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Courts Hold 1934 Mineral Reservation by Railroad is Valid

  • 04/14/2012 9:34 PM
    Message # 889866

    Staggs et al v. Union Pacific Railroad Company

    The Staggs case against Union Pacific (Successor Railroad to the old Missouir Pacific) was settled in favor of the railroad and XTO and Heartland Exploration.  This case has now been upheld by the state Supreme Court.  Unfortunately, for the Staggs, the issue was clouded by our muddled law and those pesky tax issues that keep plaguing the issue.


    Part of the issue was that they cited a 1941 decision that found a "generic" reservation of mineral rights included only substances generally known to exist at the time and place of the reservation.  The reservation was made in 1934.  Since the area was known to have gas much earlier, I didn't see how that issue was going to pass muster.  Carey Croneis did a report in the 1920's citing places where gas was found in the region. 


    Nevertheless many issues involving ownership of mineral rights remain unresolved. 

    This is an interesting link to check out...

  • 04/29/2012 9:10 AM
    Reply # 905789 on 889866
    We just continue to confound the issue of mineral interests.  Reservations in deeds is another example of how our electronic real property records are deficient in the basic requirement of subjoining the clerk's record of all interests in real property (deeds, mortgages, leases, realty instrument of any kind) with the tax assessment records.  We continue to pay government workers to develop databases and systems that allow property rights to be seized without due process.

    Keep in mind that the fee for recording and the transfer tax (deed stamps) were paid on the original conveyance by the purchaser and essential to "prove ownership".   Another major consideration in reservations, is the unique reservation, as in this case.  In south Arkansas, many reservations of mineral rights contained specific time limits, in other words, a specific number of years.  There are examples of thousands of acres of timberland in south Arkansas that have been sold with reservations of oil and mineral interests and the purchaser did not record the deed in the county records.  It is reasonable that the conveyance was recorded in The Mortgage Electronic Recording System (MERS) that was knowingly designed to omit the county records.  Delinquent tax notices are sent to the original owner, which presents the quandary of redeem or buy back when one already knows that monies have been received for the sale or just let the State seize the property and sell to someone else?
  • 04/29/2012 4:12 PM
    Reply # 906245 on 889866

    Hopefully MERS will be abolished and not recognized as "legal". There was absolutely no reason to bypass filing these things in the county records correctly except to save a few bucks in filing fees.  MERS should be BANNED.


    Further, I think all Oil & Gas leases should state both the ROYALTY and the BONUS payments in the O * G Lease to be legal and that it must be filed with the state. An affidavit or assignment should not legally be substituted for an actual oil and gas lease.


    Royalty owners desperately need ABOVE ALL - transparency - in all these transactions. Once you can see that a lease is 20% and $800 then you won't need to guess whether your offer of 12.5% and $400 is sufficient.  And also, it is time for the legislature to abolish POST PRODUCTION EXPENSES.  As the price of gas falls, these are going to exceed 50% of your checks which will be much much smaller to begin with.

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