No. 13492 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1978 

LARRY D. STENSVAD and MARGARET STENSVAD, 

M-V ENTERPRISES, INC., a Montana 

corporation, and FAUNCO, INC., a Montana 

corporation, 

Plaintiffs and Appellants, 

MUSSELSHELL COUNTY, GENO MINNIE, O.S. 

ELLIS and R. JORGENSON, County 

Commissioners, ROBERT L. HAGSTROM, 

County Assessor, and MARGARET A. 

REIGHARD, County Treasurer, 

Defendants and Respondents. 

Appeal from: District Court of the Fourteenth Judicial District, 

Honorable Nat Allen, Judge presiding. 

Counsel of Record: 

For Appellants: 

Moses, Tolliver and Wright, Billings, Montana 

Towe, Ball, Enright and Mackey, Billings, Montana 

Thomas Towe argued, Billings, Montana 

For Respondents: 

John L. Pratt, County Attorney, argued, Roundup, Montana 

Submitted: November 27, 1978 

Decided: lVlAj? - ; q7o 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

Plaintiffs appeal from a judgment of the District 

Court, Musselshell County, denying their prayer for an order 

permanently enjoining defendants from issuing a tax deed to 

certain real property for failure to pay a portion of a 1971 

assessment representing taxes on cattle under the control 

and in the possession of M-V Enterprises. The court entered 

its amended findings of fact, conclusions of law, judgment 

and order on June 30, 1976, directing defendants to proceed 

forthwith to take tax deed to the real property, now owned 

by plaintiff Faunco, Inc. Plaintiffs contend that certain 

of the court's findings of fact and conclusions of law are 

erroneous and unsupported by the evidence, and that, therefore, the judgment should be reversed. 

In 1971, Larry D. Stensvad was a stockholder in and/or 

manager of certain corporations involved in various aspects 

of the livestock industry. One of those corporations, M-V 

Enterprises, among whose principle shareholders was Stensvad, owned real property in Musselshell County upon which 

the corporation operated a feedlot. Pursuant to an agreement between M-V Enterprises and the L. D. Stensvad Cattle 

Company, cattle belonging to other individuals were left in 

the possession and control of M-V Enterprises to be fed and 

cared for in preparation for marketing. These cattle had 

been purchased by a separate Stensvad corporation, the L. D. 

Stensvad Cattle Company, whose only shareholders were Stensvad and his wife, Margaret. The arrangement was such that 

L. D. Stensvad Cattle Company would buy cattle for individual out-of-state investors who had contracted with the 

company to make the purchases for them. The cattle so 
purchased were delivered to the feedlots of M-V Enterprises 

for care and feeding; the L. D. Stensvad Cattle Company 

billed the individual investors for their respective shares 

of the expenses incurred. Each of the cattle involved in 

this arrangement carried on its right hip a pitchfork or 

"turkey track" brand owned by and registered to the L. D. 

Stensvad Cattle Company; on its right shoulder, each bore an 

unregistered brand, a number, designating its individual 

owner. 

In May, 1971, the Musselshell County assessor, in the 

process of compiling data for the upcoming tax assessment, 

supplied M-V Enterprises with a form which, when completed, 

is a record of the number of cattle which have been fed 

during each month of the preceding year. The form is provided in compliance with section 84-409, R.C.M. 1947, in 

effect at the time of the events, which requires the county 

assessor to obtain from each person a written statement, 

made under oath, which sets forth all the taxable property 

owned by that person or in his possession or under his 

control as of a specific time. Each such form contains an 

affidavit which declares that the list is a full and correct 

statement of the property subject to taxation which is 

owned, claimed, possessed or controlled by the individual or 

business entity. See section 84-410, R.C.M. 1947. M-V 

Enterprises returned to the county assessor the completed 

form, which had been signed by Dona McCleary, a secretary 

employed by the corporation. The form showed nothing as to 

the ownership of the cattle. 

The assessor, following statutory mandate, section 84- 

406(1) and (3), R.C.M. 1947 (Supp. 1971), assessed taxes on 
1/12 of the total number of cattle against M-V Enterprises, 

the party in whose possession and under whose control the 

cattle were. The corporation, maintaining that it could not 

be taxed for cattle which it did not own, refused to pay. 

 either the personal property taxes nor the real property 

taxes assessed for 1971 against M-V Enterprises were paid, 

and the county, in 1976, finally instituted proceedings for 

a tax deed. On February 18, 1976, plaintiffs, alleging that 

no statutory authority existed under which the county legally could assess against them taxes on cattle owned by 

other individuals, petitioned the District Court for an 

order enjoining the defendants from taking tax deed unless 

the total amount, $27,990.39, was paid by March 10, 1976. 

Faunco, Inc. has joined as a party plaintiff, because 

it is the present owner of the real property subject of this 

action, In November, 1971, M-V Enterprises, by virtue of an 

unrecorded assignment from L. D. and Margaret Stensvad, 

owned the real property subject of these tax deed proceedings. At that time, a Roundup bank declared L. D. Stensvad 

and M-V Enterprises in default on certain obligations and 

foreclosed on the property. Roundup Cattle Feeders, a 

corporation uninvolved in this litigation and in which none 

of the parties hereto appears to have an interest, bought 

the property at a foreclosure sale. Subsequently, in June, 

1975, Faunco, Inc., purchased the property from Roundup 

Cattle Feeders. Although apparently not a shareholder in 

Faunco, Inc., L. D. Stensvad is its general manager and its 

registered agent. Faunco, Inc,, has tendered payment of the 

outstanding taxes owed on the real property, exclusive of 

the amounts levied for the cattle owned by the individual 

investors; the county twice rejected the offer of that 
payment. Faunco requests that the county be ordered to make 

an assessment which does not include taxes on the cattle, 

so that the corporation may pay that amount and thereby 

clear its title of the tax lien. 

On April 16, 1976, the Honorable Nat Allen presided 

over a hearing on the merits of the case. In its amended 

findings of fact, conclusions of law, and judgment, the 

court concluded that the taxes were lawfully assessed and 

denied plaintiffs any relief. Notice of appeal was timely 

filed and oral argument heard by this Court. Although the 

District Court properly decided that the county assessor 

correctly assessed the taxes due on the cattle to M-V Enterprises, in whose possession and control the cattle were at 

the time of assessment, we reverse that portion of the 

determination which, in effect, precludes Faunco from paying 

all taxes and penalties due, exclusive of those assessed 

against the cattle. 

Plaintiffs allege that numerous errors are to be found 

in the court's findings and conclusions, but only one of 

those, whether the county assessor acted properly, in conformity with section 84-406, R.C.M. 1947 (Supp. 1971), in 

assessing the taxes due on the cattle to M-V Enterprises, 

merits consideration. 

Section 84-406, R.C.M. 1947 (Supp. 1971), controlling 

at the time of the events complained of by plaintiffs, reads 

in pertinent part: 

" (1) The assessor must, between the first Monday 

of March and the second Monday of July in each 

year, ascertain the names of all taxable inhabitants, and assess all property in his county subject to taxation, except such as is required to 

be assessed by the state board of equalization, 

and must assess such property to the persons by 

whom it was owned or claimed, or in whose posses- 
sion or control it was at 12 midnight of the 

first Monday of March next preceding. . . The 

procedure provided by this section shall not 

apply to: 

" (b) Livestock being -- fed in feeding -- pens or 

enclosures which may -- by subdivision --- (3) of this 

section be assessed -- on an average inventory basis. 

Credits =st be assessed as provided in section 

84-101, subdivision 6." 

Subdivision (3) states how such livestock shall be 

assessed: 

"(3) The assessed value of livestock being fed 

in feeding pens or enclosures on the first Monday 

in March may be computed by adding the value of 

livestock more than six (6) months of age being 

fed on the last day of each month since the last 

assessment date and dividing the sum by twelve 

(12) ." 

The statute is written in the disjunctive, mandating the 

assessor to assess all taxable property in his county either 

to the persons by whom it was owned or claimed -- or in whose 

possession - or control -- it was as of midnight of the first 

Monday of March. It is clear that the assessor acted properly in assessing to M-V Enterprises, in whose possession 

and control the cattle were, taxes on the cattle. 

Plaintiffs have sought an injunction pursuant to section 

84-4505, R.C.M. 1947, now section 15-1-405 MCA. That statute states: 

"No injunction must be granted by any court or 

judge to restrain the collection of any tax or 

any part thereof, nor to restrain the sale of 

any property for the nonpayment of taxes, except: 

"1. Where the tax, or the part thereof sought to 

be enjoined, is illegal, or is not authorized by 

law. If the payment of a part of a tax is sought 

to be enjoined, the other part must be paid before an action can be commenced. 

"2. Where the property is exempt from taxation." 
Although they allege at various times that the tax assessment here is both illegal and not authorized by law, plaintiffs offer no legal arguments in support of that position. 

Obviously the tax is authorized by law. The statute, section 84-406, R.C.M. 1947 (Supp. 1971), speaks for itself. 

We point out in passing that such statutes have long 

since passed constitutional muster. As a leading authority 

observed over fifty years ago: 

"Statutes sometimes provide that tangible personal property shall be assessed wherever in the 

state it may be, either to the owner himself or 

to the agent or other person having it in charge; 

and there is no doubt of the right to do this, 

whether the owner is resident in the state or not. 

[Clattle and sheep may be required by the statute 

to be assessed where they are kept or where they 

have been taken to graze or to be fed . . ." 

3 T. Cooley, --- The Law of Taxation §lo71 (4th ed. 

1924). 

It has been the general rule since the turn of the century 

that the legislature has the power to adopt a mode of 

assessment such that property may be assessed to the party 

in possession of it. The North Dakota Supreme Court declared: 

"Indeed, the necessity for speedy and certain 

methods of producing revenue for governmental 

support is so great that the legislatures of 

many states have declined to enter into an investigation of titles for the purpose of taxation, 

particularly in reference to property of a shifting nature, and have, accordingly, provided for 

assessments against the party having the possession and control upon some specified date. Such 

enactments have been repeatedly before the courts, 

and have been uniformly upheld. Indeed, we are 

cited to no case which has denied the right of 

a state to enforce this method of assessment." 

Minneapolis & Northern Elevator Co. v. Trail1 

County (1900), 9 N.D. 213, , 82 N.W. 727, 

728, and cases subsequently cited. 

We, too, have been cited to no case which has denied 

the right of a state to enforce the method of assessment 

which our legislature has seen fit to adopt. We, too, are 

of the opinion that "'"possessory control of property is 
sufficient to authorize its assessment to the possessor or 

keeper of it."'" Minneapolis & Northern Elevator Co. v. 

~raill County, 82 N.W. at 729. Furthermore, "[wle are 

convinced that the legislature had the right to act upon 

evidence of ownership afforded by possession, and for the 

purposes of taxation to make the presumption arising therefrom conclusive, and to provide, therefore, for the assessment and taxation of [cattle] to the party in possession in 

the manner and form as provided by the act in question." 82 

N.W. at 731. 

Because the tax is both authorized and legal, injunction will not lie. The District Court properly refused to 

grant an injunction on that basis. 

In passing, we note that in a previous year, M-V Enterprises gave the county assessor's office a list of the 

individuals who owned the cattle. The assessments in that 

year apparently were made to the individuals and not to M-V 

Enterprises. There is conflicting testimony as to whether 

that information was provided in 1971. The county officials 

claim that the corporation did not furnish the information, 

so the assessor, acting in a reasonable and legal manner, 

assessed the tax against M-V ~nterprises, in whose possession and control the cattle were. The assessment was not 

made to the L. D. Stensvad Cattle Company, whose registered 

brand was worn by each of the cattle, even though it is 

prima facie evidence that the person or corporation, in 

whose name a brand is of record, is the owner of all animals 

bearing the brand in the position and on the species stated 

in the certificate of record. Section 46-606, R.C.M. 1947, 

now section 81-3-105 MCA. The assessor, of course, could 

not rely on the numerical brand, which was not registered. 
No obligation is imposed on the assessor to track down the 

"true" owner of the cattle. The obligation of section 84- 

406, R.C.M. 1947 (Supp. 1971), to assess to the person in 

whose possession or control the property was, had been 

fulfilled. 

Having cracked the shell, we turn now to the nut of the 

problem, determination of whether Faunco, Inc., is obliged 

to pay taxes assessed on the cattle. Certain statutes which 

are determinative of this issue, have been overlooked. Those 

statutes are sections 84-3807 and 84-3808(a), R.C.M. 1947, 

now respectively sections 15-16-401 and 15-16-402(1) MCA: 

"84-3807. Tax operates as judgment -- or lien. 

Every tax has the effectof a judgment against 

the person, and every lien created -- by this title 

-- has the force and effect -- of an execution duly 

levied against all personal property -- in the 

possession -- of the person assessed -- from and after 

--- the date the assessment -- is made. . ." 

"84-3808. -- Tax on personal property -- lien on realty 

--separate assessment. (a) Every --- tax due upon 

personal property -- is a prior ----- lien upon any or all 

of -- such property, which lien shall have precedence 

over any other lien, claim or demand upon such 

property, and except as hereinafter provided, 

every -- tax upon personal property is also 5 lien 

upon -- the real property --- of the owner thereof, from 

and after 12 m. of the first Monday in March in 

each year." 

Thus, the tax due on the personal property, the cattle, 

is a lien on that property, section 84-3807, R.C.M. 1947, 

and the tax upon that personal property is a lien upon the 

real property of the owner thereof, section 84-3808, R.C.M. 

1947. Because the cattle have long since gone to that great 

roundup in the sky, the lien on the cattle per - se has evaporated. It has not evaporated as against the real property 

of the owners of the cattle, however. 

It does not appear of record that Faunco, Inc., was 

owner of any of the cattle. Therefore, a tax upon the 
cattle would not operate as a lien on the real property of 

Faunco, and Faunco is not obligated to pay the personal 

property taxes assessed against the cattle. 

Faunco's demand that the county accept payment of the 

taxes and penalties due, exclusive only of those assessed 

against the cattle, is appropriately made. The county may 

not look to Faunco, Inc., for payment of the taxes and 

penalties due on the cattle, but must seek payment, under 

the terms of the statute, from those who were owners of the 

cattle. To that extent the judgment is reversed and the 

county enjoined from taking tax deed to the real property 

owned now by Faunco, Inc., upon its payment of all moneys, 

exclusive of the taxes on the cattle, due the county. 

We concur: