Title washing is a highly contested, complicated issue unique to Pennsylvania. After the American Revolution, the State of Pennsylvania sold large tracts of land in northern and central parts of the state to cover wartime expenses. These out-of-state owners were difficult to locate and often failed to pay taxes on the land. In response, the Pennsylvania General Assembly passed legislation requiring owners of interests in “unseated” land to provide county commissioners with a description of the land, including any oil and gas severance thereon. (1) (2) (3) The legislation shifted the tax from a charge on the property owner to a charge on the property itself. In some cases, mineral severances were not reported, meaning later tax sales may included both surface and minerals in a result known as “title washing.” Title washing was legislatively discontinued in 1947, but this new rule did not retroactively void prior tax sales. (4)
In Herder Spring Hunting Club v. Keller, 143 A.3d 358 (Pa. 2016), the Supreme Court of Pennsylvania appeared to simplify title wash analysis by creating a three-part test, asking: (i) if the land is unseated; (ii) if the original mineral severance was unreported to the county or otherwise unnoted in the assessment records (i.e., was the severed mineral interest “unassessed”); and (iii) whether the tax deed purported to convey the entire land in fee. (5) If all three questions are answered affirmatively, the Herder Spring court ruled the tax sale conveyed the surface and the unassessed severed mineral estate, even if ownership of each was different.
When examining title to land in northern and central Pennsylvania it is important to be cognizant of title wash, especially when a tanning or lumber company such as Central Pennsylvania Lumber Company (“CPLC”), or a large landowner like Thomas Proctor, appear in title. In the 1890s, Thomas Proctor conveyed approximately 59,000 acres in Pennsylvania to the Elk Tanning Company, reserving the minerals thereunder. The Elk Tanning Company subsequently conveyed the land to CPLC.
Generally, a purchaser at a tax sale caused by their own failure to pay taxes cannot acquire a better title than originally owned. However, in 1896 the Pennsylvania Supreme Court held that this general rule does not apply to unseated lands since taxes on unseated lands were, as mentioned above, charges on the property itself; the owners did not have any personal responsibility to pay the taxes (Powell v. Lantzy, 173 PA. 543). CPLC allowed taxes on the land purchased from Thomas Proctor to become delinquent, causing the lands to become subject to tax sales; Calvin H. McCauley, Jr. and A. F. Jones then bought the lands at tax sales in June of 1908 and June of 1924. McCauley and Jones, being the Solicitor and Treasurer of CPLC, then conveyed the lands back to CPLC for minimal compensation, and CPLC and/or its successors claimed ownership of the minerals via title washing.
Thomas Proctor’s heirs have since challenged these claims in various Pennsylvania courts in multiple jurisdictions, which, despite the seemingly simple test set by the Pennsylvania Supreme Court in Herder Spring, have sometimes issued different and conflicting rulings on similar facts. This illustrates the complexities of title washing while further complicating its analysis. In Part Two of this series, we will examine several different opinions concerning ownership of minerals under Proctor lands and analyze how the hundreds of thousands of acres affected by title wash in Pennsylvania may be treated in the future.
Kuiper Law Firm, PLLC specializes in oil and gas issues; if you have any questions about how the information in this article may apply to you or your operations, do not hesitate to contact us.
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- “Unseated” land is undeveloped or unimproved and was designated as such by the assessor in the county land books.
- See the Act of 3 April 1804 and the Act of 28 March 1806.
- The recording of a deed severing the oil and gas in the subject county was not enough to provide notice to the county commissioners.
- Assessment of oil and gas was completely abolished in Pennsylvania by Independent Oil & Gas Ass’n of Pa. v. Fayette Cnty. Bd. Of Assessment Appeals, 814 A.2d 180 (Pa. 2002).
- The Herder Spring court stressed their holding does not apply to situations where minerals can be claimed through adverse possession.