Title: JACKSON v STATE
Citation: N/A
Docket Number: 14362
State: Montana
Issuer: Montana Supreme Court
Date: March 15, 1979

No. 14362 IN THE SUPREME COURT OF THE STATE OF MONTANA 1979 ALICE E. JACKSON et al., Plaintiffs and Appellants, -vs- STATE 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 16 llylg Filed: bjAR l ? . ' 1979 M r . J u s t i c e John Conway Harrison delivered t h e Opinion of t h e Court. This is an appeal from a q u i e t t i t l e a c t i o n involving c e r t a i n land lying w e s t of t h e Yellowstone River i n Section 36, adjacent t o Section 35, Township 23 North, Range 59 East, County of Richland, Montana. After a nonjury t r i a l , t h e Honorable L e s l i e G. Gulbrandson entered a judgment f o r defendants. P l a i n t i f f s appeal. The diagram below is f o r i l l u s t r a t i v e purposes, as- s i s t i n g i n t h e explanation of a complicated f a c t s i t u a t i o n . Ye //OWS fo e r A R~cord,'~ 9 0 4-,yna 1 survey i h 1 g 8 ~ I n 1923 Andrew Jackson, S r . , and h i s w i f e A l i c e began purchasing land i n t h e S1/4 of Section 35, Township 23 North, Range 59 E a s t , of Richland County. During t h e next 1 5 y e a r s they acquired 240 deeded a c r e s i n Section 35. I n 1933 they acquired, by q u i e t claim deed, a p i e c e of prop- e r t y , h e r e i n a f t e r r e f e r r e d t o as t h e "Meadors Property," located i n t h e southeast corner of Section 35. Immediately north of t h e Jacksons' property i n Section 35 a r e t w o l o t s now known as t h e " S t e i n b e i s s e r Property." When t h e Jacksons acquired t h e Meadors Property, t h e Yellowstone River, a t high w a t e r , overlapped t h e S t e i n - b e i s s e r Property and crossed a t a diagonal i n t o t h e Meadors Property. A t t h i s t i m e only a small corner, Lot 2 , was high and dry. This l o t w a s leased t o t h e Jacksons by t h e S t a t e of Montana. Since 1933 t h e Yellowstone River has gradually moved e a s t , exposing land i n Section 35, f i l l i n g i n t h e Meadors Property t o t h e s e c t i o n l i n e , and exposing land i n Section 36 which a d j o i n s t h e e a s t e r n s e c t i o n l i n e of Section 35. By 1976, a survey i n d i c a t e d t h a t land c r e a t e d by t h e eastward movement of t h e r i v e r t o t a l s some 171 a c r e s i n Section 36. A s t h e r i v e r moved eastward and more land became usable, t h e Jacksons fenced t h e a r e a and began farm- i n g it. I t i s t h e t i t l e t o t h i s "accreted" land t h a t i s i n d i s p u t e . The l e a s e between t h e Jacksons and t h e S t a t e of Montana was renewed every t e n years. It w a s modified i n 1951 t o show t h a t t h e Jacksons had become a business e n t i t y known a s Andrew Jackson and Sons. I n 1961 t h e d e s c r i p t i o n of t h e lands was changed from t h e f i v e acres of Lot 2 t o 153 a c r e s described as Lot 2 and a l l t h e land w e s t of t h e ell ow stone River i n Section 36. The Jacksons signed t h e l e a s e but a l l e g e t h a t they continued t o pay taxes on t h e same. Section 36 belongs t o t h e S t a t e of Montana. I t i s set a s i d e f o r public education and i s administered by t h e Montana Department of S t a t e Lands. I n 1931 t h e Jacksons began leasing Lot 2 , Section 36, from t h e S t a t e . A s t h e years passed, they renewed t h e l e a s e , including t h e lands t h a t were accreting. The Jacksons argue t h a t except f o r Lot 2, a l l t h e land t h a t accreted i n Section 36 belongs t o them s i n c e they were t h e owners of adjoining property i n Section 35. I n 1963 Andrew Jackson, S r . , died. I n t h e d i s t r i b u t i o n of h i s e s t a t e no mention was made of t h e accreted land now claimed, although Alice Jackson t e s t i f i e d it w a s discussed with t h e i r attorney. The property was d i s t r i b u t e d by sec- t i o n s and l o t s according t o t h e county records. I n 1964 t h e Jackson h e i r s conveyed Section 35 and Lot 5, Section 25, t o Andrew Jackson, Jr., and h i s wife Marjorie. N o mention w a s made t o t h e accreted lands although Andrew, Jr., and h i s mother continued t o run c a t t l e on t h e land e a s t of t h e s e c t i o n l i n e t o t h e r i v e r . I n 1964 t h e d e s c r i p t i o n of t h e land along t h e r i v e r w a s changed by t h e county assessor, and t h e Jacksons w e r e taxed f o r t h r e e l o t s and 65 a c r e s along t h e r i v e r . N o p r o t e s t was made as t o t h e payment of these taxes. I n 1974, following Andrew, Jr.'s death, h i s wife Mar- j o r i e conveyed t h e property which had been sold t o her and Andrew, Jr., t o t h e Holly Sugar corporation (Holly s u g a r ) . The land was advertised a s including accretions only t o Lot 5 i n Section 25 and those f i l l i n g i n t h e remaining p o r t i o n of t h e SE1/4 of Section 35. However, t h e c o n t r a c t f o r deed t o Holly Sugar, dated March 1974, gave t h e l e g a l d e s c r i p t i o n of Lot 5 of Section 25 and t h e E1/2 SW1/4 and SE1/4 of Section 35 together with a c c r e t i o n s of approximately 343.3 a c r e s . The accreted land between t h e r i v e r bank and t h e e a s t e r n s e c t i o n l i n e of Section 35 w a s n o t included i n t h e conveyance t o Holly Sugar. However, a f t e r t h e s a l e , t h e business e n t i t y of Andrew Jackson and Sons and Alice Jackson continued t o u t i l i z e t h e property f o r farm purposes. I n 1975 Andrew Jackson and Sons began a q u i e t t i t l e a c t i o n t o determine who had t h e leasehold i n t e r e s t i n Sec- t i o n 36. The c o u r t found t h e leasehold i n t e r e s t i n favor of Andrew Jackson and Sons and a g a i n s t Holly Sugar. However, t h e c o u r t was n o t asked, nor d i d it determine, what land along t h e r i v e r c o n s t i t u t e d t h e leasehold o r who owned t h a t land. Thereafter, Holly Sugar demanded t h a t Andrew Jackson and Sons move t h e i r fence t o t h e s e c t i o n l i n e and t o conduct t h e i r a c t i v i t i e s only i n Section 36. Jackson and Sons complied with t h i s request. A t about t h e same t i m e t h e Jacksons learned t h a t Stein- b e i s s e r was claiming ownership t o some of t h e accreted lands through t h e S t a t e of Montana. The Jacksons corresponded with t h e Attorney General of t h e S t a t e of Montana, and t h a t o f f i c e disclaimed any claim of t i t l e t o t h e property by adverse possession even though t h e Department of Lands had been l e a s i n g t h e property f o r a number of years. I n May 1976 t h e S t a t e of Montana, Joseph S t e i n b e i s s e r , and Holly Sugar entered i n t o a boundary agreement dividing t h e a c c r e t e d land i n t o f o u r t r a c t s : A, B , C and D. T r a c t A corresponded t o Lot 2 , Section 36, o r i g i n a l l y leased t o t h e Jacksons by t h e S t a t e p l u s a c c r e t i o n s t h e r e t o . T r a c t B described t h e accreted land a d j a c e n t t o t h e S t e i n b e i s s e r Property. T r a c t s C and D corresponded t o t h e accreted land a d j a c e n t t o t h e Meadors Property, now owned by Holly Sugar. This w a s done without t h e Jacksons' knowledge, and no p u b l i c a u c t i o n w a s held. On learning of t h e agreement, Jacksons brought an a c t i o n t o q u i e t t i t l e t o t h e accreted land which had been divided up by t h e S t a t e , Holly Sugar, and S t e i n - b e i s s e r . The Jacksons d i d n o t claim t i t l e t o T r a c t A, which they w e r e l e a s i n g from t h e S t a t e , b u t claimed they owned t h e remaining t r a c t s through adverse possession and a c c r e t i o n , having improved, u t i l i z e d , and paid t a x e s on same. The t r i a l c o u r t i n i t s f i n d i n g s of f a c t , conclusions of law and judgment found f o r defendants. C e r t a i n f i n d i n g s a r e important t o our discussion and decision. They a r e : "2. The Jacksons acquired, by Q u i t C l a i m Deed dated December 12, 1933, t h e E1/2 E1/2 of t h e SE1/4, Section 35, from John P. Meadors and Katheryn Meadors. "4. The t i t l e t o a l l lands previously owned by Joseph S t e i n b e i s s e r , and t h e t i t l e t o T r a c t B a s described i n boundary agreement recorded Book E-125, page 939 of t h e records of Richland County, Montana, which boundary agreement was entered i n t o between Joseph S t e i n b e i s s e r and t h e S t a t e of Montana a c t i n g through i t s Board of Land Com- missioners, dated May 2 4 , 1976, recorded Book E-125, page 939 of t h e records of Richland County, Montana, became vested i n Joseph Stein- b e i s s e r and C h r i s t i n e S t e i n b e i s s e r , husband and wife, a s j o i n t t e n a n t s , by v i r t u e of r a t i f i c a - t i o n of boundary agreement dated May 1 2 , 1977, f i l e d May 12, 1977, and recorded i n Book E-130, pages 506-507 of t h e M i s c . records of Richland County, Montana. "5. Joseph S t e i n b e i s s e r a t a l l t i m e s p r o t e s t e d ownership by t h e S t a t e of Montana of t h a t p o r t i o n of t h e N1/2 of Section 36 W e s t of t h e Yellowstone River l y i n g South of Lot 2 of Section 36, which Lot had a r i v e r boundary of approximately 720 f e e t . H e p r o t e s t e d ownership of t h i s land by t h e S t a t e of Montana on many occasions t o t h e S t a t e Land Board, b u t a t no time undertook l e g a l pro- ceedings t o q u i e t t i t l e a g a i n s t t h e S t a t e of Mon- tana, and t h e land a t t r i b u t a b l e as a c c r e t i o n t o h i s Lots 1 and 2 was by t h e boundary agreement, consolidated i n t o what i s now Tract B of t h e p l a t attached t o t h e boundary agreement hereinbefore r e f e r r e d t o . Said accreted land has never been s p e c i f i c a l l y described as being lands within Sec- t i o n 36 on t h e t a x records of Richland County, and Joseph S t e i n b e i s s e r has paid a l l taxes levied and assessed a g a i n s t s a i d Lots 1 and 2 of Section 35. N o taxes have been paid by any p a r t y t o t h i s a c t i o n on lands described a s being within Section 36, Township 23 North, Range 59 E a s t . "6. Insofar as t h e claim of Joseph S t e i n b e i s s e r i s concerned, t h e land s i t u a t e d within Section 36 and enclosed within a fence constructed by Andrew Jackson w a s held adversely by Jacksons only a s a Lessee of t h e S t a t e of Montana, and Jacksons never, a t any time, made any public claim t o t h i s land except a s a Lessee of t h e S t a t e of Montana. "7. Albert Jackson and h i s successors-in-interest have claimed t h e r i g h t t o fence, use and control, t h e lands i n Section 36 W e s t of t h e Yellowstone River under consecutive l e a s e s of S t a t e lands, commencing February 28, 1951, and a t no t i m e u n t i l t h e commencement of t h i s action, have contested t h e ownership of a l l lands involved i n t h i s case i n Section 36, by t h e S t a t e of Montana. "8. The t a x records covering payment of taxes by Andrew Jackson and h i s successors-in-interest, s p e c i f i c a l l y l i m i t taxes levied t o lands within Section 35, and t h e payment of taxes on t h e lands a s assessed i n Section 35, does not include any of t h e acreaqe i n Section 36 West of t h e Yellow- - stone River. Ownership, i f any, on t h e p a r t of t h e p l a i n t i f f s , r e s u l t s from p l a i n t i f f s being heirs-at-law and surviving next of k i n of Andrew Jackson, S r . N o acreage s i t u a t e d within Section 36 was included i n t h e Inventory and Appraisal dated June 19, 1963, f i l e d i n t h e probate of t h e E s t a t e of Andrew Jackson, S r . , i n t h e above-en- t i t l e d Court. The Inventory and Appraisal w a s signed and sworn t o by Alice E. Jackson as con- t a i n i n g a t r u e statement of a l l of t h e e s t a t e of s a i d deceased which has come t o t h e knowledge and possession of s a i d Alice E. Jackson, and was f i l e d with t h e S t a t e of Montana a s a b a s i s f o r deter- mination of inheritance taxes. Andrew W. Jackson, Jr., and h i s wife, Marjorie Ann Jackson, now Marjorie Ann C a r t e r , except f o r minerals reserved i n and under t h e lands owned by Andrew W. Jackson, Jr., a r e t h e successors-in-interest of a l l lands which w e r e owned by Andrew Jackson, S r . , and h i s widow, Alice E. Jackson, s a i d p r o p e r t i e s having been purchased f o r t h e sum of $40,000.00 under a Contract f o r Deed between a l l of t h e p l a i n t i f f s o t h e r than Marjorie Ann Jackson as S e l l e r s , and Andrew W. Jackson, Jr., and Marjorie Ann Jackson a s Purchasers, as j o i n t tenants with r i g h t of survivorship. This Contract f o r Deed i s dated January 1 4 , 1964, f i l e d May 7, 1965, recorded Book A-98, page 38 of t h e records of County Re- corder of Richland County. Warranty Deed executed pursuant t o s a i d Contract and dated February 1, 1965, w a s d e l i v e r e d and f i l e d January 7, 1974, and recorded Book A-110, page 210 of t h e records of Richland County, Montana. "10. Marjorie Ann C a r t e r as p l a i n t i f f , brought an a c t i o n t o q u i e t t i t l e t o t h e S t a t e Grazing Leases standing of record i n t h e name of Andrew Jackson and Sons, being Case No. 10785 of t h e records of t h i s Court. Defendants proof r e s u l t e d i n e n t r y of Findings of F a c t , Conclusions of Law, and Judg- ment of t h i s Court dated March 27, 1975, and i n which t h e Court made t h e following Finding of Fact: " ' 5 . That t h e "home" place of t h e Jackson family c o n s i s t i n g of lands o t h e r than t h e a f o r e s a i d S t a t e lands, w a s s o l d t o Andrew Jackson, Jr., on o r about- January 1 4 , 1964, b u t t h e land owned t h e S t a t e of Montana described i n Paragraph 2 above was n o t i n c l u d e d i n t h e s a l e t o Andrew Jackson, Jr . ' (emphasis added) " Seven i s s u e s a r e presented on appeal: 1. Whether t h e disputed land w a s formed by a c c r e t i o n r e q u i r i n g t h e l a w of a c c r e t i o n t o be applied i n determining i t s ownership. 2. Whether under t h e law of a c c r e t i o n t h e land belongs t o a p p e l l a n t s . 3 . Whether a p p e l l a n t s acquired t h e accreted land a j a c e n t t o t h e S t e i n b e i s s e r Property by adverse possession. 4 . Whether t h e S t a t e l e a s e b a r s a p p e l l a n t s ' claims t o t h e land. 5. Whether t h e d o c t r i n e of laches b a r s a p p e l l a n t s ' claims t o t h e property. 6. Whether t h e S t a t e ' s claim i s barred by t h e d i s - claimer of i n t e r e s t . 7 . Whether t h e State's claim i s barred by t h e s t a t u t e of l i m i t a t i o n s . For t h e purposes of t h i s opinion, w e w i l l combine c e r t a i n i s s u e s i n our discussion. I t i s agreed by t h e p a r t i e s t h a t t h e t r i a l c o u r t properly found t h a t t h e law of a c c r e t i o n applied and must t h e r e f o r e be followed i n determining ownership. They d i s - agree a s t o t h e law i n Montana, however. Appellants argue t h a t t h i s Court should enlarge our holding i n Smith v. Whitney (1937), 105 Mont. 523, 74 P.2d 450, t h e p r e v a i l i n g law on a c c r e t i o n . I n Smith w e held t h a t , "Unless excepted o r reserved, a c c r e t i o n s o r t h e r i g h t t h e r e t o pass t o a purchaser o r a p a t e n t e e although n o t described i n t h e deed o r o t h e r instrument of conveyance, i f t h e conveyance de- s c r i b e s t h e adjoining r i p a r i a n land. ( C i t a t i o n s o m i t t e d . ) " 105 Mont. a t 528. This p r i n c i p l e of r e t e n t i o n by a seller of accreted land s p e c i f i c a l l y by r e s e r v a t i o n i n t h e deed has been t h e law of t h i s S t a t e . Appellants ask us t o consider s i g n i f i c a n t a g r a n t o r ' s f a i l u r e t o include any accreted land i n t h e l e g a l descrip- t i o n of t h e land he conveys, c i t i n g Jones v. Johnston (1855), 59 U.S. 150, 15 L.ed. 320; J e f f e r i s v. E a s t 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 a l s o 78 Am J u r 2d, Water, S414. W e f i n d our holding i n Smith v. Whitney, supra, con- t r o l s here and t h a t accreted lands pass with t h e r i p a r i a n upland property u n l e s s excepted o r reserved. Therefore, t h e Jacksons, by t h e i r conveyances i n 1964 and 1974, which d i d n o t except o r r e s e r v e any a c c r e t i o n s i n Section 36, conveyed t h e a c c r e t i o n s t o Andrew Jackson, Jr., and h i s wife ~ a r j o r i e , who then conveyed them t o Holly Sugar. The 1976 boundary agreement and q u i t claim deed then conveyed Tract D to t h e S t a t e of Montana. W e next address a p p e l l a n t s ' claim of acquiring accreted land by adverse possession. To o b t a i n adverse possession of accreted land i n Montana, where t h e adverse claim i s n o t founded on a w r i t t e n instrument, t h e claimant must occupy, improve, enclose, and pay t a x e s on t h e property i n question f o r a period of n o t less than f i v e years i n a h o s t i l e and continuous manner. Townsend v. Koukol (1966), 148 Mont. 1, 416 P.2d 532. Here, a p p e l l a n t s do n o t m e e t t h e require- ments. Their claim of h o s t i l e possession, by keeping Stein- b e i s s e r o f f t h e property, w a s based on t h e f a c t they leased t h e property from t h e S t a t e . The h o s t i l e and continuous occupancy of t h e land i n Section 36 must a l s o f a i l f o r t h e r e was no proof of t a x e s paid, although t h e Jacksons claim t h a t they thought they were paying taxes. Section 36 i s t a x exempt school t r u s t land and no t a x e s a r e paid on such land. These school t r u s t lands are leased t o h e l p r a i s e school funds. Appellants raise t h e question of whether t h e S t a t e l e a s e b a r s t h e i r claims. The District Court held t h a t it d i d , and w e agree. Section 93-2512, R.C.M. 1947, now sec- t i o n 70-19-412 MCA, provides t h a t possession of a t e n a n t i s deemed possession of t h e landlord. H e r e , t h e uncontradicted testimony of S t e i n b e i s s e r i s t h a t t h e Jacksons r e l i e d on t h e l e a s e t o keep him o f f t h e land. Too, t h e l e a s e c l e a r l y s t a t e d t h a t it covered a l l land w e s t of t h e Yellowstone River i n Section 36. Further, i n t h e l a w s u i t a g a i n s t ~ o l l y Sugar i n 1975, they defended t h e i r ownership of t h e l e a s e i n Section 36 a g a i n s t Holly Sugar. The Court r u l e d t h a t they w e r e t h e owners of t h e l e a s e . W e next d i r e c t o u r consideration t o whether l a c h e s b a r s t h e Jacksons' claims. From 1961, when t h e lease w a s r e w r i t t e n t o cover t h e added acreage on t h e w e s t bank of t h e r i v e r i n Section 36, t h e Jacksons have accepted t h e t e r m s of t h e lease and have n o t n o t i f i e d t h e S t a t e of any adverse claims a g a i n s t t h e S t a t e . The t r i a l c o u r t found it would be inequi- t a b l e t o claim property they have continuously leased f o r 15 years without n o t i f y i n g t h e l e s s o r t h a t they claimed owner- s h i p of t h e property. W e agree with t h e t r i a l c o u r t i n applying t h e d o c t r i n e of laches t o t h e f a c t s here. W e held i n Montgomery v. Bank of Dillon (1943), 1 1 4 Mont. 395, 408-09, 136 P.2d 760, quoting from Riley v. Blacker (1915), 51 Mont. 364, 370, 152 P. 758, 759: ". . . '"Equity a i d s only t h e v i g i l a n t ; " and it [laches] e x i s t s when t h e r e has been unexplained delay of such d u r a t i o n o r c h a r a c t e r a s t o render t h e enforcement of t h e a s s e r t e d claim inequita- b l e . ' . . ." Next r a i s e d i s whether t h e S t a t e of Montana's claim i s barred by t h e disclaimer of i n t e r e s t by t h e S t a t e Department of Revenue. The disclaimer of i n t e r e s t w a s f i l e d by an a t t o r n e y i n t h e Department of Revenue. The disclaimer was intended t o i n d i c a t e t h a t no taxes w e r e owed on t h e land. It was never signed. The S t a t e was allowed t o amend i t s pleadings under Rule 15, M.R.Civ.P., t o withdraw t h e consent due t o mistake. N o d e f a u l t of t h e S t a t e w a s entered. The waiver was n o t given a p p e l l a n t s p r i o r t o t h i s a c t i o n . There was no showing made t h a t they were misled i n t o believing t h e S t a t e had no i n t e r e s t i n t h e i r a c t i o n . The a p p l i c a t i o n s t o withdraw t h e disclaimer and f i l e an answer w a s made long before t r i a l . The t r i a l judge properly decided t h i s i s s u e i n favor of t h e S t a t e . The f i n a l i s s u e r a i s e d i s whether t h e S t a t e of Montana's c l a i m i s barred by t h e s t a t u t e of l i m i t a t i o n s . The S t a t e gained ownership t o Tract D through t h e 1976 boundary agree- ment and q u i t claim deed from Holly Sugar. The t r i a l c o u r t c o r r e c t l y found t h a t s e c t i o n 93-2501, R.C.M. 1947, now s e c t i o n 70-19-302 MCA, d i d n o t apply t o t h i s claim. The D i s t r i c t C o u r t ' s award of t h e p r o p e r t y according t o t h e 1976 boundary agreement i s affirmed. W e concur: Chief J u s t i c e J u s t i c e s 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.