Union Pacific Railroad v. Seeco, Inc.
2016 Ark. App. 466
| Ark. Ct. App. | 2016Background
- SEECO filed an interpleader and declaratory-judgment action to determine ownership of mineral royalties from NW/4 of the NE/4 of Section 19, T8 R13W in Faulkner County, Arkansas; competing claimants were Union Pacific (successor to railroads dating to an 1857 grant) and members of the Tyus family.
- No recorded deed from Union Pacific to the Tyus family exists; the Tyus chain of title begins with a 1941 recorded warranty deed among Tyus family members and continuous family possession thereafter.
- County assessment records show Union Pacific listed as owner in a handful of isolated years (1958, 1968, 1990, 1998); in 1936 the assessor handwritten noted R.B. Tyus as owner. Many assessment years are missing from the record.
- Union Pacific asserted (1) a 1938 “lost deed” draft it found (unsigned, unrecorded) that purportedly reserved minerals to the railroad, and (2) two 2004 redemption deeds after paying delinquent taxes; it argued a severance therefore existed.
- The Tyus family produced affidavits asserting exclusive, open, and continuous possession and tax payments exceeding the seven-year adverse-possession period. Union Pacific conceded it was not claiming surface rights at trial.
- The circuit court granted SEECO’s summary-judgment motion, holding Union Pacific failed to prove a valid severance (clear-and-convincing proof required for the lost-deed claim) and that the Tyus family had adversely possessed the mineral rights. This appeal followed.
Issues
| Issue | Plaintiff's Argument (SEECO/Tyus) | Defendant's Argument (Union Pacific) | Held |
|---|---|---|---|
| Did Union Pacific meet burden to prove a 1938 "lost deed" severing minerals? | Lost-deed draft is insufficient; Tyus: no recorded severance and title acquired by adverse possession. | Lost deed and employee affidavit show deed existed and reserved minerals to railroad. | Court: Union Pacific failed to prove execution/contents by clear, convincing, satisfactory evidence; lost-deed claim fails. |
| Do sporadic county mineral assessments and redemption deeds prove severance? | Sporadic assessments and redemption deeds do not establish severance; redemption deeds only evidence tax payment. | Assessments (1958, 1968, 1990, 1998) and redemption deeds support severance/retained mineral interest. | Court: Assessments were sporadic and too late (first in 1958) to show severance before adverse possession; redemption deeds do not convey title. |
| Can Tyus family acquire mineral rights by adverse possession when mineral interest allegedly severed? | Adverse possession of surface also acquired minerals absent proof of severance; they possessed openly for statutory period. | If minerals were severed, adverse possession of surface alone is ineffective against mineral owner unless minerals actually invaded. | Court: Because Union Pacific failed to show severance existed by the time adverse possession matured, Tyus adverse possession included minerals. |
| Was summary judgment inappropriate because material facts remained or trial weighing occurred? | Facts undisputed; law controls; summary judgment proper. | Argued factual disputes and that court impermissibly weighed evidence. | Court: Parties agreed no additional facts; legal issues reviewed de novo; summary judgment proper and no impermissible weighing. |
Key Cases Cited
- Nationwide Mut. Fire Ins. Co. v. Citizens Bank & Tr. Co., 431 S.W.3d 292 (Ark. 2014) (summary-judgment standard and view of evidence)
- Barton Land Servs., Inc. v. SEECO, Inc., 428 S.W.3d 430 (Ark. 2013) (summary-judgment cross-motions and legal-issue review)
- Cranfill v. Union Planters Bank, N.A., 158 S.W.3d 703 (Ark. App. 2004) (party cannot assert factual-dispute argument on appeal after conceding facts below)
- State v. Cassell, 427 S.W.3d 663 (Ark. 2013) (de novo review of legal questions)
- Thompson v. Graves, 665 S.W.2d 268 (Ark. 1984) (lost-deed contents must be proved by clear, satisfactory, and convincing evidence)
- Witt v. Graves, 787 S.W.2d 681 (Ark. 1990) (parol evidence insufficient to prove execution/contents of lost deed without clear evidence)
- Bonds v. Carter, 75 S.W.3d 192 (Ark. 2002) (when minerals are severed, adverse possession of surface does not affect minerals absent physical intrusion)
- Ferguson v. Fields, 188 S.W.2d 302 (Ark. 1945) (redemption deed after tax payment does not confer title when claimant lacked prior interest)
- Pyburn v. Campbell, 250 S.W. 15 (Ark. 1923) (redemption deed is payment of taxes, not conveyance of title)
- Unifirst Corp. v. Ludwig Props., Inc., 476 S.W.3d 852 (Ark. App. 2015) (appellate bars on new factual arguments after conceding below)
- Barnett v. Gomance, 377 S.W.3d 317 (Ark. App. 2010) (Rule 15(b) and amendment of pleadings to conform to proof)