Case Name: The FIRST NATIONAL BANK OF EDEN, a corporation; Stanley Boe; and Jeannie R. Anderson, Plaintiffs and Appellants, v. Herman MEYER, (also known as Herman C. Meyer); Gladys F. Meyer; Gordon Phillips, doing business as Phillips Oil Co.; St. Luke's Midland Regional Medical Center, formerly St. Luke's Hospital, a corporation, doing business as Marshall County Medical Clinic, formerly Britton Medical Center; South Dakota Farmers Oil Co., Inc., a corporation; Suther Oil Co., Inc., a corporation; and Marshall County, a political subdivision of the State of South Dakota, Defendants and Appellees
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1991-10-09
Citations: 476 N.W.2d 267
Docket Number: No. 17345
Parties: The FIRST NATIONAL BANK OF EDEN, a corporation; Stanley Boe; and Jeannie R. Anderson, Plaintiffs and Appellants, v. Herman MEYER, (also known as Herman C. Meyer); Gladys F. Meyer; Gordon Phillips, doing business as Phillips Oil Co.; St. Luke’s Midland Regional Medical Center, formerly St. Luke’s Hospital, a corporation, doing business as Marshall County Medical Clinic, formerly Britton Medical Center; South Dakota Farmers Oil Co., Inc., a corporation; Suther Oil Co., Inc., a corporation; and Marshall County, a political subdivision of the State of South Dakota, Defendants and Appellees.
Judges: SABERS and AMUNDSON, JJ., concur.
Reporter: North Western Reporter 2d
Volume: 476
Pages: 267–276

Head Matter:
The FIRST NATIONAL BANK OF EDEN, a corporation; Stanley Boe; and Jeannie R. Anderson, Plaintiffs and Appellants, v. Herman MEYER, (also known as Herman C. Meyer); Gladys F. Meyer; Gordon Phillips, doing business as Phillips Oil Co.; St. Luke’s Midland Regional Medical Center, formerly St. Luke’s Hospital, a corporation, doing business as Marshall County Medical Clinic, formerly Britton Medical Center; South Dakota Farmers Oil Co., Inc., a corporation; Suther Oil Co., Inc., a corporation; and Marshall County, a political subdivision of the State of South Dakota, Defendants and Appellees.
No. 17345.
Supreme Court of South Dakota.
Argued May 22, 1991.
Decided Oct. 9, 1991.
Carlyle E. Richards of Carlyle E. Richards, P.C., Aberdeen, for plaintiffs and appellants.
Danny R. Smeins, Britton, for defendants and appellees South Dakota Farmers Oil Co. and Suther Oil Co.

Opinion:
MILLER, Chief Justice.
This is an intermediate appeal by First National Bank of Eden (Bank) from the trial court's denial of its motion for summary judgment. The summary judgment motion was in a quiet title action wherein Bank sought to quiet title to real property it acquired as a result of a tax deed proceeding. The trial court held that the tax deed notice statute was unconstitutional. We affirm.
FACTS
This legal controversy centers around three quarter sections of land in Marshall County, South Dakota, previously owned by Herman and Gladys Meyer.
In the spring of 1982, appellees South Dakota Farmers Oil Company and Suther Oil Company obtained money judgments against Herman Meyer and the same were appropriately docketed with the Marshall County Clerk of Courts. Under the provisions of SDCL 15-6-7, these judgments became a lien on all of Meyers' real estate, except their homestead (homestead rights are not at issue in this action).
In November, 1982, Bank loaned money to Meyers who executed a mortgage on the three quarter sections. This mortgage was properly filed and recorded.
Meyers did not pay the real estate taxes on said property for the years 1980 — 1985. Under the provisions of SDCL ch. 10-23, all property for which the taxes are delinquent is sold at an annual public auction. When there are no bidders on the property, the county treasurer bids off the property in the name of the county in the amount of the taxes, penalty, interest, etc. (SDCL 10-23-24) and issues a certificate to the county (SDCL 10-23-25). Apparently, there were no bidders on Meyers' property for the years in question, since the county held the tax certificate for those years.
When Meyers' mortgage went into default, Bank started a foreclosure action and then discovered that it was not the first lienholder (even though it had constructive notice of the prior judgments by virtue of their docketing). Apparently, they were junior to eight prior judgments, including appellees. When it realized this, it "backed off" its foreclosure. The President of Bank then contacted Mr. Richards to see if there was anything they could do about recouping the loan through tax process, or a tax deed.
On January 15, 1986, Bank obtained an assignment of the county treasurer's certificate covering delinquent real estate taxes assessed against Meyers' land, and paid the taxes. On January 26, 1986, Bank corn- menced proceedings to procure a tax deed on Meyers' real property. Pursuant to statute, Bank served written notice of its intent to take a tax deed on Meyers, Duane Johnson (the person in possession of the land), Marshall County, and itself. However, no notice, actual or constructive, was made upon judgment lienholders. Ultimately, the Marshall County Treasurer issued Bank a tax deed which was duly recorded.
Bank, which ultimately sold the property under a contract for deed, commenced a quiet title action and named as defendants the Meyers and various judgment lienhold-ers. This was the first notice that appel-lees received of the tax deed proceedings. Appellees answered the quiet title complaint, asserted the priority of their judgment liens and alleged that the tax deed proceeding was constitutionally deficient because of failure of Bank to give them notice. Bank moved for summary judgment against appellees (the only answering defendants). The trial court, in denying said motion, held that South Dakota's statutory scheme for taking tax deeds was constitutionally deficient because it failed to provide notice to judgment lienholders. We agree and thus affirm.
DECISION
Appellees' claims would normally be time-barred from challenging the validity of these tax deed proceedings under SDCL 10-25-44. However, they received no notice until they were joined in the quiet title action, long after the statute of limitations would have barred their claim. For reasons stated herein, appellees were entitled to notice of the tax deed proceedings. We have held that failure to give notice of tax deed proceedings to those entitled thereto is a jurisdictional defect which tolls the statute of limitations until the notice is received. McQuown v. Field, 74 S.D. 200, 50 N.W.2d 358 (1951); Cain v. Ehrler, 36 S.D. 127, 153 N.W. 941 (1915). Therefore, we reach the merits.
1. Notice:
In Mullane v. Central Hanover Bank & Tr. Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), the United States Supreme Court, in determining what notice is constitutionally adequate to satisfy due process, stated:
The fundamental requisite of due process of law is the opportunity to be heard. This right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.
An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.
339 U.S. at 314, 70 S.Ct. at 657, 94 L.Ed. at 873 (citations omitted).
In Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), the Court held that an Indiana statute which required the county auditor to post notice in the county courthouse of the sale of real property for nonpayment of property taxes, and to publish notice once each week for three consecutive weeks, was violative of the due process clause of the Fourteenth Amendment where there was no provision for notice by mail or personal service to mortgagees of the property. The Court determined that constructive notice to a mortgagee who is identified in the public records does not satisfy the due process requirement of Mullane, supra.
We hold that known or readily ascertainable judgment lienholders are entitled to the same notice ás a mortgagee. Mennonite, supra; Verba v. Ohio Cas. Ins. Co., 851 F.2d 811 (6th Cir.1988).
2. SDCL ch. 10-25:
SDCL Í0-25-3, at times salient to this appeal, provided:
The notice of intention to take tax deed shall be served upon the owner of record of the real property so sold, upon the person in possession thereof, and also upon the person in whose name the same is taxed and upon the mortgagee named in any unsatisfied mortgage then in force upon such real property of record in the office of the register of deeds of the county in which the same is located, and if any such mortgage shall have been assigned and the assignment thereof placed upon record in the office of the register of deeds, then upon such assignee in lieu of the mortgagee named in the mortgage. (Emphasis added.)
SDCL 10-25-3 did not require that notice be sent to all known or reasonably ascertainable judgment creditors. It did not even provide for notice by publication. (And remember, notice by publication was held to be insufficient in Mennonite, supra, and Tulsa Professional Collection Services v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988)).
Therefore, under the clear holdings by the United States Supreme Court, this statute (SDCL 10-25-3), in its prior form, was unconstitutional.
3. Prospective Application: We direct that the foregoing holding be applied prospectively only.
When determining whether a case holding should be applied prospectively, the court considers the following factors: (1) the decision to be applied prospectively must establish a new principle of law by either, overruling clear past precedent on which litigants have relied, or, by deciding an issue of first impression whose resolution was not clearly foreseen; (2) the court must weigh the merits and demerits of each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation; and (3) the court must determine whether the decision would produce substantial inequitable results if applied retroactively. Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971); Fisher v. Sears, Roebuck & Company, 88 S.D. 1, 214 N.W.2d 85 (1974).
In Fisher, we noted that "[i]n Great Northern R. Co. v. Sunburst Oil & Ref. Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360 [(1932) ], the United States Supreme Court declared that it was within the inherent authority of the highest court of any state to give prospective application to its decisions without offending any constitutional principles." Fisher, 88 S.D. at 4, 214 N.W.2d at 87. Therefore, it is within the inherent power of this court to declare, at the time of a decision, whether a case will achieve only prospective application. Id.
Considering the factors set forth in Chevron, supra, and recognizing that over the past many years several thousand acres of land have been acquired in this state through a good faith compliance with, and reliance upon, tax deed notice procedures, which we now find to be unconstitutional, substantial detriment could occur were this holding to be given retroactive application.
Affirmed.
SABERS and AMUNDSON, JJ., concur.
HENDERSON, J., concurs specially.
WUEST, J., dissents.
. As part of the annual tax sale proceedings, the Marshall County Treasurer published and posted notice of the pending sale and sent timely notice by mail to Meyers.
. Mr. Richards was not Bank's attorney when the Bank entered into the mortgage with Mr. Meyer.
. This was done pursuant to SDCL 10-23-28, which provides:
If any person is desirous of purchasing the interest of the county in the real property acquired by reason of the county treasurer buying the same for the county, he may do so by paying to the treasurer the amount of the taxes, penalty, interest, and costs of sale and transfer and all unpaid or subsequent taxes as specified in § 10-23-27, up to the date he so pays, and thereupon the treasurer shall issue a tax receipt and duplicate for such taxes, penalty, interest, and costs, which shall be entered upon his cashbook as other tax receipts; and he shall assign and deliver to such purchaser the certificate of purchase held by the county for such real property, which assignment and transfer shall convey unto such purchaser all the rights of the county, both legal and equitable, in and to such real property as much so as if he had been the original purchaser at the tax sale.
. As will be noted later, there was no statutory requirement for them to give notice to judgment creditors.
. The South Dakota Attorney General was notified of the challenge of the constitutionality of the notice statute but declined to appear in the action. SDCL 15-6-24(c) and Sharp v. Sharp, 422 N.W.2d 443 (S.D.1988).
. It should be noted that South Dakota has a "request notice" provision. (It was enacted in 1984, one year after Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), possibly in reaction thereto.) SDCL 10-23-2.2 provides, in pertinent part:
If any of the following persons has annually, on or before November fifteenth, on a form prescribed by the department of revenue:
(1) Requested that a notice of sale of the real property be sent to him; and
(2) Paid a three dollar fee to the county treasurer to cover the cost of sending the notice, the county treasurer shall, in addition to the notice required by § 10-23-2, send the notice of sale . to any other person who has or claims an interest in the real estate. (Emphasis added.)
In Mennonite, 462 U.S. at 793 n. 2, 103 S.Ct. at 2708 n. 2, with reference to a similar statute, the Court stated:
Indian Code § 6-1.1-24-4.2 (1982), added in 1980, provides for notice by certified mail to any mortgagee of real property which is subject to tax sale proceedings, if the mortgagee has annually requested such notice and has agreed to pay a fee, not to exceed $10, to cover the cost of sending notice. Because the events in question in this case occurred before the 1980 amendment, the constitutionality of the amendment is not before us. (Emphasis added.)
.SDCL 10-25-44 provides:
No action may be commenced by the former owner or by any person claiming under him, to recover possession of any real property which has been sold and conveyed by deed for nonpayment of taxes or to avoid such deed, unless such action is commenced within two years after the recording of such [tax] deed; and no defense may be interposed or maintained by the former owner, or by any person claiming under him, in any action brought to quiet the title in the grantee in any tax deed, or by any person claiming under such grantee, in any tax deed issued and delivered by any county treasurer of any county in this state, unless such defense is interposed within two years after the recording of such tax deed in the office of the register of deeds of the county in which the real estate described in such tax deed is located. (Emphasis added.)
. In 1991 the legislature appropriately determined to amend this provision. SDCL 10-25-3 now provides:
The notice of intention to take a tax deed shall be served upon the owner of record of the real property so sold, upon the person in possession thereof, upon the person in whose name the property is taxed, upon the mortgagee named in any unsatisfied mortgage in force upon the real property of record in the office of the register of deeds of the county in which the property is located, and if the mortgage has been assigned and the assignment thereof placed upon record in the office of the register of deeds, then upon the assignee in lieu of the mortgagee named in the mortgage. The notice of intention to take a tax deed shall also be served upon any lienholder and other interested person as may appear from the records in the office of the register of deeds, the county treasurer or the clerk of courts. The county treasurer may obtain any title information necessary to identify persons who appear from the records to be interested in such real property as owners, mortgagees, lienholders or otherwise. (Emphasis added.)