Bonds v. Carter

¶1This is a quiet-title action brought by appellant Bobbye Bonds to determine the ownership of a certain tract of land in Columbia County. Eddie Smith formerly owned all of the land in question. On June 19, 1980, Smith conveyed a timber deed to appellee Barry Carter, granting Carter “all the merchantable pine and hardwood timber standing, growing and being on” a parcel of land in Columbia County; Carter paid $1,000 in consideration for the right to cut and remove timber from the described land for 100 years. On January 15, 1981, Smith conveyed a warranty deed to Bobbye Bonds, covering the same parcel of land, and reserving to himself all the oil, gas, and mineral interests thereon. Bonds originally filed a petition to set aside the timber deed in 1982, but the case was abandoned after Eddie Smith died.

¶2Nearly twenty years later, on February 18, 2000, Bonds sued to quiet title in her land, alleging that, under Ark. Code Ann. § 18-11-102 (1987), she had acquired title to the land by paying taxes on the “wild and unimproved” property every year since 1981. Further, Bonds alleged that Carter’s timber deed was void ab initio for inadequate consideration, for violating the rule against perpetuities, and for unconscionability under the Uniform Commercial Code. Carter answered, pleading, among other things, that Bonds’s action was barred by the statute of limitations. Both parties then moved for summary judgment. In her motion, Bonds argued that, since Carter did not dispute that the land in question was wild and unimproved, she had acquired title to the property through adverse possession because she had paid taxes on it for more than fifteen years. Carter’s motion agreed that the facts were undisputed, but asserted that his timber deed was superior to Bonds’s warranty deed, and further, that Bonds’s action was barred by the statute of limitations. Carter also pointed out that his validly recorded timber deed served to put Bonds on constructive notice of a superior interest in the land, and that she purchased the property subject to the timber deed.

¶3The trial court held a hearing on the motions for summary judgment on September 13, 2000, and the hearing resulted in a court order finding that the 1980 timber deed was valid and that, while Bonds was vested with the fee simple title in the property, the issue was whether or not that vested interest interest was subject to the previously granted timber deed. Initially, the court denied both motions for summary judgment at that time; however, the court later dismissed all claims challenging the validity of the timber deed. The court also found that § 18-11-102 had no bearing on the controversy between the parties and did not affect the validity of the timber deed.

¶4On appeal, Bonds raises two points for reversal: 1) the trial court erred in not finding Carter’s severed timber estate on wild and unimproved property was adversely possessed when Bonds obtained the underlying fee to the property and paid all taxes on it from 1981 through 1998; and 2) the 100-year timber deed is an ongoing unconscionable contract, presenting public policy concerns that the trial court should have addressed to invalidate the instrument, and the court erred in dismissing the action due to statute of limitations considerations.

¶5For her first point on appeal, Bonds argues that a recorded, severed timber estate on wild and unimproved land is adversely possessed when the owner of the underlying fee pays all taxes assessed on the land (both real and personal property) from 1981 to 1998. She contends that, under § 18-11-102, her payment of taxes vests title in her. That statute provides as follows:

Unimproved and unenclosed land shall be deemed and held to be in possession of the person who pays the taxes thereon if he has color of title thereto, but no person shall be entitled to invoke the benefit of this section unless he, and those under whom he claims, shall have paid the taxes for at least seven (7) years in succession.

¶6Bonds further relies on Jones v. Barger, 67 Ark. App. 337, 1 S.W.3d 31 (1999), wherein the court of appeals held that one claiming title to land by having paid taxes on that land for seven years need not have actually adversely possessed the land in question. In Jones, both parties had received warranty deeds to the same parcel of land, and the court was faced with determining whose title was superior. The court of appeals held that, under § 18-11-102, the Joneses had paid taxes on unimproved and unenclosed land, under color of title, for at least seven years. Jones, 67 Ark. App. at 341. Because that statute did not require “actual adverse possession,” the court of appeals concluded that the Joneses had met the statutory requirements and were thus entitled to have the title to the land vested in them. Id. at 346.

¶7 The facts of the instant case are distinguishable from those in Jones. Jones involved two parties claiming the same title to the same estate in the land; here, on the other hand, we are presented with a situation in which one party has the underlying surface rights, and the other possesses the timber rights, which have been severed from the surface. Arkansas’s taxation statutes make it clear that timber rights are separate and distinct from the land itself. Ark. Code Ann. § 26-26-1109 (Repl. 1997), dealing with taxation of timber rights, provides in pertinent part as follows:

(a)(1) When the timber rights in any land shall, by conveyance or otherwise, be held by one (1) or more persons, firms, or corporations, and the fee simple in the land by one (i) or more other persons, firms, or corporations, it shall be the duty of the assessor, when advised of the fact, either by personal notice or by recording of the deeds in the office of the recorder of the county, to assess the timber rights in the lands separate from the soil.

(2) In such case, a sale of the timber rights for nonpayment of taxes shall not affect the title to the soil itself, nor shall a sale of the latter for nonpayment of taxes affect the title to the timber rights.

¶8(Emphasis added.) In sum, this statute provides that timber rights held by one person are to be assessed separately from the fee simple rights of another in the land, because the timber rights are separate from another’s rights in the soil.

¶9 Further, when a purchaser of land records his deed, it serves to put any subsequent purchaser on notice of the earlier deed. In this respect, Ark. Code Ann. § 14-15-404 (Repl. 1998) states the following:

(a) Every deed, bond, or instrument of writing affecting the title, in law or equity, to any real or personal property, within this state which is, or may be, required by law to be acknowledged or proved and recorded shall be constructive notice to all persons from the time the instrument is filed for record in the office of the recorder of the proper county.

¶10(Emphasis added.) Here, Carter recorded his timber deed six months before Bonds ever received the warranty deed from Smith. Thus, Bonds was on constructive notice of Carter’s deed.

¶11The question remains, however, as to whether or not Bonds could adversely possess Carter’s timber interest, when she was on notice of the fact that those interests had been severed and recorded prior to her taking the warranty deed to the remainder of the land. As Carter points out, there is no case law in Arkansas dealing with the question of adverse possession of timber rights. There is case law, though, setting out what must happen before one can adversely possess mineral rights. While mineral and timber rights differ in many respects, both are severable from the land on which they are found.

¶12 In Claybrooke v. Barnes, 180 Ark. 678, 22 S.W.2d 390 (1929), Laura Barnes contended that she held title to certain mineral rights through adverse possession. The mineral rights had been excepted from a deed to the surface rights dated November 17, 1911, but no such exception was contained in subsequent quitclaim deeds to the property. Barnes, who was a subsequent grantee to the surface estate, eventually claimed she held title to the mineral rights as well, although she had never exploited the mineral rights until she attempted to execute a mineral lease on the land in 1918. In reversing the trial court’s decision finding that Barnes adversely possessed the property, this court held as follows:

Where there has been a severance of the legal interest in the minerals from the ownership of the land, it has been held as to solid minerals, and the same rule has been applied to oil and gas, that adverse possession of the land is not adverse possession of the mineral estate and does not defeat the separate interest in it. [Citation omitted.] In Scott v. Laws, 185 Ky. 440, 215 S.W. 81, 13 A.L.R. 369, the court said that, since there was a severance of the mineral estate from the surface estate, the owner of the minerals did not lose his right or his possession by any length of nonuser, nor did the owner of the surface acquire tide by the statute of limitations to the minerals by his exclusive and continued occupancy and enjoyment of the surface mere.

This rule was approved by this court in Bodcaw Lumber Co. v. Goode, [160 Ark. 48, 254 S.W. 345 (1923)], and the court said: “The rule of those authorities is that the title to minerals beneath the surface is not lost by nonuse nor by adverse occupancy of the owner of the surface under the same claim of title, and that the statute can only be set in motion by an adverse use of the mineral rights, persisted in and continued for the statutory period.”

So it may be taken as settled that the two estates when once separated, remain independent, and title to the mineral rights can never be acquired by merely holding and claiming the land, even though title be asserted in the minerals all the time. The only way the statute of limitation can be asserted against the owner of the mineral rights or estate is for the owner of the surface estate or some other person to take actual possession of the minerals by opening mines and operating the same. It is only when such possession has continued for the statutory period that title to the mineral estate by adverse possession is acquired.

¶13Id. at 682 (emphasis added). Other cases have held similarly. See, e.g., Taylor v. Scott, 285 Ark. 102, 685 S.W.2d 60 (1985) (when a mineral ownership has been severed by deed from the surface ownership, adverse possession of the surface is ineffective against the owner of the minerals unless the possessor actually invades the minerals by opening mines or drilling wells and continues that action for the necessary period).

¶14 Bonds’s argument in her reply brief that mineral rights and timber rights are not analogous is not well taken,1 especially in light of her concession in her opening brief that timber rights are a profit a prendre. Timber rights are indeed a profit a prendre, see Black’s Law Dictionary 1483 (6th ed. 1990). Further, a profit d prendre is defined as a “right to take from the soil, such as by logging, mining, drilling, etc.” Id: at 1211. The right of profit d prendre is a “right to make some use of the soil of another, such as the right to mine metals, and it carries with it the right of entry and the right to remove and take from the land the designated products or profit and also includes right to use such of the surface as is necessary and convenient for exercise of the profit.” Id. In sum, while we do not conclude that timber and mineral rights are necessarily identical in nature, both rights involve the right to remove the subject goods from the surface itself; neither right .profits its owner until it is exercised by removing the goods from the land. Title to such rights is separate and apart from tide to the surface.

¶15 In conclusion, we hold that Bonds’s reliance on Jones v. Barger, supra, is misplaced, and § 18-11-102 is likewise inapplicable, because one cannot adversely possess timber rights merely by paying taxes on the land. In order to establish adverse possession, the possession must be actual, open, continuous, hostile, exclusive, and be accompanied by an intent to hold adversely and in derogation of, and not in conformity with, the right of the true owner. Koonce v. Mitchell, 341 Ark. 716, 19 S.W.3d 603 (2000); Staggs v. Story, 220 Ark. 823, 250 S.W.2d 125 (1952). Further, to adversely possess property on which another holds a superior right to timber growing thereon, there must be actual adverse possession for seven consecutive years before the commencement of the suit. Collins v. Bluff City Lumber Co., 86 Ark. 202, 205, 110 S.W. 806 (1908). If the owner of the surface holds the land upon which the timber is growing, it is presumed, unless the contrary appears, that he or she holds in subordination to the rights of the owner of the timber deed, such possession being consistent with the right to the timber; mere possession is not sufficient to bar recovery. Id. Here, Bonds did nothing to actively assert her interest in the timber growing on the land until she filed this suit. This was insufficient to claim an adverse interest in the property, and the trial court did not err in finding in favor of Carter on this issue.

¶16In her second point on appeal, Bonds argues that the trial court erred in concluding that the statute of limitations barred her challenge to the validity of the timber deed. In this respect, she contends that public policy considerations concerning the inherent “unconscionability” of the 100-year timber deed somehow trumped the seven-year statute of limitations for bringing actions to recover lands. See Ark. Code Ann. § 18-61-101 (1987). She also avers that the Uniform Commercial Code provides authority for setting aside unconscionable contracts, and cites Davis v. Kolb, 263 Ark. 158, 563 S.W.2d 438 (1978), wherein this court set aside a timber deed for unconscionability. However, Davis did not involve any question of the applicable statute of limitations, or such statute’s effect in barring the underlying suit.

¶17 In Minnesota Mining & Mfg. v. Baker, 337 Ark. 94, 989 S.W.2d 151 (1999), this court had the following to say about the interplay between public policy and statutes of limitations:

Any statute of limitation will eventually operate to bar a remedy, and the time within which a claim should be asserted is a matter of public policy, the determination of which lies almost exclusively in the legislative domain, and the decision of the General Assembly in that regard will not be interfered with by the courts in the absence of palpable error in the exercise of the legislative judgment. [Citations omitted.]

¶18Id. at 103 (emphasis added).

¶19 Bonds simply offers no convincing authority to support her argument that public policy concerns should override the applicable seven-year statute of limitations, nor does she make any argument whatsoever that the legislature made a “palpable error” in determining the statute of limitations for bringing suits to recover land. This court has repeatedly held that we do not consider assignments of error that are unsupported by convincing authority. Hurst v. Holland, 347 Ark. 235, 61 S.W.3d 180 (2001); Public Defender Comm. v. Greene County, 343 Ark. 49, 32 S.W.3d 470 (2000); Federal Fin. Co. v. Noe, 335 Ark. 78, 983 S.W.2d 107 (1998).

¶20For the foregoing reasons, the order of the chancery court is affirmed.

¶22concurring. I concur with the majority’s decision. First, I agree with the dissent’s analysis that there is a difference between a timber deed, which is more akin to the sale of a crop, and a deed granting mineral rights, which is a separate estate in the minerals beneath the surface. Common sense dictates that while a mineral estate and a surface estate can coexist due to their different positions on and under the land, a surface estate and a timber deed or contract relate to the same locale &emdash; the property above ground. The respective rights of mineral and surface owners are well settled. The owner of the minerals has an implied right to go upon the surface to drill wells to his underlying estate, and to occupy so much of the surface beyond the limits of his well as may be necessary to operate his estate and to remove its products. Diamond Shamrock Corp. v. Phillips, 256 Ark. 886, 511 S.W.2d 160 (1974). His use of the surface, however, must be reasonable. Id. The rights implied in favor of the mineral estate are to be exercised with due regard for the rights of the surface owner. See id. (citing Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971)). However, with regard to a timber interest and a surface estate, until the timber is harvested, use of the surface by the surface owner is basically suspended pending the expiration of the contractual term over the timber. For example, a surface owner cannot build a house in a grove of contractually conveyed timber without either cutting down the timber and injuring the timber owner’s interest, or waiting to the detriment of his interest until the timber is harvested. If a timber estate were perpetual, as can be a mineral estate, the surface owner could conceivably be forever barred from developing his land for fear of damaging the timber owner’s interests.

¶23Although I agree with the dissent on this point, I must concur in affirming this case because I think Ms. Bonds did not assert the proper claim below to challenge the timber contract at issue here. Certainly, as the dissent notes, the document in this case is a contract for the sale of “all the merchantable pine and hardwood timber standing, growing and being on. . . [the land].” The contract is to be performed within one huhdred years. To challenge this contract, Ms. Bonds argued that the timber contract was void ab initio because she alleged that Mr. Carter defrauded Mr. Smith by taking advantage of Mr. Smith’s alcoholism to obtain the contract, that a timber contract with a term of one hundred years to perform is against public policy for improper restraint of property, and that the timber contract and description had been materially altered after Mr. Smith signed the contract. These, however, appear to be the claims Ms. Bond asserted in her original lawsuit in 1982, in which she nonsuited her claims pursuant to Ark. R. Civ. P. 41(b) and then never refiled. The trial court noted that the action was dismissed for want of prosecution on January 15, 1986. While I believe that these particular claims are barred by the statute of limitations, I do not think that a dismissal of this current action would bar Ms. Bonds from bringing a different action such as a challenge to the reasonableness of Mr. Carter’s failure to remove “aE the merchantable pine and hardwood timber standing, growing and being on. . . [the land]” that was present in 1981 when the contract was made, or to compel Mr. Carter to remove the only the “merchantable” timber in existence in 1981 and to enjoin him from removing any other timber that matured and became “merchantable” after the moment the contract was created. The statute of limitations perhaps has not run on these or other causes of action to properly enforce the contract pursuant to our case law and consistent with public-policy considerations. Accordingly, I concur and would affirm the chancery court.