Consolidation Coal Co. v. Mutchman, 26A01-8907-CV-00285

• Decision Date: 19 December 1990
• Docket Number: No. 26A01-8907-CV-00285,26A01-8907-CV-00285
• Citation: 565 N.E.2d 1074
• Parties: CONSOLIDATION COAL COMPANY, Adele Wasson, et al., Appellants (Plaintiffs/Counterclaim Defendants Below), v. Eldon L. MUTCHMAN, Charles Marvel, et al., Appellees (Defendants/Class Representative Counterclaimants Below).
• Court: Indiana Appellate Court

Page 1074

565 N.E.2d 1074

CONSOLIDATION COAL COMPANY, Adele Wasson, et al., Appellants (Plaintiffs/Counterclaim Defendants Below), v. Eldon L. MUTCHMAN, Charles Marvel, et al., Appellees (Defendants/Class Representative Counterclaimants Below).

No. 26A01-8907-CV-00285.

Court of Appeals of Indiana First District.

Dec. 19, 1990.

Opinion on Denial of Rehearing

Feb. 21, 1991.

Richard B. Steedman, Evansville, J. William Bruner, Robert R. Aylsworth, Boonville, (Stephen T. Link, of counsel, on the Brief), Evansville, for appellants.

James G. McDonald, Jr., McDonald & McDonald, Charles R. Nixon, Fair & Fair, Verner P. Partenheimer, Hall, Partenheimer & Kinkle, Princeton, for appellees.

ROBERTSON, Judge.

Consolidation Coal Co. appeals the granting of class representative Eldon L. Mutchman's motion to correct error which sought the setting aside of two partial summary judgments granted in Consolidation Coal's favor on its complaint to quiet title, for declaratory judgment and reformation of deeds.

We reverse and direct that a partial summary judgment be entered consistent with this opinion.

This appeal stems from a dispute over certain veins of coal lying in Gibson County, Indiana. Appellant Consolidation Coal Co., lessee, traces its possession through appellants Adele Wasson et al., (collectively referred to as Consolidation), successors in interest to Garry O. Hendrickson and James R. Wasson, who purchased the severed coal estates in fee simple from Gibson County in 1943. Gibson County acquired the severed mineral estates at a tax sale also in 1943. Mutchman, as class representative of the intervenor-owners of portions of the surface overlying the coal estates, claim Wasson and the other appellants hold only foreclosable tax liens as a consequence of the tax sale. The surface owners maintain the coal estates were reunited with the surface and title to the severed estates lapsed by virtue of the Dormant Mineral Act, IND.CODE 32-5-11-1 et seq.

In its March 28, 1984, ruling on the first motion, the trial court granted summary judgment "as to the procedural regularity of the tax sale proceedings as respects assessment, delinquency, notice of delinquency, notice of sale, publication and procedural due process generally" but overruled the motion "on ... the exact nature of the property rights plaintiffs acquired from Gibson County by virtue of the tax sale proceedings and whether or not defendants, Mutchman ... have standing to attack plaintiff's claims of ownership." The second summary judgment adjudicated the issues raised by the surface owners' answer and cross-complaint, i.e., the surface owners' challenge to the validity of the tax deeds, Consolidation's affirmative defenses to that challenge, and the question of lapse, and also Consolidation's complaint to quiet title, i.e., the validity, nature, and extent of Consolidation's title and interest. The second ruling left for trial construction of the deeds insofar as they expressly conveyed rights and interests other than the mineral interests themselves, and, the extent of certain implied rights to use the surface. Following the entry of the second partial summary judgment, the parties agreed that, since mining was not yet underway, the amount of surface reasonably necessary to effectuate the mineral interests was a question not yet ripe for adjudication. The trial court then entered final judgment. The next day, Mutchman filed his motion to correct error, which, after extensive argument, was granted.

Although mention is made of the ruling on the first partial summary judgment, ¹ Consolidation's appeal is directed at the issues which were determined by the second partial judgment. Accordingly, we have treated this appeal as one solely contesting the court's action in setting aside the second partial judgment. Thus, on review we must determine whether the record discloses genuine issues of material fact, and, if not, whether Consolidation was entitled to its judgment as a matter of law. Ind.Trial Rule 56(C). We will address the

issues raised by the surface owners' answer and cross-complaint to quiet title which deal with the validity of the tax sale and the effect of the Dormant Mineral Act first, before addressing Consolidation's title and the extent of its interest.

I. Validity of the Tax Deeds

Consolidation argues that the surface owners lacked standing to challenge the validity of the tax deeds. We agree.

A suit to quiet title brings in issue all claims to the property in question. Brown v. Cody (1888), 115 Ind. 484, 489, 18 N.E. 9, 12. Hence, a plaintiff may recover only upon the strength of his own title. I.C. 34-1-48-15; Pachter v. Gray (1952), 231 Ind. 487, 489, 109 N.E.2d 412, 413. He must show legal title with a present right of possession paramount to the title of the defendant. East v. Peden (1886), 108 Ind. 92, 95-96, 8 N.E. 722, 723. It is therefore appropriate under the issues for a defendant to prove the plaintiff and those claiming under him do not have title or interest in the property. Brown, 115 Ind. at 484, 18 N.E. 9.

A defendant need not act affirmatively by cross-complaint but may introduce any facts through his general denial which according to principles of equity would defeat the plaintiff in obtaining a decree quieting title to the land in controversy. Peden, 108 Ind. at 94, 8 N.E. 722; Reed v. Kalfsbeck (1897), 147 Ind. 148, 45 N.E. 476. He may avail himself of any imperfection in the title of the plaintiff and may defeat the action by proving a subsisting outstanding legal title in a third person with whom the defendant is not connected. Peden, 108 Ind. at 94, 8 N.E. 722. However, a plaintiff may not avail himself of an alleged outstanding equity in favor of an indifferent stranger with whom he stands in no sort of legal privity. Id. In cases of mistake in written instruments, courts of equity will interpose their aid only between the original parties and those claiming under them in privity. Id. at 97, 8 N.E. 722.

Thus in East v. Peden, the court reversed a judgment in favor of a defendant in possession who conceded he had not acquired legal title in a conveyance from the plaintiff, where the trial court permitted the defendant to show that title lie not with the plaintiff but with an earlier grantee to whom the plaintiff had intended to convey her interest but by mistake in the description had failed to do so. Since the appellee-defendant claimed no right through the deed in question, the court determined that he was not in a position to assert a mistake and seek a correction so long as the parties to the instrument were content with the description as written. "The outstanding equity in a third person, which will afford shelter for a defendant in possession, without title, against a legal title in the plaintiff, must be such an equity as the defendant would have the right, by making proper parties, to invoke the aid of a court of chancery to enforce in his favor." 108 Ind. at 96.

The surface owners do not claim title through the owners of the severed estates prior to the tax sale. They therefore would have no right to bring an action on behalf of the prior owners to quiet title or petition the court for relief.

The result in East v. Peden is consistent with Indiana's real party in interest doctrine. See T.R. 17(A)(1). A real party in interest objection presupposes that the claimant does not have the substantive right to enforce the claim he is making. State v. Rankin (1973), 260 Ind. 228, 230, 294 N.E.2d 604, 606. Real party in interest status requires that the claimant have a present and substantial interest in the relief sought; in other words, he must be entitled to the fruits of the action. Cook v. City of Evansville (1978), 178 Ind.App. 20, 381 N.E.2d 493.

Without question, the Dormant Mineral Act authorizes a quiet title action by the surface owners to obtain an adjudication that the conditions identified by the Act exist, thereby vesting in them legal title to the land free of the mineral servitude which formerly existed. See generally, Short v. Texaco, Inc. (1980), 273 Ind. 518 Alternatively, Consolidation maintains that the surface owners are barred by the statutes of limitation from contesting the sufficiency of the tax deeds. Both conveyances, from the auditor of Gibson County to Gibson County and from Gibson County to Consolidation's lessors' predecessors, occurred in 1943. The statute of limitation in effect at the time provided

                406 N.E.2d 625, affirmed, 454 U.S. 516, 102 S.Ct. 781, 70 L.Ed.2d 738.   But that claim is free-standing;  the surface owners concede that their sole source of title is dependent upon the Act.  Once that potential interest has been litigated and determined adversely to them, they have no other legal basis for a claim to title, as the severed coal estates are vested property interests separate and distinct from the surface ownership, entitled to the same protection as fee simple titles.  Id. 406 N.E.2d at 627
                

[t]hat no action to contest the validity of any title acquired as a result of any sale of any real estate under this act shall be brought after the expiration of one year from the date of the execution of the deed.

Acts of 1941, ch. 224, Sec. 41 (Burns' 1943 Replmt Sec. 64-2212). In 1947, a second statute of limitation was added:

All sales of real estate heretofore made to any county or other persons pursuant to chapter 224 of the Acts of 1941 and all acts amendatory thereof, and all certificates and deeds heretofore executed by county auditors for any such real estate pursuant thereto are hereby legalized and rendered valid. Nothing in this section shall affect pending litigation. From and after the passage of this Act, no action to contest the validity of any title acquired as a result of any sale of real estate so acquired by any county or other persons under said chapter 224 and acts amendatory thereof shall be brought after the expiration of one year from the...