Caywood v. Department of Natural Resources

• Citation: 248 N.W.2d 253,71 Mich.App. 322
• Decision Date: 27 September 1976
• Docket Number: Docket No. 25042
• Parties: Millard CAYWOOD et al., Plaintiffs-Appellees, v. DEPARTMENT OF NATURAL RESOURCES of the State of Michigan, Defendant-Appellant, and Schneider Lumber Company, Inc., a Michigan Corporation, Defendant.
• Court: Court of Appeal of Michigan — District of US

Page 253

248 N.W.2d 253

71 Mich.App. 322

Millard CAYWOOD et al., Plaintiffs-Appellees, v. DEPARTMENT OF NATURAL RESOURCES of the State of Michigan,

Defendant-Appellant,

and

Schneider Lumber Company, Inc., a Michigan Corporation, Defendant.

Docket No. 25042.

Court of Appeals of Michigan.

Sept. 27, 1976.

Released for Publication Jan. 6, 1977.

Leave to Appeal Denied Feb. 16, 1977.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Clive D. Gemmill, Asst. Atty. Gen., for defendant-appellant.

John B. Olsen, Muskegon, for plaintiffs-appellees.

Before DANHOF, C.J., and D. E. HOLBROOK and MUNRO, ^* JJ.

D. E. HOLBROOK, Judge.

On August 4, 1974, plaintiffs commenced suit in Muskegon County Circuit Court for purposes of quieting title to land along the North Branch of the Muskegon River, restraining defendants ¹ from removing timber and brush, and seeking damages for the timber removed. A bench trial was had September 24, 1974. On January 30, 1975, the trial court filed its opinion, finding that (1) plaintiffs had possessed the disputed land adversely for 15 years, (2) the state's tax deed was inadequate to support its claim to a portion of the disputed land in the absence of proof that statutory conditions for perfection of title were met, and, (3) a question of adverse possession as against the state did not arise since the claimants had perfected title by adverse possession prior to the state obtaining title. Judgment was accordingly entered July 7, 1975. ² Defendant now appeals, raising eight issues, two of which require reversal of the lower court's judgment.

Plaintiffs claim property adjacent to five cabins along the river which they and their predecessors have allegedly occupied for at least 15 years. The property surrounding one of the cabins claimed by Millard and Marian Caywood is located entirely in Government Lot 4, Section 12, Town 10 N, Range 16 W, as is a portion of the land surrounding a cabin claimed by Duane Cottrell. The remainder of the land surrounding the Cottrell cabin and that adjacent to the other three cabins is located in Government Lots 1 and 2, Section 11, Town 10 N, Range 16 W. The state relied upon a 1925 tax deed as establishing its title to Government Lot 4. Government Lots 1 and 2 were conveyed to the state by warranty deed dated March 9, 1964.

The tax deed of the state was executed pursuant to 1893 P.A. 206, § 127, repealed by 1941 P.A. 234. At the time of the execution of the deed, 1893 P.A. 206, § 127; 1915 C.L. 4126 provided:

'Lands delinquent for taxes for any five years, where said lands have been sold and bid off to the state for the taxes of one or more of the said years, and then so held, and no application having been made to pay, purchase or redeem the said lands for said taxes and no action pending to set aside such taxes or to remove the cloud occasioned thereby, shall, within the meaning of this act, be deemed abandoned lands, unless such lands are actually occupied by the person having the record title thereto. Any lands delinquent for taxes for a period of five or more years, and said lands having been sold and bid in by the state and held by the state for the taxes of any of said years, and no application having been made to pay, redeem or purchase the same, and no suit pending to set aside said taxes or remove the cloud from the title occasioned thereby, shall be subject to the provisions of this section. Whenever it shall appear by the records in the auditor general's office that any lands are delinquent for taxes for five years or more and that said lands have been bid off to the state one or more times by reason of such delinquent taxes, and that the time of redemption of such sale (or) sales has expired and that no application has been made to pay, to redeem or purchase the same, and it shall appear that no action is pending in the circuit court of the county where said lands are situated to set aside the taxes or remove the cloud on the title occasioned thereby, the title to the state shall be deemed absolute in and to said lands; and it shall be the duty of the auditor general and the commissioner of the state land office to cause an examination of such lands to be made as soon as practicable, to ascertain their value and if abandoned.'

See, Grand Rapids Trust Co. v. Doctor, 222 Mich. 248, 192 N.W. 641 (1923). The redemption period then provided was the time between the sale and the first Tuesday of May of the following year. 1893 P.A. 206, § 74; 1915 C.L. 4072, presently M.C.L.A. § 211.74; M.S.A. § 7.120. 1903 P.A. 84, § 1; 1915 C.L. 4161, presently M.C.L.A. § 211.431; 431; M.S.A. § 7.661, provided:

'After the expiration of 6 months from and after the time when any deed made to the state under the provisions of section 127 or section 67a of Act 206 of the Public Acts of 1893, being the general tax law, and acts amendatory thereto, shall have been recorded in the office of the register of deeds for the county in which the land so deeded shall be situated, the title of the state in and to the same shall be deemed to be absolute and complete, and no suit or proceeding shall thereafter be instituted by any person claiming through the original or government title to set aside, vacate or annul the said deed or the title derived thereunder.'

In the present case, the state's title to the land was absolute at the earliest in 1925 when the property was bid in by the state for the fifth time and no efforts had been made to redeem from the tax sales of 1921--1925, or, at the latest, June 1, 1926, six months after the deed issued to the state was recorded. Suit could not be brought thereafter by those claiming under the original title nor could the title of the state be collaterally attacked. Dean v. Department of Natural Resources, 61 Mich.App. 669, 233 N.W.2d 135 (1975), Lv. granted, 395 Mich. 792 (1975). The trial court erred, therefore, in holding that the state's tax deed was inadequate to withstand plaintiffs' claims of adverse possession in the absence of proof of the invalidity of the underlying proceedings. Even in cases contesting the validity of tax deeds issued by the auditor general to private citizens, the deed is prima facie evidence of title and the burden of proving the invalidity of the deed is upon the party seeking to avoid it in a direct proceeding. Ritter v. Corkins, 319 Mich. 484, 30 N.W.2d 41 (1947); Smelsey v. Safety Investment Corp., 310 Mich. 686, 17 N.W.2d 868 (1945).

It is an often-stated rule that the statute of limitations for the recovery of real property does not run against the state, and, therefore, land held by the state cannot be acquired by adverse possession. Young v. Thendara, Inc., 328 Mich. 42, 49, 43 N.W.2d 58 (1950); Staub v. Tripp, 248 Mich. 45, 226 N.W. 667 (1929), Rev'd on other grounds, on rehearing, 253 Mich. 633, 235 N.W. 844 (1931); Grand Rapids Trust Co., supra. However, the more correctly stated rule is that this is so In the absence of legislation to the contrary. Staub v. Tripp, 248 Mich. 45, at 48, 226 N.W. 667 (1929). We expressly note that Young relied on Staub for its source for the abovementioned rule. We find that in Michigan there is legislation abolishing the general rule and that land can be acquired against the state by virtue of adverse possession. M.C.L.A. § 600.5821; M.S.A. § 27A5821. ³

Although the statute has not been directly interpreted, and indeed appears to have been ignored by bench and bar, the plain meaning of the statute would allow title by adverse possession to be acquired as against the state. An early case, Chamberlain v. Ahrens, 55 Mich. 111, 20 N.W. 814 (1884), recognized the injustice in allowing the state to sit on its rights while the possessor occupies, improves, and holds the land for the statutory period. The Court observed:

'Under the statutes in force when the land was bid in, the State had a title which might have been enforced before the controversy arose in 1867. It would be a perversion of all sound rules to hold that by waiting over twenty years and then selling an old tax bid, that period should not count in the possessor's favor. The State is bound by the statutes of limitations, and defendant's rights are as complete against this title as against the other.' 55 Mich. at 112--113, 20 N.W. at 815.

Apparently this case allowed adverse possession claims against the state. This case has never been expressly overruled.

Certainly this is the just and reasonable result. However, Grand Rapids Trust Co.; Staub and Young, supra, seem to dictate a contrary result. It is of great relevance that in none of these cases did the Court discuss or even mention the statutory limitation on actions by the state for recovery of land or mention Chamberlain.

Were we to stop here, our decision would indeed be a difficult one. We have expressed statutory language which appears to allow adverse possession claims against the state. On the other hand, we have Supreme Court precedent which apparently demands the contrary result. Our inclination would be to assume that the Court had not been called upon to decide the meaning of the statute and that we would be free to find the meaning of this legislation.

Our task has been made easier by Supreme Court comment in People v. Clement, 356 Mich. 314, 96 N.W.2d 804 (1959). ⁴ In that case, the people of the state acting through the Director of the Department of Conservation brought an action against defendant for damages to personal property. Defendant successfully invoked the protection of the statute of limitations ⁵ for actions for injuries to person or property and actions for trespass. This statute had been expressly applied to the state by the Legislature. ⁶ The Court's discussion is enlightening:

'The plain language of these 2 sections clearly bars this action, brought more than 3 years after the cause of action accrued. Plaintiff's contention seems to be, however, that we should hold that the statute does not mean what...