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Act, 28 Stat. 422 (1894), as amended, 43 U.S.C. §§ 641 et seq. (1970).

Color or Claim of Title: Generally

The period of possession of a color of title claim, having been initiated when the land was subject to appropriation under the public land laws, is not interrupted by a subsequent period of time during which the land was not open for appropriation.

APPEARANCES: William G. Carlson, Esq., Arco, Idaho, for appellant.

OPINION BY MR. GOSS INTERIOR BOARD OF LAND

APPEALS

Appellant has appealed from an Idaho State Office, Bureau of Land Management, decision dated June 30, 1971, rejecting his class 1 color of title applications, I 4369 and I 4370, for two 40-acre tracts of land in Butte County, Idaho. The decision held that at the time of initiation of the color of title claims the land was not vacant, unappropriated, unreserved public land subject to the public land laws. No ruling was made as to whether appellant complied with the other requirements of the Color of Title Act.

The land involved in this appeal was patented to the State of Idaho under the provisions of the Carey Act, 28 Stat. 422, as amended, 43 U.S.C. §§ 641 et seq. (1970), on July 31, 1923. The Carey Act provided for the donating, granting and patenting of desert lands to a state that complied with the requirements of the Act. The purpose of the Act was to promote the reclama

tion of desert lands and the State was not authorized to lease any of the lands, or to use or dispose of them in any manner, except to secure their reclamation, cultivation, and settlement.

A Carey Act project involving the lands in issue was commenced but not completed. By deed dated September 4, 1942, the State of Idaho reconveyed the lands to the United States. However, the lands were not available for appropriation under the public land laws until provisions for the opening of such lands were made by Bureau of Land Management order, Misc. 55843, dated March 30, 1950.

The pertinent part of the Color of Title Act, 45 Stat. 1069, as amended, 43 U.S.C. § 1068 (1970), reads as follows:

(a)

The Secretary of the Interior shall, whenever it shall be shown to his satisfaction that a tract of public land has been held in good faith and in peaceful, adverse, possession by a claimant, his ancestors or grantors, under claim or color of title for more than twenty years, and that valuable improvements have been placed on such land or some part thereof has been reduced to cultivation, *** issue a patent for not to exceed one hundred and sixty acres of such land upon the payment of not less than $1.25 per acre:

This type of claim is designated by 43 CFR 2540.0-5(b) as a class 1 claim.

The basis for appellant's color of title claims are two tax deeds executed in 1937 by Butte County, Idaho, in favor of appellant's predecessors in interest. The State Office decision held that adverse posses

February 14, 1973

sion could not have begun to run against the United States in 1937 because the State of Idaho owned the lands. Appellant argues that adverse possession was initiated in 1942 when the State of Idaho reconveyed the lands to the United States.

A question exists in connection with application I 4369. The origin of the claim in that application was a tax deed to A. R. Babcock in 1937. By probate decree of distribution the subject land passed to Maude E. Babcock. May A. R. Babcock be considered one of appellant's "grantors" under the Color of Title Act, 43 U.S.C. § 1068 (1970)? The courts have interpreted "grant" broadly to include a devise. Commissioner of Internal Revenue v. Plestcheeff, 100 F. 2d 62 (9th Cir. 1938), as well as transfers by operation of law, White v. Rosenthal, 35 P. 2d 154 (1934). The term "grantor" is defined in Black's Law Dictionary 829 (4th ed. 1951) as "the person by whom a grant is made"; "grant" being defined as "a generic term applicable to all transfers of real property." These interpretations coupled with the fact that the Color of Title Act is remedial and to be liberally construed, Harry H. Scott and Nion R. Tucker, A-15425 (April 10, 1933), make it clear that A. R. Babcock may be considered a grantor within the meaning of the Color of Title Act.

Even though the lands were owned by the State of Idaho in 1937, such is not a bar to the incep

tion of the color of title claims. The Department stated in Harry H. Scott and Nion R. Tucker, supra, that:

In the decision appealed from it was held that in the requirement of adverse possession for at least 20 years, the law contemplates that the possession must be of public lands, as such, for that length of time, and that the requirement of the law is not met where the land had the status of private land for a portion of that period. The Department regards this as an extreme and harsh interpretation. The act is remedial in nature and should be liberally construed. The interpretation complained of is not only not liberal but is actually strained and unnatural. We are authorized to sell only public land, but if the land be public at this time it is immaterial to the purpose of the act that the land may have been claimed or held in private ownership during a portion of the required 20-year period of possession. Furthermore, while this land may be regarded in a technical sense as having been in private ownership under the patent to the railroad company, nevertheless the Government had such interest in it as to justify resumption of the legal title in order to enforce the purpose of the original grant.

Appellant's period of good faith holding began to run in 1937 and continued until 1969 when appellant learned he did not have good title to the land. Even though a color of title claim could not have been initiated between 1942 and 1950 when the lands were not open to appropriation under the public land laws, such intervening period cannot now operate to defeat appellant's color of title claims. The 1942-50 period is somewhat analogous to a period of withdrawal. Clearly, a color of title claim could

not be initiated upon withdrawn or reserved lands. 43 CFR 2540.0-5 (b); Margaret C. More, 5 IBLA 252 (1972); Palo Verde Color of Title Claims, 72 I.D. 409 (1965); Claude M. Williams, Jr., et al., A-29928 (March 26, 1964). However, if a color of title claim arose before a withdrawal of the lands, the withdrawal would not preclude perfection of the claims under the Color of Title Act. Clement Vincent Tillion, Jr., A-29277 (April 12, 1963). The subject lands are presently public lands, having been restored to that status by the 1950 order. The definition commonly assigned to "public lands" is those lands subject to sale and disposition under the general laws. Borax Consolidated, Ltd., et al. v. Los Angeles, 296 U.S. 10, 17 (1935). Appellant has fulfilled the requirement of holding a tract of public land in adverse possession for more than twenty years.

Applications I-4369 and I-4370 show that Asa V. Perkes took title as "Asa V. Perkes, et ux." Therefore, appellant should be required to amend his applications to include as applicants his wife or her successors in interest or file on record any relinquishment of her interest in the lands.

If appellant has fulfilled the other requirements, patents should issue. The July 23, 1953, amendment, 67 Stat. 227, to the Color of Title Act, supra, makes the issuance of a patent by the Secretary to a class 1 claimant mandatory if it is found that the conditions prescribed in the statute are met.

Accordingly, pursuant to the authority delegated to the Board of Land Appeals by the Secretary of the Interior, 43 CFR 4.1, the decision appealed from is reversed and the case is remanded for appropriate action consistent with this decision.

JOSEPH W. Goss, Member.

WE CONCUR:

FREDERICK FISHMAN, Member.

ANNE POINDEXTER LEWIS, Member.

PLACID OIL COMPANY

9 IBLA 384

Decided February 16, 1973

Appeal from a decision of the New Mexico State Office, Bureau of Land Management, denying offers for future interest oil and gas leases, unless evidence of a continued control over the operating rights by applicant is submitted within 30 days.

Affirmed as modified.

Oil and Gas Leases: Future and Fractional Interest Leases

Where an applicant for a future interest oil and gas lease of acquired lands has interests only in the land below 1,000 feet below the surface, it does not own or control all or substantially all of the present operating rights to the minerals in the land; if it seeks only a lease for the zone below 1,000 feet, it is requesting a lease of a horizontal zone, which is granted, if at all, only where the need for it is clear and convincing; in either case its offer for a future interest lease must be rejected.

February 16, 1973

APPEARANCES: Walter Fraker, for Placid Oil Company; Gayle E. Manges, Field Solicitor, for Department of the Interior.

OPINION BY MR. RITVO INTERIOR BOARD OF LAND APPEALS

Placid Oil Company has appealed from a decision by the New Mexico State Office, Bureau of Land Management, denying future interest oil and gas lease applications NM A-10938, NM A-10940 through NM A-10943, unless Placid Oil Company submits evidence within 30 days to demonstrate its continued control over the operating rights between the expiration date. of the primary term of its lease, May 28, 1974, and the date the mineral interest will vest in the United States, January 2, 1985.

Placid Oil Company filed future interest offers on December 10, 1969,

for lands located in the Sabine National Forest in Texas. The records

show that the United States acquired title to the lands by warranty deed dated December 27, 1935, subject to a reservation by the grantor of all the minerals until January 1, 1985, to be extended in the event of commercial production.

The December 23, 1971, decision covered offers NM-A-10937 through 10939. The January 3, 1972, decision modified the December 23, 1971, decision in that it required a further certificate of title for offers NM-A10937 and NM-A-10939, certifying the mineral interest outstanding only in these two tracts; the earlier decision had required a further certificate of title. as required by regulation 43 CFR 3130.4-5. for all the offers. These two offers are not involved in this appeal.

497-456-73-13

By "Oil and/or Gas Lease" Agreement dated May 27, 1969, Temple Industries, Inc., successor to the mineral interests in the land, granted to Placid Oil Company an oil and gas lease for lands below 1,000 feet below the surface for a period of five years. Concerning the possibility of extension of the period of rental, in a letter of January 18, 1972, to the Bureau, applicant stated:

At the time applicant acquired its present lease covering the present mineral interest, we were unable to negotiate for a primary term longer than 5 years. Based upon our prior negotiations with the owner of the present mineral interest, we doubt that we would be successful in renewing the present lease upon the expiration of its primary term for a term of more than five years.

Appellant thus in essence admits that absent production, it will not have continued ownership or control of operating rights to the present mineral interests, between the

expiration date of May 28, 1974, and January 2, 1985. However, citing Clare Davis Pickens, Colorado 0109978, November 15, 1963, appellant argues that the policy of the Bureau of Land Management in issuing future interest leases should encourage further resource development. Therefore, appellant argues, since he cannot operate beyond the 1974 lease date, he will be discouraged from now attempting to develop the land for oil and gas. Since his future interest lease rights would not vest unless he produces oil, appellant further argues, the Government will have nothing to

lose by granting a future interest

lease.

The State Office's decision denying the applications was based on 43 CFR 3130.4-5. Citing Smead Stewart, BLM A-047789-92 (May 8, 1961), the State Office decided that since Placid did not have continued control over the operating rights between the expiration date of the primary term of its lease and the date the mineral interest would vest in the United States, its applications for future interest leases should be rejected.

We believe the Bureau's ruling should be upheld, but on a different ground. 43 CFR 3130.4-5 dealing with future interest offers states:

(a) Application. A noncompetitive lease for a whole or fractional future interest will be issued only to an offeror who owns all or substantially all of the present operating rights to the minerals in the lands in the offer as mineral fee owner, as lessee or as an operator holding such rights. *** (Italics added)

Without deciding whether Placid would otherwise qualify as an applicant, we find the requirement that an offeror own or lease-"all or substantially all" of the present operating rights disqualifies Placid since the lease granted by Temple to Placid gives rights to oil and gas exploration only below 1,000 feet.

We note that Placid's offer was not limited to the zone covered by its lease from Temple. Such partial ownership does not constitute substantially all of the present operating rights in the lands in the offer, as required by the regulation.

The Department's disapproval of leasing future or fractional interests where the applicant does not own substantially all of the present operating interests is based upon the concept that any leasehold should have a continuity of term. Fritz, Mineral Problems Relating to Acquired Lands, 3 Rocky Mt. Min. L. Inst. 379, 385 (1957). To give Placid a future interest lease for the first 1,000 feet would violate this practical policy, since it has no present operating rights for that zone.

Even if the "ownership" required by the regulation were to be considered as applying only to the rights Placid has, that is, those below 1,000 feet from the surface, a lease granting such rights to it would be a lease of a separate horizontal zone. While there are no specific prohibitions against such leasing in the law or regulations, the practice has been "most uncommon in the Department." Clear Creek Inn Corporation, 7 IBLA 200, 202, 79 I.D. 571 (1972).

However, as that case points out, the Secretary may approve assignments of a separate zone or deposit in an existing oil and gas lease. The Mineral Leasing Act so provides, 30 U.S.C. § 187(a); but the pertinent regulation states that such an assignment will not be approved tablished by clear and convincing unless the necessity therefor is esevidence. 43 CFR 3106.3-2.

Applying this standard, to Placid's request for future interest leases, we can find no necessity for creating leases of a separate zone.

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