Court Opinion

ID: 9703830
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:09:34.240143+00
Date Added: 2024-06-11T18:21:52.061816
License: Public Domain

MESCHKE, Justice.
We consider whether the doctrine of acquiescence may be applied to determine boundaries of “original grant” school lands held by patent from the State of North Dakota less than 20 years, although purchased from the State by contract for deed more than 20 years prior to this action. The trial court held acquiescence cannot apply, relying on a statute which says that such lands “which have been sold on contract shall retain their character as such grant lands until the contract has been paid up and a patent issued therefor.” § 15-06-01, N.D.C.C. We hold that the time period for adverse possession or acquiescence 1 may commence to run against a purchaser of original grant lands anytime after the contract for sale is entered into, where the action to establish acquiescence comes after the contract for deed is fully paid. Accordingly, we reverse.
Plaintiff Gordon Cook owns the south half of the northwest quarter, the west half of the northeast quarter, and the southeast quarter of section 11 through State patents issued in 1967 and 1970, which were preceded by contracts for deed with the State in 1952 and 1953.
Defendant Evelyn S. Huffman holds fee title to the adjacent southwest quarter of section 11 through a State patent issued in 1971, which was preceded by a contract for deed with the State in 1952. Defendant Kenneth Clark is purchasing the southwest quarter from Huffman by contract for deed. For brevity only, we refer to both defendants as “Clark.”
The underlying factual dispute is outlined by Cook’s amended complaint which asserts that his boundaries have been fenced for more than 20 years, which established his boundaries by acquiescence, but that Clark has removed the fence on the north part of his southwest quarter and that Clark wants the fence on the east part of his quarter moved east to the quarter-line. Clark’s answer and counterclaim maintains that the quarterlines, not the fencelines, are the true boundaries, so that Cook is encroaching on the southwest quarter.
The trial court entered partial summary judgment, holding as a matter of law that acquiescence was not available to Cook, because none of the lands had been patented for 20 years or more. The trial court reserved determination of factual issues of survey and damages, but determined under Rule 54(b), N.D.R.Civ.P., that there was no just reason for delay in entry of the partial judgment.
*183The sole issue on appeal is whether or not, under any circumstances, the 20 year period of possession necessary to establish ownership under the doctrine of acquiescence can start to run before a patent is issued on original grant lands.
Following through on a condition for receiving certain grants of land from the United States upon admission into the union (13 N.D.C.C., The Enabling Act, §§ 10 and 11, pp. 68-69), North Dakota, like many other western and midwestern states, provided in its state constitution that it would hold those lands in trust for educational purposes and that those lands would be sold only at public sale, with the proceeds going to a school trust fund. This “trust” element caused most states to hold that title to school grant lands can never be acquired by adverse possession as against a state. See, e.g., Murtaugh v. Chicago, M. & St. P. Ry. Co., 102 Minn. 52, 112 N.W. 860 (1907). But, where a state’s interest is not affected, the decisions held that the time period for adverse possession could start against the purchaser of state lands when the purchaser had full equitable title and all that remained was to transfer the actual legal title. See, e.g., Hibben v. Malone, 85 Ark. 584, 109 S.W. 1008 (1908); Hellerud v. Hauck, 52 Idaho 226, 13 P.2d 1099 (1932).
The general rule is that title to land held by a state in any capacity cannot be obtained by adverse possession or prescription. On the other hand, this protection of the public interest from adverse effects of long inaction is not always extended to the private interests of purchasers of public lands. At least some jurisdictions hold that a prospective patentee by purchase contract has an equitable title that will permit adverse possession to commence against him even before a patent issues. Annot., 55 A.L.R.2d 554, 585 (1957).
An early North Dakota case held that upon approval of a contract for sale of school land by the board of university and school lands, the purchaser received immediate possession and obtained sufficient title to enable him to transfer and encumber his interest, subject only to payment of the balance due on the contract. School District No. 109 of Walsh County v. Hefta, 35 N.D. 637, 160 N.W. 1005 (1917). According to Hefta, a purchase of school lands by contract was essentially equivalent to a deed subject to payment of a mortgage, and therefore the purchaser had a title subject to taxation and to adverse possession. Hefta held that the title of a contract purchaser was subject to the statute of limitations and to adverse possession in an action commenced shortly after the State patent was issued.
When Hefta, supra, was decided, neither the state constitution nor state statutes defined the term “original grant lands.” In 1943, the state legislature enacted § 15-0601, R.C. (1943), which defined original grant lands:
“The term ‘original grant lands’ shall mean all of the public lands which heretofore have been or hereafter may be granted to the state by the United States for the support and maintenance of the common schools or for the support and maintenance of the university, the school of mines, the state training school, the agricultural college, the school for the deaf and dumb, any normal school, or any other educational, penal, or charitable institution, and any lands which have been obtained by the state through a trade of any such lands for other lands. Original grant lands which have been sold on contract shall retain their character as such grant lands until the contract has been paid up and a patent issued therefor.” (emphasis supplied.)
That section, now § 15-06-01, N.D.C.C., has undergone only very minor changes since 1943.
Clark maintains that the last sentence of § 15-06-01 was inserted as a direct response to the Hefta decision and means that the limitation period for adverse possession or acquiescence can only begin to run, regardless of the situation, when a patent has been issued. To support his position, Clark relies on the Code Reviser’s *184Note to § 15-0601, R.C. (1943), which reads in its entirety:
“This section is based on ss. 153, 159 of the N.D. Const., and is recommended to clarify this chapter. The legislative assembly has distinguished between original grant lands and nongrant lands in the acts relating to the sale of lands under the control of the board of university and school lands. This chapter deals exclusively with the sale of original grant lands, and this definition includes all original grant lands as defined in the constitution and in the decisions of the courts of this state. Another chapter in this title deals with the sale of nongrant lands and a definition is supplied in that chapter defining nongrant lands as all lands under the control of the board of university and school lands except those defined in this section.”
We do not agree with Clark’s interpretation of the Code Reviser’s Note or with the application of the last sentence of § 15-06-01, N.D.C.C. to the situation presented here. We believe that the new section was intended only as a clarification and not as a change of law. The Code Reviser’s Note says only that the new section was “to clarify.” It does not specifically refer to the Hefta decision or single out its holding.
The distinction between original grant lands and nongrant lands was evidently made in order to clearly separate procedures and allocation of funds. See Code Reviser’s Note to Chapter 15-06. It is clear that the last sentence means only that original grant lands sold on contract retain their character as grant lands for purposes of assuring full proceeds to the school trust fund. It is the public interest in assuring payment to the trust fund that is protected. No intention to benefit private property interests is apparent.
The underlying purpose of the restrictions on sale of school grant lands is to ensure that the land or the proceeds from the sale of the land constitute a trust fund to be used for educational purposes. While allowing someone to establish adverse possession or acquiescence against the State itself would impinge upon that trust, we observe that where the purchaser of grant lands has made timely payments, the State’s interest is adequately protected. There is no compelling reason why a contract purchaser should be allowed to insulate himself from his own inaction simply because he is buying from the State. A contract purchaser is not insulated from the effects of his own inaction when he purchases from a private party. Of course, until a purchase contract with the State is fully paid, a title by adverse possession or acquiescence cannot be acquired and confirmed against a contract purchaser because he may default on the contract and the equitable interest will revert to the State.
We hold that enactment of § 15-06-01, N.D.C.C. and its predecessor, § 15-0601, R.C. (1943), did not overrule the decision in School District No. 109 of Walsh County v. Hefta, 35 N.D. 637, 160 N.W. 1005 (1917). The rationale of Hefta, distinguishing between public property and private property interests as they may be affected by inaction, is as valid today as it was in 1917. We therefore hold that the time period for acquiescence can commence to run against a purchaser of original grant lands when the contract for sale is entered into, where the action to establish acquiescence comes after the contract for deed is fully paid.
Since the trial court did not reach the factual issues of whether or not acquiescence was established in this case, we reverse the partial summary judgment and remand for trial.
LEVINE and GIERKE, JJ., concur.

. The doctrine of acquiescence developed in response to the harshness of strict adherence to the doctrine of adverse possession which requires the person claiming title to intend to occupy the disputed territory even though he knows the land is not his. Production Credit Association of Mandan v. Terra Vallee, 303 N.W.2d 79 (N.D.1981). Essentially, acquiescence is a doctrine of repose for well-established boundaries after long inaction. 12 Am. Jur.2d, Boundaries, § 85 (1964).