Broadhurst v. American Colloid Co., No. 10719

• Court: Supreme Court of South Dakota
• Writing for the Court: HOMEYER
• Citation: 177 N.W.2d 261,85 S.D. 65
• Docket Number: No. 10719
• Decision Date: 12 May 1970
• Parties: Thomas J. BROADHURST, Respondent, v. AMERICAN COLLOID COMPANY, a Corporation, and Belle Products, Inc., a Corporation, Appellants.

Page 261

177 N.W.2d 261 85 S.D. 65 Thomas J. BROADHURST, Respondent,
v.
AMERICAN COLLOID COMPANY, a Corporation, and Belle Products,
Inc., a Corporation, Appellants. No. 10719. Supreme Court of South Dakota. May 12, 1970.

[85 S.D. 68]

Page 262

Overpeck, Hamblin & Mueller, Walter Mueller, Belle Fourche, for appellants.

Reynolds & Hughes, Sundance, Wyo., Stephens & Brandenburg, Belle Fourche, for respondent.

HOMEYER, Judge.

This controversy involves the ownership of mineral rights in 280 acres ¹ of land in Butte County, South Dakota. Defendants' claims are predicated upon title by adverse possession. The trial court concluded that plaintiff, who is the surface owner, also owned the minerals, and judgment was so entered from which the defendants appeal.

The subject property was a part of the public domain when homestead entry was

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allowed Charles C. Barbour on November 17, 1917. A Patent was issued to him by the United States of America on January 17, 1923, and recorded in the office of the Register of Deeds on February 10, 1923. Title to minerals was not reserved.

Early in the year 1920 Bert Marchant was prospecting for minerals in the area and on September 8, 1920, he caused to be filed with the Register of Deeds a Location Notice of Bentonite Placer Claim No. 4 covering 160 acres involved in [85 S.D. 69] this controversy. On February 5, 1921, there was filed a like notice for Bentonite Placer Claim No. 17 on 160 acres, ² of which 120 acres is here involved. On May 1, 1923, the locators of these claims conveyed all interest therein to The Belle Fourche Bentonite Products Company. ³

Treasurer's Tax Deeds to Butte County were issued on September 12, 1936 and April 21, 1937, respectively, which included this real estate. On December 6, 1944, Butte County conveyed the property to W. J. Hultenschmidt, who on August 31, 1945, conveyed it to the plaintiff. Additional facts will appear in the discussion to follow.

The law is well settled when a Patent issues to one who has previously made a homestead entry, it relates back for all purposes to the time of the original entry and cuts off any intervening claimants. Knapp v. Alexander-Edgar Lumber Co., 237 U.S. 162, 35 S.Ct. 515, 59 L.Ed. 894; Shepley v. Cowan, 91 U.S. 330, 23 L.Ed. 424; 42 Am.Jur., Public Lands, § 34, p. 813. Consequently, when the Patent issued to the homesteader, Barbour, without reserving title to the minerals in the United States, it related back to the time of his original entry upon the land on November 17, 1917, and the attempted location of mineral claims by Marchant subsequent to that date became a nullity. Until the issuance of a Patent, Marchant as the purported locator and mineral claimant may have been able to challenge the character of the land and possibly may have shown that it should not have been classified as nonmineral; however, after the United States of America acting through its General Land Office issued the Patent to Barbour without reserving the minerals, it was a final and conclusive adjudication that he was the owner and entitled to possession of not only surface [85 S.D. 70] rights but also the mineral rights in the land described in the Patent. Barden v. Northern Pacific Railroad Co., 154 U.S. 288, 14 S.Ct. 1030, 38 L.Ed. 992; 36 Am.Jur., Mines and Minerals, § 14, p. 290. Thus any acts which either Marchant or his successors performed thereafter in the furtherance of protecting a purported mineral right under federal law were likewise a nullity.

Title to the land including title to all minerals remained in Barbour until the tax deeds mentioned supra were issued to Butte County. There is no privity between the holder of a tax deed and the former owner of the property. The tax deed has nothing to do with the prior chain of title. It is in the nature of an independent grant from the sovereign authority and extinguishes all former titles and liens not expressly excepted. Lambert v. Bradley, 73 S.D. 316, 42 N.W.2d 606; Warren v. Blackman, 62 S.D. 26, 250 N.W. 681; Payne v. A. M. Fruh Company, N.D., 98 N.W.2d 27; Flag Oil Corporation of Delaware v. Phelps, Okl., 298 P.2d 456. A new title therefore originated with the tax deeds to Butte County and extinguished all former claims to such property whether premised upon adverse possession or otherwise.

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Harrison v. Everett, 135 Colo. 55, 308 P.2d 216.

Butte County held title to the property from September 12, 1936, (80 acres) and April 21, 1937 (200 acres) until December 6, 1944, when it was sold to W. J. Hultenschmidt. Defendants' claim to title to the minerals by adverse possession it is argued commenced from the time Butte County took title by tax deed. This argument assumes that when a county acquires a treasurer's tax deed to property for delinquent taxes it stands in the same position as a private person. We do not agree.

When a county purchases land at a tax sale for want of other bidders, SDCL 10--23--24, the county takes and holds the land, not in a proprietary capacity, but in trust for the state and other taxing districts within which it is located. Sasse v. King County, 196 Wash. 242, 82 P.2d 536; Board of County Com'rs of Choctaw County v. Schuessler, Okl., 358 P.2d 830. A sale of land to the county for delinquent taxes is merely a process of enforcing the payment and collection [85 S.D. 71] of taxes. The taxes remain unpaid until redemption is made, the certificate is assigned, or the land is resold by the county after title by tax deed has been acquired. Read v. Jerauld County, 70 S.D. 298, 17 N.W.2d 269; Messersmith v. Stanga, 71 S.D. 88, 21 N.W.2d 321; Parrish v. Duncan, 72 S.D. 56, 29 N.W.2d 487.

The resale of the land by the county does not transfer the tax lien, Coughlin v. City of Pierre, 66 S.D. 523, 286 N.W. 877, and it is only a part of the statutory tax collecting process. It is not complete until such resale has been finally made by the county and the proceeds apportioned the distributed to the various taxing districts. SDCL 10--25--28, 10--25--39.

We find nothing in our statutes which should be construed that adverse possession will run against a county when it holds title under a tax deed before resale. Although there is some precedent to the contrary, ⁴ we believe the better rule to be that adverse possession does not run against the county while it is the owner of property obtained on sale for delinquent taxes. Harrison v. Everett, supra; Gustaveson v. Dwyer, 78 Wash. 336, 139 P. 194; Winstead v. Winstead, 204 Miss. 787, 38 So.2d 118; Greene v. Esquibel, 58 N.M. 429, 272 P.2d 330; 2 C.J.S. Adverse Possession § 152e, p. 721.

What we have said disposes of defendants' claims based on adverse possession prior to December 6, 1944. Because we believe anything that occurred before that date is of no consequence so far as defendants' claims are concerned, for purposes of brevity we have chosen not to detail and list the testimony and documentary evidence consisting of notices, affidavits, leases, etc., in the record which defendants maintain support their claims to the minerals by adverse possession.

We now turn to defendants' claims predicated on what transpired subsequent to December 6, 1944. Defendants contend[85 S.D. 72] that they acquired title to the minerals by adverse...