Court Opinion

ID: 6882845
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:20:09.903705+00
Date Added: 2024-06-11T16:05:37.947908
License: Public Domain

WILBUR, Circuit Judge
(concurring).
While I concur in the result reached by my associates, I find myself unable to agree with some of the statements and conclusions in the opinion of the majority. I therefore state the reasons which seem to me to sustain the action of the trial court, first stating some of the reasons why I cannot agree with the opinion of the majority.
After quoting from § 6449, Nevada Compiled Laws of 1929, to the effect that no action or counterclaim for the recovery of lands sold for taxes shall lie unless the same shall be brought within three years, etc., the majority opinion states: “The statute is applicable to suits in equity as well as actions at law, since in Nevada there is but one form of civil action.” But the abolition of the formal distinctions between actions at law and suits in equity does not make them identical or necessarily subject to the same defenses. Pomeroy, Code Remedies, 5th Ed., § 13. The fact that there is but one form of civil action in Nevada does not require that a statute of limitations expressly applicable to an action to recover land should be held to apply to an action such as the one at bar in which it is sought to remove a cloud upon title caused by a tax deed. In Colorado, as in Nevada, there is but one form of civil action. The Supreme Court of Colorado, in passing upon § 5733 of the Revised Statutes of Colorado, held that a statute almost identical with that of Nevada (§ 6449, supra) did not apply to an action to remove a cloud upon a title. Munson v. Marks, 52 Colo. 553, 124 P. 187. The following cases, cited by the court, each decided in a state whose law provides for a single civil action and each applying a statute of limitations of similar import, fully support the decision in Munson v. Marks, supra: Beck v. Me-roney, 135 N.C. 532, 47 S.E. 613; Mount v. McAulay, 47 Or. 444, 83 P. 529; Kraus v. Montgomery, 114 Ind. 103, 16 N.E. 153. The question has not been determined by the Nevada state courts.
In view of these decisions and of the lack of an authoritative Nevada decision upon the applicability of § 6449 as a statutory, defense to the appellant’s action to quiet title, I am of opinion that our decision should not rest specifically upon this section of the Nevada statute considered as such a defense. For the same reason I deem it unnecessary to pass upon the question, much discussed by counsel, as to whether the statute of limitations has been sufficiently pleaded. For a similar reason, I am also of opinion that the asserted understanding of the parties that the running of the statute has been put in issue, is, if true, quite immaterial. It does not follow, however, that the state statute of limitations should be wholly disregarded in the case at bar. A federal court, sitting as a court of equity, will apply the doctrine of laches where the remedy is barred by the local statute of limitations. And this is true whether the statute be applicable in the state courts to law actions only as to both legal and equitable proceedings. The rule is thus stated by the Supreme Court, speaking through Mr. Justice Stone, in Russell v. Todd, 309 U.S. 280, 289, 60 S.Ct. 527, 532, 84 L.Ed. 754: “Even though there is no state statute applicable to similar equitable demands, when the jurisdiction of the federal court is concurrent with that of law, or the suit is brought in aid of a legal right, equity will withhold its remedy if the legal right is barred by the local statute of limitations. It thus stays its hand in aid of a legal right which, under the Rules of Decision Act, would be unenforcible in the federal courts of law as well as in the state courts.”
In view of this rule so recently stated by the Supreme Court it is very clear that, in applying the doctrine of laches in this equitable proceeding in a federal court, we may consider the effect of § 6449, supra, without the necessity of first determining whether the three-year period fixed by it would or would not be applicable to an equitable action in a state court or, if applicable, whether it has been sufficiently pleaded as a statutory defense.
I also find myself unable to concur in that part of the main opinion which deals with the curative provisions of § 6449, supra, to the effect that no tax shall be held invalid by any court of the state on account of irregularity, etc. The opinion holds the deed to be valid under the curative provision of the statute on the ground that it is “perfectly clear that the legislature could have dispensed with the requirement that consent of the court must be obtained”. This I believe to be erroneous. We are here dealing with a conflict of jurisdiction between the federal and state governments. *807The United States District Court had assumed jurisdiction over the property in question; it had taken custody of this property by its receiver. With that jurisdiction and custody no state agency was at liberty to interfere. Covell v. Heyman, 111 U.S. 176, 4 S.Ct. 355, 28 L.Ed. 390. This principle received a pertinent application in Ex parte Tyler, 149 U.S. 164, 13 S.Ct. 785, 37 L.Ed. 689, in which the Supreme Court held that a state could not authorize a tax collector to levy a tax warrant upon property in the hands of a federal court without the permission of that court. If the tax collector could not levy upon the property without the court’s permission it follows that a tax deed based upon such a levy must be void. This point does not appear to be seriously disputed by the appellees. They say in their brief: “We have no quarrel with Ex parte Tyler, 149 U.S. 164 [13 S.Ct. 785], 37 L.Ed. 689, or the related cases cited in appellant’s brief.” On the oral argument they conceded that the tax deed here involved was invalid because the sale was made during the active administration of the property by the federal court. They rest their case on other grounds.
I now state the reasons which lead me to concur in the result reached by my associates. In doing so I shall rely upon the. statement of facts contained in the majority opinion with such additional facts as I may state.
The answer sufficiently pleads laches as an affirmative defense. It relies upon plaintiff’s alleged failure to assert any claim for the recovery of the property in question for a period of fifteen years during which, to plaintiff’s knowledge and without his objection, defendants remained in possession of the property and spent money upon its development. Under the rule of Russell v. Todd, supra, the plaintiff’s action to quiet title may be considered as one in aid of his right to possession. In applying the doctrine of laches we may therefore have regard to the Nevada statute of limitations as well as to plaintiff’s acquiescence in defendant’s activity in developing the property. Tn applying any statute of limitations it is often difficult to determine when the statute begins to run. That is true in this case; for the court at no time issued an order surrendering the property and the statute could not run against any possessory action to recover the property so long as it remained in custody of the court. Mattingly v. Boyd, 20 How. 128, 15 L.Ed. 845. But in view of the court’s release of the receiver from all liability by its order of February 18, 1929, of the receiver’s surrender of actual possession upon the issuance of the order, and of the court’s inactivity in relation to these supposedly worthless mining claims, I am of opinion that the court must be considered as having intended to surrender its custody of this property at the time the receiver was released of liability. In any equitable view of the situation this short three-year statute of limitations has run in favor of the defendants who with their predecessors have been in possession for nearly fifteen years. In this connection it may be observed that § 8508, idem, provides for a still shorter period (two years) for actions to recover mining claims. This legislation is alone sufficient to support the defense of laches.
Furthermore, the doctrine of laches is peculiarly applicable when there has been such a change in the situation of the parties that the enforcement of rights which have long lain dormant would work an injustice to the defendant, and this is emphatically such a case, as a brief review of some of the facts will show. As early as April 3, 1923, the court having control of the property had evidently come to the conclusion that the property was worthless and the situation hopeless. The report of the receiver showed that he had issued receiver’s certificates for $75,000, none of which had been paid, had expended $78,000, could not sell the property, and had no funds with which to pay taxes, or to do the annual assessment work upon the mining claims. Under these conditions the court released the receiver and his sureties from liability. It is evident from the report that the purpose of the receivership had wholly failed. Without additional funds the property would be lost by the failure to do assessment work and the water rights appurtenant thereto would be lost because of nonuser. The receiver abandoned the property and it was taken over by the appellees as early as 1923 when the tax deed was issued. They have since expended $57,000 in caring for and developing the property. From 1923 no action was taken by the plaintiff or defendant, or any of the creditors or holders of receiver’s certificates to have the property administered by the court until the recent increase in the price of gold, the effect of which was to give these mining claims a value which they did not possess when the receiver abandoned them in 1923. It would be difficult to find a clearer *808case for applying the equitable doctrine of laches.
The decree of the District Court not only denied relief to the plaintiff but went farther and gave affirmative relief to the defendants, quieting their title to the property in question as against any claim of the plaintiff. This portion of the decree was responsive to the allegations and prayer of the counterclaim. It cannot be supported by the doctrine of laches, for that is purely a matter of defense. But it is supported by the statutory law of Nevada as applied to the facts which were found by the court upon sufficient evidence. Under section 8513, Nevada Compiled Laws, 1929, it has been held by the Supreme Court of Nevada that title may be acquired by one who, claiming title under a written instrument, has remained in adverse possession of real property for a period of five years. Gander v. Simpson, 37 Nev. 1, 137 P. 514; O’Banion v. Simpson, 44 Nev. 188, 191 P. 1083. By section 8505, idem, the time required for the acquisition of title to mining claims by adverse possession under this section appears to be reduced to two years. Sec. 8517, however, requires that all taxes must be paid by the adverse possessor during the statutory period. Here, as found by the court, the defendants had been in adverse possession of all this property for nearly fifteen years and paid all taxes accruing during that time. Section 8514, idem, prescribes what may be considered a sufficient occupancy for the purpose of securing title by adverse possession under § 8513, supra. One of the cases designated as such is “the ordinary uses of the occupant.” Here the appellees carried on continuous mining operations and at the same time made an ordinary use of the water rights and distributing facilities involved herein and covered by the decree. As to the mining claims this point is expressly covered by § 8508, idem: “Occupation and adverse possession of a mining claim shall consist in holding and working the same, in the usual and customary mode of holding and working similar claims in the vicinity thereof.”
Unquestionably the character and duration of defendants’ adverse possession were sufficient to comply with these pertinent sections of Nevada Compiled statutes, 1929. But appellant argues that they are inapplicable for other reasons which will now be considered.
First, appellant contends that these statutory provisions are inapplicable on the broad ground that adverse possession cannot be acquired as to property which is in custodia legis. Some cases and text books are cited in support of the rule upon which appellant thus relies and I assume that the law is in accordance with these authorities ; but, for reasons which I have already stated in discussing the defense of laches as applied to the plaintiff’s case, I am of opinion the District Court should be considered as having surrendered the property at so early a date that no question could arise as to the sufficiency of the time in which to acquire title by adverse possession under the pertinent sections of Nevada Compiled Laws, 1929. The order accepting the receiver’s resignation and releasing him from liability on account of his inability to pay taxes, do assessment work and meet necessary expenses was consistent only with consent by the court that the state should exercise its taxing power and enforce its rights by sale in accordance with the state statutes and that the purchaser should take possession under the deed. I am, therefore, of opinion that this objection of the appellant is untenable.
Appellant further contends that, assuming that this property could be acquired by adverse possession under the statutory law of Nevada, it was not so acquired in the case at bar because it was not based 'upon a “written instrument” as required by § 8513, supra. It is argued that the tax deed was void when issued since the property was at that time in the custody of the District Court through its receiver and could not therefore be conveyed by a tax deed. As previously stated, I agree that the tax deed was void when issued; but it does not follow that it was insufficient for the purpose of § 8513, supra. This deed was regular in form and disclosed on its face no jurisdictional defect. It was acquired and possession taken under its apparent authority in entire good faith. It appears to be well settled in jurisdictions with similar statutes that such a deed, although void for reasons not apparent on its face, is sufficient as an instrument of title when, as in the case at bar, it was accepted in good faith and made the basis of actual possession for the statutory period. 1 Am.Jur. 901; Widdicomb Co. v. Card, 218 Mich. 72, 187 N.W. 308, 22 A.L.R. 545, 550. That this is in harmony with the law of Nevada with reference to adverse possession under *809a tax deed originally invalid would seem to be a necessary inference from the following provision of § 6449, supra: “No action or counterclaim for the recovery of lands sold for taxes shall lie unless the same be brought or interposed within three years after the execution and delivery of the deed therefor by the treasurer, any law to the contrary notwithstanding.” In view of this sweeping language, which necessarily gives practical effect to a tax deed which may have been invalid when issued, it would be difficult to maintain the proposition that such a deed is not such a “written instrument” as will sustain the acquisition of a title by adverse possession under § 8513, Nevada Compiled Laws, 1929.
For these reasons I am of opinion that the decree should be affirmed.