Kaye v. Cooper Grocery Co.

• Decision Date: 10 June 1957
• Docket Number: No. 6167,6167
• Parties: Emby KAYE; Samuel T. Goldberg; M. J. McNulty, Jr.; Saul A. Yager and Marian Yager, Plaintiffs-Appellees, v. The COOPER GROCERY COMPANY, a Corporation; W. E. Grisso Heirs et al., Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 798

312 P.2d 798

63 N.M. 36

Emby KAYE; Samuel T. Goldberg; M. J. McNulty, Jr.; Saul A.

Yager and Marian Yager, Plaintiffs-Appellees, v. The COOPER GROCERY COMPANY, a Corporation; W. E. Grisso

Heirs et al., Defendants-Appellants.

No. 6167.

Supreme Court of New Mexico.

June 10, 1957.

Carpenter & Phelps, Roswell, G. T. Hanners, Lovington, for appellants.

Reese, McCormick, Lusk & Paine, Carlsbad, for appellees.

COMPTON, Justice.

The pertinent facts giving rise to this controversy are as follows: In 1930, Len Dalton and his wife owned the property in question in fee simple. On July 29, 1930, they deeded an undivided one-half interest in the minerals to Dorothy Heard. This deed was recorded the same day. On the same day she conveyed her mineral interest to W. E. Grisso, whose deed likewise was recorded on July 29, 1930. For 1931, 1932 and 1933, the property was assessed for taxes in the name of Len Dalton. No separate assessment was made of the mineral estate.

An agent of the present plaintiffs acquired a tax deed to the property in 1937 based upon the delinquent taxes for the 1931-1933 period. In 1938, the agent filed suit to quiet title to the property in question. W. E. Grisso, owner of the undivided one-half interest in the minerals, was one of numerous defendants. By registered mail, process was sent to Grisso in Enid, Oklahoma. Plaintiff's attorney had secured the information that Grisso's residence was Enid, Oklahoma, from an address list maintained by a Lea County abstract company. Grisso was actually a resident of Seminole, Oklahoma, although the Grisso Royalty Corporation, controlled by him, had an office in Enid. Certain recorded instruments in Lea County showed the address of Grisso to be Seminole, Oklahoma.

Apparently Grisso failed to receive the notice and service of process mailed to Enid, Oklahoma. A default judgment was taken against Grisso and title to the property was quieted in the plaintiff.

To clear up any uncertainties as to the mineral interests in the property, the present plaintiffs brought this suit in Lea County to quiet title in the mineral estate. Several parties were made defendants, including W. E. Grisso, who alleges that since 1930 he has been, and still is, the owner of an undivided one-half interest in the mineral estate. Judgment in the court below was for the plaintiffs. W. E. Grisso having died shortly after the trial, the case comes to this court on appeal by the Grisso heirs.

Appellants contend that the 1938 judgment quieting title to the property here in question was void for suppression of notice. The court below found against appellants on this point and that finding of fact is supported by substantial evidence.

The controversy concerning notice arises from the fact that the complaint and summons in the 1938 action were mailed to W. E. Grisso in Enid, Oklahoma, when, in fact, he resided in Seminole, Oklahoma, and certain deeds and leases recorded in Lea County showed his address to be Seminole, Oklahoma. But it should be noted that other recorded instruments gave the address of the Grisso Royalty Corporation as Enid, Oklahoma.

This court in discussing the requirements of notice made the following statement in Owens v. Owens, 32 N.M. 445, 449, 259 P. 822, 823, 'It would be taking a liberal view indeed to say that it was intended that one might close his eyes in order to remain ignorant.' But the record does not bear out appellants' allegation that the plaintiff and his attorney either suppressed notice or in effect chose to remain ignorant of Grisso's true address. While plaintiff's attorney did not examine the reception books in Lea County, he did utilize an address list maintained by a Lea County abstract company in order to determine Grisso's correct address. This list gave such address as Enid Oklahoma. The record indicates that attorneys in the area frequently made use of this index in ascertaining addresses. We are not prepared to say that failure to examine receiption books in the county clerk's office is in and of itself a lack of due diligence. Diligence is a relative term and must be determined by the circumstances in each case. Campbell v. Doherty, 53 N.M. 280, 206 P.2d 1145, 9 A.L.R.2d 699; Restatement, Judgments Sec. 32 comment f.

Notice in the 1938 suit was mailed to W. E. Grisso in Enid, Oklahoma, by registered mail, return receipt requested. The depositions of two witnesses employed in the United States Post Office in Enid, Oklahoma, in 1938, are substantially to the effect that mail addressed to W. E. Grisso in Enid would have been placed in the box of the Grisso Royalty Corporation. Moreover, the correspondence between the plaintiff and his attorney relative to the 1938 suit indicates a good faith attempt on the part of each to secure the addresses of defendants.

Appellants alleged fraud on the part of plaintiff's attorney in withholding or suppressing evidence in the 1938 suit. The trial court concluded that appellants failed to prove a suppression of evidence. We agree with this conclusion and do not believe that the assertion merits extended discussion. Suffice it to say the burden is upon the party alleging fraud to establish its existence by clear and convincing evidence. Lumpkins v. McPhee, 59 N.M. 442, 286 P.2d 299; Frear v. Roberts, 51 N.M. 137, 179 P.2d 998. Appellants have failed to carry this burden.

We come now to appellants' contention that the judgment in the 1938 quiet title was void because the tax deed did not cover the undivided mineral interest, and, therefore, the court was without jurisdiction. It may be assumed for the moment that the tax deed did not carry the mineral estate. However, it does not follow from this that the court lacked jurisdiction.

The plaintiff in the 1938 quiet title action proceeded under the statutory authority of Sec. 22-14-1, N.M.S.A., 1953 Comp. This section provides as follows:

'An action to determine and quiet the title of real property may be brought by anyone having or claiming an interest therein * * * .' (Emphasis added.)

By virtue of the tax deed the plaintiff was claiming the entire interest in the surface estate and the entire interest in the mineral estate. W. E. Grisso was joined as a defendant for this reason. His sole interest was in the mineral estate. Even after a severance has occurred, a complaint in a quiet title suit describing the property and alleging a fee simple ownership is equivalent to a claim of ownership of the fee in the surface and in the minerals. If a plaintiff's claim is solely to the surface estate, then his complaint should so state. If his claim is solely to the mineral estate, then his complaint should so state.

The action to quiet title is a substantive adjudication of title. The judgment is self-operating, that is, by the judgment itself the interest is established. In such an action all matters affecting the title of the parties to the action may be litigated and determined, and the judgment therein is final and conclusive. 2 Black, Judgments Sec. 697 (2d Ed.).

In the 1938 suit the court had jurisdiction over the subject matter. Although there must be jurisdiction in the court in order to make its judgment a bar, it is not necessary that such judgment should be free from error. 2 Black, Judgments Sec. 680. Such was the holding in Bowers v. Brazell, 27 N.M. 685, 205 P. 715; Id., 31 N.M. 316, 244 P. 893. See also Caudill v. Caudill, 39 N.M. 248, 44 P.2d 724. The force of a former judgment as an adjudication of the rights of the parties thereto is not affected by the fact that the judgment was erroneous. The judgment must stand until corrected in an appropriate way. In over 15 years Grisso failed to move to set aside the default judgment. In fact he never took such affirmative action.

Public policy calls for the protection of judgments in order to secure termination of litigation and the finality of judicial determinations. 1 Freeman, Judgments 602 (5th Ed.).

We might well conclude our opinion here, affirming the judgment, but due to the public importance of the question presented, we go one step further. Appellants contend that the tax deed issued in 1937 did not cover the undivided one-half mineral interest severed by a recorded deed prior to the 1931 tax year. In support of this position appellants maintain that the New Mexico statutes contemplate the separate assessment of fractional undivided mineral interests, and that since the appellants' undivided one-half interest had not been separately assessed, the tax deed did not carry this interest.

There is a split of authority as to whether a separate assessment can be levied against fractional undivided interests. On the one hand there is the following view expressed in Hager v. Stakes, 116 Tex. 453, 294 S.W. 835, 842:

'Real estate is ordinarily taxed as a unit; yet,...