Mineral Reservations and Exceptions: Federal Land Bank

摘要

Plaintiffs' predecessors-in-interest purchased a tract of land from the Federal Land Bank of St. Louis (FLB) in 1938 and 1939. The FLB had acquired the tract pursuant to the Federal Farm Loan Act of 1916, which was repealed in its entirety by the Farm Credit Act of 1971, PubL. No. 92-181, 85 Stat. 583 (1971). In both the 1938 and 1939 conveyances from the FLB they reserved to themselves 1/2 of the oil, gas, coal and other minerals. The deeds contain no temporal limits. Under the 1916 Act, federal land banks were limited to holding land to a period of no more than five years without getting special permission. In 1943, the Farm Credit Administration promulgated a regulation that authorized federal land banks to hold mineral rights for a period in excess of five years. Plaintiffs brought this action asserting that the five-year limit on owning surface and mineral estates governs their 1938 and 1939 deeds so that they are now the owners of the FLB-reserved 1/2 mineral interest. The District Court concluded that the 1916 Act was not violated by the perpetual reservation since with "special approval" the mineral rights reservation could be extended and that the 1943 regulation exempted the mineral rights from the five-year limit. Held: affirmed. The Eighth Circuit focused on the language in the 1916 Act that allowed federal land banks to hold either surface or mineral interests in excess of five years with special approval. The 1943 regulation constituted such special approval even though it took place well beyond the five-year period from when the FLB first obtained ownership of the interests eventually conveyed to the plaintiffs in 1938 and 1939. Thus, the five-year limit was not applicable to the FLB reserved 1/2 mineral interests and plaintiffs were not entitled to be declared the owners thereof.