United States v. 936.71 Acres of Land, State of Fla.

• Decision Date: 13 October 1969
• Docket Number: No. 27172.,27172.
• Parties: UNITED STATES of America, Plaintiff, v. 936.71 ACRES OF LAND, MORE OR LESS, Situated IN BREVARD COUNTY, STATE OF FLORIDA, et al., Defendants. Sarah E. WALKER et al., Appellants-Cross-Appellees, v. Edwin A. McQUATERS and Helen E. McQuaters et al., Appellees-Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

418 F.2d 551 (1969)

UNITED STATES of America, Plaintiff, v. 936.71 ACRES OF LAND, MORE OR LESS, Situated IN BREVARD COUNTY, STATE OF FLORIDA, et al., Defendants.

Sarah E. WALKER et al., Appellants-Cross-Appellees, v. Edwin A. McQUATERS and Helen E. McQuaters et al., Appellees-Cross-Appellants.

No. 27172.

United States Court of Appeals Fifth Circuit.

October 13, 1969.

COPYRIGHT MATERIAL OMITTED

Ralph H. Bearden, Jr., Miami, Fla., for Walker.

Harlan Tuck, Giles, Hedrick & Robinson, Orlando, Fla., for McQuaters.

Norman C. Roettger, Jr., Ft. Lauderdale, Fla., for Canaveral Beach, Inc.

Francis G. Rearick, Lands Div., Dept. of Justice, Orlando, Fla., J. Kenneth Ballinger, Asst. Atty. Gen., Tallahassee, Fla., Charles M. Harris, Crofton, Holland & Starling, L. C. Crofton, Titusville, Fla., for Alys A. Simons.

Before WISDOM and MORGAN, Circuit Judges, and DAVIS,^* Judge of the United States Court of Claims.

WISDOM, Circuit Judge:

The United States has condemned certain lands in Brevard County, Florida for use in connection with the Space Program. This suit resulted from a dispute over rights to the condemnation proceeds. The intervenor, Sarah Walker, contends that the right to redeem land willed to her by her husband, but taken by the State for non-payment of taxes, did not end when the State auctioned the land, since the auction was procedurally faulty. She contends also that part of the land platted as streets never passed to the State in the first place. The district court held against Mrs. Walker without passing upon the validity of the auction. We affirm.

The land in question consists of two different tracts, Number 3912 and Number 3913. Each has a separate history.

TRACT 3913

Walker Properties, Inc., a Florida corporation, bought a portion of Tract 3913 in 1925. George R. Walker, Sarah Walker's husband, owned 996 of the corporation's 1000 shares of stock; F. A. Newell and F. N. Boudreau owned two shares each. In 1936 the Governor ordered the corporation dissolved for failure to pay its corporation capital stock tax. Under Florida law, title to the assets of a dissolved corporation vests for twenty years in the last board of directors as trustees for the stockholders.¹ After twenty years, title passes to the stockholders themselves.

Sarah Walker contends that she is the ultimate successor to the interest of Walker Properties, Inc. Her husband, George R. Walker, died in January 1953. His will, bequeathing all his property to Mrs. Walker, was not probated until 1966, but, under Florida law, as the trial judge held, the passage of title under the will dated back to the time of her husband's death.² Mrs. Walker therefore acquired his 996/1000 undivided interest of the land in 1956, or twenty years after the dissolution of Walker Properties, Inc., when title in its assets reverted to the individual stockholders. Another stockholder, F. N. Boudreau, executed a quit-claim deed in favor of Mrs. Walker in 1963, conveying his interest (two shares) in the corporate assets.

In 1930, 1931, and 1932 the corporation failed to pay property taxes on the land, and the tax collector for Brevard County issued tax sale certificates for nonpayment. In 1939 title to the lands which were subject to outstanding tax certificates passed to the State under Florida's "Murphy Act".³ Although the former owners, the Walker properties board and their successors, ceased at that time to have an absolute right of redemption, they continued, under Florida's statutes, to have a "right" to repurchase the property with the approval of the Trustees of the State Internal Improvement Fund.⁴ That opportunity to repurchase is what Sarah Walker asserts in the present case.

In 1944 the Trustees of the Internal Improvement Fund, acting through their agent, the Clerk of the Circuit Court, issued Brevard County Deed No. 719 to Edwin A. and Helen E. McQuaters (appellees), as a result of their bid at the sale of a portion of Tract 3913. The McQuaters recorded the deed on July 10, 1944. In 1944 the State also auctioned off another part of Tract 3913 to the McQuaters; they recorded this second deed, Number 913, on May 14, 1945. Sarah Walker alleges that the sales were invalid, because the successful bidders submitted their offers through the Clerk of the Circuit Court, rather than in person. The McQuaters, who owned an adjoining homestead, were in open, adverse, notorious, continuous, and exclusive possession of the deeded land for a period of more than seven years, according to the finding of the district court. They paid all taxes on the land. In 1960 the McQuaters conveyed the property to Canaveral Beach, Inc.

The United States condemned Tract 3913 in August 1962, naming Canaveral and the McQuaters as defendants. In April 1964 Sarah Walker intervened. She asserted first that the State's sale of the land to the McQuaters had been invalidated by the fact that the McQuaters had submitted their bid through the auctioning Clerk of Court, rather than by appearing personally. She also maintained that the streets originally platted on Tract 3913 had never been dedicated as public property, and that since they had never been assessed for taxation, they had never passed to the State under the Murphy Act. Instead, she said, title had continued in Walker Properties, Inc. and its successors. In the alternative, as a basis for her claim to the streets, Mrs. Walker alleged that the State had never acquired more than an easement in the land, and that this interest had reverted to her at the time of the condemnation, when the streets ceased to be used for their original purpose. She therefore claimed either the right to repurchase the State's interest in the land, or, alternatively, a right to the proceeds relating to condemnation of the streets.

The district court found that the McQuaters's adverse possession of the land as against Mrs. Walker for the statutory seven-year period had barred any claim she might have to the land. Insofar as she based her claim upon the invalidity of the State sale, the court held that the State would be estopped to deny the validity of its own deed to the McQuaters. The court also held that the platted streets had been dedicated, and that the State had passed valid title in them to the McQuaters.

TRACT 3912

Tract 3912, like Tract 3913, passed in 1939 from the Board of Directors of Walker Properties, Inc. to the State under the Murphy Act. In 1944 the Circuit Court Clerk G. M. Simmons who was auctioning the land for the Trustees of the Internal Improvement Fund, himself bought the tract. He continued in possession until the United States condemned the land in 1962. Sarah Walker contended that Simmons's sale to himself was a nullity, that title continued in the State, and that she, as successor to Walker Properties, Inc. had the right to repurchase the land or the right to the condemnation award that now stands in its place. Initially the district court agreed with her contention. It ordered that title to the condemnation award for Tract 3912 be vested in the Trustees of the Internal Improvement Fund. In a supplemental decree, however, the Court noted that the award had already been paid into the estate of G. M. Simmons, and that the Trustees of the Internal Improvement Fund, although parties to the suit, had never asserted any interest in the award; it held therefore that "the Trustees cannot now ask that the money be repaid into the registry of the Court". Sarah Walker's rights, which could rise no higher than the State's, were extinguished.

I.

We consider first the intervenor's claim to those portions of Tract 3913 deeded by the Trustees of the Internal Improvement Fund to the McQuaters in 1944 and 1945. All parties agree that the State took absolute title to that land in 1939 by operation of the unequivocal terms of the Murphy Act. Assuming for the moment that the McQuaters's deed was utterly void because of the "fraudulent" tax sale, title to the land would have remained in the State until 1962, when it was replaced by the proceeds of the federal condemnation. Section 192.381 of the Florida Statutes, F.S.A. empowers the Trustees to resell Murphy Act lands to their former owners, or to the owners' successors. The statute however says nothing about the power of the Trustees to dispose of proceeds that have replaced the land. More importantly, it merely empowers the Trustees to resell to the former owners; nowhere does it create a duty to permit redemption:

"Lands acquired by the state through * * * the Murphy Act * * * may, at the discretion of the trustees of the internal improvement fund, be sold and conveyed, by the state and through its said trustees, * * * to the successors of the former owner upon such terms and conditions and for such consideration as to the trustees shall seem equitable and proper." (Emphasis added.)

This statute leaves Sarah Walker nothing more than the opportunity to bargain with the Trustees of the Internal Improvement Fund for the chance to "purchase" the cash award which has replaced tax-delinquent land. To get that chance she puts forward certain supposed rights of the State, rights that State itself does not assert. She herself has no rights in the land, or in the award. Therefore, as the McQuaters point out, she has no standing to protest the supposed fraud of the Circuit Court Clerk in disposing of the land.

A party has standing to prosecute a suit in the federal courts only if he is the "real party in interest" as that term is defined under Fed.R.Civ.P. 17(a). The stricture applies to intervenors as well as plaintiffs. Celanese Corp. v. John Clark Indus., Inc., 5 Cir. 1954, 214 F.2d 551, 556. Whether a person is a real party in interest depends upon his substantive rights, which, in diversity cases and cases like the present one, are determined by state law. American Fidelity & Cas. Co. v. All Amer. Bus Lines, 10 Cir. 1950, 179 F.2d 7. The authorities agree, moreover, that a party has...