No. 86-385
IN THE SUPREME COURT OF THE STATE OF MONTANA
ROBERT W. BENSON and MARGARET BENSON
GREENE, individually and ROBERT W.
BENSON, as personal representative of
the Estate of Clara Worthen Benson,
Plaintiffs and Appellants,
-vs-
GEORGE W. DIEHL and ELIZABETH DIEHL;
THE DIEHL RANCH COMPANY, a corp.,
and THE DIEHL COMPANY, A Montana corp.,
the heirs of GEORGE W. PADBURY; W.T.
McCULLOUGH; and KAIZER CEMENT AND GYPSUM
CORP., et al.,
Defendants and Respondents.
APPEAL FROM: District Court of the Fifth Judicial District,
In and for the County of Jefferson,
The Honorable Frank Davis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Morrison Law Offices; Frank Morrison, Sr. argued,
Helena, Montana
Robert M. Peterson argued, Boulder, Montana
For Respondent:
Gough, Shanahan, Johnson & Waterman; Ward A. Shanahan
argued, Helena, Montana (Kaiser)
Harrison, Loendorf & Poston; James T. Harrison, Jr.,
Helena, Montana (Diehl)
Hughes, Kellner, Sullivan & Alke; John L. Alke,
Helena, Montana (McCullough)
Submitted: June 3, 1987
Decided: August 21, 1987
Filed: AUG 2 1 1 8
97
Mr. Justice John C. Harrison delivered the Opinion of the
Court.
Plaintiffs appeal from the order of the Fifth Judicial
District in and for Jefferson County, Montana, granting
defendants' motion for summary judgment. We affirm the order
of the District Court.
The plaintiffs/appellants, Bensons, instituted a quiet
title action to approximately 120 acres in Jefferson County.
The record owner of the property, both surface and mineral
rights, is the defendant, Kaiser. The property was acquired
from Diehl, by warranty deed recorded October 3, 1978.
Kaiser has been in possession of the property since 1977
under a lease option agreement.
Bensons base their claim on a warranty deed in the
chain of title dated January 18, 1944 conveying the property
from Wyman P. Benson and Clara Worthen Benson to George
Padbury, Jr., George Diehl and W. T. McCullough. The deed
has no reservation of mineral interest. Bensons claim this
deed, which was not recorded until August 21, 1950, was
materially altered. They claim the original deed conveyed
land to George Padbury only, and reserved the mineral rights
to Bensons. McCullough is the only party to this deed who is
still living. The whereabouts of the original deed is
unknown, although Bensons have a document that they claim is
the unsigned copy of the deed they claim was altered. This
document contains a mineral reservation and George Padbury is
the sole grantee.
Plaintiff Robert Benson claims his father, Wyman
Benson, told him of the mineral reservation in 1945. Wyman
died in 1964. His estate was probated in Idaho, but the
mineral interest was not claimed as an asset. Clara Benson,
Robert's mother, who discovered the carbon copy of the
claimed deed, died in 1981. Her estate also was probated in
Idaho, and again the mineral reservation was not claimed as
an asset in her estate.
Sometime after the deed was recorded, the various
grantees engaged in partnership business activities involving
their properties. Eventually the property was mortgaged and
a number of quit claim deeds were filed. The District Court
did not find, however, that any of this activity pointed to a
material alteration of the deed or to any type of a caveat to
a title examiner that the deed had been altered.
It is from these facts the District Court concluded
Kaiser was entitled to summary judgment. Bensons appeal.
Summary judgment is proper when there are no genuine
issues of material fact. Rule 56 M.R.Civ P., Cereck v.
Albertson's, Inc. (1981), 195 Mont. 409, 637 P.2d 509. In
determining the appropriateness of summary judgment, the
court may review the complete file to determine whether there
is a genuine issue of material fact. Reagan v. Union Oil Co.
of Calif. (Mont. 1984), 675 P.2d 953, 41 St.Rep. 131. It is
incumbent on Bensons to present evidence of a "material and
substantial nature" which raises a genuine issue of fact in
order to defeat the summary judgment motion. B.M. by Berger
v. State of Montana (Mont. 1985), 698 P.2d 399, 401, 42
St.Rep. 272, 274.
We will consider whether there are genuine issues of
material fact precluding entry of summary judgment, and
whether the District Court erred in its application of the
doctrine of laches.
The foregoing rules clearly prescribe the parameters
within which we analyze summary judgment. The facts on which
the trial court based its ruling are not in dispute. The
documents purporting to prove that the deed was altered and
therefore could not have passed title to the mineral rights
to Kaiser, consist of an unsigned, carbon copy warranty deed
including a mineral reservation that is not on the recorded
deed. Robert Benson testified his father, Wyman, told him
about the mineral reservation in 1945, well before the deed
was recorded. Wyman died in 1946, his estate was probated in
Idaho, but the mineral interest was not claimed as an asset.
Nor was it claimed when Robert's mother's estate was probated
after her death in 1981. There is no question Kaiser relied
on the public record, which contains a warranty deed with
property descriptions that accurately reflect the Bensons'
homesteads. The deed was executed and notarized January 18,
1944, but not recorded until August 1950. Bensons argue,
however, the summary judgment order leaves numerous fact
questions unanswered. They contend the District Court
ignored Benson family records, which establish the
negotiation and sale of the Benson homesteads to George
Padbury only, and a jury should be allowed to determine which
deed is the true deed.
The District Court properly concluded the Benson family
records did nothing more than raise a suspicion that the
recorded deed was altered. A suspicion, regardless of how
particularized it may be, is not sufficient to sustain an
action or to defeat a motion for summary judgment.
Unsupported conclusory or speculative statements do not raise
a genuine issue of material fact. The trial court has no
duty to anticipate possible proof. Gates v. Life of Mont.
Ins. Co. (Mont. 1982), 638 P.2d 1063, 1066, 39 St.Rep. 16,
19.
The overriding issue is whether the public has a right
to rely on the public record. Bensons appear to be arguing
that a party cannot expect to rely on the public record, even
after a document has been of record for more than 30 years.
At the same time, however, they assumed it was placed on the
public record to their benefit. We find these two positions
to be contradictory, and agree with the District Court which
stated:
To sustain Plaintiff's position in this
case would require the Court to
completely ignore the recording statutes
...To hold otherwise would shake the
very foundation of established law and
standards applicable to record titles to
real property in Montana.
Bensons cannot have it both ways. Either the public
record can be relied on by all parties or it cannot.
Reversing the District Court, of course, would give a jury
the opportunity to determine whether the deed was altered.
Such a reversal also would cast doubt as to the validity of
every recorded deed and wreak havoc in the county courthouse.
More importantly, it would do nothing to resolve the issue of
the parties' rights under the deed in question.
Montana's statutory scheme provides that instruments
that are made with intent to defraud are "void as against
every purchaser or encumbrancer for value of the same
property or the rents or profits thereof." Section
70-20-401, MCA. The statutes, however, provide protection
for purchasers in good faith and for value in § 70-20-404,
MCA :
The rights of a purchaser or encumbrancer
in good faith and for value are not to be
impaired by any of the foregoing
provisions of this part.
It appears Bensons want to find the deed void pursuant
to § 70-20-401, MCA, while denying Kaiser the protection of 5
70-20-404, MCA, arguing it is not a bona fide purchaser.
This is inconsistent with the facts. The District Court
found "nothing in the abstract of title or the public record
. . . which would defeat Kaisers's status as a buyer in good
faith without notice." The statute cannot be read, as
Bensons argue, to affect the status of a grantee as a bona
fide purchaser in good faith for value. It must be read to
protect the grantee who is bona fide purchaser for value.
Kaiser purchased the property in good faith by relying on the
public record. Nothing on the record indicated any material
alteration to the deed which would put Kaiser on inquiry.
A person, in dealing with another in
respect to real estate, may rely on the
record title to the property, in the
absence of actual knowledge of the title
in fact, or of facts sufficient to put
him on inquiry in respect thereto. If
this were not so, no one would be safe in
purchasing real estate, or in loaning
upon the strength of it as security.
Kirgin v. Kirgin (1949), 123 Mont. 34, 38, 207 P.2d 557, 559.
The District Court found nothing that would point to a
material alteration of the deed or any type of caveat to a
title examiner that the deed had been altered. There is no
evidence of any matter that would put a reasonable person on
notice to inquire further. In short, there is nothing to
suggest that Kaiser is not a bona fide purchaser in good
faith and for value protected by § 70-20-404, MCA. Under the
facts of this case, this result obtains whether or not the
deed was altered.
Bensons argue the District Court should not have
applied the doctrine of laches. While this doctrine is not
sufficient in itself to sustain Kaiser's motion for summary
judgment, the delay by Bensons to assert their claimed rights
is of such duration and character as to render enforcement
inequitable. Clayton v. ~tlanticRichfield (Mont. 1986), 717
P.2d 558, 43 St.Rep. 717; Brabender v. Kitt (1977), 174 Mont.
63, 568 P.2d 547. There is no absolute rule pertaining to
the doctrine of laches and each case is determined upon its
own special circumstances. Matter of Estate of Wallace
(19801, 186 Mont. 18, 25, 606 P.2d 136, 140.
Bensons contend there must be a showing of negligence
for the doctrine of laches to apply. While it may be true
that Bensons had no duty to expunge a void deed to protect
the public at large, they slept on their rights by not
ascertaining the status of their property for nearly 40
years. If they believed the deed had been altered, they
should have acted to protect their interest, since the
alteration they claim was made clearly worked to their
disadvantage. However, for more than 40 years Bensons
assumed the deed had not been altered and that they retained
the mineral interest in the property. It was during this
period of time they slept on their rights, which militates
for application of the doctrine of laches. Robert Benson
testified his father informed him of the interest in 1944 and
again in 1945. He assisted in the probate of his father's
estate, yet did not list the property on the inventory and
appraisement list in 1964. While personal representative of
his mother's estate, Robert Benson again failed to list the
property in 1981. Apparently he made no effort on either
occasion to ascertain the correct status of the property. We
repeat the adage that the concept of laches is fundamental to
the notion of responsibility in general, and aids the
vigilant who do not sleep on, or neglect, their rights.
We also look to "unexplained delay which would render
enforcement of the asserted right inequitable.'' Peterson,
684 P. 2d at 1066. Bensons would have us find the District
Court in error because it applied the doctrine of laches by
deciding numerous genuine issues of material fact. These
facts, however, were not in dispute. The District Court
found no evidence in the record sufficient to explain
Bensons' delay. Nor do we. Absence from the state does not
excuse one from sleeping on his rights. Determination that
mineral interests are unprofitable is irrelevant to the issue
of delay in asserting one's ownership rights. If the deed
had been altered, Bensons' vigilance would have unearthed
that fact long ago. Bensons, however, predicate their entire
argument against application of the doctrine of laches on the
fact the deed had been altered. Thus their position with
respect to application of laches is untenable.
To permit Bensons to come forward now to claim property
that they have neglected for over 40 years would work a grave
injustice on Kaiser. Kaiser purchased the property,
correctly assuming it had clear title, and proceeded with
well announced plans to mine it. The District Court did not
err in applying laches, or in granting summary judgment.
We affirm.
We Concur:
Justices
Mr. Justice John C. Sheehy, dissenting:
The Court should first identify the true nature of the
instrument that is before us in this case. We are not
dealing with a void deed; we are instead dealing with an
alleged "altered instrument." There are sharp differences in
legal consequences which result from an altered instrument,
especially as concerns the nonconsenting party. It was
explained in Smith v. Barnes (1915), 51 Mont. 202, 211, 212;
149 P.963:
... Technically speaking, an "alteration" occurs
when a written contract is intentionally changed in
material respect after execution, by or at the
insistence of one of the parties, and without the
consent of the other ... The legal effect of an
alteration is to extinguish all the executory
obligations of the contract in favor of the parties
responsible as against the parties who do not
consent (Revised Codes 5 5069) ; and the appellant,
if the change was an alteration procured by him,
could not maintain this action, nor maintain any
action, upon the contract, either in its original
or its altered form (citing authority). - - But the
nonconsenting party loses no right. - is not
He - -
obliged - rescind - repudiate the contract - -
to or as it
actually was -
- made. He may ignore the change,
because - - - not expyess his contract, - -
it does and hold
the other party - - contract according - -
to the to its
original terms (citing authority); and this, a
right peculiar to the nonconsenting party in the
case of an alteration, is the final effect of a
spoliation as to both parties. The contract stands
as originally made, without regard to the change
(citing authority). So that, whether the change in
question was an alteration or a spoliation, the
right of Barnes to do what he seeks to do, and what
the allegations of fraudulent procurement were
clearly intended to entitle him to do, cannot be
assailed.
It is insisted in this connection, however,
that Barnes cannot stand upon the contract as it
was actually made, because of ratification or
waiver. This ratification or waiver is claimed
because of his retention of the first payment after
knowledge of the change, and 'because of his
failure to examine his own copy or that of the
bank, or to do anything to avoid the contract until
May, 1911'. There is no room for this contention
in the pleadings. Ratification and waiver are in
the nature of estoppel, and to be available, they
must be pleaded when an opportunity to make such
plea is presented. (Citing authority.) Not only
is there - -
- no such plea, - - point - -
but in of fact there
could - -
be none, because the issues - - upon
were made
the character - - contract as executed.
of the But
this claim of ratification or waiver also betrays a
misconception of Barnes' position. If, as we have
held, he could ignore the change and stand upon the
contract as made, he was certainly not required to
avoid it. It was his right to retain the first
payment, to permit the appellant to perform the
contract, and to forfeit the payment, if the
appellant failed. Unless Barnes received something
from the appellant under the contract as changed,
with knowledge of the change, his rejection,
through the bank, of appellant's tenders gave
notice of his refusal to abide the change. As he
was not required to avoid the true contract, and as
he could ignore the change until somethinq occurred
-
to compel him to accept or reject it, he could not
- -
- estopped by any action - inazion which
be or
amounted - anythinq --- acceptance - -
to less than an of the
change. (Emphasis supplied.)
The law is, or was until this case, in case of an
altered instrument, where the change was made without the
consent of the other party, the nonconsenting party was not
required to take any action, and thus there could be no
charge against him, until he accepted the change, relating to
laches, estoppel, waiver, or any like defense. In this case
therefore the discussion of laches, or the effect of
recording, under the facts adduced in this case, is
irrelevant. Here Benson acted when he learned that the other
party and his successors were relying on the altered portion
of the instrument.
We should reverse this case on the fact issue that is
presented. The District Court granted a summary judgment.
The fact issue to be determined in this case is whether we do
have before us an altered instrument. In that regard, we are
presented with the evidence of McCullough, who is named as a
grantee in the altered deed, and who now claims in oral
testimony that he was not a party to the deed, and had no
knowledge that he was a grantee under the deed. Militating
against his oral testimony now is an earlier deed that he
made, with others, granting to Diehl Company this and other
properties, but without a mineral reservation. This case
requires a trier of fact to determine whether there is
actually before us an altered instrument. If it does turn
out that the instrument has been altered, the legal
ramifications clearly follow. Laches and statutes of
limitations and recording statutes have no application until
the mining on the property has begun.
The reliance of the majority upon $ 70-20-404, MCA, to
protect Kaiser as an innocent purchaser for value is
ill-founded. Section 70-20-404, MCA, applies only to
fraudulent transfers made by grantors with fraudulent intent
to defraud prior or subsequent purchases or encumbrancers.
This instrument is not a fraudulent conveyance. It is an
altered instrument, if it was altered, and it was altered by
the grantee. This Court would do well not to mess up our
property law by applying statutes that have no application.
The rule is that in the case of altered instruments, a
deed fraudulently altered becomes void and a bona fide
purchaser from the person altering it takes nothing by it.
Mosely v. Magnolia Petroleum Co. (1941), 45 N.M. 230, 114
P.2d 740; 4 Am.Jur.2d.2c., Section 27, Alteration - of
Instruments. The purchaser protects himself by exacting from
his grantor the necessary covenants. The only effect of the
alteration of the mineral reservation was to cloud Benson's
title; the recording of an altered deed gives no notice to
anyone because the altered portion of the deed is void and
even a bona fide purchaser takes nothing by the alteration.
Rasmussen v. Olsen (Utah 1978), 583 P.2d 5 0 . The doctrine of
bona fide purchaser applies only to purchasers of legal title
to the mineral interest. Thomas v. Roth (Wyo. 19631, 386
P.2d 926.
d
I concur with the foregoing diss9nt.