No. 85-52
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
CARL E. ANDERSON, MARJORIE J. ANDERSON,
CARRIE M. BURCH, CONRAD E. BROWER,
CHARLES M. ANDERSON AND BARBARA SHERM,
Plaintiffs and Appellants,
RICHLAND COUNTY, a local government
in the State of Montana,
Defendant and Respondent.
APPEAL FROM: District Court of the Seventh Judicial District,
In and for the County of Richland,
The Honorable A. B. r art in, Judge presiding.
COUNSEL OF REC0R.D:
For Appellant:
Olsen, Christensen, Gannett & Waller; Paul G. Olsen,
Billings, Montana
For Respondent:
Victor G. K o c ~ ,argued, County Attorney, Sidney,
Montana
For Amicus Curiae:
James McCann, Roosevelt County Attorney, Mont. County
Attorney's Assoc., Wolf Point, Montana
Submitted: June 28, 1985
Decided: December 17, 1985
Filed: DEC 1 '7 1385
Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
The plaintiffs brought an action to quiet title to 6 % %
royalty interest claimed in the production of oil and gas
from a fractional section of Richland County land. Based on
stipulated facts, the Richland County District Court quieted
title in Richland County to the royalty interests. The
plaintiffs appeal. We affirm the judgment of the District
Court on a different theory than that expressed by that
court.
The determinative issues are:
1. Was the tax deed void because of defects in the sale
proceeding prior to issuance of the certificates cf tax sale,
or because of a lack of proper notice to the property owners
in the course of the tax deed proceeding?
2. If the tax deed was void, was the proceeding brought
by the Swigarts for a confirmation tax deed sufficient to
establish title in the Swigarts?
3. Was the exchange of deeds between the plaintiffs and
the successors of Swigart (the present surface owners) effec-
tive in validating the Richland County claim to the 6 % %
royalty?
4. Was the claim on the part of the plaintiffs barred
by laches extending over a period in excess of 40 years?
While other issues were raised by the parties, we do not
find it necessary to discuss them.
This cause was presented to the District Court upon an
agreed statement of facts with supporting affidavits, exhib-
its, and answers to interrogatories. The District Court
entered findings of fact, conclusions of law and a decree.
The uncontested facts are as follows:
The real estate consists of approximately 440 acres of
land in Richland County, Montana. The six plaintiffs are
children and grandchildren of Marius Anderson, who died in
1936, and are his only heirs. Marius Anderson became the
owner of an undivided one-half interest in the land under a
deed dated February 24, 1925, between Caskie M. Riddick and
Mary J. Riddick, as grantors, and Marius Anderson, as grant-
ee. The Riddicks who retained an undivided one-half interest
in the land are not parties to this action.
Taxes assessed against the land became delinquent for
the years 1.931 through 1942. Richland County procured a tax
deed to the land on September 24, 1943. On December 6, 1943,
Richland County deeded the land to Sterling Swigart with a
reservation of a 6%% royalty interest in all oil, gas and
minerals recovered and saved from the described lands.
Sterling Swigart and his heirs and successors have used and
occupied the land for grazing purposes since 1943.
Chapter 43, 1945 Mont. Laws contains a procedure for
securing a confirmation deed of conveyance to be issued by a
county treasurer for lands described in a tax deed previously
issued. Pursuant to that chapter, Sterling Swigart commenced
an action in 1947, and a judgment was entered in August 1947.
The Richland County Treasurer executed a confirmation deed of
conveyance to Sterling Swigart on August 27, 1947. The
confirmation deed stated that the validity of the tax deed
was doubtful; that by virtue of the judgment and decree of
the District Court, the County Treasurer had been ordered and
directed to issue the deed of conveyance; and that in confor-
mity to the judgment, the County Treasurer granted and. con-
veyed the land in question to Sterling Swigart. Neither the
judgment nor the confirmation deed recites Richland County's
reservation of a 6%% royalty interest.
All taxes levied subsequent to the tax deed have been
paid. No taxes are now delinquent.
Plaintiffs' complaint was filed on April 19, 1982,
approximately 39 years after the tax deed was issued. Since
1930, the plaintiffs and their predecessors-in-interest have
not paid or attempted to pay any taxes or assessments levied
against the property. The land was used by the Swigart
family for grazing. The parties who could testify to first-
hand knowledge of the facts of such use are now deceased, as
are the participants in the tax deed proceeding.
The royalty interest in oil, gas and minerals became
extremely valuable because of the development of a producing
oil well in 1977. The affidavit of the Clerk and Recorder
established that Richland County had received in excess of $1
million from this royalty by 1982.
From the early 1930's until commencement of the present
action, neither the plaintiffs nor their predecessors-in-in-
terest have been in possession of the land or any part of
it. One of the plaintiffs, however, did receive notice of
application for tax deed on July 15, 1943. Annie E.
McMahon, plaintiffs' predecessor-in-interest, received
notice of application for tax deed on July 14, 1943. In
1977, the Swigarts executed an oil division order recog-
nizing the royalty to be paid to Richland County.
In June 1983, the plaintiffs as heirs of Ma-rius Anderson
quitclaimed to the Swigarts' successors all of their interest
in the land, but reserved a 6%% royalty interest. In ex-
change the Swigarts' successors executed a quit claim deed
purporting to convey the 6 4 % royalty reserved by Richland
County. The curative effect, if any, of the
Swigart-plaintiffs deed is limited to their one-half interest
in the property.
The District Court concluded that the failure of the
court to describe the royalty reservation in the 1943
confirmation deed action did not negate the County's royalty
reservation. The court concluded that by reason of the
plaintiffs ' action in confirming the Swigarts ' ownership of
the minerals, and by reason of the plaintiffs' delay in
asserting their right of redemption until oil was found many
years after the right of redemption a.ccrued, the plaintiffs
have waived their right of redemption. The District Court
then concluded that Richland County is the owner of the
royalty interest in question. That conclusion is founded
partly upon the theory that the quit claim deeds between the
plaintiffs and the Swigarts validated the Richland County
roya.lty reservation.
We will refer to additional agreed facts in the course
of the opinion. The present opinion is a companion opinion
to Supreme Court cause no. 85-078, Richardson v. Richland
County which was decided by this Court on December 17 , 1985.
Readers are referred to Richardson for a more complete dis-
cussion of the rules of law that are controllj-ng in the
present case.
I
Was the tax deed void because of defects in the sale
proceeding prior to issuance of the certificates of tax sale,
or because of a lack of proper notice to the property owners
in the course of the tax deed proceeding?
Plaintiffs devote extensive argument to the claimed
insufficiency of the tax deed proceeding. As a result, they
contend they have a right of redemption which extends up to
the present time. Although we conclude there has been no
attempted redemption by the plaintiffs, we will discuss the
sufficiency of the tax deed proceeding.
Section 2187, R.C.M. 1921 & 1935 required that the
County Treasurer file an affidavit of publication of notice
o f t a x s a l e i n t h e o f f i c e o f t h e C l e r k and R e c o r d e r p r e c e d i n g
the actual tax sale. No such a f f i d a v i t s w e r e f i l e d with
regard t o t h e c e r t i f i c a t e s of t a x s a l e f o r t h e y e a r s 1930,
1931, 1937, 1938, 1939, 1940 a n d 1941. A p p a r e n t l y no t a x
s a l e c e r t i f i c a t e s w e r e i s s u e d f o r t h e y e a r s 1932 a n d 1936.
Under § 2195, R.C.M. 1921 & 1 9 3 5 , a copy o f t h e c e r t i f i c a t e
o f t a x s a l e s i g n e d by t h e County T r e a s u r e r was t o b e f i l e d i n
t h e o f f i c e o f t h e C l e r k and R e c o r d e r .
S e c t i o n 2209, R.C.M. 1921, a s amended i n 1929 a n d 1 9 3 3 ,
required that at least 60 d a y s b e f o r e a p p l i c a t i o n for tax
deed, the purchaser of property sold f o r delinquent taxes
must "serve upon the owner of t h e property purchased, if
known," a w r i t t e n n o t i c e . The a g r e e d f a c t s e s t a b l i s h t h a t t h e
c e r t i f i c a t e s o f t a x s a l e showed t h a t "Anderson & R i d d i c k " was
a-ssessed with t h e t a x e s . That r a i s e s a s i g n i f i c a n t q u e s t i o n
a s t h e p r o p e r t y owner was M a r i u s Anderson and t h e County had
a s t a t u t o r y o b l i g a t i o n t o a s s e s s t h e t a x e s i n h i s name.
In addition, the f i l e s i n t h e o f f i c e o f t h e C l e r k and
Recorder of Richland County established that a notice of
application for tax deed was mailed to "Heirs of Marius
Anderson, deceased, c a r e of M r s . M a r i u s Anderson, K a l i s p e l l ,
Montana." The a g r e e d f a c t s a l s o i n d i c a t e t h a t t h e r e c o r d s o f
t h e C l e r k and R e c o r d e r c o n t a i n a l e t t e r from M r s . Annie E .
McMahon, f o r m e r l y M r s . M a r i u s Anderson, l i v i n g a t 8829 F i r e -
s t o n e P l a z a , Los A n g e l e s , C a l i f o r n i a . The l e t t e r , d a t e d J u l y
14, 1 9 4 3 , was a d d r e s s e d t o t h e C l e r k a n d R e c o r d e r and s t a t e d
t h a t s h e had r e c e i v e d a n o t i c e a b o u t t a x e s due on some l a n d
i n R i c h l a n d County. She a d v i s e d s h e had n e v e r r e c e i v e d any
notice of t a x e s d u e a n d a s k e d t o b e i n f o r m e d what t h i s was
a l l about. The r e c o r d s e s t a b l i s h t h a t by l e t t e r , d a t e d J u l y
29, 1 9 4 3 , t h e C l e r k and R e c o r d e r r e s p o n d e d t o Mrs. McMahon.
H e a d v i s e d h e r o f t h e c h a i n o f t i t l e t o M a r i u s Anderson a n d
p o i n t e d o u t t h a t t h e A s s e s s o r ' s O f f i c e showed t h a t t h e l a n d
ha.d been a s s e s s e d t o Anderson & Riddick and t a x n o t i c e s had
been sent t o Anderson & Riddick. The C l e r k and Recorder
informed M r s . McMahon t h a t no t a x e s had been p a i d s i n c e 1 9 3 0
and t h a t t h e amount due was more t h a n t h e l a n d was w o r t h .
Notwithstanding t h a t information, no change i n p r o c e d u r e was
made and Richland County proceeded i n t h e o r d i n a r y manner t o
i s s u e a t a x deed on September 9 , 1943.
Section 2209, R.C.M. 1935 r e q u i r e d n o t i c e o f a p p l i c a -
t i o n f o r t a x deed t o t h e owner o f t h e p r o p e r t y . The r e c o r d
e s t a b l i s h e s t h a t t h e C l e r k and Recorder knew o f t h e d e a t h o f
P'iarius Anderson and had both the name and a d d r e s s of his
widow. The C l e r k and Recorder had a s t a t u t o r y o b l i g a t i o n t o
d e t e r m i n e who t h e h e i r s o f Marius Anderson might be and t o
make c e r t a i n t h a t a p p r o p r i a t e n o t i c e was g i v e n t o them. He
did not attempt any such i n q u i r y . The r e c o r d establishes
t h a t a s o f February 5 , 1 9 4 2 , Marius Anderson had f i v e s u r v i v -
i n g c h i l d r e n , a l l o f whom were l i v i n g i n K a l i s p e l l , Montana.
U n f o r t u n a t e l y t h e C l e r k a.nd Recorder d i d n o t i n q u i r e o f M r s .
McMahon a s t o t h e names and a d d r e s s e s o f t h e f i v e c h i l d r e n .
In addition, n e i t h e r t h e C l e r k and Recorder n o r t h e County
T r e a s u r e r t o o k any s t e p s t o c o r r e c t t h e l a c k of p r o p e r n o t i c e
of t a x a s s e s s m e n t , n o t i c e of t a x s a l e , and n o t i c e o f a p p l i c a -
t i o n f o r t a x deed t o t h e r e c o r d owner o f t h e p r o p e r t y .
The r e c o r d a f f i r m a t i v e l y e s t a b l i s h e s t h a t t h e C l e r k and
Recorder f a i l e d t o g i v e n o t i c e o f a p p l i c a t i o n f o r t a x deed t o
t h e owners o f t h e p r o p e r t y . I n addition, t h e record estab-
lishes a.n i n s u f f i c i e n t notice of tax sale, b a s e d upon t h e
failure t o assess the property in the name o f the owner,
Marius Anderson. We therefore c o n c l u d e t h a t t h e t a x deed
p r o c e e d i n g was v o i d .
I1
Was the proceeding brought by the Swigarts for a confir-
mation tax deed sufficient to establish title in the
Swigarts?
The proceeding requesting a confirmation deed from the
Richland County Treasurer was commenced by a complaint which
named Marius Anderson as a party defendant. The complaint
also named all "unknown heirs and devisees of any defendant
who may be deceased." In the affidavit for publication of
summons, the attorney for the plaintiff, Sterling Swigart,
stated that defendant Marius Anderson was deceased, that his
last known address was Kalispell, Montana, and that the
defendants named as unknown heirs and devisees do not reside
in Montana and their whereabouts could not be ascertained.
The affidavit concluded with the statement that personal
service of summons could not be made upon any of the unknown
heirs and devisees of any defendant. Based upon this affida-
vit, summons was apparently published. A decree was
utlimately entered on August 23, 1947, barring the named
parties d-efendant from exerting any claim to the property and
requiring the Fichland County Treasurer to issue a confirma-
tion deed of conveyance. The confirmation deed was issued to
Sterling Swigart.
This proceeding was subject to the same basic infirmity
as the tax deed proceeding. The record of the tax deed
proceeding in the Office of the Richland County Clerk and
Recorder established the name and address of Annie E.
McMahon, widow of Marius Anderson. She was neither named nor
properly served. In addition, the record of the tax deed
proceeding contained the letter to the Clerk and Recorder
from Mrs. McMahon with her Los Angeles address. Counsel for
plaintiff was obligated to make the minimum investigation to
determine the names and add.resses of the Anderson children,
who should also have been named as parties defendant and
properly served. In addition, the deficiencies with regard
to the assessment of taxes and notices of tax sale were not
corrected.
We find that the proceeding was ineffective as a basis
for issuing a confirmation deed. We conclude that the
confirmation deed was void in the same manner as the original
tax deed was void.
III
Was the exchange of deeds between the plaintiffs and the
successors of Swigart (the present surface owners) effective
in validating the Richland County claim to the 6 & % royalty?
We refer to the Richardson case for a detailed analysis
on this issue. As in Richardson, we conclude tha.t the spe-
cific exception in the plaintiffs' deed to the Swigart suc-
cessors of the 6%% royalty is comparable to a royalty
reservation in any other type of deed. We conclude that the
plaintiffs did not convey or give up any claim which they had
to the 6%% royalty interest claimed.by Richland County.
IV
Was the claim on the part of the plaintiffs barred by
laches extending over a period in excess of 40 years?
We refer to the Richardson case for its discussion
of all of the elements of laches and related factors, and
specifically adopt the same in the present case. We find the
following significant factors are determinative in this case:
1. Swigart and his successors have used and occupied
the land for grazing purposes since purchase from Richla-nd
County on December 6, 1943. They have paid all of the taxes
assessed upon such property after that date, and no taxes are
now delinquent.
2. Since at least 1943, the plaintiffs a-nd their prede-
cessors abandoned the property, have not claimed any right to
physical possession of the land, and have not paid any of the
taxes assessed against the land.
3. After a lapse of more than 30 years, the property
interest claimed has become extremely valuable.
4. Plaintiffs first learned of their claim after the
discovery of oil in 1977.
5. Prior to September 21, 1982, Richland County had
received in excess of $1 million in royalty payments from the
production of oil on the land.
6. Reimbursement of any royalties paid would fall upon
the taxpayers of Richland County.
7. The principal parties to the tax deed proceeding,
who could furnish firsthand knowledge concerning the facts,
are now deceased as are all the early occupants of the land
in question.
8. Plaintiffs have not shown by testimony or otherwise
the reasons for the unexplained delay in exercising their
asserted right between the 1943 tax deed and the filing of
the complaint in 1982.
9. Prior to 1982, None of the successors-in-interest
who followed Richland County, including the Swigarts, has
questioned the validity of the 6 & % royalty reservation on the
part of Richland County.
10. The plaintiffs have not in fact sought to redeem
the property, but have based their claims upon the exchange
deeds with the Swigarts' successors-in-interest.
As in Richardson, we conclude that the actions of the
plaintiffs in the present case do not meet the statutory
requirements for a redemption. Upon analyzing the foregoing
factors and balancing the equities for all- of the parties, we
conclude that there has been no reasonable excuse for the
delay and that all of the factors considered together make it
inequitable to allow the plaintiffs to assert their present
claim. That conclusion is enhanced by the significant change
in value of the royalty interest following the discovery of
oil.
The District Court in the entry of its judgment dated
November 13, 1984, based its conclusion on a different legal
theory than the laches theory, which we find to be control-
ling. Because the decision was correct even though based
upon a different legal theory, we affirm the District Court's
judgment that the 6&% royalty is vested in Richland County.
We concur:
Hon. M. ~ d e s
Sorte, District Judge
Sitting in place of Mr. Justice
L. C. Gulbrandson