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“The 2Point Way” - Railroads—What Right (and Where)

Determining the extent and type of right conveyed or dedicated for railroad use is one of the thornier issues facing land use professionals in the United States. Representatives from the various rail companies may provide incorrect information based on overview maps or GIS databases. These in turn may be based on valuation maps, or on faulty or incomplete analysis of the relevant principles and documents.

The “easement vs. fee” dispute frequently is the ultimate issue for the courts. The solution to this query is essential in a proper survey retracement adjoining a rail line because the answer controls whether private ownership of adjoining tracts extends to the edge of the right-of-way, to the center, or to some other pre-existing line.

It is unfortunate but true that the term “right of way” describes a location and seldom controls in disputes over the nature of railroad rights. Judges nationwide concede that the phrase has been overworked to the point where it has no real significance in determining existing rights. Courts consistently look to the surrounding circumstances of the case in order to determine whether the rail company took ownership of the strip of land or merely purchased a limited right to operate a rail line over the area described.

The Texas decision S.H. Oil & Royalty Co. v. Texas & New Orleans R.R.: 295 S.W.2d 227 (1956) illustrates both the problem and the presumption often applied by the courts: “While it appears to be true that when used in this state in an instrument of conveyance to describe or to limit the estate that is the subject of conveyance the term “right of way” is to be construed as describing or as denoting only a servitude of passage or a mere easement, …the term is nevertheless recognized by our courts as having a twofold signification and as being used upon occasion and in other circumstances to describe or denote the right-of-way strip of land itself.”

Many courts follow the presumption that the term “right of way” is synonymous with a servitude, but this is a rebuttable presumption that can be ignored where relevant contrary evidence exists. It is also clear that the strength of the presumption varies from state to state and has numerous exceptions.

To begin a proper analysis, land use professionals should start with the enabling legislation and the original document that conveys the right from the previous landowner to the rail company. The original conveyance should be considered in the light of the legislative act that authorized the original construction of the segment of rail line under consideration. State-specific common law precedent is also a critical component.

Enabling Legislation

The relevant legislative act is of critical importance because it defines the powers granted to the corporation in terms of acquiring lands, but it also may enumerate actions that are not allowed within the framework of the legislation. The date of the legislative act is significant (though not always controlling) because government policies associated with railroad construction changed significantly over time. This “sea change” of attitude is admirably summarized in the U.S. Supreme Court decision Brant Revocable Trust v. United States: 134 S.Ct. 1257 (2014).

In the 1860’s, railroads were routinely granted tracts of land adjoining the proposed rail line in fee simple in an attempt to motivate the rail companies to complete construction in a timely manner. As time passed, it became apparent that the railways were acquiring land but sometimes failed to follow the land acquisitions with speedy construction of tracks and bridges.

Reflecting on this apparent failure of the railroads to fulfill their perceived commitments, the U.S. Legislature included the following quotation in a House resolution in 1872: “That in the judgment of this House the policy of granting subsidies in public lands to railroads and other corporations ought to be discontinued, and that every consideration of public policy and equal justice to the whole people requires that the public lands should be held for the purpose of securing homesteads to actual settlers, and for educational purposes, as may be provided by law.”

While the Brandt decision is predicated on the General Railroad Right-of-Way Act of 1875 and deals with a Wyoming dispute, the alteration of the national perception is significant to disputes across the nation. In general, early enabling acts (prior to 1870) are more likely to authorize the taking of the fee simple by the rail company, while railroad legislation written after 1872 will generally only authorize condemnation of an easement for the rail lines themselves. However, this generalization is not absolute.

In Meyer v. Pittsburgh, Cincinnati, Chicago & St. Louis Railway Co. 113 N.E. 443 (1916), the Indiana court describes an unusual double standard based on the language and date of enabling legislation. Judge Caldwell concludes that relevant language in a specific charter can modify the rebuttable presumptions associated with prescriptive claims or written conveyances to rail companies.

The court recognizes that the prevailing standard holds that the prescriptive right perfected by railroads for railroad tracks are servitudes. This analysis also recognizes a separate presumption for prescription associated with tracks created under early legislation. Prescription associated with Indiana Acts of 1832, 1846 and 1848 are presumed to result in a fee based on specific language found in the early statutes.

While the presumption is reversed in this instance, it is still a rebuttable presumption: “…where the charter or the creating and enabling act of a railroad company authorizes it to acquire lands by specified methods for right of way purposes, and provides that lands acquired by such methods shall be held and owned in fee simple, such provisions of the charter or creating act not being exclusive in character, do not destroy or prohibit the exercise of the common-law power to contract.” In other words, the fact that the rail company had the right to purchase or condemn a fee simple title does not mean that they had to if they chose otherwise in a specific instance.

Other enabling acts have been analyzed by the courts when the intent of the legislators was unclear. The New Mexico decision United States Trust Co. v. Smith: 8 N.M. 673 (1896) devotes significant effort to determining the intent of the Congressional Act of July 27, 1866 that authorized the construction of a major rail line by the Atlantic & Pacific Railroad Company. This analysis includes additional complications because New Mexico was still a territory rather than a state at the time of the litigation.

As with any ambiguous document, the court considers surrounding circumstances at the time of the original legislative enactment. Judge Smith observes that the proposed rail line passes through inhospitable and relatively worthless terrain and concludes that the government intended to provide substantial incentives to the rail company in order to encourage construction of the rail corridor. The court considers it unnecessary to determine whether the right of way was in fact a fee or an easement, but ultimately concludes that the land involved was exempt from taxation as part of the incentives package implicit in the congressional act.

Original Grant: a Critical Puzzle Piece

While the relevant legislative act provides the framework within which the rail company is allowed to operate, the intent of the original grant from the landowner to the rail company cannot be ignored. For example, an enabling act might allow the corporation to condemn lands in fee, but existence of this option would not preclude representatives from negotiating lesser rights for portions of the track where the corporation saw no need for fee title. Likewise, legislation might allow for a 200-foot easement when a lesser width might be sufficient. Negotiating a lesser width might avoid potential hostilities with owners along the prospective track, thus simplifying the process and speeding the overall progress of the project. These examples illustrate the need to carefully examine the wording of the individual grants – in some cases the researcher may discover a patchwork of rights along a single line.

Additional difficulties often arise due to the poor or ambiguous wording found in many of the descriptions associated with railroad rights. Documents may seem to describe a conveyance of fee, the creation of a limited right, or both. Courts will often apply different standards to depots and loading facilities due to the increased burden imposed on the land. In general, rail companies are more likely to successfully claim title to the fee in disputes over areas obtained for depots, storage facilities and switching stations than for remote segments of rail line that are not directly adjacent to a major facility.

This dual standard is illustrated in the Maryland decision Chevy Chase Land Co. v. U.S.A.: 733 A.2d 1055 (1999). This case includes an exhaustive analysis of two adjoining segments of an old rail line conveniently labeled as parcels “A” and “B.” One significant factor in this case was that two different granting clauses for A and B were included in the description. The court concluded that, had the right created for both parcels been intended to be the same, only one granting clause would have been necessary. The inclusion of two granting clauses indicated that one parcel was a fee, while the other was an easement.

Despite the urging of the parties to this dispute, the Maryland judges avoided basing their decision on single isolated phrases. The fact that the word “easement” was not included in the agreement was not considered controlling; nor was the inclusion of the phrase “free and perpetual.” The court applied sound principles of deed interpretation by considering the document as a whole in the light of surrounding circumstances and refused to be hamstrung by individual definitions of specific words and phrases. Chevy Chase also considers the amount paid by the rail company as a significant indicator of the right conveyed and notes the significance of the phrase “for railroad purposes.”

Specific Common Law Precedent

The unique aspects often associated with railroad grants have created their own variants of deed interpretation. Several courts point out specific indicators that, while not controlling, may be helpful. One that has been considered by the courts to indicate an easement is “over, across and through(Tazian v. Cline: Ind. 686 N.E.2d 95 (1997)). The West Virginia court agrees that prepositions “in,” “upon” and “through” are consistent with the creation of a servitude over the lands of another. (Uhl v. Ohio River R.R.: 51 W. Va. 106 (1902))

By contrast, the language “all that certain strip or parcel of land” found in a description as described in Bailey v. Town of Saltville: 279 Va. 627 (2010) was considered indicative of conveyance of the fee to the rail company.

The examples above are only a limited cross-section of the possible problems and outcomes that can be found in the totality of railroad law in this country. It should be abundantly clear that utmost diligence is required to make a proper determination of the rights associated with a rail line – and the related question of the limits of title for the adjoining landowner. While this requires extra research and analysis, failure to make a proper determination will have unfortunate and far-reaching effects on the public and on the professional reputations of those involved in an erroneous decision.

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