No. 82-375 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1983 

THE STATE OF MONTANA, acting by 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: 

-- Clerk 
Mr. 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 facts to 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 

'State Pit' ) . 

"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 Pit1 property. 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 

interest to Edith 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 registered mail in prescribed form. 
"7. On June 27, 1981 defendant Timothy E. 

Wood obtained a quitclaim deed . . . of the 

'State Pit1 from Edith I. Walters whom he had 

first met and contacted af ter the public auction and after he had talked with his attorney, Jeff Essman, about Midland Materials 

Co. I s claim to be the successor in interest. 

"8. Both defendant Midland Materials Co. and 

defendant Timothy E. Wood claim to be the successor in interest of 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 State of Montana, prior to the filing 

of this suit, rejected the claim of Timothy E. 

Wood by letter dated July 2, 1981." 

Subsequent to the stipulation and a£ ter judgment was entered, 

Midland Materials submitted a check to the State for the 

full purchase 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 subsequently recorded. 

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 set out in Darrah v. Milbank Mutual Insurance 

Company (1983) -- . -- Mont . -- .- , 658 P.2d 374, 40 St.Rep. 117. 

There we stated: 

"In cases involving summary judgment the pretrial records must be looked at to 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 j udgment 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)r 615 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), 631 P.2d 695, 38 St.Rep. 1083. 

"The moving party in a summary judgment action 

has the burden of showing the complete absence 
of material issues of fact. Byrd v. Bennett 

(1981), 631 P.2d at 696; Cereck v. 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 at 375. 

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 

Montana Highway Department, the agency charged with administering 

the statute. Montana Power Company v. Cremer (1979) 182 Mont. 

Section 60-1-102, MCA, the legislative policy and 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, 

within the limits of available funds, to plan, 

develop , operate, maintain, and protect the 

highway facilities of this state for present 

as well as for future use; 

"(4) to provide sufficiently broad authority 

to enable the highway officials at all levels 

of government to function adequately and 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 adjacent landowner whose chain of title can be traced to the original 

owner of the entire tract. The District Court so found in its 

conclusion of law No. 7. After citing section 60-1-102, 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 into by all the parties, it stated: 

"All of these factors indicated that the 

agency interpretation of 60-4-204, MCA, by the 

Montana Department of Highways supports the 

conclusion that Midland Materials Co. is the 

'successor in interest.'" 

Under the case law, it is clear that, when faced with 

problems of statutory construction, the court must show deference 

and respect to the interpretations given the statute by the officers and agencies charged with administration. Montana Power Co. 

v. Environmental Protection Agency (9th Cir. 1979), 608 F.2d 

334, 344, Department of Revenue v. Puget Sound Power and Light 

(1978), 179 Mont. 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 (see also, Montana 

Power Company v. Environmental Protection Agency, supra). In the 

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. 10 it stated: 

"In this case ' successor-in-interest' can only 

reasonably refer to the present owner of the 

adjacent property from which 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 to match the high bid at public 

auction by obtaining quitclaim deeds from 

original owners who no longer had any ownership interest. " 

This Court has previously held that when construing statutes, the 

interpretation should be 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 in granting summary judgment. / 

A£ f irmed . 

Justice 

We concur: 

=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.nd Materials Co. ; (3) Timothy E. 

Wood, by virtue of the quitclaim deed which he received from 

the original grantor, Edith Walters, is merely 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. 

The majority errs in this case because it misinterprets 

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. It certainly is not 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 only and not in 

substance. --- It does not include - a transfer -- from one 

party to another . . . 

"The City endeavors to apply the terms 'successor 

in interest,' and 'successor in title' as having 

the same meaning, 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, 233 N.Y.S.2d 887. 

A successor in interest an owner of real property may 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 not a 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 these proceedings in existence and 

very much so. The Sta-te recognized that she was 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~tion to 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 this case the deed from Edith Walters to Malcolm 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-terials Co. 

The majority relies on the interpretation of the term 

"successor in interest" by the Highway Department. Where 

that interpretation, a matter of law, is manifestly wrong, we 

should not follow such interpretation when the effect is to 

muddle what otherwise should be clear law. 

The same logic applies to the argument of Timothy Wood. 

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 can Midland Materials Co. as a mere transferee. 

Midland Materials Co. also contends in this case that 

the appeal of Timothy E. Wood is moot because a quitclaim 

deed has been delivered by the Highway Department to Midland. 

Under the facts of this case, however, the judgment is not 

moot. On August 24, 1982, the District Court, acting ex 

parte, as it may under Rule 7, M.R.App.Civ.P., issued a stay 

order with respect to its judgment. The judgment was to the 

effect that Midland, upon payment of the proper money to the 

Highway Department would obtain a deed to the State Pit. 

However the deed was not delivered by the Highwa-y Department 

until after the date on which the District Court 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 the District Court. 

The situation before us therefore should be clear: 

Midland Materials Co. is not a successor in interest to 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 she had 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 sum of money that the highest bidder would 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 to Midland 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 lands which would then have reverted to it, it must 

follow the statutory procedures, and be guided by our opinion 

in conducting the public auction.