Case Title: JAMES L. and PAMELA H. BENTLEY V. DIRECTOR OF THE OFFICE OF STATE LANDS AND INVESTMENTS; LYNNE BOOMGAARDEN, in her official capacity as Director of the Office of State Lands and Investments; BOARD OF LAND COMMISSIONERS; GOVERNOR DAVE FREUDENTHAL, SECRETARY OF STATE JOSEPH B. MEYER, AUDITOR MAX MAXFIELD, TREASURER CYNTHIA LUMMIS, and SUPERINTENDENT OF PUBLIC INSTRUCTION JIM McBRIDE, in their official capacities as members of the Board of Land Commissioners; WYOMING GAME AND FISH COMMISSION; WYOMING GAME AND FISH DEPARTMENT; and TERRY CLEVELAND, in his official capacity as Director of the Wyoming Game and Fish Department

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2007-06-08T00:00:00Z

Document:
JAMES L. and PAMELA H. BENTLEY V. DIRECTOR OF THE OFFICE OF STATE LANDS AND INVESTMENTS; LYNNE BOOMGAARDEN, in her official capacity as Director of the Office of State Lands and Investments; BOARD OF LAND COMMISSIONERS; GOVERNOR DAVE FREUDENTHAL, SECRETARY OF STATE JOSEPH B. MEYER, AUDITOR MAX MAXFIELD, TREASURER CYNTHIA LUMMIS, and SUPERINTENDENT OF PUBLIC INSTRUCTION JIM McBRIDE, in their official capacities as members of the Board of Land Commissioners; WYOMING GAME AND FISH COMMISSION; WYOMING GAME AND FISH DEPARTMENT; and TERRY CLEVELAND, in his official capacity as Director of the Wyoming Game and Fish Department2007 WY 94160 P.3d 1109Case Number: 06-131Decided: 06/08/2007
APRIL 
TERM, A.D. 2007

 
 
JAMES L. and PAMELA H. 
BENTLEY,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 
DIRECTOR OF THE OFFICE OF STATE 
LANDS AND INVESTMENTS; LYNNE BOOMGAARDEN, in her official capacity as Director 
of the Office of State Lands and Investments; BOARD OF LAND COMMISSIONERS; 
GOVERNOR DAVE FREUDENTHAL, SECRETARY OF STATE JOSEPH B. MEYER, AUDITOR MAX 
MAXFIELD, TREASURER CYNTHIA LUMMIS, and SUPERINTENDENT OF PUBLIC INSTRUCTION JIM 
McBRIDE, in their official capacities as members of the Board of Land 
Commissioners; WYOMING GAME AND FISH COMMISSION; WYOMING GAME AND FISH 
DEPARTMENT; and TERRY CLEVELAND, in his official capacity as Director of the 
Wyoming Game and Fish Department,

 
 
Appellees

(Defendants).

 
 
Appeal from the 
DistrictCourtofCarbonCounty

The Honorable Wade E. 
Waldrip, Judge

 
 
Representing 
Appellants:

 
 
Karen Budd-Falen and Brandon L. Jensen, Budd-Falen 
Law Offices, LLC, Cheyenne, 
Wyoming.  Argument by Mr. Jensen. 

 
 
Representing Appellees:

 
 
Patrick J. Crank, Attorney General; Michael L. 
Hubbard, Deputy Attorney General; Bridget Hill, Assistant Attorney General; C. 
Levi Martin, Senior Assistant Attorney General; Susan K. Stipe, Senior Assistant 
Attorney General.  Argument by Mr. 
Martin and Ms. Stipe.      

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, 
JJ.

 
 
BURKE, 
Justice.

 
 
[¶1]      In 1992, the 
State Board of Land Commissioners ("Board") began contemplating a sale of school 
lands in CarbonCounty where the Dome Rock 
Reservoir is located.  In response 
to public concern that sale of the land would prevent public use of the 
reservoir for fishing purposes, the Board approved an easement in favor of the 
Wyoming Game and Fish Commission in 1993.  
The land was subsequently advertised for public auction subject to the 
easement.  It was purchased by John 
Anselmi, who entered into an installment sales contract with the Board.  

 
 
[¶2]      In 2000, Mr. 
Anselmi assigned the sales contract to Appellants, James and Pamela 
Bentley.  A short time later, the 
Game and Fish easement was recorded with the county clerk.  In 2002, when the Bentleys made full 
payment under the sales contract, the State of Wyoming issued a patent conveying the land to 
them.  The Bentleys initiated this 
action in 2004, seeking a declaration that the easement was void, injunctive 
relief, and damages.  The district 
court upheld the validity of the easement and determined that the water rights 
appurtenant to the publicly auctioned land had also been transferred to Game and 
Fish.

 
 
[¶3]      On appeal, the 
Bentleys contend that the district court erred in dismissing their claims and in 
granting summary judgment to Appellees.  
They assert the Game and Fish easement is invalid.  They also claim ownership of the water 
rights associated with the property they acquired by assignment.  We affirm. 

 
 
ISSUES

 
 
[¶4]      The Bentleys 
present the following issues for review:

 
 

1.      
Whether the Wyoming Board 
of Land Commissioners failed to convey a valid, and legally enforceable, 
easement to the Wyoming Game and Fish Commission on January 7, 
1993?

            

2.      
Whether the Amortization 
Sales Contract conveyed immediate possession and equitable title to the 
Plaintiffs' successors-in-interest?

 
 

3.      
Whether the Patent issued 
to the Plaintiffs in 2002 relates back to the inception of title to the subject 
property, or June 3, 1993?

 
 

4.      
Whether the Plaintiffs 
purchased Section 16 without adequate notice of the 
easement?

 
 

5.      
Whether the Plaintiffs 
are the rightful owners of any and all water rights appurtenant to Section 16, 
including any water stored in the Dome Rock Reservoir (a.k.a. Indian Creek 
Reservoir)?

 
 
Appellees state the 
issues as follows:

 
 

1.      
Did the district court 
err when it dismissed appellants' causes of action relating to the Board of Land 
Commissioners' easement to the Wyoming Game and Fish 
Commission?

 
 

2.      
Did the district court 
err when it found that the water rights which were historically attached to 
Section 16 were severed by the easement and, therefore, conveyed to the Wyoming 
Game and Fish Commission?

 
 
FACTS

 
 
I. Property Ownership 
History

 
 
[¶5]      The property at 
issue here, Section 16, Township 27 North, Range 83 West of the 6th Prime Meridian ("Section 
16"), was granted to the State of Wyoming for the benefit of common schools upon 
admission as a state.  See The Wyoming Act of Admission, ch. 664, § 4, 26 
Stat. 222 (1890).  In 1975, the 
federal government issued a land patent for Section 16 to the State of 
Wyoming.  Dome Rock Reservoir ("reservoir"), also 
known as Indian Creek Reservoir, is located entirely within the boundaries of 
the property, and is considered a trophy fishery.  

 
 
[¶6]      In 1992, Mr. 
Frederick Werner proposed a sale of Section 16.  At that time, the property was leased 
for grazing and agricultural purposes to Ralph Crow and John Anselmi.  The Board gave preliminary approval of 
the sale at its May 7, 1992 meeting.  
However, after approval of the sale, the public voiced concern in 
opposition to the sale, fearing loss of access to the reservoir for public 
fishing.  A public hearing was held 
and, as a result of comments at the hearing, the Board decided it would grant an 
easement to the Wyoming Game and Fish Commission ("Game and Fish") to preserve 
public access to the reservoir.  At 
its public meeting on January 7, 1993, the Board approved an easement 
application from Game and Fish.  The 
application for easement specifically requested:

 

. . . an easement to 
provide public vehicular road access, a parking lot, and a 50' wide fishing 
easement around the shoreline of Dome Rock Reservoir.  The entire acreage will encompass 
approximately 12.30 acres. . . . The easement also grants the Wyoming Game and 
Fish any water rights that the Board may own in the 
reservoir.

 
 
The Board's approval was 
documented in Board Matter E-1A.  
Game and Fish paid the Board $26,500, the market value of the 
easement.

 
 
[¶7]      The Board 
approved Section 16 for sale at its public meeting on April 1, 1993.  The Board set the appraised value of the 
property at $91,000, the market value of the property after the easement to the 
Game and Fish, and authorized the Director of the Wyoming State Land and Farm 
Loan Office (now known as the Office of State Lands and Investments) to 
schedule, advertise, and conduct the public auction with a minimum bid of 
$91,000.  The Notice of Sale of 
State Land indicated that the land was being sold subject to the Game and Fish 
easement, stating:

 
 
The above described land 
will be sold subject to any rights-of-way or easements, including approximately 
12.3 acres to the Wyoming Game and Fish [Commission] for a fishing easement, 
access road, and parking area at Dome Rock Pond, or any previously granted 
interest in the land.

 
 
[¶8]      Mr. John Anselmi 
purchased the property for $120,000 at a public auction held in Rawlins, Wyoming.  
On June 3, 1993, Mr. Anselmi and the Board executed an Amortization Sales 
Contract ("Sales Contract") which provided:

 
 
These lands are conveyed 
subject to any rights-of-way or easements of record previously granted under the 
laws of the State of Wyoming or reserved to the 
United 
States upon or across the above described 
lands.

 
 
The Amortization Sales 
Contract was recorded in the Office of the CountyClerk 
for CarbonCounty on June 16, 
1993.  Mr. Anselmi assigned the 
Sales Contract to the Bentleys on October 12, 2000.  He also provided a warranty deed to the 
Bentleys stating that the property was subject to "all easements, reservations, 
restrictions and rights-of-way of record or apparent upon the ground."  

 
 
[¶9]      On November 28, 
2000, Easement No. 5382 was executed by the Governor and the Director of the 
Office of State Lands.  The easement 
was recorded in the Carbon County Clerk's Office on November 29, 2000.  This easement included use of the access 
road, parking area, and the fishing easement around the reservoir.  On its face, the easement does not 
convey any water rights to the Game and Fish.  However, it does incorporate by 
reference Board Matter E1-A which grants "any water rights that the Board may 
own in the reservoir."

 
 
[¶10]   On May 16, 2002, the State of 
Wyoming, in 
consideration of full payment and in conformity with Wyo. Stat. Ann. § 36-9-112, 
issued a patent conveying the property to the Bentleys.  The patent conveys the property 
"[s]ubject to any and all rights of way or easements of record previously 
granted under the laws of the State of Wyoming 
or reserved to the United 
States upon or across the above described 
lands."  The patent also states that 
the conveyance is:

 
 
Subject to the legal 
operation and effect of a Grant of Easement dated as of January 7, 1993 by the 
State of Wyoming to Wyoming Game and Fish Commission, recorded on November 29, 
2000 in the Carbon County Clerk's Office in Book 994, at Page 183, including the 
water rights described in the grant thereof and appurtenant thereto[.]   

 
 
The patent was recorded 
in the Carbon County Clerk's Office on May 24, 2002.  The public continues to use the 
reservoir for fishing and other recreation.

 
 
II. Water 
Rights

 
 
[¶11]   The Dome Rock Reservoir is an 
on-channel facility along Indian Creek, entirely located within Section 16.  Permit No. 6002RES, the primary permit, 
allowed the creation of the reservoir and provides for the storage of 65.15 
acre-feet of water within the Dome Rock Reservoir.  Permit No. 6002RES has a priority date 
of July 21, 1952 and is in good standing.

 
 
[¶12]   Secondary permits, which granted 
the authority to appropriate the stored waters of the reservoir to beneficial 
use are Permit No. 21152 (the Indian Grove Ditch No. 3), Permit No. 21154 (the 
Indian Ditch), and Permit No. 21155 (the Indian Grove Ditch No. 4).  These three secondary permits allocate 
the entire capacity of the reservoir to lands within Sections 16 and 21.1  The Bentleys currently own all the lands 
in Sections 16 and 21 that benefit from the water rights preserved in the 
permits.2  

 
 
III. Proceedings 
Below

 
 
[¶13]   On September 29, 2004, the Bentleys 
filed their Complaint for Declaratory and Injunctive Relief, Quiet Title, and 
Damages for Trespass.  With respect 
to the easement, the Bentleys claimed that the easement was not valid, sought to 
quiet title, and requested damages for trespass and a temporary taking.  With respect to the water rights, the 
Bentleys took the position that, as owners of the lands benefiting from the use 
permits, they are the owners of the water in the reservoir.3  Appellees filed a Motion to Dismiss 
pursuant to W.R.C.P. 12(b)(6), for failure to state a claim upon which relief 
can be granted.  The district court 
granted that motion in part, disposing of the Bentleys' first, second, fifth, 
and sixth causes of action, ruling that the Game and Fish holds a valid 
easement.  The district court denied 
the motion to dismiss the Bentleys' third and fourth causes of action pertaining 
to water rights associated with Section 16.  Subsequently, the parties submitted 
cross-motions for summary judgment on the Bentleys' water rights claims.  The district court resolved the case by 
granting summary judgment in part for both parties.  It concluded that the water rights for 
irrigation of Section 16 were conveyed to the Game and Fish, but that the 
Bentleys own the water rights appurtenant to Section 21.  The Bentleys 
appealed.

 
 
DISCUSSION

 
 
I. Dismissal of Easement 
Claims

 
 
[¶14]   The Bentleys challenge the district 
court's dismissal of their claims seeking to extinguish the easement and recover 
damages. The district court concluded that the Bentleys' easement-related claims 
-- styled as actions seeking declaratory relief, quiet title, trespass damages, 
and compensation for taking -- failed to state any claims upon which relief 
could be granted.  Pursuant to 
W.R.C.P. 12(b)(6), the district court granted Appellees' motion to dismiss.   

 
 
[¶15]   On appeal, the Bentleys claim that 
their ownership of Section 16 is not subject to the easement because: 1) the 
easement was not created and validly established prior to their purchase of the 
property; and 2) they had no notice of the easement at the time they purchased 
the property.  Invoking bona fide 
purchaser status, they assert the easement cannot be enforced against them, 
relying upon the operation of Wyo. Stat. Ann. § 34-1-120.  The Bentleys' argument is premised on 
the nature of the State's ownership after the Sales Contract was executed.  As stated in their brief, "as of June 3, 
1993, the State of Wyoming no longer owned Section 16; and therefore, no longer 
owned any interest in which to convey an easement."  The Bentleys contend that any interest 
granted by the State after June 3, 1993, cannot be enforced against 
them.

 
 
[¶16]   This Court will sustain a dismissal 
only if the complaint shows on its face that the plaintiff was not entitled to 
relief under any set of facts.  Hochalter v. City of Gillette, 2005 WY 125, ¶ 9, 120 P.3d 674, 677 (Wyo. 
2005); Natrona County v. Blake, 2003 WY 170, ¶ 5, 81 P.3d 948, 950-51 (Wyo. 2003).  The "facts 
alleged in the complaint are admitted and the allegations must be viewed in the 
light most favorable to plaintiffs.  
Dismissal is a drastic remedy, and is sparingly granted."  Cranston v. WestonCounty 
Weed & Pest Bd., 826 P.2d 251, 254-55 (Wyo. 1992); Darrar 
v. Bourke, 910 P.2d 572, 575 (Wyo. 1996); 
Wilson v. Town of Alpine, 2005 WY 57, ¶ 4, 111 P.3d 290, 291 (Wyo. 2005).

 
 
[¶17]   The Bentleys' complaint describes 
or incorporates several documents pertaining to Section 16.  We find it helpful to begin our 
discussion by examining these instruments, determining the nature of the 
interests created, and the legal effect.  
We consider first the instruments pertaining to the Bentleys' ownership, 
followed by analysis of the easement.  
Finally, we discuss the interplay between the instruments to determine 
whether the Bentleys stated any claims for relief concerning the easement.  

 
 
A. Bentleys' 
Ownership

 
 
1. Sales 
Contract

 
 
[¶18]   After he was the successful bidder 
at the public auction, Mr. Anselmi and the State entered into the Sales Contract 
on June 3, 1993.  The Sales Contract 
was an installment land contract, specifically authorized by statute.4  In an installment land contract, the 
seller agrees to accept payments from the buyer, usually over a period of time, 
until the price set by the contract has been paid.  In re Estate of Ventling, 771 P.2d 388, 
389 (Wyo. 
1989).  When all payments have been 
made, the seller is bound to convey title to the buyer.  Id.

            
 

[¶19]   Pursuant to Wyo. Stat. Ann. § 
36-9-107(b) (LexisNexis 2005), the buyer must record an installment contract for 
the purchase of state lands in the county where the property is located.  The Sales Contract was recorded in 
CarbonCounty on June 16, 1993.5  Throughout their appeal, the Bentleys 
attribute significance to the date of the Sales Contract.

 
 
[¶20]   However, both the statutory 
provisions governing the sale of public lands and our jurisprudence recognize 
that even after the date of the Sales Contract, legal title remained with the 
State.  Pursuant to Wyo. Stat. Ann. 
§ 36-9-112(a), fee ownership of Section 16 could be transferred only by 
patent.  That provision 
states:

 
 

Whenever 
the purchaser of any state land, or his assign, has complied with all the 
conditions of this act and has paid all the purchase money therefor, together 
with the lawful interest thereon, he shall receive a patent for the land 
purchased. Such patent shall run in the name of the state of Wyoming, it shall be 
signed by the governor, and countersigned by the director, and attested by the 
seal of the board. Such patent signed 
and executed as aforesaid shall convey a good and sufficient title to the 
patentee therein named. A fee interest in any state land may be perfected only 
as herein provided and only by express grant by the state of Wyoming for that 
purpose. 

 

Wyo. Stat. Ann. § 
36-9-112(a) (LexisNexis 2005) (emphasis added).

 
 
[¶21]   The Bentleys generalize the Sales 
Contract as the "purchase" of Section 16.  
They fail to recognize that, when the Sales Contract was assigned to 
them, it was still an executory contract and remained so until its terms were 
fulfilled.  A contract is executory 
"where something remains to be done by one or more of the parties" and a 
"contract for the sale of land is wholly executory until the conveyance is 
made."  State Highway Comm'n v. Rollins, 
Wyo., 471 P.2d 324, 327 (1970), quoting 8A, Thompson on Real Property, § 4441, pp. 249-50 (1963 
Repl.).  An installment land 
contract is a contract for sale, not a sale in itself.  Id.

 
 
[¶22]   Long ago, this Court construed 
statutory provisions governing the disposition of state lands similar to those 
applicable in this case and considered the buyer's interest under an installment 
contract.  Olds v. Little Horse Creek Cattle Co., 
22 Wyo. 336, 
140 P. 1004 (1914).  Olds clearly identifies the buyer's 
interest as equitable, and incomplete, in nature.  140 P.  at 1008.  The buyer "does not acquire a complete 
equitable title until upon paying the purchase-money and complying with the 
other conditions precedent he has become entitled to a conveyance."  Id.  The State possesses the same rights as 
any other seller under an installment land contract and continues to retain 
legal title to the property.  
Id. at 
1008-09.  Until the full purchase 
price is paid, the State "is not bound to convey; there are many uncertain 
events to happen before it will be known whether [it] will ever have to convey, 
and [it] retains for certain purposes, [its] old dominion over the estate."  Id. 
at 1008.  Therefore, the Bentleys 
could not acquire full "equitable title" until they were entitled to a patent, 
i.e., when full payment under the Sales Contract had been made.  Id. 
at 1011.  Since our decision in Olds, our jurisprudence has affirmed 
that a buyer's interest under an installment land contract is equitable in 
nature, and legal title remains with the seller.  Ventling, 771 P.2d  at 389.  Thus, under the executory Sales 
Contract, the State retained legal title to Section 16 and transferred only a 
limited equitable interest.

 
 
2. Assignment to 
Bentleys

            

[¶23]   On October 12, 2000, Mr. Anselmi 
assigned his interest in the Sales Contract to the Bentleys.6  Applying the principles outlined above, 
it is evident that the Bentleys acquired a limited equitable interest in Section 
16 from Mr. Anselmi.  The Sales 
Contract, as assigned, was still executory, and neither Mr. Anselmi nor the 
Bentleys were entitled to a conveyance of legal title until the conditions of 
the Sales Contract were performed.  
Through the assignment, the Bentleys took the place of Mr. Anselmi, 
assuming the risks inherent in purchasing an equitable interest, which is 
subject to outstanding equities and possible imperfections.  77 Am. Jur. 2d Vendor and Purchaser § 373 (2006).  In Caldwell v. Bush, 6 Wyo. 342, 353, 45 P. 488, 
490 (1896), we highlighted the uncertainty of purchasing such an equitable 
interest noting, "the doctrine of caveat emptor applies." 

 
 
3. Patent to 
Bentleys

            

[¶24]   After the Bentleys made full 
payment under the Sales Contract, they received a patent in accordance with Wyo. 
Stat. Ann. § 36-9-112(a).  Patent 
number 2992 issued on May 16, 2002, and was recorded on May 24, 2002.  The patent specifies that the Bentleys' 
title to Section 16 is subject to the easement.  Although the Bentleys have framed their 
causes of action and arguments on appeal as if there are inconsistent claims to 
Section 16, the patent is consistent with the existence of the easement.   

 
 
[¶25]   The Bentleys' real complaint is 
that they do not believe their patent conveyed all they were entitled to receive 
under the Sales Contract.  However, 
once a contract for the sale of realty has been executed, its provisions merge 
with the conveyance and are no longer separately enforceable.  Rehnberg v. Hirshberg, 2003 WY 21, ¶ 13, 
64 P.3d 115, 119 (Wyo. 2003).  The 
Bentleys' rights are therefore controlled by the patent.  Id.  See also Bakken v. Price, Wyo., 613 P.2d 1222, 
1227-29 (1980).  Because the patent 
specifies that title is subject to the easement, the Bentleys' title is indeed 
subject to the easement.          

 
 
4. Equitable 
Doctrines

 
 
[¶26]   The Bentleys acknowledge that they 
did not obtain legal title until the patent issued in 2002, but they assert that 
two principles  relation back and equitable conversion  apply under the 
circumstances.  According to the 
Bentleys, equity transforms the nature of the interests discussed above to 
recognize in them full ownership of Section 16 prior to the patent.  They reason that their full ownership in 
Section 16 thereafter divested the State of the ability to convey an easement to 
Game and Fish.  As explained below, 
however, we do not find either of the equitable doctrines to have that 
effect.

 
 
a) Doctrine of 
Relation

 
 
[¶27]   The Bentleys contend the patent 
relates back to the inception of their interest in Section 16.  According to them, relation back makes 
their patent effective as of June 3, 1993, the date of the Sales Contract.  The Bentleys rely upon Roberts v. Hudson, 25 Wyo. 505, 507-10, 173 P. 786, 787-88 (Wyo. 1918), where the 
doctrine of relation was applied to uphold a mortgage granted by a patentee 
prior to receiving his patent.  Roberts involved patented lands acquired 
by entry.  The Court observed, 
"[t]he general [principle] unquestionably is, that a Government patent, when 
issued, relates back to the original entry, and perfects and makes valid any 
attempted transfer by the patentee intermediate the entry and patent." 
Id. at 787.  

 
 
[¶28]   The Bentleys do not find any 
meaningful distinction between the equitable interest acquired by entry in Roberts and their interest under the 
Sales Contract.  However, one 
distinction is clear: the patentee in Roberts had achieved complete equitable 
ownership by fulfilling every condition necessary to his patent.  "Having made his filing, paid the 
initial payment, made proofs of the required expenditures for the three years 
and having submitted his final proof before he gave the mortgage he had then 
done all that he was then required to do or could do to entitle him to a 
patent."  Roberts, 173 P.  at 787 (emphasis 
added).  Here, there is no dispute 
that the conditions of the Sales Contract were not satisfied on June 3, 
1993.  

 
 
[¶29]   Still, we have held that an 
imperfect equitable right in land may suffice to apply the doctrine of 
relation.  Walliker v. Escott, Wyo., 
608 P.2d 1272, 1277 (1980).  In 
Walliker, the patentee had given quitclaim deeds to third parties 
before receiving her patent.  The 
deeds were upheld, as equity required.  
Id.  As a function of equity, the contours of 
the doctrine of relation are difficult to state with precision.  Recently, we recognized Walliker as presenting "a classic 
relation-back case, founded in the traditional land entry to patent 
rationale."  Kennedy Oil v. Lance Oil & Gas Co., 
2006 WY 9, ¶ 19, 126 P.3d 875, 881 (Wyo. 2006).  Ultimately, the doctrine "is a fiction 
of law resorted to whenever justice requires."  Roberts, 173 P.  at 787.            

 
 
[¶30]   In contrast to Walliker, this is not a classic relation 
back situation.  Even when viewed in 
a light most favorable to the Bentleys, it is clear they seek relation back of a 
legal title they have not acquired.  
They claim entitlement to an unencumbered fee interest in Section 16, 
free from the easement, under the Sales Contract.  However, we have never applied the 
doctrine of relation to rectify a perceived deficiency in a patent, i.e., the 
owner's claim that his earlier, equitable interest was not fully realized by the 
conveyance.  The Bentleys provide no 
legal authority for this novel use of the doctrine of relation.   

 
 
[¶31]   The Section 16 patent, by its 
terms, conveyed title subject to the easement.  Even if we were to conclude that the 
patent related back to June 3, 1993, that legal fiction would not provide the 
Bentleys the relief they desire.  
Under these circumstances, the district court properly concluded that the 
Bentleys did not present any reason and justice did not require the application 
of the doctrine of relation.

 
 
 
 
b) Equitable 
Conversion

            

[¶32]   The Bentleys assert that equity 
made them full owners of Section 16 and divested the State of ownership before 
the patent issued.  Although they do 
not identify the doctrine of equitable conversion by that name, we interpret 
their argument as seeking its application.  
"The equitable conversion theory treats the interest of the purchaser to 
be tangible real estate from the time the installment land contract or contract 
for deed is executed and considers the purpose of the retention of title by the 
vendor to be a security interest, with the contractual right to the balance of 
the purchase price treated as personalty."  
Ventling, 771 P.2d  at 
390.  

 
 
This rule, for many 
purposes, determines in equity the rights of the parties and others who have 
succeeded to the interest of either party by transfer or otherwise; and the rule 
is itself but the consequence of the familiar doctrine of courts of equity that 
for many purposes things agreed to be done are treated as if they were actually 
done . . . .

 
 

Olds, 140 P.  at 1007.  Stated another way, equitable conversion 
flows from the maxim that "equity regards and treats as done what, in good 
conscience, ought to be done."  Ventling, 771 P.2d  at 
390.

 
 
[¶33]   We rejected the application of 
equitable conversion to installment land contracts in both Ventling and Olds.  Ventling noted the problems that may 
arise when equitable conversion is applied, and held that a judgment lien does 
not attach to the buyer's equitable interest.  771 P.2d  at 390-392.  Olds rejected application of the 
doctrine to obligate the buyer to pay taxes on state land, preventing that land 
from being sold at a tax sale.  140 P.  at 1007-1013.  This Court also 
rejected the doctrine in Moncrief v. 
Louisiana Land & Exploration Co., 861 P.2d 516, 518, 529 (Wyo. 1993) (on 
rehearing, overruling Moncrief v. 
Louisiana Land & Exploration Co., 861 P.2d 500 (Wyo. 1993) (applying 
equitable conversion to farm-out agreement)). 

 
 
[¶34]   In support of their claim that 
their equitable interest in Section 16 was the equivalent of full ownership, the 
Bentleys rely upon language appearing in Pedro/Aspen, Ltd. v. Board of County 
Comm'rs, 2004 WY 84, ¶¶ 17-18, 94 P.3d 412, 418 (Wyo. 2004), Dubray v. Howshar, 884 P.2d 23, 26 (Wyo. 
1994), and Mayflower Restaurant Co. v. 
Griego, 741 P.2d 1106, 1113 (Wyo. 1987).  Taken out of context, quoted portions 
from these cases seem to support the Bentleys' view.  Mayflower, 741 P.2d  at 1113 ("When 
property is sold under a valid contract and an escrow created, the purchaser 
under the contract is the equitable owner and assumes all the risk, including 
liability of ownership, while the seller holds legal title in trust for the 
purchaser as security for the performance of the contract."); Dubray, 884 P.2d  at 26; Pedro/Aspen, ¶ 17, 94 P.3d  at 418 ("We 
have held the vendor under a typical contract for deed has parted with title, 
possession, and control of the property.").  

 
 
[¶35]   However, the cases the Bentleys 
rely upon did not involve questions of title and competing claims to 
property.  Mayflower and Dubray addressed tort liability and the 
duty of vendors of property in that regard.  Mayflower, 741 P.2d  at 1113; Dubray, 884 P.2d  at 26.  In Pedro/Aspen, a buyer under a contract 
for deed was held to have standing to challenge a county's zoning 
regulation.  Pedro/Aspen, ¶¶ 15-23, 94 P.3d  at 
417-19.  We do not disagree that an 
equitable interest in property may be relevant to inquiries regarding standing 
to maintain a suit or premises/tort liability.  When these cases are considered in 
context, however, they simply do not provide support for the Bentleys' claims in 
this case.  Again, the Bentleys' 
complaint demonstrates that their interest under the Sales Contract was an 
incomplete equitable interest, and legal title to Section 16 remained with the 
State.  

 
 
B. 
Easement

 
 
[¶36]   The Bentleys challenge the validity 
of the easement, in large part, based upon their understanding of their 
ownership interest in Section 16 at various points in time.  As to the recorded grant, they assume 
that the State lacked any ability to make that conveyance in 2000 because it had 
previously conveyed Section 16 pursuant to the Sales Contract.  The Bentleys therefore focus upon the 
Board's actions in early 1993 and conclude that no valid easement predates the 
Sales Contract.  

 
 
1. Board Matter 
E-1A

 
 
[¶37]   The district court found that Board 
Matter E-1A created a valid easement.  
Board Matter E-1A describes the Game and Fish request for "an easement to 
provide public vehicular road access, a parking lot, and a 50' wide fishing 
easement around the shoreline of Dome Rock Reservoir.  The entire acreage will encompass 
approximately 12.30 acres. . . . The easement also grants the Wyoming Game and 
Fish any water rights that the Board may own in the reservoir."  Board Matter E-1A also documents Board 
approval of the Game and Fish application.  
The Bentleys' complaint also recites that Game and Fish paid $26,500 in 
exchange for the easement encompassing approximately 12.3 
acres.

 
 
[¶38]   No official grant of easement was 
recorded until 2000.  The Bentleys 
claim that the failure to formalize the grant and to record it in a timely 
fashion renders the easement unenforceable against them.7  We agree with the Bentleys that the 
Board's approval lacked material terms and formalities required in a formal 
conveyance of an interest in state land, but we also agree with the district 
court that the intent to create an easement was demonstrated by the Board's 
actions.  Board Matter E-1A showing 
the application, approval, and recited consideration, reflected a clear intent 
to convey the easement in the future.  
4 Powell on Real Property § 34.05 (Michael Allan Wolf ed., 2007).  This documented intent may not have the 
formal, legal significance of creating an easement, but it is highly relevant to 
a determination of competing equitable interests in land.  Id.    

 
 
2. Easement No. 
5382

            

[¶39]   The Board of Land Commissioners has 
discretionary authority to grant public easements over state lands.  Wyo. Stat. Ann. § 36-9-118 (LexisNexis 
2005) provides: 

 
 
The board of land 
commissioners may, at their discretion, grant permanent rights-of-way or 
easements across or upon any portion of state or school lands, upon such terms 
as the board may determine, for any ditch, reservoir, railroad, public highway, 
telegraph and telephone lines, or other public 
conveyances.

 
 
Having already determined 
that the State held legal title to Section 16 on the date it granted the 
easement, we reject the Bentleys' repeated assertions that the November 28, 2000 
grant was void on that basis.

 
 
C. Which 
Instrument/Interest Prevails?

 
 
1. Recording Act and Bona 
Fide Purchaser Status

 
 
[¶40]   The parties have asserted various 
arguments regarding "notice" without the benefit of an orderly or meaningful 
analysis of the various legal and equitable interests involved.   We begin with the pertinent 
provision of the recording act:

 
 
§ 34-1-120. Unrecorded 
conveyance void as to subsequent purchasers recording first. 

 

Every conveyance of real 
estate within this state, hereafter made, which shall not be recorded as 
required by law, shall be void, as against any subsequent purchaser or 
purchasers in good faith and for a valuable consideration of the same real 
estate or any portion thereof, whose conveyance shall be first duly 
recorded.

            

To prevail in a contest 
under Wyo. Stat. Ann. § 34-1-120 (LexisNexis 2005), the Bentleys must show that 
they have the status of a "bona fide purchaser," which is: (1) a purchaser in 
good faith; (2) for a valuable consideration, not by gift; (3) with no actual, 
constructive or inquiry notice of any alleged or real infirmities in the title; 
and (4) who would be prejudiced by the cancellation or reformation.  Grose v. Sauvageau, 942 P.2d 398, 402 
(Wyo. 
1997).  The Bentleys do not discuss 
their burden in this regard.  
Rather, they simply assume that they are bona fide purchasers under Wyo. 
Stat. Ann. § 34-1-120 and are entitled to void the easement.  We gather that they reach this 
conclusion because the Sales Contract was recorded on June 16, 1993, before the 
easement was recorded in 2000.  

 
 
[¶41]   The State asserts that the easement 
was created and placed of record prior to 2000.  The State suggests that Matter E-1A and 
related documents predating Easement No. 5382 were recorded because they were 
available to the public at the Office of State Lands and Investments.  We have expressly rejected the notion 
that such filings amount to recording under the recording act.  Torgeson v. Connelly, Wyo., 
348 P.2d 63, 66 (1959).  "[T]he 
Wyoming 
legislative provisions are definite that the filing or leaving of a conveyance 
in any office other than that of the register of deeds cannot constitute 
constructive notice."  
Id.  
Thus, we focus upon Easement No. 5382, recorded on November 29, 2000, as 
the only conveyance pertaining to the easement which was recorded in the real 
property records in CarbonCounty.    

 
 
[¶42]   The Bentleys assert they were 
purchasers in good faith whose conveyance was recorded prior to Easement No. 
5382 and, therefore, their ownership of Section 16 is not subject to the 
easement.  A statutory definition 
for purchaser is provided: "The term purchaser', as used in this act shall be 
construed to embrace every person to whom any estate or interest in real estate 
shall be conveyed for a valuable consideration, and also every assignee of a 
mortgage or lease, or other conditional estate."  Wyo. Stat. Ann. § 34-1-101 (LexisNexis 
2005).  Conveyance is also defined 
by statute: 

 
 
The term "conveyance", as 
used in this act, shall be construed to embrace every instrument in writing by 
which any estate or interest in real estate is created, alienated, mortgaged or 
assigned, or by which the title to any real estate may be affected in law or in 
equity, except wills, leases for a 
term not exceeding three (3) years, executory contracts for the sale or 
purchase of lands, and certificates which show that the purchaser has paid 
the consideration and is entitled to a deed for the lands, and contain a promise 
or agreement to furnish said deed at some future time.

 
 
Wyo. Stat. Ann. § 
34-1-102 (LexisNexis 2005) (emphasis added).

 
 
[¶43]   We accept that the Bentleys, who 
were paying valuable consideration and expecting a conveyance of Section 16, 
were "purchasers" within the meaning of the recording act.  However, they did not receive a 
conveyance to Section 16 until they received the patent.  The Sales Contract was an executory 
contract, specifically excluded from the statutory definition of 
conveyance.  Accordingly, the fact 
that the Sales Contract was recorded does not change the operation of Wyo. Stat. 
Ann. § 34-1-120.8  By its express terms, the statute 
provides no protection for a purchaser who was not the first to record a 
conveyance.  For purposes of this 
appeal, the first conveyance to be recorded was Easement No. 5382.  The Bentleys' conveyance, the patent, 
was recorded two years later.

 
 
[¶44]   Moreover, the Bentleys are likewise 
ineligible for protection under the recording act because they cannot 
demonstrate that they are bona fide purchasers.  Under the third prong of that inquiry, 
the Bentleys would have to prove that they lacked "actual, constructive or 
inquiry notice of any alleged or real infirmities in the title" to Section 16. 
Grose, 942 P.2d  at 402.  This they cannot do.  While they might not have discovered 
documentation of the easement before they received their assignment from Mr. 
Anselmi, the assignment itself reflects a defect in the title, i.e., it was 
retained by the State.  Any effort 
to check the county clerk's records would have revealed that Mr. Anselmi lacked 
the ability to convey legal title to Section 16.  It is apparent that the Bentleys did not 
make such efforts.  

 
 
[¶45]   The Bentleys' claims that they 
lacked notice of the easement are solidly refuted by the very facts alleged in 
their complaint.  Their complaint 
states that at the time of their purchase, Section 16 featured a roadway to the 
reservoir, a parking lot, and signs announcing that the reservoir is a public 
fishery.  Also, members of the 
public used the fishery.  According 
to the Bentleys, that public use was known to them and was ongoing.  The improvements visible upon physical 
inspection of the property, as well as the continual access and use by the 
public, provided inquiry notice of an easement.  Perhaps conceding the import of these 
facts, counsel for the Bentleys admitted actual knowledge of the easement at the 
hearing on the motion to dismiss.9 

 
 
[¶46]   As the foregoing demonstrates, the 
Bentleys' reliance upon the recording act to void the easement is misplaced.10  The protections afforded by recording 
acts generally do not extend to equitable interests as such holders are not 
considered bona fide purchasers. 77 Am. Jur. 2d Vendor and Purchaser § 355 (2006); See also 77 Am. Jur. 2d Vendor and Purchaser § 373, § 375, § 376 
(2006).  It is apparent from their 
pleading that the Bentleys are not entitled to relief under Wyo. Stat. Ann. § 
34-1-120.  

 
 
2. 
Equity

 
 
[¶47]   A purchaser under an installment 
contract, although lacking a conveyance, may have a remedy in equity.  However, resort to principles of equity 
is of no assistance to the Bentleys.  
Their equitable interest was preceded in time by a public interest, 
documented in public records, of which they had knowledge. 

 
 
[¶48]   When the recording act does not 
control, a pertinent common law maxim is "he who is first in time has the better 
right."  Low v. Sanger, Wyo., 
478 P.2d 60, 63 (1970).  The 
inchoate, equitable interest purchased by Game and Fish arose prior to the 
Bentleys' equitable interest under the Sales Contract.  Generally, "[t]he equitable interest of 
a purchaser under a contract of sale is subject to the interest of a person 
claiming under the vendor under a prior transaction, whether such prior 
transaction was effective to give a legal interest or merely an equitable 
interest."  77 Am. Jur. 2d 
Vendor and Purchaser § 355 (2006) (footnote omitted).  "Where the purchase is only of an 
equitable title, it is ordinarily taken with all its imperfections and 
outstanding equities, notwithstanding the fact that a valuable consideration may 
have been given and that there may have been no notice of the equity or defense 
against the title."  77 Am. Jur. 2d 
Vendor and Purchaser § 373 
(2006).  Accordingly, the Bentleys' 
ownership of Section 16 could equitably be made subject to a prior equitable 
interest, even if they had no knowledge of it.

 
 
[¶49]   However, the Bentleys did have 
knowledge of public use.  There is 
no indication that they possessed Section 16 in a manner that was inconsistent 
with the easement.  The public 
continued to access Dome Rock Reservoir without interference.  In this case, equity favors upholding 
the easement which was prior in time to the Bentleys' interest, is consistent 
with the clearly expressed intent of the Board and Game and Fish, and ultimately 
benefits the public.

 
 
[¶50]   Overall, the Bentleys complain that 
a provision of the Sales Contract was not fulfilled because the State granted 
something less than the fee interest they were promised.  We would make several observations to 
counter the unfairness they perceive.  
First, the Bentleys were not without legal remedy.  They did not assert a claim based upon a 
breach of contract theory, nor did they seek to enforce or rescind the Sales 
Contract.11  Second, Mr. Anselmi never bargained for 
a fee interest free from the easement.  
The public auction advertised Section 16 as being subject to the 
easement, and Mr. Anselmi's bid logically took this encumbrance into 
account.  Finally, we have 
considered the countervailing equities.  
The easement was requested, approved, and paid for before the Bentleys 
entered the picture.  While they 
argue that they did not receive the full benefit of their bargain, they fail to 
appreciate that the public is equally deserving of the benefit of Game and 
Fish's bargain.  This benefit has 
been continuously enjoyed by the fishing and recreating public, and the Bentleys 
were aware of this use of their property long before they instituted this 
action.

 
 
[¶51]   Having reviewed the Bentleys' 
complaint and the documents attached thereto, we find that the Bentleys failed 
to state a claim which would invalidate or extinguish the easement.  The district court properly dismissed 
the claims premised upon the Bentleys' assertions that their ownership of 
Section 16 was not subject to the easement.  

 
 
II. Summary Judgment on 
Water Rights Claims

 
 
[¶52]   As we set forth above, there are 
three permits associated with the use of the water stored in the reservoir.  The three permits allocate the entire 
capacity of the reservoir.  The 
Bentleys currently own all of the lands in Section 16 and in Section 21 that 
benefit from the reservoir permits.  
They contend the easement could not have severed the water rights because 
the legal owner of the intended lands also owns the water rights.  

 
 
[¶53]   In its ruling on summary judgment, 
the district court ruled that the water rights for irrigation of Section 16 were 
conveyed with the easement and are now owned by Game and Fish.  The district court also ruled that the 
rights for irrigation of Section 21 were not conveyed with Section 16, but 
rather remain appurtenant to Section 21 and thus are owned by the Bentleys.  The Bentleys have appealed only the 
portion of the ruling concerning the Section 16 rights.

            

[¶54]   In reviewing a district court's 
grant of summary judgment, the standards we apply are well 
established:

The propriety of 
granting a motion for summary judgment depends upon the correctness of the dual 
findings that there is no genuine issue as to any material fact and that the 
prevailing party is entitled to judgment as a matter of law. Reed v. Miles Land and Livestock 
Company, 2001 WY 16, ¶ 9, 18 P.3d 1161, ¶ 9 (Wyo. 2001). A genuine issue of 
material fact exists when a disputed fact, if proven, would have the effect of 
establishing or refuting an essential element of an asserted cause of action or 
defense. We, of course, examine the record from a vantage point most favorable 
to that party who opposed the motion, affording to that party the benefit of all 
favorable inferences that fairly may be drawn from the record. Scherer Construction, LLC v. Hedquist 
Construction, Inc., 2001 WY 23, ¶ 15, 18 P.3d 645, ¶ 15 (Wyo. 2001); Central Wyoming Medical Laboratory, LLC v. 
Medical Testing Lab, Inc., 2002 WY 47, ¶ 15, 43 P.3d 121, ¶ 15 (Wyo. 
2002).

                                                                                                                            

Mueller v. 
Zimmer, 
2005 WY 156, ¶ 3, 124 P.3d 340, 346 (Wyo. 2005).  Questions of law are reviewed de novo.  Martin v. Committee for Honesty and 
Justice, 2004 WY 128, ¶ 8, 101 P.3d 123, 127 (Wyo. 2004).  "We may uphold the grant of summary 
judgment upon any proper legal ground finding support in the record."  Coates v. Anderson, 2004 WY 11, ¶ 5, 84 P.3d 953, 956 (Wyo. 2004).

 
 
[¶55]   As a general rule, a water right 
beneficially used upon land becomes appurtenant to the land.  Condict v. Ryan, 79 Wyo. 211, 228-29, 333 P.2d 684, 689 (1958); Sturgeon v. Brooks, 73 Wyo. 436, 455-56, 281 P.2d 675, 682 (1955); Frank v. Hicks, 4 Wyo. 502, 530-31, 35 P. 475, 484 (1894).  And, when the land 
is conveyed, the water right passes with it.  In Condict we explained, "when a permit to 
construct a reservoir is granted upon condition that the impounded water is to 
be used upon particular lands, the right to the use of those waters is not a 
mere personal right, but is a right running with the land and it passes with a 
conveyance of the land even in the absence of special mention."  333 P.2d  at 688.  However, in this case, the water rights 
could be, and were, identified and separately transferred to the Game and 
Fish.  See Sturgeon, 281 P.2d  at 682-83 (stored 
water rights can be severed from the lands to which they have been 
attached).   

 
 
[¶56]   In Matter E-1A, the Board stated 
its intent to sever its ownership and transfer "any water rights that the Board 
may own in the reservoir."  
Subsequently when the easement was conveyed, the Board still held legal 
title to Section 16 and, thus, also owned the water rights attached to it.  The recorded easement attached and 
incorporated Board Matter E-1A.  We 
agree with the district court that the easement conveyed the reservoir rights to 
the Game and Fish and severed them from Section 16.  

 
 
[¶57]   The Board clearly indicated its 
"intention to convey specific property."  
King v. White, Wyo., 499 P.2d 585, 588 
(1972).  Although the Board's 
reference to "any rights" language could have been more precise, there is no 
question which reservoir was involved because Dome Rock Reservoir is the only 
reservoir on Section 16 and was also the subject of the easement.  It is obvious that water in the 
reservoir is essential to a public fishery, the interest served by the 
easement.  The only water rights in 
the reservoir owned by the Board at the time were represented by Permits 
6002RES, 21152, 21154, and 21155.  
Thus, the Board sufficiently demonstrated its intent to convey its water 
rights to Game and Fish, along with the easement.  This intent was manifested in the 
patent, which excludes the reservoir water rights.

 
 
[¶58]   The Bentleys also assert that the 
conveyance was invalid and could not have severed the water rights because the 
Board did not petition the State Engineer's Office for change in use, change in 
point of diversion, enlargement of use, or change in place of use of the 
water.  The water rights at issue 
are for stored water, not "for the direct use of the natural unstored flow of 
any stream."  Wyo. Stat. Ann. § 
41-3-101 (LexisNexis 2005).  The 
Bentleys appear to overlook this distinction.12  The fact that the reservoir rights were 
permitted for irrigation does not impact the ownership of the rights conveyed by 
the Board when it granted the easement to the Game and Fish.13  

 
 
[¶59]   Additionally, the Bentleys claim 
that the indications of an easement upon Section 16 would not have alerted them 
to the transfer of water rights in Dome Rock Reservoir.  While that may be true, as discussed 
above, the Bentleys' claims that they lacked notice are unavailing because they 
accepted an assignment of a mere equitable interest, subject to all 
imperfections and competing claims.14  

 
 
CONCLUSION

 
 
[¶60]   We find the Bentleys failed to 
state a claim for relief which would invalidate the easement, and the district 
court properly dismissed those causes of action.  Their equitable interest in Section 16 
did not prevent the Board from granting a valid easement to Game and Fish.  We also conclude that the district court 
was correct in holding that the water rights associated with Section 16 were 
severed and conveyed to the Game and Fish with the easement. 

 
 
[¶61]   Affirmed.

 
 
FOOTNOTES

 
 

1Permit No. 
21152 provides for the irrigation use of 15.83 acre-feet of water stored within 
the reservoir as secondary supply for 18.9 acres of land located in Section 16 
and served by the Indian Grove Ditch No. 3.  Permit No. 21154 provides for the 
irrigation use of 12.56 acre-feet of water stored in the reservoir as secondary 
supply for lands covered by Permit No. 21153, and both permits authorize the 
diversion and appropriation of water through the Indian Ditch.  The intended lands under the Indian 
Ditch involve a total of 15.0 acres located in Section 16. Finally, Permit No. 
21155 provides for the irrigation use of 36.76 acre-feet of water stored in the 
reservoir as secondary supply for lands described under Permit No. 10157, and 
both permits authorize the diversion and appropriation of water through the 
Indian Grove Ditch No. 4.  The 
intended lands under Indian Grove Ditch No. 4 involve a total of 43.9 acres, 
39.1 of which are located in Section 21 and 4.8 of which are located in Section 
16.  

 
 

2The 
Bentleys apparently own other water rights appurtenant to Section 16, which are 
not at issue in this case.

 
 

3The Bentleys 
asserted the following claims for relief: (1) Quiet Title to Fix the Status of 
the Real Property with Respect to Ownership; (2) Declaratory Judgment to 
Ascertain and Establish the Status of the Real Property with Respect to 
Ownership; (3) Declaratory Judgment to Ascertain and Establish the Plaintiffs' 
Right to Use Water Appurtenant to the Real Property; (4) Permanent Injunction 
Prohibiting Interference with any Lawful Appropriation of Water from any 
Surface, Underground, or Reservoir Water Source Located on, or Appurtenant to, 
Sections 16 and 21; (5) Declaratory Judgment to Establish a Temporary Taking of 
Private Property in Violation of the United States Constitution and the 
Constitution of the State of Wyoming; and (6) Declaratory Judgment to Establish 
Damages for Trespass by the State of Wyoming and Members of the General 
Public.

 
 

4Wyo. Stat. 
Ann. § 36-9-107 (LexisNexis 2005) 
states: 

 

(a) 
The terms of payment for school and state lands shall be as follows: not less 
than twenty-five percent (25%) of the purchase price in cash on day of sale, the 
balance is not to exceed thirty (30) equal annual payments figured on the 
amortization plan, which shall include interest on the deferred part of the 
payments at a rate of interest established by the board in accordance with 
current [interest] rates. The interest rate on all amounts not paid when due 
shall be established by the board in accordance with current lending practices. 
The purchaser may pay in full at the time of the sale or payment of any 
installment may be made at any time if accrued interest is paid to the time of 
payment.

 

(b) 
When school or state lands are sold under an installment contract the state 
shall insert a provision that the vendee shall pay the taxes upon the fair value 
of the lands sold from the date of the contract. The provision is binding upon 
the vendee. The installment contract shall be recorded in the county wherein the 
lands are situated by the vendee within thirty (30) days following its 
execution.

 

Wyo. 
Stat. Ann. § 36-9-108 (LexisNexis 2005) defines amortization plan: 

 

The 
amortization plan is hereby defined, when applied to state land contracts or 
certificates, as being that plan under which part of the principal is required 
to be paid each time interest becomes due and payable, and under which this part 
payment on the principal increases at each succeeding installment in the same 
amount that the interest payment decreases, so that the combined amount due on 
principal and interest on each due date remains the same until the loan is paid 
in full.

 
 

5Once an 
installment contract has been awarded for the purchase of state lands, the State 
is required to issue a certificate to the buyer for recordation. Wyo. Stat. Ann. § 
36-9-109 (LexisNexis 2005).  That 
provision states:

 
 
§ 
36-9-109. Certificate of purchase; issuance and contents. 

 

When 
any state land shall have been purchased according to law, the board shall make 
and deliver to the purchaser a certificate of purchase, which shall contain the 
name of the purchaser, a description of the land purchased, the sum paid, the 
sum remaining unpaid, the amount of annual payments, which shall include the 
accrued interest, upon the amortization plan as hereinbefore defined, and the 
date on which each of the deferred payments falls due. All annual payments shall 
be due and payable on the first day of December of each year, provided that 
interest is paid on the full amount of the deferred payments at the rate of four 
percent (4%) per annum from date of the sale to the first day of December 
following such date of sale.

 
 
The parties 
do not refer to any certificate and one does not appear in the record on 
appeal.  However, the required 
contents of the certificate appear within the Sales Contract.  For purposes of this appeal, we need not 
determine the legal impact of the absence of a certificate because it appears 
that the recorded Sales Contract served as a functional equivalent to give 
notice to third parties of Mr. Anselmi's interest in Section 16.  In Olds v. Little Horse Creek Cattle Co., 
22 Wyo. 336, 356-57, 140 P. 1004, 1011 (1914), we described the certificate as a 
condition precedent to the right to a patent, but that issue has not been raised 
by the parties, and we need not question the validity of the 
patent.

 
 

6When he 
executed the assignment, Mr. Anselmi also provided the Bentleys with a warranty 
deed for Section 16.  Given our 
conclusion that the State retained title, it is clear that Mr. Anselmi never had 
legal title to Section 16.  
Consequently, he was never able to convey legal title to the Bentleys, 
via the warranty deed or otherwise.  
The Bentleys acknowledge that the warranty deed did not transfer title to 
them and do not rely upon it as the basis for their 
claims.

 
 

7Many of the 
arguments on appeal address the sufficiency of the Board Matter E-1A to create a 
legally valid easement.  The focus 
upon the Board's actions in 1993 is a result of the Bentleys' erroneous 
conclusion that the State lost title to Section 16 after it entered into the 
Sales Contract with Mr. Anselmi.  
Having explained that the State retained legal title and the ability to 
convey, we need not discuss further the parties' arguments pertaining to the 
creation of an easement in 1993.

 
 

8We recognize 
that some may perceive a lack of harmony between Wyo. Stat. Ann. § 36-9-107(b), 
which requires recording of installment land contracts for state lands, and the 
exclusion from protection under the recording act against later recorded 
conveyances.  As one commentator 
summarized decades ago:

 
 
The man who 
records a contract to sell land in Wyoming is like the farmer who puts a 
scarecrow in his cornfield.  It may 
not be a real man, but it keeps the crows away.  Recording of contracts for purposes of 
cutting off subsequent grantees isn't provided for in the statutes, but by 
decision it will shoo the crows away.  
Originally ours was an especially confusing situation both to the crows 
and to the farmer because of our recording scheme. One paragraph of the statute 
says that every instrument touching any interest in land which is recorded will 
be notice, and another provides an unrecorded conveyance is void as against a 
subsequent bona fide purchaser who first records.  [The statute] defines a conveyance so that an executory contract 
is expressly excluded, and yet another permits the recording of an executory 
contract but does not say the record will be notice. 

 
 
Robert S. 
Sturges, Recording the Land Contract, 
6 Wyo. L. J. 
208, 208 (1951-1952) (italics in original) (footnotes omitted).  This discrepancy was addressed in Hawkins v. Stoffers, 40 Wyo. 226, 276 P. 452 (1929), reh'g denied, 40 Wyo. 226, 278 P. 76 
(1929).  Hawkins concluded the buyer under an 
installment contract had a paramount right to title against a prior purchaser 
who did not take possession or record his deed right away.  40 Wyo. at 248-254.  The decision recognized that an 
executory contract was not a conveyance, but the buyer was nevertheless able to 
defeat a prior claim to the property because he had assumed possession.  Id. 
at 248. Relying upon principles of justice and equity, the Court determined that 
the buyer's open and notorious possession provided notice equivalent to 
registration.  Id. at 
248-254.  We consider Hawkins instructive in this case, in 
that it is apparent that principles of justice and equity, and not the 
provisions of the recording act, are the source of any relief for the 
Bentleys.

 
 

9In their 
brief(s), the Bentleys contend that there was no concession of this nature.  However, we do not have a transcript of 
the hearing and, consequently, have no reason to question the district court's 
statement in its decision letter: "[Counsel] conceded in oral argument before 
this Court that Plaintiffs did in fact have notice of the easement in question 
before their purchase of the property. . . ."  

 
 

10As 
previously noted, their patent does not conflict with the easement.  See Condos v. Trapp, 739 P.2d 749, 750-751 
(Wyo. 1987) 
(suggesting recording act does not apply in the absence of conflicting 
conveyances).

  

11We also note 
that the Bentleys did not pursue any remedy they may have had against Mr. 
Anselmi in this action.

  

12"Water 
rights for the direct use of the natural unstored flow of any stream cannot be 
detached from the lands, place or purpose for which they are acquired. . . 
."  Wyo. Stat. Ann. § 41-3-101.  By contrast, as set forth in Wyo. Stat. Ann. § 41-3-303 
(LexisNexis 2005), the use of stored reservoir water may be acquired by 
agreement:

 
 
The use of 
water stored under the provisions of this chapter may be acquired under such 
terms as shall be agreed upon by and between the parties in interest. Lands 
entitled to the use of water in any reservoir may use the water stored therein, 
and to which they are entitled, at such times and in such amounts as the water 
users may elect, provided that a beneficial use of water is made at all 
times.

 
 

13The present 
use of the water rights by Game and Fish, i.e., whether that use is beneficial 
and requires changes to be made to the permits, should be determined by the 
State Engineer and/or the Board of Control.  

 
 

14Even if we 
were to consider the state of the Bentleys' knowledge as material to the outcome 
of this portion of the appeal, we would have to consider the water report 
exhibits the Bentleys submitted in support of their motion for summary 
judgment.  They claimed to have 
relied upon these documents when they purchased Section 16.  The reports acknowledge the State's 
ownership in at least 50% of the water in the reservoir, recognize that the 
reservoir was made into a public trout fishery before Mr. Anselmi purchased 
Section 16 from the State, and opine that the reservoir had not been used for 
irrigation in recent years and "[t]o do so would almost certainly jeopardize the 
trout fishery."