No. 80-365 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

LORETTA E. KING, personal representative 

of the Estate of ROY M. KING, deceased; 

and LORETTA E. KING et al., 

Plaintiffs and Appellants, 

ROSEBUD COUNTY, a local government unit 

in the State of Montana, 

Defendant and Respondent. 

Appeal from: District Court of the Sixteenth Judicial District, 

In and for the County of Rosebud. 

Honorable Alfred B. Coate, Judge presiding. 

Counsel of Record: 

For Appellants: 

Olsen, Christensen and Gannett, Billings, Montana 

Paul G. Olsen argued, Billings, Montana 

For Respondent: 

John S. forsythe, County Attorney, Forsyth, Montana 

Fillner and Pitet, Billings, Montana 

Russell K. Fillner argued, Billings, Montana 

Submitted: April 23, 1981 

Decided: July 22, 1981 

Filed: JOL 2 2 1981 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

Appellants/plaintiffs are the personal representative 

and widow of Roy M. King, and the ex-wife of Roy M. King. 

They brought this action in Rosebud County, before the 

Honorable Alfred B. Coate, seeking to quiet title, in favor 

of themselves and the estate, to a royalty interest of 6.25 

percent in all oil, gas and minerals recoverable from certain 

tracts of land. 

Nonjury trial was held on March 11, 1980. The plaintiffs 

now appeal from the judgment of the District Court in favor 

of the County. 

The following issues are presented for review: 

1. Did the District Court err in concluding that the 

County took valid title to the lands as a result of tax sale 

proceedings? 

2. Did the District Court err in concluding that the 

plaintiffs' action is barred by doctrines of estoppel, 

laches, or by asserted statutes of limitation? 

We hold the District Court did err on both issues, and 

reverse the District Court's judgment. 

FACTS : 

This action concerns title to royalty interests in two 

tracts of land, a "King" tract and a "Stillwell" tract. 

Both were purchased by Roy M. King from the County after 

the County had taken tax title to both. Two other tracts of 

land will also be mentioned, a "Bentley" tract and a "LaFurge" 

tract. King bought those parcels at about the same time and 

in a similar manner. The parties rely for authority upon 

the conduct and outcome of litigation over the Bentley and 

LaFurge lands. 

Roy King, Albert Stillwell, May Bentley and William 
LaFurge each owned certain separate lands in Rosebud County. 

~ll defaulted on payment of taxes. The County purchased all 

of the tracts at tax sales held in the late 1930's and 

1940's. The procedure followed by the County in issuing tax 

deeds to itself forms the substance of this appeal, and will 

be described later. 

Albert Stillwell died on May 24, 1937, in Pennsylvania, 

before any of the events described here occurred. His widow 

served asexecutrix of the Stillwell estate. The plaintiffs 

have submitted evidence of the Stillwell probate proceedings 

held in Pennsylvania, which the County cites in support of 

its argument that Stillwell and his heirs long ago waived or 

abandoned any claim which they might have had to the royalty 

interest in the Stillwell tract, so that King, who took his 

claimed interest in the Stillwell tract from Stillwell's 

heirs, must be held to have acquired no interest in royalties 

from the Stillwells. 

The County took tax title to the King tract on September 

1, 1939, to the Stillwell tract on January 15, 1944, and to 

the Bentley tract probably some time in the early 1940's. 

Roy King later purchased from the County all of the 

tracts. He was issued a quitclaim deed by the County to the 

Stillwell tract on March 7, 1944. King received a quitclaim 

deed to his own former tract on September 21, 1944. He also 

received quitclaim deeds for the Bentley and LaFurge tracts. 

Each of the quitclaim deeds issued to King contained the 

County's reservation of a royalty interest of 6.25 percent 

of all oil, gas and minerals recovered and saved from the 

lands. 

In order to conclusively establish his title to the 

tracts, King filed an action in Rosebud County in 1947 to 

quiet title to all of the tracts and to other lands which he 
had purchased. Named as defendants, among others, were 

Albert Stillwell, May Bentley, Rosebud County and William 

LaFurge. The District Court file for the quiet title action 

was introduced into evidence. (Civil Cause No. 5475, in the 

Sixteenth Judicial District, Rosebud County.) 

Judgment by default was entered against all defendants 

on August 31, 1948, the court decreeing that full and complete 

title to the King, Stillwell, Bentley and LaFurge tracts 

was quieted in King. No mention was made in the decree of 

the County ' s reservations. 

The parties agree that the County was not properly 

served in the 1947 action. Because the District Court did 

not obtain jurisdiction over the County, the County is not 

now bound by the default decree entered against it. 

That part of the decree which quieted title to the 

Bentley tract in favor of King was later found void as 

against May Bentley by the Ninth Circuit Court of Appeals. 

Bentley v. Rosebud County, Montana (1956), 230 F.2d 1, cert. 

den., 351 U.S. 984, 76 S.Ct. 1051, 100 L.Ed. 1498. The 

plaintiffs rely on the rationale of that federal decision to 

support their claim that the county treasurer did not have 

jurisdiction to issue the tax deeds to the tracts involved 

here, claiming that the deeds are void and the County's subsequent reservations invalid. 

PERTINENT HISTORY OF THE BENTLEY & LAFURGE TRACTS 

Oil was discovered on the Bentley tract, probably in 

the late 1940's or early 1950's. May Bentley, as a resident 

of Wisconsin, brought an action in federal district court to 

quiet title to her lands and royalty interests. 

In Bentley v. Rosebud County, Montana, supra, the ~inth 

Circuit Court of Appeals reversed the lower court, and held 

the tax sale by which the County took title to the Bentley 
tract had been fatally defective, rendering the tax deed 

void. 

Relying on the case of Perry v. Maves (1951), 125 Mont. 

215, 233 P.2d 820, the ninth circuit court held that a 

county treasurer ' s jurisdiction to issue tax deeds rests 

solely upon the affidavits of service which are required by 

statute to be filed with him; and, in determining the sufficiency of tax title proceedings, the record before the 

county treasurer alone may be considered, and defects or 

omissions may not be corrected or supplied by anything 

outside the record. The court found that neither the notice 

of application for tax deed nor the affidavit and proof of 

service, which were filed with the county treasurer, showed 

whether service on Bentley by publication had been accomplished 

60 days prior to the issuance of the tax deed to King. Bentley, 

230 F. 2d 4. In the absence of an affirmative showing to the 

treasurer of compliance with all the requirements of the 

statutes, the tax deed was held to be void, and the subsequent 

royalty reservation by the County in its quitclaim deed to 

King was declared invalid. Bentley, 230 F.2d 7. 

While the Bentley quiet title action was on appeal to 

the ninth circuit court, a different action was brought concerning the LaFurge tract, which King had purchased from the 

County. The second action, LaFurge v. King, brought in the 

District Court for Rosebud County, is mentioned only because 

it generated an exchange of letters between the then county 

attorney and the lawyer for King. The County argues that the 

letters constitute admissions by King that the County's 

royalty interests in the King and Stillwell tracts are valid. 

Judgment in the LaFurge action was entered on April 15, 

1957, after the Bentley case had been decided by the ninth 

circuit. The judgment recognizes the County's reservations. 
The County relies on the letters, actions and admissions 

of King, made in regard to the Bentley and LaFurge cases, 

as support for the County's defenses of estoppel and laches. 

We do not set forth the acts and admissions in detail because 

we hold the defenses of estoppel and laches inapplicable in 

any event. 

PROCEDURAL HISTORY OF THIS APPEAL 

In March of 1956, Roy King conveyed one-half interest 

in all minerals in and under the King and Stillwell tracts 

to his ex-wife, Celia I. Shock, as part of a property settlement agreement. Shock is the other named plaintiff in this 

action. 

Roy King died in December 1975. In November 1975, oil 

had been discovered on the King and Stillwell tracts. All 

proceeds due on the royalty interests in dispute have been 

held in escrow by the oil producers pending the outcome of 

this case. 

On April 2, 1976, and again on February 18, 1977, the 

heirs of Albert Stillwell quitclaimed all their right, title 

and interest in the Stillwell tract to the plaintiffs. 

King's widow and his ex-wife filed their quiet title 

complaint on November 15, 1977. Ultimately the County filed 

an amended answer denying all allegations of the complaint, 

alleging the validity of the tax deeds and of the reservations 

of royalty interests, and setting forth affirmative defenses 

of estoppel, laches, and statutory bar to the action under 

former SS93-2503 to 2505, R.C.M., 1947, now sections 70-19- 

304, 70-19-401 and 402, MCA, respectively. 

Trial was held on March 11, 1980. The only purpose of 

the trial was to introduce exhibits into evidence. 

The District Court then adopted the County's proposed 

findings and conclusions, concluding that the tax title pro- 
ceedings had been validly conducted and that this action was 

barred by estoppel, laches and by the statutes of limitation. 

Plaintiffs appeal. 

TAX SALE PROCEEDINGS 

King Tract: A notice of application for tax deed and an 

affidavit and proof of service were filed with the county 

treasurer pursuant to statute prior to issuance of the tax 

deed by the treasurer to the County. 

The notice of application for tax deed states, "the 

period within which the . . . above described lands and premises may be redeemed from the sale to pay the taxes for the 

year 1931 has long since expired, and . . . the . . . [clerk 

and recorder] will, on the 1st day of Sept., 1939, which 

will be at least sixty (60) days after the service of this 

notice upon you, make application to the Treasurer of Rosebud 

County for tax deed to be issued to it as provided by law." 

It is dated June 14, 1939, and is directed to King and to 

two mortgagees. 

The affidavit and proof of service states, inter alia, 

that the clerk and recorder served copies of the abovementioned notice upon King and the mortgagees by mail, and 

that "the receipts for letters, showing delivery thereof, 

are on file in the Office of the County Clerk of Rosebud 

County, Montana . . . " The affidavit also states that the 

notice was published in the local newspaper for two consecutive 

weeks, "as is shown by the Affidavit of Publication which is 

on file in the of £ice of the County Clerk of Rosebud County, 

Montana . . ." The affiant was the acting county clerk; the 

affidavit is dated August 3, 1939, less than one month prior 

to the date on which the notice states that application 

would be made. A tax deed for the King tract was issued to 

the County on September 1, 1939. 
Nothing on the face of the record before the treasurer 

shows the date on which notice was actually given to King. 

The treasurer could not have known if notice had actually 

been given more than 60 days prior to the date he issued the 

deed, as required by the statute set forth below. 

Stillwell Tract: Albert Stillwell was served by mail in 

Pennsylvania. His widow signed for the letter. 

The form of the notice of application for tax deed and 

the affidavit and proof of service, filed with the treasurer, 

are identical to those regarding the King tract, except the 

af fidavit does not state that the notice was published. The 

notice is dated October 18, 1943, and the affidavit January 

5, 1944. No date of mailing the notice is stated, and the 

receipt for the letter is referred to as being filed with 

the county clerk. The tax deed was issued January 15, 1944. 

Again, the treasurer could not have known whether timely 

notice in fact had been given. 

DISCUSSION 

The following statutes were applicable at the time the 

tax deeds were issued to the County: 

"Notice of application --- for tax deed. The purchaser 

of property sold for delinquent taxes . . . must, 

. . . at least sixty (60) days before he applies for 

a deed, serve upon the owner of the property purchased, 

if known, . . . a written notice, stating that said 

property, or a portion thereof, has been sold for 

delinquent taxes, giving the date of sale, the amount 

of property sold, the amount for which it was sold, 

the amount due, and the time when the right of redemption will expire, or when the purchaser will apply for 

a tax deed, and the owner of the property, . . . has 

the right of redemption indefinitely until such 

notice has been given . . . Notice of any owner, 

. . . shall be given by registered letter addressed to 

. . . [the owner] at the post office address of said 

owner . . . In case of unoccupied property . . . such notice must be by registered mail deposited in 

the post office, addressed to any known owner residing in or outside of said county with the postage 

thereon prepaid . . . at least sixty (60) days before 

the purchaser applies for such tax deed . . .If 
52209, R.C.M., 1935 (later codified as former 

section 84-4151, R.C.M., 1947, now section 

15-18-202, MCA.) 

"Affidavit showing notice - given--sum allowed for 

service of notice and making affidavit. No deed 

of the property sold at a delmax sale must 

be issued by the county treasurer . . . to the 

purchaser of the property, until after such purchaser shall have filed with the treasurer . . . an affidavit showing that the notice hereinbefore 

required to be given has been given as herein 

required, which said affidavit must be filed by 

the treasurer as other files, papers, and records 

kept by him in his office. . ." 52212, R.C.M. 1935 

(later amended and codified as former section 

84-4156, R.C.M., 1947, now section 15-18-204, MCA.) 

This Court construed the above statutes in Perry v. 

Maves (1951), 125 Mont. 215, 233 P.2d 820. In Perry, the 

affidavit filed with the treasurer of McCone County stated 

as follows: 

"That on Feb. 13, 1940, the . . . [county clerk] 

filed in the office of the County Clerk and 

Recorder of McCone County, Montana, an Affidavit 

and Proof showing the manner in which said Notice 

of Application for Tax Deed was given, all as provided by the laws of the State of Montana, to which 

Affidavit and accompanying proofs you are hereby 

referred." 125 Mont. 217, 233 P.2d 821. 

This Court held as follows: 

"The provisions of section 2212, Revised Codes of 

Montana 1935, were mandatory and prohibitory. One 

mandate was that an 'affidavit must be filed -- by the 

treasurer . . . -- in his office.' This mandate plainly 

required that an af fidavit must be filed in the 

county treasurer's office. Another mandate of 

the statute was that the affidavit so filed in 

the county treasurer's office must show ' that the 

notice hereinbefore required to be given has 

been given as herein required.' The notice so 

required to be given was the notice expressly 

provided for and required by section 2209, Revised Codes of 1935. The provisions of the statute 

(2212) expressly forbade and prohibited the issuance of a tax deed by the county treasurer until 

after the above mentioned affidavit had been filed 

in the county treasurer's office. The prohibition 

was that no deed of the property sold at a delinquent tax sale must be issued by the county treasurer to the purchaser of the property until after 

such purchaser shall have filed with the treasurer 

an affidavit showing the required facts . . . Emphasis supplied." 
"The affidavit provided for in section 2212, supra, 

must state the essential facts, as distinguished 

from mere conclusions, showing that the notice required to be given by section 2209, supra, has been 

given and until such affidavit was filed in his 

office showing -- such facts the county treasurer was 

denied the authority and power to issue a valid deed 

to the purchaser of the property so sold at delinquent tax sale. 

"Proceedings on tax sales are in invitum. Every 

essential or material step prescribed by the statute 

must be strictly followed. If the requirements of the 

statute are not strictly followed the sale may be 

avoided. In the county treasurer's proceedings to 

sell the land there is no distinction recognized between the mandatory and directory requirements of 

the statute. The county treasurer must a c t a s the 

statute directs. Otherwise he acts without authority 

and the purported sale which he assumes to make is invalid. This holds true even though the requirement 

with which the county treasurer failed to comply was 

not one enacted for the protection of the owner of 

the land. 

"I. . . "In determining the sufficiency of tax title 

proceedings, the records alone can be considered and 

defects or omissions may not be corrected or supplied 

by anything dehors the record." . . . fcitationl' 

"'This is necessarily so, since section 2209, after 

specifying how notices shall be given, provides as 

follows: "The owner of the property . . . has the 

right of redemption indefinitely until such notice 

has been given." Certainly "such notice" does not 

mean "some notice" or "any notice," and neither 

the county treasurer nor members of the judiciary 

may substitute their own ideas as to what notice 

should be considered the equivalent of or substitute 

for the notice required by the legislature.' . . ." 

Perry, 125 Mont. 216-218, 233 P.2d 820-821. 

The reference in the Perry affidavit to documents filed 

with the county clerk was held insufficient to confer jurisdiction upon the treasurer to issue a tax deed. The tax 

deed was held void. 

Just as in Perry, the references in the instant affidavits to receipts for the mailed notices and to the affidavit 

showing publication of the King notice, stated as being 

filed with the county clerk, were also to documents outside 

the record before the treasurer. The affidavits filed with 

the treasurer must be held insufficient to show proof of 
service of notice on King and Stillwell. 

Because the treasurer could not know from the record 

whether notice had been given within the statutory period, 

he had no authority to issue the deed. 

The County cites Milne v. Leiphart (1946), 119 Mont. 

263, 174 P. 2d 805, and Cavitt v. Seirson (1946), 119 Mont. 

437, 175 P.2d 767, in support of its argument that the 

affidavits filed with the treasurer were sufficient to 

confer jurisdiction to issue the tax deeds. We agree, 

however, with the ninth circuit court's interpretation of 

Milne in Bentley v. Rosebud County, supra, 230 F.2d 4-5. It 

is not clear in Milne whether the county treasurer had had 

before him in the record the date on which notice was served. 

119 Mont. 269-270, 174 P.2d 808-809. To the extent that 

Milne conflicts with the holding here or in Perry on the 

question of sufficiency of the affidavit, the Milne holding 

is overruled. 

Cavitt, on the other hand, is distinguishable on the 

facts. That case did not concern the question of sufficiency 

of a particular affidavit; rather, the question involved was 

whether any affidavit had been filed at all. The court 

there held that a tax deed gives rise to statutory presumptions that official duty has been performed and the law 

has been obeyed. The defendant there failed to carry his 

burden of overcoming the presumptions by failing to prove 

that no affidavit had been filed. 119 Mont. 440-442, 175 

P.2d 769. The plaintiffs in this case have shown that the 

filed affidavits were incomplete and therefore defective, 

and that the tax deeds are void for lack of jurisdiction in 

the treasurer to issue them. The plaintiffs here have 

overcome the presumptions cited in ~avitt. 
The District Court concluded as follows: "The tax 

title proceedings conducted by the defendant, Rosebud County 

were valid and sufficient to divest Roy M. King and Albert 

J. Stilwell, and his estate, of any title in and to said 

lands described in plaintiff's complaint." Such a conclusion 

is clearly incorrect from the evidence; the judgment based 

thereon must be reversed. 

AFFIRMATIVE DEFENSES 

The County asserted defenses of estoppel, laches and 

statutes of limitation. The estoppel and laches defenses 

are predicated mainly upon the lapse of time between the tax 

sales and the filing of this action. As support for the 

defenses, the County relies on the acts and representations 

of King and his lawyer in regard to the Bentley and LaFurge 

cases previously mentioned. The District Court concluded 

that King and his heirs are barred by laches and estoppel to 

deny the County's reservation. The court also used waiver/ 

abandonment type language in discussing plaintiffs' predecessors' (the Stillwells') acknowledgement and recognition 

of the County's interests. (Conclusion No. 9; Conclusion No. 

4 

We hold that the court's conclusions are not supported 

by the findings, because one of the required elements of 

each asserted defense is lacking. 

Estoppel requires as one of its elements a detrimental 

reliance on another's conduct. Matter of Shaw (1980), 

- Mont. - , 615 P.2d 910, 914, 37 St.Rep. 1480, 1484. 

There is no evidence that the County has done anything but 

sit back and wait for any royalties that might come. stop pel 

cannot be found where the County has incurred no detriment, 

nor changed its position. The County may lose the benefit 

of the royalty money, but it would not be in a worse position 
than before the tax sales. 

Laches requires a party to sleep on his rights for such 

a period as to render enforcement inequitable. Mountain 

view Cemetery v. Granger (1978), 175 Mont. 351, 358, 574 

P.2d 254, 258; Davis v. Steingruber (1957), 131 Mont. 468, 470-471, 

311 P. 2d 784, 785. Length of time within which rights are 

not asserted is not the only consideration. Matter of 

Estate of Wallace (1980), Mont . 606 P.2d 136, 139- 

1-40, 37 St.Rep. 158, 163. Royalties have been earned only 

since 1975 which does not result in a period sufficient to 

show that enforcement would be inequitable. The County has 

incurred no detriment by simply waiting to see if any oil or 

minerals are produced. 

The County also asserted a statute of limitations 

defense, based on former 8893-2503, 2504 and 2505, R.C.M., 

1947, now sections 70-19-304, 401 and 402, MCA. 

Section 70-19-304, MCA, is an old section. Code annotations reveal no Montana cases which construe it. However, 

it is not applicable here on its face, because the ten-year 

period starts to run only after a competent court declares 

the letters patent or the grants void. Appellants seek just 

such a declaration in this case. 

Section 70-19-401 and 402 are "adverse possession" 

statutes. The statutes are also inapplicable. The record 

discloses no evidence to show that plaintiffs, who have 

established legal title, were not "seized or possessed" of 

the real property. The County has failed to overcome the 

presumption that plaintiffs were in possession within the 

required period. Former 893-2507, R.C.M., 1947, now section 

70-19-404, MCA. Warren v. Warren (1953), 127 Mont. 259, 

262, 261 P.2d 364, 365. Even if plaintiffs or their predecessors were not in actual possession of the properties 
within the period, they are deemed to have been "seized" of 

the properties based on the title they held. Stephens v. 

Hurly (1977), 172 Mont. 269, 274-75, 563 P.2d 546, 549-50. 

The County failed to prove that it had fuLfill.ed all the 

elements of adverse possession, necessary to establish title 

in itself under the above statutes. Therefore, the statutes 

of limitation are not applicable. 

The District Court's conclusion as to statutory bar is 

incorrect. We do not discuss plaintiffs' contention that 

doctrines of estoppel, laches, and statutes of limitation 

cannot be used to give life to an otherwise void tax deed 

because we find the defenses do not apply in any event. 

CONCLUSION 

It is not necessary to discuss other asserted issues. 

The County's tax deeds are void for lack of jurisdiction in 

the treasurer to issue them. Having received nothing under 

void deeds, the County owned nothing from which it could reserve royalty interests. 

We have determined that plaintiffs are the owners of 

the royalty interests in the King and Stillwell tracts. We 

reverse the judgment of the District Court and direct the 

entry of judgment in accord with this opinion. 

Mstice 

-C 

We concur: 

Chief Justice