Giles v. Adobe Royalty, Inc.

• Decision Date: 08 June 1984
• Docket Number: No. 56283,56283
• Citation: 684 P.2d 406,235 Kan. 758
• Parties: Edward E. GILES, Appellee, v. ADOBE ROYALTY, INC., et al., Appellants.
• Court: Kansas Supreme Court

Page 406

684 P.2d 406

235 Kan. 758

Edward E. GILES, Appellee, v. ADOBE ROYALTY, INC., et al., Appellants.

No. 56283.

Supreme Court of Kansas.

June 8, 1984.

Syllabus by the Court

1. Where the names and addresses of adverse parties are known or are easily ascertainable, notice of pending proceedings by publication service, alone, is not sufficient to satisfy the requirements of due process under the 14th Amendment to the Federal Constitution or § 2 of the Bill of Rights of the Kansas Constitution. Pierce v. Board of County Commissioners, 200 Kan. 74, Syl. p 6, 434 P.2d 858 (1967).

2. If the hardship and disruption caused by a retrospective application of a court decision changing public policy is significant, the decision will be applied prospectively only. Thus, it is held Walker v. Hutchinson City, 352 U.S. 112, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956), is not to be applied retrospectively due to the substantial impact such application would have on previous cases fairly heard and determined under prior law. Vaughn v. Murray, 214 Kan. 456, 521 P.2d 262 (1974).

Richard L. Friedeman of Conner, Opie & Friedeman, Great Bend, argued the cause, and Fred L. Conner and Glenn Opie, Great Bend, of the same firm, were with him on brief for appellants.

Rae E. Batt, Kinsley, argued the cause and was on brief for appellee.

HERD, Justice:

This is an action by Edward E. Giles to quiet the title to the following described real estate situated in Edwards County, to-wit:

"The West Half of the Southeast Quarter (W/2 SE/4) and the East Half of the Southwest Quarter (E/2 SW/4) of Section Twenty-seven (27), and the Southwest Quarter (SW/4) of Section Thirty-four (34); All in Township Twenty-six (26) South, Range Sixteen (16) West of the Sixth Principal Meridian."

Appellants counterclaimed seeking to quiet the title in them to an undivided one-half interest in the minerals under the real estate. They filed a motion for summary judgment which was denied. Judgment was then entered for appellee, Giles. This appeal followed.

This dispute arose as follows. On December 1, 1922, Jasper Fisk and his wife, Vivian Fisk, executed a note secured by a mortgage on the above real estate to the Kansas City Joint Stock Land Bank of Kansas City, Missouri. It then assigned the note and mortgage to Phoenix Joint Stock Land Bank of Kansas City. At the time of the execution of the note and mortgage, the Fisks were the owners in fee simple of the real estate. On December 20, 1928, they conveyed in perpetuity an undivided one-half interest in and to the oil, gas and other minerals therein to Harold F. Young of 806 Perrine Building, Oklahoma City, Oklahoma, subject to the mortgage. Young later conveyed an undivided one-fourth of the minerals under the real estate to D.W. Ohern who then conveyed his interest to Income Shares Corporation. Adobe Royalty is the successor to the interest of Income Shares.

The Fisks were unable to make their note payments or pay real estate taxes for the years 1930 through 1935. As a result, Phoenix filed an action to foreclose its mortgage on September 22, 1936. The Fisks, Harold F. Young, Cora Young, D.W. Ohern, Income Shares Corporation and others of no concern to this action were made party defendants. Personal service of summons was obtained on all the individual defendants except Effie I. Fisk, Harold F. Young, Cora Young, his wife, and D.W. Ohern and ____ Ohern, his wife, all of whom were declared "not found in said County," by the Edwards County Sheriff.

Phoenix filed an affidavit and obtained constructive service by publication upon the unknown heirs of Vivian Fisk and upon Effie I. Fisk, Harold F. Young and Cora Young, and D.W. Ohern and ____ Ohern, as nonresidents of Kansas. The district court approved the service of process.

The Journal Entry of Foreclosure was entered January 5, 1937. The district court found "all of the mineral interests outstanding against the real estate described in the petition were all junior and inferior to the mortgage of plaintiff Phoenix." The court ordered the sheriff to offer the real estate for sale subject to the rights of Income Shares in the minerals. In the event the real estate did not bring a sufficient sum to satisfy Phoenix's judgment, together with interest, taxes and costs, the real estate and severed mineral rights were then to be offered for sale, free and clear of the rights of Income Shares. The real estate was first offered accordingly but no bids were received. The land was then offered for sale with the minerals and sold to Phoenix. The sale was confirmed by the trial court. The appellee in this case, successor in interest to Phoenix, brought this action to quiet his title to the property.

The sole issue in this case is whether notice by publication in 1936 fulfills the Youngs' and their successors' due process rights where their out-of-state address was known to Phoenix from the beginning of the 1936 foreclosure action. Income Shares Corporation, as predecessor of Adobe Royalty, Inc., filed an answer and cross-petition in the 1936 foreclosure action, thereby entering its appearance and precluding Adobe from successfully asserting this defense.

The appellants argue the notice in this case, which was exclusively by publication, violates their 14th Amendment Due Process guarantees and renders the 1936 legal proceedings invalid. It has been held that "[l]ack of valid service ... deprives the court of jurisdiction and the judgment may be attacked at any time." Dunn v. City of Emporia, 7 Kan.App.2d 445, 452, 643 P.2d 1137 (1982). Thus, if the notice was constitutionally defective in this case, the 1936 foreclosure proceedings are void as to the appellants.

In 1956, the United States Supreme Court reversed the Kansas Supreme Court and held unequivocally that notice by publication in a condemnation case was a deprivation of due process when the owner's name and address was known or could be readily ascertained. See Walker v. Hutchinson City, 352 U.S. 112, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956). In its decision the Walker court noted an earlier United States Supreme Court case in which the due process requirements of notice were articulated.

"An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Tr. Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950).

We later adopted the Walker court's decision in Chapin v. Aylward, 204 Kan. 448, 464 P.2d 177 (1970), and Pierce v. Board of County Commissioners, 200 Kan. 74, 434 P.2d 858 (1967). In Pierce the court stated the basic notice requirements of the United States and Kansas Constitutions:

"Where the names and addresses of adverse parties are known or easily ascertainable, notice of pending proceedings by publication service, alone, is not sufficient to satisfy the requirements of due process under the 14th Amendment to the federal Constitution or § 2 of the Bill of Rights of the Kansas Constitution." 200 Kan. 74, 434 P.2d 858, Syl. p 6.

If the 1956 Walker decision is applicable to the 1936 mortgage foreclosure, the notice by publication was insufficient since the name and address of Harold F. Young was known to the parties. Phoenix advised the court of the Youngs' address, but since the Youngs were out-of-state residents it requested the court to approve notice by publication. The court approved the notice. The Walker court noted the deficiency of notice in such cases when it stated, "It is common knowledge that mere newspaper publication rarely informs a landowner of proceedings against his property." 352 U.S. at 116, 77 S.Ct. 202. The Walker court further added "[T]here seem to be no compelling or even persuasive reasons why such direct notice cannot be given. Appellant's name was known to the [appellee] and was on the official records. Even a letter would have apprised him that his property was about to be taken and that he must appear if he wanted to be heard ...." 352 U.S. at 116, 77 S.Ct. at 202. There is no question if the rule stated in Walker is applicable, the Youngs were deprived of due process by the publication notice.

The question remaining is whether the 1956 Walker decision is applicable to prior actions. Appellee places great importance on this court's noting in Pierce the exact date of the Walker decision. In adopting Walker, Pierce overruled a previous Kansas case in which notice by publication was held not to violate due process. That case, Phillips Petroleum Co. v. Moore, 179 Kan. 482, 297 P.2d 183 (1956), was handed down May 5, 1956. The Walker case was decided December 10, 1956. The Pierce court noted these dates arguably to show that any decisions upholding publication notice prior to the date of the Walker decision in December, 1956, were valid. The holding in Pierce, however, does not specifically state that as its purpose. We have studiously avoided crossing that threshold heretofore. The issue is presented clearly in the instant case for our resolution.

Constructive notice has been a part of Kansas jurisprudence from the beginning of statehood. The General Laws of Kansas for 1862 provided in pertinent part:

"Service may be made by publication in either of the following cases: In actions brought under the fifty-second and fifty-third sections of this code, where any or all of the defendants reside out of the Territory; in actions brought to establish or set aside a will, where any or all of the defendants reside out of the Territory; in actions brought against a non-resident of this Territory, or a foreign corporation, having in this Territory property or debts owing to them, sought to be taken by any of the provisional remedies, or to be appropriated in any way; in actions which relate to, or the subject of which...