APPEAL FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT LAWRENCE COUNTY, SOUTH DAKOTA. HONORABLE RANDALL L. MACY Judge.
The opinion of the court was delivered by: Konenkamp, Justice.
ARGUED ON NOVEMBER 4, 2008
[¶1.] Plaintiff landowners brought suit to quiet title to certain railroad rights of way. On cross motions for summary judgment, the circuit court quieted title in favor of the landowners. To resolve this appeal, we must interpret several 1890 deeds and the General Railroad Right-of-Way Act of 1875. We affirm in part, reverse in part, and remand.
[¶2.] James Swaby, et al. (plaintiffs), brought a quiet title action against Northern Hills Regional Railroad Authority, et al. (NHRRA).*fn1 Plaintiffs and NHRRA dispute title to certain property located in Lawrence County, South Dakota. The parties filed cross motions for summary judgment and submitted stipulated material facts. Those facts reveal that in 1890 several landowners executed deeds conveying a property interest in certain strips of land to the Fremont, Elkhorn and Missouri Valley Railroad Company (FEMV).*fn2 FEMV had also obtained certain property interests in land under the General Railroad Right-of-Way Act of March 3, 1875 (1875 Act).*fn3 The land conveyed to FEMV by the 1890 deeds or obtained by the 1875 Act will be referred to as the "Right of Way."
[¶3.] In May 1890, FEMV located and graded a railroad route in the Right of Way. FEMV also filed a plat and profile of its Whitewood to Deadwood, South Dakota railroad with the United States Land Office in Rapid City, South Dakota. The plat and profile were approved by the Secretary of the Interior in June 1890. In 1903, FEMV conveyed its interest in the Right of Way to the Chicago and Northwestern Railway Company (CNW).
[¶4.] In 1970, CNW filed an application with the Interstate Commerce Commission (ICC) entitled, "Application for a Certificate of Public Convenience and Necessity Authorizing the Abandonment of a Line of Railroad between Whitewood and Deadwood, Lawrence County, South Dakota." The ICC issued a "Certificate and Order" on May 13, 1970, and the abandonment was confirmed. CNW removed its railroad tracks and no railroad service has since been conducted over the Right of Way.
[¶5.] In December 1970, CNW entered into an agreement with the State of South Dakota (State) to sell to the State a portion of the Right of Way. On May 30, 1972, CNW quitclaimed its interest in the Right of Way to the State. On May 15, 1985, the State, through the South Dakota Department of Transportation (DOT), quitclaimed a portion of the Right of Way to the South Dakota Game, Fish, and Parks (GFP). On March 25, 2004, DOT quitclaimed all its remaininginterest in the Right of Way to NHRRA. On June 16, 2006, Union Pacific Railroad Company quitclaimed all its interest in the Right of Way to NHRRA.*fn4 On October 17, 2006, the Dakota, Minnesota & Eastern Railroad Corporation quitclaimed all its interest in the Right of Way to NHRRA.
[¶6.] Plaintiffs are the successors in interest to the original owners of the Right of Way acquired by FEMV. In their motion for summary judgment, plaintiffs asserted fee title ownership of the Right of Way based on abandonment and rights of reverter. NHRRA countered that it is the fee owner, as the successor in interest to FEMV. In considering the parties' motions, the circuit court examined the Right of Way by dividing it into three property types: property conveyed by the 1875 Act; property conveyed in 1890 by private deeds with reversionary language; and property conveyed in 1890 by private deeds without reversionary language. With respect to each type of property, the court ruled that the Right of Way had been abandoned, and thus the property reverted to the heirs and assigns of the original owners. The court quieted title in certain Right of Way land in favor of plaintiffs. The court also entered a default judgment against those who failed to answer plaintiffs' amended complaint.*fn5
[¶7.] NHRRA appeals. In summary, it argues that the court erred when it quieted title in favor of plaintiffs and against NHRRA for the land conveyed by (1) the 1875 Act; (2) the 1890 deeds with reversionary language; (3) the 1890 deeds without reversionary language; and (4) the deeds that specifically excluded the Right of Way land.*fn6
1. The 1875 Right of Way Act
[¶8.] We discussed the 1875 Act in Brown v. Northern Hills Regional Railroad Authority,2007 SD 49, 732 NW2d 732.
Beginning in the 1800s, Congress enacted several bills which explicitly granted public lands to railroad companies to aid the construction of a cross-country railroad. Barney [v. Burlington Northern R.R. Co.], 490 NW2d [726,] 729 [(SD 1992)] (citing Act of Sept. 20, 1850, 9 Stat 466). Pursuant to these bills, "Congress gave generous land grants from the public domain to the railroads to subsidize the costs of the western expansion." Id. The expansion stretched from the 100th meridian from the middle of Nebraska to California. Id. Because of mounting public criticism, the nature of the land grants changed in 1872. Id. "[T]he House of Representatives enacted a resolution condemning its policy of outright land grant subsidies to railroads." Id. (citing Leo Sheep Co. v. United States, 440 US 668, 99 SCt 1403, 59 LEd2d 677 (1979)). Instead, Congress began to reserve the land for homesteads and educational purposes. Id. Notwithstanding this changed policy, Congress continued to encourage the expansion of the West by enacting the 1875 Act, which authorized ROW [right of way] grants to railroads. Id. (citing 43 U.S.C. § 934).
[¶9.] The United States issued land patents to homesteaders, passing title and ownership of certain public land to private individuals. Id. Some patents were issued subject to a railroad's right of way. Id. However, because the land patent at issue in Brown did not contain language indicating that the United States retained a reversionary interest in the right of way, we held that "whatever interest the United States retained in the ROWs [rights of way] through the 1875 Act was relinquished when land patents were issued[.]" Id. ¶22. The case was then remanded to determine whether the right of way had been abandoned.
[¶10.] Here, CNW's predecessor in interest, FEMV, acquired a right of way interest in public lands under the 1875 Act. The United States also issued land patents to certain predecessors in interest of plaintiffs.*fn7 These land patents were subject to the railroad's right of way. But, like the land patents in Brown, the patents here do not reserve any interest in the Right of Way inthe United States. Therefore, under Brown,if the Right of Way has been abandoned, plaintiffs are the fee owners as the heirs, successors, or assigns of the original property owners. See id.
[¶11.] Plaintiffs contend that CNW abandoned the Right of Way in 1970, when it removed the railroad tracks and facilities and never again used the Right of Way for railroad purposes. NHRRA, on the other hand, insists that despite CNW's application for abandonment with the ICC, it could not legally abandon the Right of Way "unless a specific Act of Congress would authorize such action."*fn8 NHRRA contends that 43 U.S.C. §§ 912, 913 require this specific Act of Congress. NHRRA insists these sections apply because 43 U.S.C. § 939 gave Congress the power to amend the 1875 Act.*fn9
[¶12.] In Brown, we rejected the notion that sections 912 or 913 apply when the United States issues a land patent without specifically reserving an interest in the right of way. 2007 SD 49, ¶22, 732 NW2d at 740. The facts of this case fit squarely within our holding in Brown; therefore, sections 912 and 913 do not apply in this case. Nevertheless, NHRRA maintains that no abandonment can occur because a railroad cannot alienate its property interest acquired by a congressional act.*fn10 We can find no authority to support NHRRA's assertion. Rather, based on our review of the caselaw, courts across the nation, both federal and state, have declared railroad rights of way abandoned despite the fact that the rights of way were acquired by a federal act. See Denver & R.G.R. Co. v. Mills, 222 F 481, 486 (8thCir 1915) (recognizing that a right of way granted to a railroad by Congress can be abandoned). Most recently, courts have held that a railroad right of way is abandoned when converted to a recreational trail. Ellamae Phillips Co. v. United States, 77 FedCl 387, 394 (2007), vacated on other grounds, 564 F3d 1367 (FedCir 2009); see also Preseault v. Interstate Commerce Comm'n, 494 US 1, 13, 110 SCt 914, 922, 108 LEd2d 1 (1990) (abandonment by converting right of way to a recreational trail); Hash v. United States (Hash II), 403 F3d 1308, 1318 (FedCir 2005).
[¶13.] Acknowledging that a right of way acquired by a congressional act can be abandoned, we must now determine what constitutes legal abandonment. South Dakota has not previously addressed the issue of abandonment of a railroad right of way. We note, however, that railroad rights of way implicate particularly unique property interests.*fn11 See Hanson Indus., Inc. v. County of Spokane, 58 P3d 910, 914 (WashCtApp 2002) ("The chaos reflected in court decisions arises from the unique nature of railroad rights-of-way."). Thus, while our past cases discussing abandonment of easements might be instructive, we are particularly guided by the decisions of courts that have considered abandonment of railroad rights of way.
[¶14.] In addressing abandonment of rights of way, courts have invoked common law abandonment principles. Chatham v. Blount County, 789 So2d 235, 241 (Ala 2001); Hinojos v. Lohmann, 182 P3d 692, 701 (ColoCtApp 2008); Martell v. Stewart, 628 P2d 1069, 1070-71 (KanCtApp 1981); Washington Sec. and Inv. Corp. v. Horse Heaven Heights, Inc., 130 P3d 880, 884-85 (WashCtApp 2006). One court considered state-specific statutory abandonment law. Macerich Real Estate Co. v. City of Ames, 433 NW2d 726, 729 (Iowa 1988). And, depending on the circumstances, other courts have considered federal enactments, such as 43 ...