### No. 14362 IN THE SUPREME COURT OF THE STATE OF MONTANA 1979

ALICE 

### E. JACKSON et al., Plaintiffs and Appellants,

-vsSTATE OF MONTANA: HOLLY SUGAR CORPORATION, et al., Defendants and Respondents.

Appeal from: District Court of the Seventh Judicial District, Hon. L. C. Gulbrandson, Judge presiding. Counsel of Record: For Appellants: Moses, Tolliver and Wright, Billings, Montana Joel Guthals argued, Billings, Montana For Respondents: Habedank, Cumming & 

### Best, Sidney, Montana Otto Habedank argued, Sidney,Montana David W. Woodgerd argued, Helena, Montana

Submitted: February 8, 

### 1979 Decided: 

## MAR

# 16llylg Filed:

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# l?.'1979Mr. 

### JusticeJohn Conway Harrison delivered the Opinion of the Court. This 

### is an appeal from a quiet title action involving certain land lying

### westof the Yellowstone River inSection 36, adjacent toSection 35, Township 23 North, Range 59 East, County of Richland, Montana. After a nonjury trial, the Honorable Leslie G. 

### Gulbrandson entered a judgment for defendants. Plaintiffs appeal. The diagram below is 

### for illustrativepurposes, assisting inthe explanation of a complicated fact situation. 

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# 1 survey ih 

## 1g8~In 1923Andrew Jackson, Sr., and hiswife Alicebegan purchasing land inthe S1/4 of Section 35, Township 23 North, Range 59 East, of Richland County. During the next 15years they acquired 240 deeded acres inSection 35. In 1933 they acquired, by quiet claim deed, a piece of property, hereinafter referred to

### as the "Meadors Property," located inthe southeast corner of Section 35. Immediately north of theJacksons' property inSection 35 are

### two lots

now known 

### as the "Steinbeisser Property." When the Jacksons acquired the Meadors Property, the Yellowstone River, athigh 

### water, overlapped the Steinbeisser Property and crossed ata diagonal into the Meadors Property. Atthis 

### timeonly a small corner, Lot 2, was high and dry. This lot

### was leased to the Jacksons by the State of Montana. Since 1933 the Yellowstone River has gradually moved east, exposing land inSection 35, fillinginthe Meadors Property tothe section line, and exposing land in Section 36 which adjoins the eastern section line of Section 35. By 1976, a survey indicated that land created by the eastward movement of the river totals some 171acres in Section 36. As the rivermoved eastward and more land became usable, the Jacksons fenced the area and began farming 

### it. It is the 

### title to this "accreted" land that 

### is in dispute. The leasebetween the Jacksons and the Stateof Montana

was renewed every ten years. It

### was modified in 1951to show that theJacksons had become a business entityknown as Andrew Jackson and Sons. In 1961the description of the lands was changed from the five 

### acres of Lot 2 to 153 acres described 

### as Lot 2 and allthe land 

### westof theell ow stone

### River inSection 36. The Jacksons signed the lease but allege that they continued topay taxes on the 

### same. Section 36 belongs tothe Stateof Montana. It 

### is set aside forpublic education and is 

### administered by theMontana Department of StateLands. In 1931the Jacksons began leasing Lot 2, 

### Section 36, from the State. As 

### the years passed, they renewed the lease, including the lands that



### were accreting. The Jacksons argue that except for Lot 2, all

### the land that accreted inSection 36 belongs to them since they were the owners of adjoining property inSection 35. In 1963Andrew Jackson, Sr., died. In the distribution of his estateno mention was made of the accreted land now claimed, although Alice Jackson testified it

### was discussed with their attorney. The property was distributedby sections and lots according to the county records. In 1964 the Jackson heirs conveyed Section 35 and Lot 5, Section 25, toAndrew Jackson, Jr., and his wife Marjorie. No mention 

### wasmade tothe accreted lands although Andrew, Jr., and hismother continued torun cattleon the land east of the section line to the river. In 1964 the description of the land along the river 

### was changed by the county assessor, and the Jacksons 

### were taxed for three lotsand 65 acres along the river. No protest was made as to thepayment of these taxes. In 1974, following Andrew, Jr.'s 

### death, hiswife Marjorie conveyed the property which had been sold toher and Andrew, Jr., 

### to theHolly Sugar corporation (Holly sugar). The land was advertised as including accretions only toLot 5 inSection 25 and those filling inthe remaining portion 

### of the SE1/4 

### of Section 35. 

### However, the contract for deedtoHolly Sugar, dated March 1974, gave the legal description of Lot 5 of Section 25 and the E1/2 SW1/4 and SE1/4 of Section 35 together with accretions of approximately 343.3

acres. The accreted land between the river bank and the eastern section lineof Section 35 

### was not included inthe conveyance toHolly Sugar. However, after the sale, the business entityof Andrew Jackson and Sons and Alice Jackson continued toutilize the property for farm purposes. In 1975Andrew Jackson and Sons began a quiet title action todetermine who had the leasehold interest inSection 36. The court found the leasehold interest in favor of Andrew Jackson and Sons and against Holly Sugar. However, the court was not asked, nor did 

### itdetermine, what land along the river constituted the leasehold or who owned that land. Thereafter, Holly Sugar demanded thatAndrew Jackson and Sons move their fence to the section line and to conduct their activitiesonly inSection 36. Jackson and Sons complied with thisrequest. Atabout the 

### same 

### timethe Jacksons learned that Steinbeisser was claiming ownership to some of the accreted lands through the Stateof Montana. The Jacksons corresponded with the Attorney General of the State of Montana, and that officedisclaimed any claim of 

### title to the property by adverse possession even though the Department of Lands had been leasing the property for a number of years. InMay 1976 the Stateof Montana, Joseph Steinbeisser, and Holly Sugar entered into a boundary agreement dividing the accreted land into four tracts: A, B, C and D. Tract A corresponded toLot 2, Section 36, originally leased to the Jacksons by the Stateplus accretions thereto. Tract B described the accreted 

### land adjacent to the SteinbeisserProperty. Tracts C and D corresponded tothe accreted land adjacent tothe Meadors Property, now owned by Holly Sugar. This 

### was done without the Jacksons' knowledge, and no public auction

### was held. On learning of the agreement, Jacksons brought an action toquiet 

### title to the accreted land which had been divided up by the State, Holly Sugar, and Steinbeisser. The Jacksons did not claim 

### title toTract

### A, which they 

### were leasing from the State, but claimed they owned the remaining tracts through adverse possession and accretion, having improved, utilized, and paid taxes on 

### same. The trial court in

### its findings of fact, conclusions of law and judgment found for defendants. Certain findings are important toour discussion and decision. They are: "2. The Jacksons acquired, by QuitClaimDeed dated December 12, 1933, the E1/2 E1/2 of the SE1/4, Section 35, from John P. Meadors and Katheryn Meadors.

"4. The 

### title to

### all lands previously owned by Joseph Steinbeisser, and the 

### title toTract B asdescribed inboundary agreement recorded Book E-125, page 939 of the records of Richland County, Montana, which boundary agreement was entered intobetween Joseph Steinbeisser and the State of Montana acting through 

### itsBoard of Land Commissioners, dated May 24, 1976, recorded Book E-125, page 939 of the records of Richland County, Montana, became vested inJoseph Steinbeisser and Christine Steinbeisser, husband and wife, asjoint tenants, by virtue of ratification of boundary agreement dated May 12, 1977, filedMay 12, 1977, and recorded inBook E-130, pages 506-507 of the Misc. records of Richland County, Montana. "5. Joseph Steinbeisser 

### atall

### timesprotested ownership by the Stateof Montana of thatportion of the N1/2 of Section 36 Westof the Yellowstone River lying South of Lot 2 of Section 36, which Lot had a river boundary of approximately 720 feet. Heprotested ownership of this land by the Stateof Montana on many occasions to the State Land Board, but atno time undertook legalproceedings toquiet 

### title against the Stateof Montana, and the land attributable 

### as accretion to hisLots 

### 1and 2was by the boundary agreement,

### consolidated intowhat is

### now Tract B 

### of the plat attached tothe boundary agreement hereinbefore referred to. Said accreted land has never been specificallydescribed as being lands within Section 36 on the tax records of Richland County, and Joseph Steinbeisserhas paid all 

### taxes levied and assessed against saidLots 1

### and 2 

### of Section 35. No taxes have been paid by any party to this action on lands described asbeing within Section 36, Township 23 North, Range 59 East. 

### "6. Insofar as the claim of Joseph Steinbeisser is 

### concerned, the land situated within Section 36 and enclosed within a fence constructed by Andrew Jackson was

### held adversely by Jacksons only as a 

### Lessee 

### of the State of Montana, and Jacksons never, at

### any time, made any public claim tothis land except as a 

### Lessee of the Stateof Montana. "7. 

### Albert Jackson and his successors-in-interest have claimed the right tofence, use and control, the lands inSection 36 West

### of theYellowstone River under consecutive leases of State lands, commencing February 28, 1951, and atno time

### until the commencement of this action, have contested the ownership of alllands involved inthis case inSection 36, by the State of Montana. "8. The tax records covering payment of taxes by Andrew Jackson and his successors-in-interest, specifically limit

### taxes levied to lands within Section 35, and thepayment of taxes on the lands asassessed inSection 35, does not include any of the acreaqe 

### inSection 36 West 

### of the Yellow

### - stoneRiver. Ownership, if any, on the part of theplaintiffs, results from plaintiffsbeing heirs-at-law and surviving next of kin of Andrew Jackson, Sr. 

### No acreage situatedwithin Section 36 was included inthe Inventory and Appraisal dated June 19, 1963, filed inthe probate of the Estate of Andrew Jackson, Sr., 

### inthe above-entitledCourt. The Inventory and Appraisal 

### was signed and sworn toby Alice E. 

### Jackson as containing a true statement of all

### of the estate of said deceased which has come to the knowledge and possession of saidAlice E. 

### Jackson, and was filed with the Stateof Montana as 

### a basis for determination of inheritance taxes. Andrew W. 

### Jackson, Jr., and hiswife, Marjorie Ann Jackson, now Marjorie Ann Carter, 

### except forminerals reserved inand under the lands owned by Andrew W. 

### Jackson, Jr., 

### are the successors-in-interest of alllands which were

### owned by Andrew Jackson, Sr., and his widow, Alice E. 

### Jackson, said properties having been purchased for the sum of $40,000.00 under 

### a Contract forDeed between all

### of theplaintiffs other than Marjorie Ann Jackson as 

### Sellers, and Andrew W. 

### Jackson, Jr., and Marjorie Ann Jackson asPurchasers, 

### as joint tenants with right ofsurvivorship. This Contract for Deed 

### is dated January 14, 1964, filedMay 7, 1965, recorded Book A-98, page 38 of the records of County Recorder of Richland County. Warranty Deed executed pursuant to said Contract and dated February 1, 1965, 

### was delivered and filed January 7, 1974, and recorded Book A-110, page 210 of the records of Richland County, Montana.

"10. Marjorie Ann Carter 

### as plaintiff, brought an action toquiet 

### title tothe StateGrazing Leases standing of record inthe name of Andrew Jackson and Sons, being Case No. 10785 of the records of this Court. Defendants proof resulted inentry of Findings of Fact, Conclusions of Law, and Judgment of thisCourt dated March 27, 1975, and in which the Court made the following Finding of Fact: "'5. That the "home" place of the Jackson family consisting of lands other than the aforesaid State lands, 

### was sold toAndrew Jackson, 

### Jr., on or about- January 14, 1964, but the land owned the Stateof Montana described inParagraph 2 above was notincluded inthe sale toAndrew Jackson, 

### Jr

# .' (emphasis added)

### " Seven issues arepresented on appeal: 

### 1. Whether the disputed land 

### was formed by accretion requiring the 

### lawof accretion tobe applied indetermining 

### its ownership. 

### 2. Whether under the law of accretion the land belongs to appellants. 3. Whether appellants acquired the accreted land ajacent to the Steinbeisser Property by adverse possession. 4. Whether the State lease bars appellants' claims to the land. 

### 5. Whether the doctrine of laches bars appellants' claims tothe property. 6. Whether the State's claim isbarred by the disclaimer of interest. 7. Whether the State's claim isbarred by the statute of limitations.For the purposes of this opinion, 

### wewillcombine certain issues inour discussion. It 

### is agreed by the parties that the 

### trial court properly found that the law of accretion applied and must therefore be followed indetermining ownership. They disagree as to the law inMontana, however. Appellants argue that this Court should enlarge our holding in Smith v. Whitney (1937), 105Mont. 523, 74 P.2d 450, the prevailing law on accretion. In Smith 

### weheld that, "Unless excepted

orreserved, accretions or the right thereto pass to a purchaser or a patentee although not described inthe deed

or other instrument of conveyance, if the conveyance describes the adjoining riparian land. (Citationsomitted.)" 105Mont. 

### at 528. This principle of retention by 

### a seller of accreted land specificallyby reservation inthe deed has been the law of this State. Appellants ask us toconsider significant a grantor's failure toinclude any accreted land inthe legal description of the land he conveys, citing Jones v. Johnston (1855), 59 U.S. 150, 15L.ed. 320; Jefferis v. East Omaha Land Co. (1890), 134 U.S. 178, 10 S.Ct. 518, 33 L.ed. 872; and Stevens

v. Arnold (1923), 262 U.S. 266, 43 S.Ct. 567, 67 L.ed. 965. See also 78 Am Jur 2d, 

### Water, S414. We find our holding inSmith v. Whitney, supra, controls here and that accreted lands pass with the riparian upland property unless excepted or reserved. Therefore, the Jacksons, by their conveyances in 1964 and 1974, which did not except orreserve any accretions inSection 36, conveyed the accretions toAndrew Jackson, 

### Jr., and hiswife ~arjorie, who then conveyed them toHolly Sugar. The 1976 boundary agreement and quit claim deed then conveyed Tract D to the Stateof Montana.We next address appellants' claim of acquiring accreted land by adverse possession. To obtain adverse possession of accreted land inMontana, where the adverse claim 

### is not founded on 

### a written instrument, the claimant must occupy, improve, enclose, and pay taxes on the property inquestion for 

### a period of not 

### less than fiveyears ina hostile and continuous manner. Townsend v. Koukol (1966), 148Mont. 

### 1, 416 P.2d 532. Here, appellants do not

### meet the requirements. Their claim of hostile possession, by keeping Steinbeisser off the property, 

### was based on the fact they leased the property from the State. The hostile and continuous occupancy of the land inSection 36 must also fail for there

was no proof of taxes paid, although the Jacksons claim that they thought they were paying taxes. Section 36 

### is tax exempt school trust land and no taxes arepaid on such land. These school trust lands 

### are leased tohelp raise school funds. Appellants 

### raise the question of whether the State leasebars their claims. The 

### District Court held that 

### it did, and 

### we agree. Section 93-2512, R.C.M. 1947, now section 70-19-412 MCA, provides thatpossession of 

### a tenant 

### is deemed possession of the landlord. Here, the uncontradicted testimony of Steinbeisser 

### is that the Jacksons relied on the lease tokeep him off the land. Too, the lease clearly stated that 

### it covered allland 

### west of the Yellowstone River inSection 36. Further, in the lawsuit against ~olly Sugar in 1975, they defended their ownership of the lease in Section 36 against Holly Sugar. The Court ruled that they



### were the owners of the lease. Wenext directour consideration towhether laches bars the Jacksons' claims. From 1961, when the 

### lease 

### was rewrittentocover the added acreage on the 

### westbank of the river in Section 36, the Jacksons have accepted the 

### terms of the 

### lease and have not notified the Stateof any adverse claims against the State. The 

### trial court found 

### it would be inequitable toclaim property they have continuously leased for 15 years without notifying the lessor that they claimed ownership of theproperty. We agree with the 

### trial court in applying the doctrine of laches to the facts here. We held inMontgomery v. Bank of Dillon (1943), 

### 114 Mont. 395, 408-09, 136 P.2d 760, quoting from Riley v. Blacker (1915), 51Mont. 364, 370, 152 P. 758, 759: 

# ".

. . '"Equity aidsonly the vigilant;" and 

### it [laches] exists when there has been unexplained delay of such duration or character as torender the enforcement of the asserted claim inequitable.' 

# . .."

Next raised 

### iswhether the Stateof Montana's claim 

### is barred by the disclaimer of interestby the State Department of Revenue. The disclaimer of interest

### was filedby an attorney inthe Department of Revenue. The disclaimer was intended to indicate that no taxes 

### were owed on the land. It was never signed. The Statewas allowed to amend 

### its pleadings under Rule 15, M.R.Civ.P., towithdraw the consent due tomistake. No default of the State

### was entered. The waiver was not given appellantsprior to this action. There

was no showing made that they were misled intobelieving the State had no interest intheir action. The applications to withdraw the disclaimer and filean answer 

### was made long before trial. The 

### trial judge properly decided this issue infavor of the State. The final issueraised iswhether the Stateof Montana's 

### claimisbarred by the statuteof limitations. The State gained ownership to Tract D through the 1976 boundary agree-ment and quit claim deed from Holly Sugar. The 

### trial court correctly found that section 93-2501, R.C.M. 1947, now section 70-19-302 MCA, did not apply to this claim. The DistrictCourt's award of the property according to the 1976 boundary agreement 

### is affirmed.

We concur:

Chief Justice

Justices

### Mr. Justice John 

### C. Sheehy specially concurring:

Under Section 14, 1867 Organic Act, the United States entrusted every tract numbered Section 16 or 36 inviolable from any tricks by deed or ruse, lawless or statutory,when it created the Montana Territory. Likewise, our Enabling Act states in Section 10 and 11, for education of our children, the same traCts shall not be conveyed, deeded or lost, unless the permanent school fund gets full market cost. Our duty then is to guard against depletion of trusted lands by any means, and that includes accretion. Here the result is just by reason of the trade completed by the state which cannot be unmade. I concur in the result.