### 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: DistrictCourt of the Sixteenth Judicial District, In and for the County of Rosebud. HonorableAlfred 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: 

# JOL22

## 1981

ClerkMr. 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 inRosebud County, before the Honorable Alfred B. Coate, seeking toquiet 

### title, in favor of themselves and the estate, to a royalty interestof 6.25 percent inalloil, gas and minerals recoverable from certain tracts of land. Nonjury trialwas held on March 11, 1980. The plaintiffs

now appeal from the judgment of the DistrictCourt in favor of the County. The following issues arepresented for review: 

### 1. Did the District Court err inconcluding that the County took valid title to the lands as a result of tax sale proceedings? 2. Did the DistrictCourt err inconcluding that the plaintiffs' action 

### isbarred by doctrines of estoppel, laches, or by asserted statutesof limitation? We hold the District Court did 

### err on both issues, and reverse the District Court's judgment. FACTS : This action concerns 

### title toroyalty 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 toboth. Two other tracts of land 

### willalsobe mentioned, a "Bentley" tractand a "LaFurge" tract. King bought those parcels atabout the same timeand ina 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 

### WilliamLaFurge each owned certain separate lands inRosebud County. ~ll defaulted on payment of taxes. The County purchased all of the tracts attax sales held inthe 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 Stillwelldied on May 24, 1937, inPennsylvania, before any of the events described here occurred. Hiswidow served asexecutrixof the Stillwellestate. The plaintiffs have submitted evidence of the Stillwellprobate proceedings held inPennsylvania, 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 inthe Stillwell 

### tract, so that King, who took his claimed interestinthe Stillwell tract from Stillwell's heirs, must be held tohave acquired no interest inroyalties 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 tractprobably some 

### timeinthe early 1940's. Roy King laterpurchased from the County allof the tracts. Hewas issued a quitclaim deed by the County to the Stillwell tracton March 7, 1944. King received a quitclaim deed tohis own former tracton 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 alloil, gas and minerals recovered and saved from the lands. In order toconclusively establish his title to the tracts, King filed an action

### inRosebud County in 1947 

### to quiet

### title to allof the tracts and to other lands which hehad purchased. Named asdefendants, among others, were Albert Stillwell, May Bentley, Rosebud County and William LaFurge. The DistrictCourt filefor the quiet 

### title action

was introduced into evidence. (CivilCause No. 5475, inthe Sixteenth Judicial District, Rosebud County.) Judgment by defaultwas entered against alldefendants

on August 31, 1948, the court decreeing that full and complete title to the King, Stillwell, Bentley and LaFurge tracts

was quieted inKing. No mention was made inthe decree of the County

### 's reservations. The parties agree that the County was not properly served in the 1947 action. Because the DistrictCourt 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 tractinfavor of King was later found void as againstMay 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 arevoid and the County's subsequent reservations invalid. PERTINENT HISTORY OF THE BENTLEY & LAFURGE TRACTS Oilwas 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 infederal districtcourt to quiet title to her lands and royalty interests. In Bentley v. Rosebud County, Montana, supra, the ~inth CircuitCourt of Appeals reversed the lower court, and held the tax sale by which the County took 

### title to the Bentley

### tracthad been fatally defective, rendering the tax deed void.Relying on the case of Perry v. Maves (1951), 125Mont. 215, 233 P.2d 820, the ninth circuitcourtheld that a county treasurer

### 's jurisdiction to issue tax deeds rests solelyupon the affidavitsof servicewhich 

### are required by statute tobe filedwith him; and, indetermining the sufficiency of tax titleproceedings, 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 filedwith 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 tobe void, and the subsequent royalty reservation by the County in

### itsquitclaim deed to King was declared invalid. Bentley, 230 F.2d 

### 7. While the Bentley quiet titleactionwas on appeal to the ninth circuitcourt, 

### a differentactionwas brought concerning the LaFurge tract, which King had purchased from the County. The second action, LaFurge v. King, brought in the DistrictCourt for Rosebud County, 

### ismentioned only because 

### it generated an exchange of lettersbetween 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 inthe King and Stillwell tracts arevalid. Judgment in the LaFurge actionwas 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 inregard 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 indetailbecause

we hold the defenses of estoppel and laches inapplicable in any event. PROCEDURAL HISTORY OF THIS APPEAL InMarch of 1956, Roy King conveyed one-half interest inallminerals inand under the King and Stillwell tracts tohis ex-wife, Celia I. 

### Shock, aspart of a property settlement agreement. Shock 

### is the other named plaintiff inthis action. Roy King died inDecember 1975. InNovember 1975, oil had been discovered on the King and Stillwell tracts. All 

### proceeds due on the royalty interests indispute have been held inescrow by the oilproducers pending the outcome of this case. On April 2, 

### 1976, and again on February 18, 1977, the heirs of Albert Stillwellquitclaimed alltheir 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 allallegations of the complaint, alleging the validity of the tax deeds and of the reservations of royalty interests, and setting forthaffirmative defenses of estoppel, laches, and statutorybar 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 trialwas to introduce exhibits intoevidence. 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 actionwas barred by estoppel, laches and by the statutesof limitation. Plaintiffs appeal. TAX SALE PROCEEDINGS King Tract: A notice of application for tax deed and an affidavit and proof of servicewere filedwith the county treasurer pursuant to statuteprior toissuance 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 pre

### misesmay be redeemed from the sale topay the taxes for the year 1931has long since expired, and 

# . . . the 

# . . . [clerk and recorder] 

### will, on the 

### 1stday of Sept., 1939, which 

### willbe atleast 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 asprovided by law." It 

### is dated June 

### 14, 1939, and 

### isdirected 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,

areon file

### inthe 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 filein the of£ice of the County Clerk of Rosebud County, Montana 

# .

# . ." The affiantwas the acting county clerk; the affidavit 

### isdated 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 tractwas 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 datehe issued the deed, asrequired by the statute 

### set forthbelow. StillwellTract: Albert Stillwell was served by mail in Pennsylvania. Hiswidow signed for the letter. The form of the notice of application for tax deed and the affidavit and proof of service, filedwith the treasurer,

areidentical to those regarding the King tract, except the affidavit does not state that the notice was published. The notice 

### is dated October 18, 1943, and the affidavitJanuary 5, 1944. No date of mailing the notice 

### is stated, and the receipt for the letter 

### is referred to asbeing filedwith the county clerk. The tax deed was issued January 15, 1944. Again, the treasurer could not have known whether timely notice in facthad been given. DISCUSSION The following statuteswere applicable atthe 

### time the tax deeds were issued to the County: "Notice of application 

## --- for tax deed. The purchaser of property sold for delinquent taxes 

# . 

# . . must,



## . 

# . . atleast sixty 

### (60) days before he applies for a deed, serveupon 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

### willexpire, or when the purchaser 

### willapply 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



## . 

# . . [theowner] atthe 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 inor outside of said county with the postage thereon prepaid 

# . . . atleast sixty (60) days before the purchaser applies 

### for such tax deed

# . . .If52209, R.C.M., 1935 (latercodified 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 ata delmax 

### sale must be issued by the county treasurer

# . . . to the purchaser of the property, until after such purchaser shall have filedwith the treasurer 

# . . . an affidavit showing that the notice hereinbefore required tobe given has been given asherein required, which said affidavitmust be filed by the treasurer asother files, papers, and records kept by him inhis office. 

# .." 52212, R.C.M. 1935 (lateramended and codified as former section 84-4156, R.C.M., 1947, now section 15-18-204, MCA.) This Court construed the above statutes inPerry v. Maves (1951), 125Mont. 215, 233 P.2d 820. InPerry, the affidavit filed with the treasurer of McCone County stated

as follows: "That on Feb. 13, 1940, the

# . . . [county clerk] filed inthe office of the County Clerk and Recorder of McCone County, Montana, an Affidavit and Proof showing the manner inwhich saidNotice of Application for Tax Deed was given, allasprovided by the laws of the State of Montana, towhich Affidavit and accompanying proofs you arehereby referred." 125Mont. 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 filedby the 

## -- treasurer 

# .

# . . -- inhis office.' This mandate plainly required that an affidavitmust be filed in the county treasurer's office. Another mandate of the statutewas that the affidavit so filed in the county treasurer's officemust show 

## 'that the notice hereinbefore required tobe given has been given asherein required.' The notice so required tobe 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 inthe county treasurer's office. The prohibition 

### was thatno deed of the property sold ata delinquent tax salemust 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 affidavitprovided for in section 2212, supra, must state the essential facts, asdistinguished from mere conclusions, showing that the notice 

### required tobe given by section 2209, supra, has been given and until such affidavitwas filed inhis 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 atdelinquent tax sale. "Proceedings on tax sales are in invitum. Every essential or material stepprescribed by the statute must be strictly followed. If the requirements of the statuteare not strictlyfollowed the salemay 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 statutedirects. Otherwise he actswithout authority and the purported salewhich he assumes tomake 

### is invalid. This holds true even though the requirement with which the county treasurer failed tocomply was not one enacted for the protection of the owner of the land.

"I. 

# . . "Indetermining the sufficiency of tax 

### title proceedings, therecords alone can be considered and defects or omissions may not be corrected or supplied by anything dehors the record." 

# . . . fcitationl' "'This 

### isnecessarily 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 towhat notice should be considered the equivalent of or substitute for the notice required by the legislature.' 

# .

# . ." Perry, 125Mont. 216-218, 233 P.2d 820-821. The reference inthe Perry affidavit to documents filed with the county clerk was held insufficient toconfer jurisdictionupon the treasurer to issue a tax deed. The tax deed was held void. Just as inPerry, the references inthe instant affidavits toreceipts for themailed notices and to the affidavit showing publication of the King notice, stated asbeing filedwith the county clerk, 

### were also todocuments outside the record before the treasurer. The affidavits filedwith the treasurer must be held insufficient to show proof ofservice of notice on King and Stillwell. Because the treasurer could not know from the record whether notice had been given within the statutoryperiod, he had no authority to issue the deed. The County citesMilne v. Leiphart (1946), 119 Mont. 263, 174 P.2d 805, and Cavittv. Seirson (1946), 

### 119Mont. 437, 175P.2d 767, in support of 

### its argument that the affidavits filedwith the treasurer were sufficient to confer jurisdiction to issue the tax deeds. We agree, however, with the ninth circuitcourt's interpretation of Milne inBentley v. Rosebud County, supra, 230 F.2d 4-5. It 

### isnot clear inMilne whether the county treasurer had had before him inthe record the date on which notice was served. 119 Mont. 269-270, 174 P.2d 808-809. To the extent that Milne conflictswith the holding here or inPerry on the question of sufficiency of the affidavit, the Milne holding 

### isoverruled. Cavitt, on the other hand, 

### isdistinguishable on the facts. That case did not concern the question of sufficiency of a particular affidavit; rather, the question involved 

### was whether any affidavithad been filed atall. The court there held thata tax deed gives 

### rise to statutorypresumptions thatofficialduty has been performed and the 

### law has been obeyed. The defendant there failed to carry his burden of overcoming the presumptions by failing toprove that no affidavithad 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 arevoid for lack of jurisdiction in the treasurer to issue them. The plaintiffs here have

overcome the presumptions cited in~avitt.The DistrictCourt concluded asfollows: "The tax title proceedings conducted by the defendant, Rosebud County



### were valid and sufficient to divestRoy M. King and Albert J. Stilwell, and his estate, of any 

### title inand to said lands described inplaintiff'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

arepredicated mainly upon the lapse of 

### timebetween the tax sales and the filingof this action. As support for the defenses, the County 

### relies on the acts and representations of King and his lawyer inregard to the Bentley and LaFurge cases previously mentioned. The DistrictCourt concluded thatKing and hisheirs arebarred by laches and estoppel to deny the County's reservation. The court alsoused waiver/ abandonment type language indiscussing plaintiffs' predecessors' (theStillwells') acknowledgement and recognition of the County's interests. (ConclusionNo. 9; Conclusion No. 4 Wehold that the court's conclusions arenot supported by the findings, because one of the required elements of each asserted defense 

### is lacking. Estoppel requires asone 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 

### isno evidence that the County has done anything but sitback and wait for any royalties thatmight come. stop pel cannot be found where the County has incurred no detriment,

nor changed 

### itsposition. The County may lose the benefit of the royaltymoney, but 

### itwould notbe ina worse positionthan 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), 175Mont. 351, 358, 574 P.2d 254, 258; Davis v. Steingruber (1957),131Mont. 468, 470-471, 311 P.2d 784, 785. Length of 

### timewithin 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 ina period sufficient to show that enforcement would be inequitable. The County has incurred no detriment by simply waiting to 

### see if any oilor minerals areproduced. The County also asserted a statuteof 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 torun only after a competent court declares the 

### letters patent or the grants void. Appellants seek just such a declaration inthis case. Section 70-19-401 and 402 are "adverse possession" statutes. The statutes are also inapplicable. The record discloses no evidence to show thatplaintiffs, who have established legal 

### title, 

### were not "seized or possessed" of the realproperty. The County has failed to overcome the presumption thatplaintiffs

### were inpossession 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 inactual possession of the propertieswithin the period, they aredeemed to have been "seized" of theproperties based on the 

### title they held. Stephens v. Hurly (1977), 172 Mont. 269, 274-75, 563 P.2d 546, 549-50. The County failed toprove that 

### ithad fuLfill.ed allthe elements of adverse possession, necessary to establish 

### title initself under the above statutes. Therefore, the statutes of limitation arenot applicable. The 

### District Court's conclusion as to statutory bar 

### is incorrect. We do not discussplaintiffs' contention that doctrines of estoppel, laches, and statutes of limitation cannot be used togive lifeto an otherwise void tax deed because 

### we find the defenses do not apply in any event. CONCLUSION It 

### isnot necessary todiscuss other asserted issues. The County's tax deeds arevoid 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. 

### Wehave determined that plaintiffs are the owners of the royalty interests inthe King and Stillwell tracts. We

reverse the judgment of the District Court and direct the entry of judgment inaccord with this opinion.



### Mstice -C

Weconcur:

Chief Justice