Smith v. Musselshell County, 11736

• Citation: 472 P.2d 878,155 Mont. 376
• Decision Date: 22 July 1970
• Docket Number: No. 11736,11736
• Parties: Charles P. SMITH, Plaintiff and Respondent, v. COUNTY OF MUSSELSHELL, Montana, a body corporate and politic of the State of Montana, Defendant and Appellant.
• Court: United States State Supreme Court of Montana

Page 878

472 P.2d 878

155 Mont. 376

Charles P. SMITH, Plaintiff and Respondent, v. COUNTY OF MUSSELSHELL, Montana, a body corporate and politic of the State of Montana, Defendant and Appellant.

No. 11736.

Supreme Court of Montana.

July 22, 1970.

Anderson, Symmes, Forbes, Peete & Brown, Billings, Ben N. Forbes, argued, Billings, for defendant and appellant.

Crowley, Kilbourne, Haughey, Hanson & Gallagher, Billings, Norman Hanson, argued, Billings, for plaintiff and respondent.

JAMES T. HARRISON, Chief Justice.

From a summary judgment for the plaintiff entered in the district court of Musselshell County, defendant appealed.

Charles P. Smith (hereafter referred to as plaintiff), successor in title to land of A. J. Ziesmer, brought this suit to determine his interest in land located in Musselshell County and interests reserved by the original vendor, Musselshell County (hereafter referred to as the county). The district court rendered a summary judgment based on a 1945 quiet title decree which it found to be res judicata of all issues in the present suit.

From the record it appears that on June 4, 1941 the county sold approximately 672 acres of land to A. J. Ziesmer under a contract which provided: 'Vendor reserves an undivided 6 1/4% of all oil, gas and other minerals lying in, under and beneath the premises hereinbefore described.' The county gave a deed for this land to A. J. Ziesmer, dated April 5, 1944, which contained a reservation for the county of, 'an undivided 6% royalty of all oil, gas, and other minerals lying in, and that may be produced from the premises herebefore described, delivered free of cost to first party.' One year later, A. J. Ziesmer brought an action to settle various interests in this land naming the county as one of several defendants, and on April 2, 1945, a district court decree quieted title in the land with this reservation: 'Subject to a reservation in and to Musselshell County, Montana, of 6 1/4% of all oil, gas, and other minerals lying in and that may be produced from the said premises.'

The county urges as controlling in this cause a 1941 Montana statute which authorized county commissioners to convey county land and provides: '* * * the county may reserve not to exceed six and one-fourth per cent (6 1/4%) royalty interest in the oil, gas, and minerals produced and saved from said land.' Sec. 2, Ch. 171, Session Laws 1941, (now section 84-4191, R.C.M.1947). The effect of this statute, the county contends, is to limit a county's reservation strictly to a royalty interest and to completely exclude by statute any reservation of a mineral interest.

The issues on this appeal are: (1) Whether or not the 1945 quiet title decree is res judicata regarding the interests of the county and the plaintiff; (2) If it is res judicata, does its interpretation allow the county a royalty interest or a mineral interest.

As to the first issue, four criteria exist in Montana law which must be met before a plea of res judicata can be sustained. These criteria are: (1) the parties or their privies must be the same; (2) the subject-matter of the action must be the same; (3) the issues must be the same, and must relate to the same subject-matter; and (4) the capacities of the persons must be the same in reference to the subject-matter and to the issues between them. State ex rel. Sullivan v. School Dist. No. 1, 100 Mont. 468, 50 P.2d 252; Brannon v. Lewis & Clark Cty., 143 Mont. 200, 387 P.2d 706. In the present action, plaintiff is the successor in title to land of A. J. Ziesmer, hence is in privy with all of A. J. Ziesmer's former interests. The county was a party to the quiet title action brought by A. J. Ziesmer in 1945 which concerned the exact land and reservation in issue in this suit. Therefore, the first three criteria are met. The fourth criterion is also met, because neither party is asserting any right on appeal which was not available to them or their predecessors in title in the 1945 quiet title action. As a result, the district court correctly found the decree of April 2, 1945 to be a conclusive statement and res judicata of particular issues presented on appeal regarding the respective parties' interests. The rule was succinctly reiterated by the United States District Court in a similar case on issues found to be res judicata by a former decree to quiet title in these words: 'A prior judgment is conclusive upon the issues made or tendered, and as far as those issues are concerned, the judgment is conclusive of everything that might have been urged for or against him.' Mondakota Gas Company v. Reed, 244 F.Supp. 327, 330 (D.Mont.1965).

Turning to the second issue, since the decree of April 2, 1945 is a final expression of the county's reservation, it is the only document that can be inspected to determine the specific interest reserved. The decree describes the reservation as '6% of all oil, gas, and other minerals lying in and that may be produced from the said premises.' Does this connote a royalty or a mineral interest?

This Court has distinguished a royalty and a mineral interest in the following manner: 'Since 'royalty' and 'nonparticipating royalty' are shares in production only, certain words denoting a share in production have been used to delimit the interest conveyed. Likewise a mineral interest being a severing of the mineral fee is often described in terms of ownership under the ground. Thus, 'produced and saved' have been associated with royalties, 'oil and...