Noss v. Hagen

• Court: United States State Supreme Court of North Dakota
• Citation: 274 N.W.2d 228
• Docket Number: No. 9492,9492
• Parties: August NOSS, Earl Ferguson, Laurence Smitton, and Violet F. Hanson, Individually and as personal representative of the Estate of Anna Fehrman, deceased, Plaintiffs and Appellants, v. Lillian E. HAGEN et al., Defendants and Appellees. Civ.
• Decision Date: 08 January 1979

Page 228

274 N.W.2d 228

August NOSS, Earl Ferguson, Laurence Smitton, and Violet F.

Hanson, Individually and as personal

representative of the Estate of Anna

Fehrman, deceased, Plaintiffs and Appellants, v. Lillian E. HAGEN et al., Defendants and Appellees.

Civ. No. 9492.

Supreme Court of North Dakota.

Jan. 8, 1979.

Pringle & Herigstad, Minot and McIntee & Whisenand, Williston, for plaintiffs and appellants; argued by Herbert L. Meschke, Minot.

Rolfstad, Winkjer, McKennett, Kaiser & Stenehjem, Williston, for Steven A. Robinson, George B. Robinson, Lillian E. Hagen, Betty J. Hagen Grovogel, Lillian Louise Crowder, Roberta Jean Miller, Jay Hagen Gilliland and Tom Harrison Gilliland.

Mackoff, Kellogg, Kirby & Kloster, Dickinson, for Liberty Nat. Bank & Trust Co.

Everett E. Palmer, Williston, for Ethel M. Popham, Arthur J. Sharbo and Walter J. Sharbo.

William S. Heigaard, Langdon, for Mattie S. Haaven and Lynn J. Haaven and Ethel and Claude Crockett.

Kelsch, Kelsch & Tudor, Bismarck, for Elsbeth E. A. Godwin.

Fleck, Mather, Strutz & Mayer, Bismarck, for Dean F. Smith, Bruce Alfson, Norman Jessen, Marshall Simpson, Delmer Duffy, Helen Brown, John Klemer, Steven Harris and Ellen E. Smith.

John H. MacMaster, Williston, for Neva H. MacMaster and Audrey H. Bourgeois.

F. J. Smith, Bismarck, for V. L. Gilbreath, trustee, and George M. Thompson, trustee.

Nilles, Hansen, Selbo, Magill & Davies, Fargo, for St. Mary's Cathedral.

Bjella & Jestrab, Williston, for Grand Forks Oil Pool Trust, defendants and appellees; argued by Russell R. Mather, Bismarck.

ERICKSTAD, Chief Justice.

The plaintiffs and appellants seek to quiet title to a two and one-half percent royalty interest in the oil and gas in 160 acres in Williams County, including the right to approximately $60,000 in proceeds from the two and one-half percent royalty interest that accrued from oil produced from that land. They are the descendants of the former record owner, Gustav Noss, and claim title to the royalty interest and the proceeds through a 1949 auditor's tax deed. The defendants and appellees claim title through an assignment by Noss to M. G. Jacobson of the two and one-half percent royalty interest in 1937. The district court found for the assignees, and the descendants of Noss appeal. We affirm.

Gustav Noss homesteaded 160 acres in Williams County, receiving a United States patent covering the property in 1913. Noss lived on the property continuously until he died intestate on October 23, 1939. Although Noss' estate was not probated in North Dakota, he was survived by his wife, Emilge Noss, and four sons, August Noss, John Fehrman, Earl Ferguson, and Laurence Smitton. Mrs. Noss was institutionalized in Minnesota hospitals and sanitoriums from 1904 until she died intestate on May 26, 1967. In 1904, each of the sons was placed in a separate foster home, apart from both parents. Neither Mrs. Noss nor the sons ever lived upon the real property in question, except for a brief period from 1923 to 1926 when John Fehrman and his family lived with his father on the premises. John Fehrman died in 1974 and plaintiff, Violet E. Hanson, is his daughter and sole surviving descendant.

On September 25, 1937, Noss conveyed to M. G. Jacobson an undivided two and one-half percent royalty in all the oil and gas produced and saved from the property. The conveyance contained the following warranty:

"To have and to hold unto the said assignee, his heirs, administrators, and assigns said royalty as above set forth, and said oil and gas so produced and saved from said lands to be delivered free of cost to the royalty owner in the pipe line serving said premises or tanks erected thereupon for the purpose of storing such products, together with the rights, privileges and benefits to be derived therefrom, and I do hereby assign said royalty under the lease now covering said lands as well as any lease, or leases, that may be hereafter made covering said premises, And agree to warrant and defend the title to the same, and that I have lawful authority to sell and assign said royalty." (Emphasis added.)

Jacobson made a number of assignments of royalty commencing on October 8, 1937, and the defendants are all holders of parts of the royalty through these assignments.

Noss did not pay the 1937 taxes on the property and on December 13, 1938, a tax sale was held and a certificate of tax sale was issued to the Williams County Auditor. On September 14, 1942, the tax sale certificate was assigned to John Fehrman, August Noss, and Earl Ferguson. An Auditor's Tax Deed was issued to the same parties on February 7, 1949.

John Fehrman, representing the heirs of Gustav Noss, paid the real estate taxes on the property for the years 1942 through 1967, and also rented the land to Henry Rud on a crop share basis from 1940 to 1968. Rud had rented the land from Gustav Noss in 1938 and 1939. In 1967, August Noss, John Fehrman, Earl Ferguson, and Laurence Smitton joined in a deed that divided the land equally among themselves. The four sold the land in 1968, reserving to themselves, however, all mineral rights.

In 1959, Amerada Petroleum Corporation secured a producing oil and gas well on the premises. Since that time, the proceeds of the two and one-half percent royalty interest has been accumulated by Amerada. In December, 1975, Amerada began depositing the proceeds with the clerk of Williams County District Court.

The descendants of Gustav Noss initiated a quiet title action in district court on December 22, 1975, claiming the royalty interest and the accumulated proceeds by virtue of the 1949 Auditor's Tax Deed. The assignees of Jacobson answered, claiming their respective interests in the two and one-half percent royalty interest by virtue of assignments from Jacobson. The district court held that the descendants had in effect redeemed the property by their payment of the delinquent taxes and were bound by the warranty in their father's conveyance of the royalty interest.

The Noss descendants appeal from the district court's decision to this court. We shall hereinafter refer to the plaintiffs as the Descendants and the defendants as the Assignees.

The Descendants argue that they acquired an independent title to the property through their 1949 tax deed that is paramount to the royalty interests. In support of their argument that they acquired title free and clear of the royalty conveyance, they point out that the district court found that Chapter 57-27, NDRC (1943) ("Rights of Private Purchaser When Land Not Redeemed") applied, and assert that this chapter does not deal with redemptions. Furthermore, Descendants submit that the 1949 Auditor's Tax Deed expressly provided that no redemption had occurred. The tax deed provides in pertinent part:

"And it appearing that

John Fehrman, August Noss and Earl Ferguson are the legal owner of the said certificate of tax sale and the time allowed by law for redeeming the land herein described having now expired and proof of legal notice of the expiration of the period of redemption having been filed in the office of the county auditor prior to the maturity of such certificate as provided by law,

and said land not having been redeemed from such sale pursuant to law, and the said John Fehrman, August Noss and Earl Ferguson, having demanded a deed for the tract of land mentioned in said certificate; and it appearing that said lands were legally liable Tor (sic) taxation, and had been assessed and properly charged on the tax book or duplicate for the year 1937, and that said lands had been legally advertised for taxes and were sold on the 13th day of December, 1938, as aforesaid,

WITNESSETH, That the said party of the first part, for and in consideration of the premises, and the sum paid, has granted, bargained and sold and by these presents does grant, bargain, sell and convey unto the said party of the second part, their heirs or assigns, forever, the tract or parcel of land mentioned in said certificate,"

Descendants also contend that other provisions of the 1943 Revised Code could have been used if anything other than an independent title was intended. For example, Chapter 57-26, NDRC (1943), provides for "Redemption From Real Estate Tax Sales," and Section 57-2819, NDRC (1943), provides for "Rights of Former Owner to Repurchase."

Descendants argue that the district court's holding is to the effect that "heirs of a former owner could only redeem, since they are legally barred from acquiring greater rights to his property than the former owner." They contend that we held differently in Hefty v. Aldrich, 220 N.W.2d 840 (N.D.1974).

Hefty was an action to quiet title in which the plaintiff, daughter of the former record owner, received a title through a quitclaim deed from the county in 1970. The county had acquired title through a tax deed to the property in 1968 for nonpayment of taxes. The defendant, Credit Bureau, contended, among other things, that it was a lienholder by virtue of a judgment obtained prior to the issuance of the tax deed to the county, and that the plaintiff/daughter was a trustee for its benefit because she owed a duty to pay taxes and therefore could not purchase the property free and clear of the judgment lien. We held that the daughter acquired the property free and clear of the judgment because she "was under no obligation to pay the taxes on the property, and she was not attempting by the purchase to strengthen her title."

Descendants are apparently citing Hefty for the proposition that an heir of a former record holder may acquire an independent title to the property and is not limited to redemption. Descendants also submit that pursuant to the "relation-back" theory of Conlin v. Metzger, 77 N.D. 620, 44 N.W.2d 617 (1950), taxes assessed on the assessment date of April 1, 1937, were for the entire estate and thus were prior to the royalty assignment of Noss to Jacobson on September 25, 1937. Because of...