Hope Land Mineral Corp. v. Christian

570 N.W.2d 268, 225 Mich. App. 43
CourtMichigan Court of Appeals
DecidedAugust 15, 1997
DocketDocket No. 194922
StatusPublished
Cited by2 cases

This text of 570 N.W.2d 268 (Hope Land Mineral Corp. v. Christian) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hope Land Mineral Corp. v. Christian, 570 N.W.2d 268, 225 Mich. App. 43 (Mich. Ct. App. 1997).

Opinion

Michael J. Kelly, J.

Defendant Stewart Christian, in his capacity as personal representative of the estate of Elmo C. Kuhns, and intervening defendantcounteiplaintiff Panhandle Eastern Pipeline Company appeal as of right the trial court’s judgment for plaintiff Hope Land Mineral Corporation in this action to quiet title in underground natural gas storage rights. We affirm.

By 1977, Elmo Kuhns and his wife, Rhea Kuhns, owned a one-half interest in approximately 330 acres of land in Genoa Township. Their son and his wife, Bernard and Betty Kuhns, owned the other one-half interest. The Kuhnses, Elmo, Rhea, Bernard, and .Betty, held the land subject to Panhandle’s gas storage leases, which had been acquired in 1957. In April 1977, in exchange for a loan, the Kuhnses granted the Federal Land Bank a mortgage on their property that [45]*45concluded with the language, “[excepting all oil, gas, mineral rights and pipelines.” The Kuhnses defaulted on the loan. In June 1979, Rhea Kuhns died and her interest in the land passed to Elmo Kuhns. The three surviving Kuhns family members then sued the Federal Land Bank and obtained a judgment ordering the bank to sell the property subject to the mortgage in four separate parcels, and not as a single lot.

In April 1982, the two properties relevant to this case were foreclosed upon and sold to the Federal Land Bank at a sheriffs sale. Neither the judgment nor the two sheriffs deeds contained language concerning the Kuhnses’ interest in the gas storage leases. From 1957 to when the redemption period of the sheriff’s deeds expired in April 1983, Panhandle had paid the annual rent for its gas storage leases to the Kuhnses. After April 1983, Panhandle paid rent to the Federal Land Bank. In early 1984, Bernard and Betty filed for bankruptcy, but did not list any interest in the gas storage leases on their schedules of assets.

On November 26, 1984, the Federal Land Bank conveyed a portion of the former Kuhns family property to Peter Burgher by a limited warranty deed that was recorded the same day. This deed contained the language “excepting and reserving to the party of the first part and its successors and assigns 50% per cent [sic] of all right and title in and to any and all oil, gas and other minerals . ...” On the same day, Burgher conveyed his interest in the property to his business, Hope Land Company, by a quitclaim deed that was also recorded. Thereafter, Panhandle paid half of its gas storage rent to Hope Land Company and the other half to the Federal Land Bank.

[46]*46On February 25, 1985, Elmo Kuhns died. On December 18, 1989, Hope Land Company conveyed its interest in the gas storage rights to its successor, plaintiff Hope Land Mineral Corporation, by a quitclaim deed that was recorded the same day. Hope Land Company subdivided the surface land into residential lots, with each deed excepting and reserving the gas storage rights. Although from July 1984 to September 1992 Panhandle did not pay any rent to Bernard and Betty Kuhns, these parties recorded a “Ratification of Oil, Gas and Storage Leases” on September 11, 1992. Plaintiff discovered this and objected, considering itself to be the true owner of the gas storage rights as contemplated in the ratification.

In March 1994, plaintiff filed this quiet title action against the estate of Elmo Kuhns and its personal representative, alleging that for more than five years, the applicable period of limitation under MCL 600.5801(1); MSA 27A.5801(1), neither Elmo Kuhns nor anyone acting on his behalf challenged the title to the gas storage leases that plaintiff traced to the 1982 sheriffs deeds and, hence, that plaintiff held its interest in the gas storage leases by virtue of adverse possession. Panhandle intervened as a defendant and filed a counterclaim against plaintiff for slander of title.1 Determining plaintiff to be the true owner of the gas storage interests at issue by virtue of adverse possession under color of the sheriffs deeds, the trial court entered judgment in plaintiffs favor.

[47]*47Appellants first argue that the trial court erred in determining that the five-year period of limitation for actions for the recovery or possession of lands, MCL 600.5801(1); MSA 27A.5801(1), applied to the facts of this case, and not the fifteen-year limitation period set forth in MCL 600.5801(4); MSA 27A.5801(4). Appellants contend that the five-year limitation period applies only in situations where the validity of foreclosure proceedings is in dispute because of an irregularity. Appellants argue that, because plaintiff is not challenging the validity of the 1982 foreclosure proceedings, but claims to have obtained title by adverse possession under color of the 1982 sheriffs deeds, it may not avail itself of the five-year limitation period. Thus, appellants advance that the trial court erred in entering judgment for plaintiff, because plaintiff could not establish that it had openly and notoriously claimed an interest in the gas storage leases for the requisite fifteen-year period, as provided in MCL 600.5801(4); MSA 27A.5801(4). We agree with plaintiff that the trial court was correct in applying the five-year limitation period to plaintiffs adverse possession claim.

MCL 600.5801(1); MSA 27A.5801(1) provides:

No person may bring or maintain any action for the recovery or possession of any lands or make any entry upon any lands unless, after the claim or right to make the entry first accrued to himself or to someone through whom he claims, he commences the action or makes the entry within the periods of time prescribed by this section.
(1) When the defendant claims title to the land in question by or through some deed made upon the sale of the premises ... by a sheriff upon a mortgage foreclosure sale the period of limitation is 5 years.

[48]*48See also Thomas v Steuernol, 185 Mich App 148, 152-153; 460 NW2d 577 (1990).

Although our reading of MCL 600.5801(1); MSA 27A.5801(1) leads us to the conclusion plaintiff urges upon us, we acknowledge that appellants’ argument finds some support in earlier Supreme Court opinions. See, e.g., Lau v Pontiac Commercial & Savings Bank, 260 Mich 73; 244 NW 233 (1932). However, the Supreme Court’s opinion in Adair v Bonninghausen, 305 Mich 137; 9 NW2d 35 (1943), persuades us that the five-year limitation period in MCL 600.5801(1); MSA 27A.5801(1) is not limited solely to situations in which the validity of foreclosure proceedings is challenged.

In Adair, at 141, the Supreme Court addressed the application of a predecessor statute that provided a fifteen-year limitation period for “all other cases” and a ten-year limitation period where a person “claims title under a deed made . . . upon the sale of land for taxes.” The Adair plaintiffs filed an action to quiet title, claiming that they obtained good title to the land in question by adverse possession under color of a tax deed. Id. at 140. The Supreme Court framed the issue thusly: “Can [the] defendant . . . claim any title under a tax deed within the meaning of this statute after nonaction for over 10 years on the ground of [the] plaintiff’s [sic] failure to serve notice of reconveyance on all interested parties after plaintiffs have been in possession of the property?” Id. at 141. The Court concluded that the case should be decided under the shorter limitation period, stating:

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Bluebook (online)
570 N.W.2d 268, 225 Mich. App. 43, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hope-land-mineral-corp-v-christian-michctapp-1997.