can be used. It's up to the buyer to figure that out. Which I would never do and the purpose of what I did was to protect a known right of way. But I have a deed that says I own the land and so does another guy! Until one of us challenges the other in court? I guess we both own it. Which is fine by me. But with that paper I can't be removed from the land. It's not up to the cops to sort that out. I wonder if mineral rights work the same way.

I'm guessing mineral rights could be the same way. There are probably cases of over written and rights sold a few times to people that don't actually own them , but until challenged? who would really know? . I'll bet there are places in this country that are a mess to sort out.


I've also Heard of gas and oil paying people that didn't own their rights anymore. but it was much easier and cheaper to pay these people than to deal with court. Just pay them and lets get moving forward type of thing. This happened in Southern Ohio. There were people that had already sold the rights, but got paid again just to keep things going smoothly.

I wonder if your just small digging on your own land if it's really an issue? If you own the land and just explore and dig until someone challenges it. That my be a horrible thought but I kind of think some of this stuff gets out of hand. What's the penalty? Who's going to Challenge it? and is it written out in the open? Unless a major deposit is discovered? Then hire an attorney and keep your mouth shut until it's solved. I've seen business do this same type of thing. The fine is sometimes cheaper than the solution.

 

[IMAUDIGGER]

I liked post # 29 Before the edit. I have nothing against anyone and don't have enough knowledge in the subject to argue it or take sides. I've learned a lot from everyone. And any information that I've ever gotten from Claydiggins was correct.

Just wanted to ad that....I'm not any side, just liked the post because it was a response to mine with some info. not the Dig on Diggins!

No dig, just friendly poking.

 

[IMAUDIGGER]

Clay, You make it sound like this is unique to crazy California law.

Here is a few statutes from North Dakota, almost the same word for word.
Incidents being the same as appurtenances.

47-09-13. Grant shall be interpreted in favor of grantee - Exceptions.
A grant shall be interpreted in favor of the grantee, except that a reservation in any grant, and every grant by a public officer or body, as such, to a private party, is to be interpreted in favor of the grantor.

47-09-16. Transfer vests actual title - Thing includes incidents.
A transfer vests in the transferee all the actual title to the thing transferred which the transferor then has unless a different intention is expressed or is necessarily implied. It also transfers all its incidents unless expressly excepted, but the transfer of an incident to a thing does not transfer the thing itself.

Thank you, this has been a useful bit of discussion. Please don’t take it as arguementative in a confronting way. As Nitric said you DO provide a bunch of great info here..free of charge and I have learned from it. I just disagreed with part of what you said.

Legimate mineral estate research is probably fairly expensive compared to typical title research, which may only go back 40 years.

 

[mendoAu]

If you buy land thru a realtor and they can't tell you if the land includes mineral rights get a new realtor. Just as a side note, I had a friend that obtained mineral rights under half the buildings in Placerville California.....allot of good it did without "access". HA!