No. 82-375
IN THE SUPREME COURT OF THE STATE OF MONTANA 1983

THE STATE OF MONTANA, actingby and through its Department of Highways, Plaintiff and Respondent,

VS. MIDLAND MATERIALS CO., Defendant. and Respondent, and TIMOTHY E. WOOD, Defendant and Appellant.

Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone Honorable Diane Barz, Judge presiding. Counsel of Record: For Appellant: Bruce E. Lee, Bill.ings, Montana For Respondents: Crowley, Haughey, Hanson, Toole & Dietrich, Billings,

Montana James R. Beck, Helena, Montana

Submitted on briefs: February 24, 1983 Decided: 

### May 12, 1983 Filed:

-- ClerkMr. Justice L. C. Gulbrandson delivered the Opinion of the Court.

This case stems from an interpleader action brought by the Nontana Highway Department to determine whether respondent, Midland Materials Co., 

### or appellant, Tim Wood, was the "successor-in-interest" to Edith I.Walters

## , the former owner of property known as the "State Pit," under section 60-4-204, MCA. The District Court of the Thirteenth Judicial District

## , Yellowstone County, denied defendant Wood's motion for summary judgment and granted the summary judgment motion submitted by Midland Materials Co. From that judgment, Tim Wood appeals. The parties stipulated the factsto be as follows: "1. On December 30, 1954 Edith I. Walters conveyed by deed

# . .

# . to the State Highway Commission of Montana a tract of land in Yellowstone County, Montana (hereinafter 'StatePit')

# . "2. In 1974 Edith I. Walters conveyed by warranty deed 

# . . . to M. G. Long property adjacent to and north and southwest of the 'State Pit1, excepting the 'State Pit1. In 1975 M. G. Long conveyed the 'Midland' property to defendant Midland Materials Co. by warranty deed

# .. . "3. On February 4, 1981 the Montana Department of Highways sent a letter to Edith Walters 

# .

# . . "4. On February 6, 1981 the Montana Department of Highways sent a letter to Midland Materials Co.

# ..

# . "5. Sometime prior to June 25, 1981 the Montana Department of Highways published a Notice of Sale of the 'State Pit1 property

"6. On June 25, 1981 the Montana Department of Highways, acting pursuant to the authority granted by 59 60-4-202 and 60-4-204, MCA, conducted a public auction at Billings, Montana of the 'State Pit1property. The bidding at said auction was opened by Mr. Joel Long of defendant Midland Materials Co

# . for $18,000.00. Defendant Timothy E. Wood then bid $18,100.00. After an unsuccessful call for higher bids the auctioneer concluded the sale at the $18,100.00 high bid. Mr. 

### Joel Long then alleged 

### to those present that they (Midland 

### Materials Co.) 

### were successors in interesttoEdith I.Walters and would like

### to exercise their right 

### to meet the high bid. Mr. Long 

### was informed by a Highway Department representative 

### to send his claim to the State by registeredmail inprescribed form."7. On June 27, 1981 defendant Timothy E. Wood obtained a quitclaim deed 

# . . 

# . of the 'State Pit1from Edith I. Walters whom he had firstmet and contacted after the public auction and after he had talked with his attorney, Jeff Essman, about Midland 

### Materials Co. Is claim tobe the successor in interest. "8. Both defendant Midland Materials Co. and defendantTimothy E. Wood claim to be the successor in interestof Edith I.Walters for the purpose of S 60-4-204, MCA, and 

### are both prepared to pay the high bid price to the State Highway Commission

# .

# .

# . "9. The Stateof Montana, prior 

### to the filing of this suit, rejected the claim of Timothy E. Wood by letterdated July2, 1981." Subsequent to the stipulationand a£terjudgment 

### was entered, Midland Materials submitted 

### a check to the State for the fullpurchase price and a deed was mailed to them on August 25, 1982. The deed, although signed prior 

### to August 25, 

### was not mailed until that date. On August 24, Tim Wood had obtained a stay of execution but it 

### was not served on appellants or the State prior 

### to the issuing of the deed. The deed 

### was subsequentlyrecorded. The issue presented 

### is whether the District Court erred in determining Midland Materials Co. to be the "successor-ininterest" as that 

### term is used in section 60-4-204, MCA? As this case is an appeal from a summary judgment, 

### we must follow the rules 

### as setout inDarrah v. Milbank Mutual Insurance Company (1983) -- . -- Mont

# . -- .- 

## , 658 P.2d 374, 40 St.Rep. 117. Therewe stated: "In 

### cases involving summary judgment the pretrial records must be looked atto determine whether there are any genuine issues of material fact, 56(c) M.R.Civ.P., Flemmer v. Ming (1980)r 621 P.2d 1038, 37 St.Rep. 1916, because summary judgment is only proper under Rule 56(c) M.R.Civ.P., where the record discloses no such issues exist and the moving party is entitled to judgment as a matter of law. Reaves v. Reinbold (1980)r615 P.2d 896, 898, 37 St.Rep. 1500, (and cases cited therein). As the purpose of the proceeding is to determine whether there are any 

### material issues of fact involved, it should be 

### remembered that the formal issues presented by the pleadings are not controlling. Byrd v. Bennett (1981), 631P.2d 695, 38 St.Rep. 1083. "The moving party ina summary judgment action has theburden of showing the complete absenceof 

### material issues of fact. Byrd v. Bennett (1981), 631P.2d at696; Cereckv. Albertsonls Inc. (1981), 637 P.2d 509, 511, 38 St.Rep. 1986, (and

### cases cited therein); Rumph v. Dale Edwards, Inc. (1979),600 P.2d 163, 36 St.Rep. 1022." 658 P.2d at375. In this case, the absence of such issues has been shown, despite there being no prior interpretation of the 

### term "successor-in-interest," contained in section 60-4-204, MCA, by this Court 

### or the legislature, or any indication 

### as 

### to the legislative intent from the statute 

### as a whole. Guidance in construing this term 

### is provided by the interpretation of the MontanaHighway Department, the agency charged with administering the statute. Montana Power Company v. Cremer (1979) 182 Mont.

Section 60-1-102, MCA, the legislativepolicyand intent 

### section of the Highway Code, placed a great deal of trust and authority in the hands of highway officials. The pertinent part of that section states: "Consistent with the foregoing determination and declarations, the legislature intends: 

### "(1) to place a high degree of trust in the hands of those officials whose duty it is, withinthe limitsof available funds, toplan, develop

## , operate, maintain, and protect the highway facilities of this 

### state for present as

### wellas forfutureuse;

"(4) 

### to provide sufficientlybroad authority 

### to enable the highway officials at alllevels of government to function adequatelyand efficiently in all 

### areas of their respective responsibilities, subject 

### to the limitations of the constitution and the legislative mandate hereinafter imposed

# ." Section 60-1-102, MCA. Under this authority the Highway Department in the past has interpreted the terms "successor-in-interest" to mean the adjacentlandownerwhose chain of titlecan be traced to the original

owner of the entire 

### tract. The 

### District Court so found in 

### its conclusion of 

### law No. 7. Afterciting section60-1-102, MCA, the legislative policy and intent section of the Highway Code, the



### case of Castles v. State ex rel. Montana Department of Highways(1980); ---- Mont

# . 609 P,2d 1223, 37 St.Rep. 234, and the stipulation entered intoby alltheparties,it stated: "All of these factors indicated that the agencyinterpretation of 60-4-204, MCA, by the Montana Department of Highways supports the conclusion that Midland Materials Co. 

### is the 'successor ininterest.'" Under the 

### case law, it 

### is clear that, when faced with problems of statutoryconstruction, the courtmust show deference and respect tothe interpretations given the statuteby the officersand agencies charged with administration. MontanaPower Co.

v. Environmental Protection Agency (9th Cir. 1979), 608 F.2d 334, 344, Department of Revenue v. Puget Sound Power and Light (1978), 179Mont. 255, 587 P.2d 1282, Northern Cheyenne Tribe v. Hallowbreast (1976),'425

### U.S. 649, 48 L.Ed.2d 274, 96 S.Ct. 1793. "The persuasiveness of an administrative interpretation of a statute depends upon the thoroughness evident in 

### its consideration, the validity of 

### its reasoning and its consistency with earlier and later pronouncements of the same agency. [citation omitted]" Blackfeet Tribe of Indians v. State of Montana (D.Mont. 1981), 507 F,Supp. 446, 451 (seealso, Montana Power Company v. Environmental ProtectionAgency, supra). Inthe

case at bar, there 

### is no substantial evidence to show that the interpretation of "successor-in-interest" made by the Highway Department has not been consistently applied over the years. It should also be noted that the District Court found that the interpretation advanced by the appellant would lead to an absurd result if adopted. In conclusion of law No. 10it stated: "Inthiscase 

### 'successor-in-interest' canonly reasonably refer to the present owner of the adjacentproperty fromwhich original tract of land the Montana Department of Highways acquired 

### its portion or strip. Any other interpretation would be unreasonable 

### as it would-lead to parties without an interest in the adjacent land being allowed the advantage of being able tomatch the high bid atpublic auction by obtaining quitclaim deeds from original owners who no longer had any ownership interest.

### " ThisCourt haspreviously held thatwhen construing statutes, the interpretationshouldbe reasonable to avoid such absurd results.Montana Power Co. v. Cremer, supra (and cases cited therein). For the foregoing reasons, we believe the District Court was correct ingranting summary judgment. 

## / A£firmed

# .

Justice

Weconcur: =2Ad$

# &*&a Chief Justice

Justices

### Mr. Justice John

### C. Sheehy,dissenting:

I

### dissent from the foregoing opinion. I 

### would hold (1)the term "successor in interest" does not include a successor in title; (2)the appeal here is not moot by virtue of the delivery of a quitclaim deed by the Highway Department to Midla.ndMaterials Co.; 

### (3) Timothy 

### E. Wood,by virtue of the quitclaimdeed which he received from the original grantor, Edith Walters, ismerely a transferee,

a successor in title,and not 

### a "successor in interest";and



### (4) the quitclaim deed to Midland Materials should be held null and void, set aside,and the Highway Department ordered to follow the proper statutory procedures if it intends to sell the land in question. Themajority errs in this case because itmisinterprets the term "successor in interest" both on the facts here and the applicable law. First let us determine what a "successor i.n interest" is. Itcertainly isnot a successor in title. The two terms are not synomous. "In order to be a 'successor in interest,

### ' a party must continue to retain the same rights as the original owner without 

### - a change in ownership. There must be a change in form onlyand not in substance. 

### --- Itdoesnot include - 

### a transfer fromone 

### -- party

## toanother

# . .

# .

"The City endeavors to apply the terms 'successor in interest,' and 'successor in title' as having the samemeaning, but cites no law to support this claim 

# . 

# . .I' City of New York v. Turnpike Development Corporation (S.Ct. Kings Co. 1962)

## , 36 

### Misc.2d 704, 233N.Y.S.2d 887. 

### A successor in interest an owner of realpropertymay be

one who is substituted for the owner by operation of law, such as an heir, a personal representative, a trustee in bankruptcy, a purchaser at foreclosure, or any other change

### which is in form only and not in substance. It cannot include a transferee by deed or assignment from the owner because such a transferee or assignee is a successor in title,and nota successor in interest. Moreover, on the facts of this case, there can be no "successor in interest," because the original owner, Edith Walters, is at the time of theseproceedings in existenceand very much so. The Sta-terecognized that shewas in existence by serving upon her a request for a waiver of her right as the original owner. The statute which applies says "The owner from whom the interest is originally acquired 

### -- or his successor in interest shall have the o~tionto purchase theinterest by offering therecore an amount of money equal to <he highest bid received for the interest at the sale

# . .."

It can be discerned from the terms of the statute that

an owner, and the owner's successor in interest, cannot coexist at the same time. 

### If the owner exists,the successor does not. The successor in interest exists only if he is substituted in the place and stead of the original owner. In thiscase the deed from EdithWalters toMalcolm Long specifically excepted the property known as the State Pit. Malcolm Long acquired no right, title or interest in the State Pit by virtue of his deed from Edith Walters and neither did Malcolm Long

## 's transferee,Midland Ma-terialsCo. The majority relies on the interpretation of the term "successor in interest" by the Highway Department. Where that interpretation,amatter of law, is manifestly wrong,we should not follow such interpretation when the effect is to muddlewhat otherwise shouldbe clear law. The same logic applies to the argument of TimothyWood. He claims to be a successor in interest by 

### virtue of a quitclaim deed obtained from Edith Walters after the

### purported. sale of the property had taken place. He did not thereby become a successor in interest, rather he became a
successor in title. As a transferee,he is not a successor in interest. He can claim no right to meet the highest bid under section 60-4-204, MCA, as a mere transferee anymore than canMidland MaterialsCo. as amere transferee. Midland Materials Co. also contends in this case that the appeal of Timothy E. Wood is moot because a quitclaim deed hasbeen deliveredby theHighway Department toMidland. Under the facts of this case, however, the judgment is not moot. On August 24, 1982, the District Court, acting ex parte, as itmay under Rule 7,

### M.R.App.Civ.P., issued a stay order with respect to its judgment. The judgmentwas to the effect that Midland, upon payment of the propermoney to the Highway Department would obtain a deed to the State Pit. However the deed was not deliveredby the Highwa-yDepartment until after the date onwhich the DistrictCourt entered its supersedeas order. In that circumstance, the judgment is stayed and the issue is not moot for the purposes of Woods appeal. A deed takes effect only upon legal delivery. 23 Am.Jur.2d Deeds S 

### 78. Here the delivery by the Highway Department, on August 25, 1982, was too late to avoid the effect of the supersedeas order of theDistrictCourt. The situation before us therefore should be clear: Midland MaterialsCo. is not a successor in interestto Edith Walters. Timothy Wood is not a successor in interest to Edith Walters. Edith Walters is no longer an owner because she has quitclaimed any interest shehad in the State Pit.to Timothy Wood. It should be the object of the Highway Department in selling land which it does not need to obtain the greatest sumofmoney that the highestbidderwould agree

### to pay at a pub]-ic auction. The actions of 

### the Highway Department in this case have side-stepped that beneficial purpose. We should therefore order that the deed issued by the Highway Department in this case toMidland Materials Co. be declared null and void, and set aside, and the judgment reversed. If 

### the Highway Department wishes in the future to sell the landswhich would then have reverted to it, itmust followthe statutoryprocedures,and be guided by our opinion in conducting thepublic auction.