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Marathon Oil Co. v. Heath

March 3, 1966

MARATHON OIL COMPANY, PLAINTIFF-APPELLEE,
v.
GAIL HEATH AND THE BALTIMORE & OHIO RAILROAD COMPANY, DEFENDANTS-APPELLANTS



Hastings, Chief Judge, and Knoch and Swygert, Circuit Judges.

Author: Swygert

SWYGERT, Circuit Judge.

This is a diversity action in which the Marathon Oil Company, an Ohio corporation and successor of The Ohio Oil Company, sued Gail Heath and The Baltimore & Ohio Railroad Company for a declaration that certain gas and oil leases owned by the plaintiff include a part of the right of way over which the defendant railroad operates its trains in Lawrence County, Illinois. The plaintiff also requested an injunction prohibiting the defendants from drilling for oil and gas upon the lands in question.*fn1 The district court entered findings of fact and conclusions of law favorable to the plaintiff and by its decree granted the relief requested. This appeal followed.

The Ohio & Mississippi Railroad Company, predecessor in title to the B & O railroad, acquired the right of way in question by condemnation in 1853. The right of way is a parcel of land one hundred and fifty feet in width through the south half of the southeast quarter of section 7, township 3 north, range 12 west, Lawrence County, Illinois. The north and south boundaries of this strip run parallel with the railroad track, seventy-one and seventy-nine feet respectively from the centerline of the track.*fn2

The district court construed the condemnation proceedings as granting the railroad merely an easement over the lands condemned. The court held that the fee, including the rights to the mineral deposits, remained in the persons who owned the lands at the time of the condemnation proceedings and that their titles passed by mesne conveyances to the landowners who entered into oil and gas leases with the plaintiff. The court also found that a portion of the right of way which lies south of an old wire fence running parallel to the railroad track had been abandoned by the railroad more than fifty years ago.*fn3 The court further found that the lessors of the plaintiff and their privies in title have been in "open, notorious, exclusive, hostile and adverse possession" of the "abandoned" part of the right of way for a similar period. The court concluded that the defendants are barred from claiming any interest in the "abandoned portion" of the right of way.

I.

The first issue is whether the B & O railroad has a fee interest in its right of way, subject only to the oil and gas lease granted to defendant Heath, or whether it has merely an easement. The question is one of law, to be resolved by a consideration of the Illinois statutes upon which the condemnation proceedings of 1853 were based and the decisions interpreting these statutes.

The formation of the O & M railroad was authorized by the Illinois legislature February 12, 1851. The railroad was empowered to "lay out, designate and establish" a road not exceeding one hundred and fifty feet in width, to appropriate to its own use all the lands so designated, and to "take grants and conveyances of any and all interests and estates therein." The statute provided that in the event the lands designated could not be obtained by voluntary purchase, "the same may be taken and paid for, if any damages are awarded, in the manner provided in 'An Act to Provide for a General System of Railroad Incorporations.'" The latter statute, approved November 5, 1849, set out a condemnation procedure not material here. The statute did, however, contemplate the taking of a fee by a railroad for use in the construction of its tracks, and thus is material in indicating the powers which the O & M railroad obtained by its legislative charter.

The condemnation actions instituted by the O & M railroad to acquire the right of way in question were prosecuted under an Illinois statute passed June 22, 1852 entitled "An Act to Amend the Law Condemning Right of Way for Purposes of Internal Improvement."*fn4 This statute specifically authorized railroad corporations previously chartered by the legislature to avail themselves of its provisions. It provided for the filing of a petition with the circuit court of the county where the lands proposed to be taken were located, indicating the purpose of the taking. It required the appointment of commissioners to fix the compensation to be awarded the owners of the land and a report of the findings of the commissioners to the court. The act then provided that "upon the making and filing of any report * * * any party interested may appeal * * * but if no appeal is taken, the decisions, estimates and assessments as reported, shall be conclusive * * * and the right and title to that part of each tract required, in respect to which compensation is allowed or damages assessed, shall vest in the * * * corporation * * * upon the payment of the compensation and damages so fixed or assessed. * * *"

The records of the 1853 condemnation proceedings here involved show that they conformed in all respects to the requirements of the 1852 statute. Each petition described the tracts proposed to be taken. Each requested the court to appoint commissioners for the purpose of fixing the compensation to be awarded the owners and further requested that upon payment, "the owners * * * may be required to make and deliver * * * a conveyance or release in fee" to the O & M railroad. The record shows that commissioners were appointed, the compensation to be awarded was set, no appeal was perfected, and payment in the amounts assessed was made. The proceedings in their entirety reflect an intention on the part of the railroad to take an interest in the lands condemned commensurate with the power granted by its charter.

The Illinois Supreme Court has considered the 1852 statute and has held that a railroad instituting condemnation proceedings under it acquired fee simple title to the lands condemned. In Bartlow v. Chicago, B. & Q.R.R., 243 Ill. 332, 336, 90 N.E. 721, 723 (1909), the court stated:

Under the statute then in force [the act of June 22, 1852], when the property was taken and condemned for public use the condemnation was of the entire property, and the assessment of damages was held to be in satisfaction of all the title to the property, including the fee simple and all lesser estates.

A subsequent case, Keen v. Cleveland, C.C. & St. L. Ry., 392 Ill. 362, 64 N.E.2d 499 (1945), concerned the question of whether a certain deed to a strip of land used for the purpose of a right of way conveyed a fee simple title to The Cairo & Vincennes Railroad Company. That railroad was organized under a special act of the Illinois legislature in 1867 and was empowered to acquire and appropriate as much land as might be necessary for a right of way.*fn5 The question arose as to whether the railroad had been empowered to take a fee interest in those lands it acquired by voluntary conveyance. In the course of its decision, the court said:

The eminent domain act of June 22, 1852, referred to in section 4 of the special act creating the Cairo & Vincennes Railroad Company, was construed by this court in Bartlow v. Chicago, Burlington & Quincy Railroad Co. * * *. It was there held that in eminent domain proceedings under said act, the railroad company condemning the land acquired feesimple title to the lands condemned. The rights in and the power to take real estate ...


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