No. 14362 IN THE SUPREME COURT OF THE STATE OF MONTANA 1979
ALICE E. JACKSON et al., Plaintiffs and Appellants, -vs- STATE OF MONTANA: HOLLY SUGAR CORPORATION, et al., Defendants and Respondents.
Appeal from: District Court of the Seventh Judicial District, Hon. L. C. Gulbrandson, Judge presiding. Counsel of Record: For Appellants: Moses, Tolliver and Wright, Billings, Montana Joel Guthals argued, Billings, Montana For Respondents: Habedank, Cumming & Best, Sidney, Montana Otto Habedank argued, Sidney, Montana David W. Woodgerd argued, Helena, Montana
Submitted: February 8, 1979 Decided: MAR 16 llylg Filed: bjAR l?.'1979 M r . J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion o f t h e Court.
T h i s i s a n a p p e a l from a q u i e t t i t l e a c t i o n i n v o l v i n g
c e r t a i n l a n d l y i n g w e s t o f t h e Yellowstone R i v e r i n S e c t i o n
36, a d j a c e n t t o S e c t i o n 35, Township 23 North, Range 59
E a s t , County of R i c h l a n d , Montana. A f t e r a nonjury t r i a l ,
t h e Honorable L e s l i e G. Gulbrandson e n t e r e d a judgment f o r
defendants. P l a i n t i f f s appeal.
The diagram below i s f o r i l l u s t r a t i v e p u r p o s e s , a s -
s i s t i n g i n t h e explanation of a complicated f a c t s i t u a t i o n .
Ye //OWS fo e r A R ~ c o r d , '9 ~0 4-,yna 1 survey ih 1 g 8 ~ I n 1923 Andrew J a c k s o n , S r . , and h i s w i f e A l i c e began
p u r c h a s i n g l a n d i n t h e S1/4 o f S e c t i o n 35, Township 23
N o r t h , Range 59 E a s t , of R i c h l a n d County. During t h e n e x t
1 5 y e a r s t h e y a c q u i r e d 240 deeded a c r e s i n S e c t i o n 35. In
1933 t h e y a c q u i r e d , by q u i e t c l a i m d e e d , a p i e c e of prop-
e r t y , h e r e i n a f t e r r e f e r r e d t o as t h e "Meadors P r o p e r t y , "
l o c a t e d i n t h e s o u t h e a s t c o r n e r o f S e c t i o n 35. Immediately
n o r t h of t h e J a c k s o n s ' p r o p e r t y i n S e c t i o n 35 a r e t w o l o t s
now known a s t h e " S t e i n b e i s s e r P r o p e r t y . "
When t h e J a c k s o n s a c q u i r e d t h e Meadors P r o p e r t y , t h e
Yellowstone R i v e r , a t h i g h w a t e r , o v e r l a p p e d t h e S t e i n -
b e i s s e r P r o p e r t y and c r o s s e d a t a d i a g o n a l i n t o t h e Meadors
Property. A t t h i s t i m e only a small corner, L o t 2 , was h i g h
and d r y . T h i s l o t w a s l e a s e d t o t h e J a c k s o n s by t h e S t a t e
o f Montana. S i n c e 1933 t h e Yellowstone R i v e r h a s g r a d u a l l y
moved e a s t , e x p o s i n g l a n d i n S e c t i o n 35, f i l l i n g i n t h e
Meadors P r o p e r t y t o t h e s e c t i o n l i n e , and e x p o s i n g l a n d i n
S e c t i o n 36 which a d j o i n s t h e e a s t e r n s e c t i o n l i n e of S e c t i o n
35. By 1976, a s u r v e y i n d i c a t e d t h a t l a n d c r e a t e d by t h e
e a s t w a r d movement o f t h e r i v e r t o t a l s some 1 7 1 a c r e s i n
S e c t i o n 36. A s t h e r i v e r moved e a s t w a r d and more l a n d
became u s a b l e , t h e J a c k s o n s f e n c e d t h e a r e a and began farm-
ing it. I t i s t h e t i t l e t o t h i s "accreted" land t h a t i s i n
dispute.
The l e a s e between t h e J a c k s o n s and t h e S t a t e of Montana
was renewed e v e r y t e n y e a r s . I t w a s modified i n 1951 t o
show t h a t t h e J a c k s o n s had become a b u s i n e s s e n t i t y known a s
Andrew J a c k s o n and Sons. I n 1961 t h e d e s c r i p t i o n of t h e
l a n d s was changed from t h e f i v e acres o f L o t 2 t o 153 a c r e s d e s c r i b e d a s L o t 2 and a l l t h e l a n d w e s t of t h e ell ow stone R i v e r i n S e c t i o n 36. The J a c k s o n s s i g n e d t h e l e a s e b u t
a l l e g e t h a t t h e y c o n t i n u e d t o pay t a x e s on t h e same.
S e c t i o n 36 b e l o n g s t o t h e S t a t e of Montana. I t i s set
a s i d e f o r p u b l i c e d u c a t i o n and i s a d m i n i s t e r e d by t h e Montana Department o f S t a t e Lands. I n 1931 t h e J a c k s o n s began
l e a s i n g L o t 2 , S e c t i o n 36, from t h e S t a t e . A s the years
p a s s e d , t h e y renewed t h e l e a s e , i n c l u d i n g t h e l a n d s t h a t
were a c c r e t i n g . The J a c k s o n s a r g u e t h a t e x c e p t f o r L o t 2,
a l l t h e l a n d t h a t a c c r e t e d i n S e c t i o n 36 b e l o n g s t o them
s i n c e t h e y were t h e owners of a d j o i n i n g p r o p e r t y i n S e c t i o n
35.
I n 1963 Andrew J a c k s o n , S r . , d i e d . In the distribution
of h i s e s t a t e no mention was made o f t h e a c c r e t e d l a n d now
claimed, although A l i c e Jackson t e s t i f i e d it w a s discussed
with t h e i r attorney. The p r o p e r t y was d i s t r i b u t e d by s e c - t i o n s and l o t s a c c o r d i n g t o t h e c o u n t y r e c o r d s .
I n 1964 t h e J a c k s o n h e i r s conveyed S e c t i o n 35 and L o t
5 , S e c t i o n 25, t o Andrew J a c k s o n , J r . , and h i s w i f e M a r j o r i e .
No mention w a s made t o t h e a c c r e t e d l a n d s a l t h o u g h Andrew,
J r . , and h i s mother c o n t i n u e d t o r u n c a t t l e o n t h e l a n d e a s t of t h e s e c t i o n l i n e t o t h e r i v e r .
I n 1964 t h e d e s c r i p t i o n of t h e l a n d a l o n g t h e r i v e r w a s
changed by t h e c o u n t y a s s e s s o r , and t h e J a c k s o n s w e r e t a x e d
f o r t h r e e l o t s and 65 a c r e s a l o n g t h e r i v e r . N p r o t e s t was o
made a s t o t h e payment o f t h e s e t a x e s . I n 1974, f o l l o w i n g Andrew, J r . ' s d e a t h , h i s w i f e Mar- j o r i e conveyed t h e p r o p e r t y which had been s o l d t o h e r and Andrew, J r . , t o t h e H o l l y Sugar c o r p o r a t i o n ( H o l l y s u g a r ) . The l a n d was a d v e r t i s e d a s i n c l u d i n g a c c r e t i o n s o n l y t o L o t
5 i n S e c t i o n 25 and t h o s e f i l l i n g i n t h e r e m a i n i n g p o r t i o n of t h e S E 1 / 4 of S e c t i o n 35. However, t h e c o n t r a c t f o r deed t o H o l l y S u g a r , d a t e d March 1974, gave t h e l e g a l d e s c r i p t i o n
o f L o t 5 of S e c t i o n 25 and t h e E 1 / 2 SW1/4 and SE1/4 o f
S e c t i o n 35 t o g e t h e r w i t h a c c r e t i o n s o f a p p r o x i m a t e l y 343.3
acres. The a c c r e t e d l a n d between t h e r i v e r bank and t h e
e a s t e r n s e c t i o n l i n e o f S e c t i o n 35 w a s n o t i n c l u d e d i n t h e
conveyance t o H o l l y Sugar. However, a f t e r t h e s a l e , t h e
b u s i n e s s e n t i t y of Andrew J a c k s o n and Sons and A l i c e J a c k s o n
c o n t i n u e d t o u t i l i z e t h e p r o p e r t y f o r farm p u r p o s e s .
I n 1975 Andrew J a c k s o n and Sons began a q u i e t t i t l e
a c t i o n t o d e t e r m i n e who had t h e l e a s e h o l d i n t e r e s t i n Sec-
t i o n 36. The c o u r t found t h e l e a s e h o l d i n t e r e s t i n f a v o r o f
Andrew J a c k s o n and Sons and a g a i n s t H o l l y S u g a r . However,
t h e c o u r t was n o t a s k e d , n o r d i d i t d e t e r m i n e , what l a n d
a l o n g t h e r i v e r c o n s t i t u t e d t h e l e a s e h o l d o r who owned t h a t
land. T h e r e a f t e r , H o l l y Sugar demanded t h a t Andrew J a c k s o n
and Sons move t h e i r f e n c e t o t h e s e c t i o n l i n e and t o c o n d u c t
t h e i r a c t i v i t i e s o n l y i n S e c t i o n 36. J a c k s o n and Sons
complied w i t h t h i s r e q u e s t .
A t a b o u t t h e same t i m e t h e J a c k s o n s l e a r n e d t h a t S t e i n -
b e i s s e r was c l a i m i n g ownership t o some of t h e a c c r e t e d l a n d s
t h r o u g h t h e S t a t e of Montana. The J a c k s o n s c o r r e s p o n d e d
w i t h t h e A t t o r n e y G e n e r a l of t h e S t a t e of Montana, and t h a t
o f f i c e d i s c l a i m e d any c l a i m of t i t l e t o t h e p r o p e r t y by
a d v e r s e p o s s e s s i o n even though t h e Department o f Lands had
been l e a s i n g t h e p r o p e r t y f o r a number o f y e a r s .
I n May 1976 t h e S t a t e o f Montana, J o s e p h S t e i n b e i s s e r ,
and H o l l y Sugar e n t e r e d i n t o a boundary agreement d i v i d i n g
t h e a c c r e t e d l a n d i n t o f o u r t r a c t s : A , B , C and D. Tract A
c o r r e s p o n d e d t o L o t 2 , S e c t i o n 36, o r i g i n a l l y l e a s e d t o t h e J a c k s o n s by t h e S t a t e p l u s a c c r e t i o n s t h e r e t o . Tract B
described t h e accreted land a d j a c e n t t o t h e S t e i n b e i s s e r Property. T r a c t s C and D c o r r e s p o n d e d t o t h e a c c r e t e d l a n d
a d j a c e n t t o t h e Meadors P r o p e r t y , now owned by H o l l y S u g a r .
T h i s w a s done w i t h o u t t h e J a c k s o n s ' knowledge, and no p u b l i c
auction w a s held. On l e a r n i n g o f t h e a g r e e m e n t , J a c k s o n s
b r o u g h t a n a c t i o n t o q u i e t t i t l e t o t h e a c c r e t e d l a n d which
had been d i v i d e d up by t h e S t a t e , H o l l y S u g a r , and S t e i n -
beisser. The J a c k s o n s d i d n o t c l a i m t i t l e t o T r a c t A, which
t h e y w e r e l e a s i n g from t h e S t a t e , b u t c l a i m e d t h e y owned t h e
r e m a i n i n g t r a c t s t h r o u g h a d v e r s e p o s s e s s i o n and a c c r e t i o n ,
having improved, u t i l i z e d , and p a i d t a x e s on same.
The t r i a l c o u r t i n i t s f i n d i n g s o f f a c t , c o n c l u s i o n s of
law and judgment found f o r d e f e n d a n t s . Certain findings a r e
i m p o r t a n t t o o u r d i s c u s s i o n and d e c i s i o n . They a r e :
" 2 . The J a c k s o n s a c q u i r e d , by Q u i t C l a i m Deed d a t e d December 1 2 , 1933, t h e E1/2 E 1 / 2 of t h e SE1/4, S e c t i o n 35, from John P. Meadors and Katheryn Meadors.
" 4 . The t i t l e t o a l l l a n d s p r e v i o u s l y owned by J o s e p h S t e i n b e i s s e r , and t h e t i t l e t o T r a c t B a s d e s c r i b e d i n boundary agreement r e c o r d e d Book E-125, page 939 o f t h e r e c o r d s o f R i c h l a n d County, Montana, which boundary agreement was e n t e r e d i n t o between J o s e p h S t e i n b e i s s e r and t h e S t a t e o f Montana a c t i n g t h r o u g h i t s Board of Land Com- m i s s i o n e r s , d a t e d May 2 4 , 1976, r e c o r d e d Book E-125, page 939 o f t h e r e c o r d s of R i c h l a n d County, Montana, became v e s t e d i n J o s e p h S t e i n - b e i s s e r and C h r i s t i n e S t e i n b e i s s e r , husband and w i f e , a s j o i n t t e n a n t s , by v i r t u e o f r a t i f i c a - t i o n of boundary agreement d a t e d May 1 2 , 1977, f i l e d May 1 2 , 1977, and r e c o r d e d i n Book E-130, p a g e s 506-507 o f t h e M i s c . r e c o r d s of R i c h l a n d County, Montana.
"5. J o s e p h S t e i n b e i s s e r a t a l l t i m e s p r o t e s t e d o w n e r s h i p by t h e S t a t e of Montana o f t h a t p o r t i o n o f t h e N1/2 o f S e c t i o n 36 W e s t of t h e Yellowstone R i v e r l y i n g S o u t h o f L o t 2 of S e c t i o n 36, which L o t had a r i v e r boundary of a p p r o x i m a t e l y 720 f e e t . H e p r o t e s t e d ownership of t h i s l a n d by t h e S t a t e o f Montana on many o c c a s i o n s t o t h e S t a t e Land Board, b u t a t no t i m e u n d e r t o o k l e g a l pro- c e e d i n g s t o q u i e t t i t l e a g a i n s t t h e S t a t e of Mon- t a n a , and t h e l a n d a t t r i b u t a b l e a s a c c r e t i o n t o h i s L o t s 1 and 2 was by t h e boundary agreement, c o n s o l i d a t e d i n t o what i s now T r a c t B o f t h e p l a t a t t a c h e d t o t h e boundary agreement h e r e i n b e f o r e r e f e r r e d t o . S a i d a c c r e t e d l a n d h a s n e v e r been s p e c i f i c a l l y d e s c r i b e d a s b e i n g l a n d s w i t h i n Sec- t i o n 36 on t h e t a x r e c o r d s o f R i c h l a n d County, and J o s e p h S t e i n b e i s s e r h a s p a i d a l l t a x e s l e v i e d and a s s e s s e d a g a i n s t s a i d L o t s 1 and 2 o f S e c t i o n 35. No t a x e s have been p a i d by any p a r t y t o t h i s a c t i o n on l a n d s d e s c r i b e d a s b e i n g w i t h i n S e c t i o n 36, Township 23 North, Range 59 E a s t .
"6. I n s o f a r a s t h e c l a i m of J o s e p h S t e i n b e i s s e r i s concerned, t h e land s i t u a t e d w i t h i n Section 36 and e n c l o s e d w i t h i n a f e n c e c o n s t r u c t e d by Andrew J a c k s o n w a s h e l d a d v e r s e l y by J a c k s o n s o n l y a s a Lessee o f t h e S t a t e of Montana, and J a c k s o n s n e v e r , a t any t i m e , made any p u b l i c c l a i m t o t h i s l a n d e x c e p t a s a L e s s e e o f t h e S t a t e of Montana.
"7. A l b e r t J a c k s o n and h i s s u c c e s s o r s - i n - i n t e r e s t have c l a i m e d t h e r i g h t t o f e n c e , u s e and c o n t r o l , t h e l a n d s i n S e c t i o n 36 W e s t o f t h e Yellowstone R i v e r under c o n s e c u t i v e l e a s e s o f S t a t e l a n d s , commencing F e b r u a r y 28, 1951, and a t no t i m e u n t i l t h e commencement o f t h i s a c t i o n , have c o n t e s t e d t h e ownership o f a l l l a n d s i n v o l v e d i n t h i s c a s e i n S e c t i o n 36, by t h e S t a t e of Montana.
" 8 . The t a x r e c o r d s c o v e r i n g payment o f t a x e s by Andrew J a c k s o n and h i s s u c c e s s o r s - i n - i n t e r e s t , specifically l i m i t taxes levied t o lands within S e c t i o n 35, and t h e payment of t a x e s on t h e l a n d s a s a s s e s s e d i n S e c t i o n 35, d o e s n o t i n c l u d e any of t h e acreaqe i n S e c t i o n 36 West of t h e Yellow- - s t o n e R i v e r . Ownership, i f a n y , on t h e p a r t of t h e p l a i n t i f f s , r e s u l t s from p l a i n t i f f s b e i n g h e i r s - a t - l a w and s u r v i v i n g n e x t of k i n of Andrew Jackson, S r . N acreage s i t u a t e d w i t h i n Section o 36 was i n c l u d e d i n t h e I n v e n t o r y and A p p r a i s a l d a t e d J u n e 1 9 , 1963, f i l e d i n t h e p r o b a t e of t h e E s t a t e o f Andrew J a c k s o n , S r . , i n t h e above-en- t i t l e d C o u r t . The I n v e n t o r y and A p p r a i s a l w a s s i g n e d and sworn t o by A l i c e E . J a c k s o n as con- t a i n i n g a t r u e s t a t e m e n t of a l l of t h e e s t a t e of s a i d d e c e a s e d which h a s come t o t h e knowledge and p o s s e s s i o n of s a i d A l i c e E. J a c k s o n , and was f i l e d w i t h t h e S t a t e o f Montana a s a b a s i s f o r d e t e r - m i n a t i o n o f i n h e r i t a n c e t a x e s . Andrew W. J a c k s o n , J r . , and h i s w i f e , M a r j o r i e Ann J a c k s o n , now M a r j o r i e Ann C a r t e r , e x c e p t f o r m i n e r a l s r e s e r v e d i n and under t h e l a n d s owned by Andrew W . J a c k s o n , J r . , a r e t h e s u c c e s s o r s - i n - i n t e r e s t of a l l l a n d s which w e r e owned by Andrew J a c k s o n , S r . , and h i s widow, A l i c e E. J a c k s o n , s a i d p r o p e r t i e s having been p u r c h a s e d f o r t h e sum of $40,000.00 under a C o n t r a c t f o r Deed between a l l of t h e p l a i n t i f f s o t h e r t h a n M a r j o r i e Ann J a c k s o n a s S e l l e r s , and Andrew W. J a c k s o n , J r . , and M a r j o r i e Ann J a c k s o n a s P u r c h a s e r s , as j o i n t t e n a n t s w i t h r i g h t of survivorship. T h i s C o n t r a c t f o r Deed i s d a t e d J a n u a r y 1 4 , 1964, f i l e d May 7 , 1965, r e c o r d e d Book A-98, page 38 o f t h e r e c o r d s of County R e - c o r d e r o f R i c h l a n d County. Warranty Deed e x e c u t e d p u r s u a n t t o s a i d C o n t r a c t and d a t e d F e b r u a r y 1, 1965, w a s d e l i v e r e d and f i l e d J a n u a r y 7, 1974, and r e c o r d e d Book A-110, page 210 of t h e r e c o r d s of R i c h l a n d County, Montana.
"10. M a r j o r i e Ann C a r t e r a s p l a i n t i f f , b r o u g h t a n a c t i o n t o q u i e t t i t l e t o t h e S t a t e Grazing Leases s t a n d i n g of r e c o r d i n t h e name of Andrew J a c k s o n and S o n s , b e i n g Case No. 10785 o f t h e r e c o r d s of t h i s C o u r t . Defendants proof r e s u l t e d i n e n t r y o f F i n d i n g s of F a c t , C o n c l u s i o n s of Law, and Judg- ment o f t h i s C o u r t d a t e d March 27, 1975, and i n which t h e C o u r t made t h e f o l l o w i n g F i n d i n g of F a c t :
"'5. T h a t t h e "home" p l a c e o f t h e J a c k s o n f a m i l y c o n s i s t i n g of lands o t h e r than t h e a f o r e s a i d S t a t e l a n d s , w a s s o l d t o Andrew J a c k s o n , J r . , on o r a b o u t -J a n u a r y 1 4 , 1964, b u t t h e l a n d owned the S t a t e o f Montana d e s c r i b e d i n P a r a g r a p h 2 above was n o t i n c l u d e d i n t h e s a l e t o Andrew J a c k s o n , . Jr ' (emphasis added) "
Seven i s s u e s a r e p r e s e n t e d on a p p e a l :
1. Whether t h e d i s p u t e d l a n d w a s formed by a c c r e t i o n
r e q u i r i n g t h e l a w of a c c r e t i o n t o be applied i n determining
i t s ownership.
2. Whether under t h e law of a c c r e t i o n t h e l a n d b e l o n g s
t o appellants.
3. Whether a p p e l l a n t s a c q u i r e d t h e a c c r e t e d l a n d
a j a c e n t t o t h e S t e i n b e i s s e r P r o p e r t y by a d v e r s e p o s s e s s i o n .
4. Whether t h e S t a t e l e a s e b a r s a p p e l l a n t s ' c l a i m s t o
t h e land.
5. Whether t h e d o c t r i n e of l a c h e s b a r s a p p e l l a n t s '
claims t o t h e p r o p e r t y .
6. Whether t h e S t a t e ' s c l a i m i s b a r r e d by t h e d i s -
c l a i m e r of i n t e r e s t .
7. Whether t h e S t a t e ' s c l a i m i s b a r r e d by t h e s t a t u t e
of l i m i t a t i o n s . F o r t h e p u r p o s e s o f t h i s o p i n i o n , w e w i l l combine
c e r t a i n i s s u e s i n our discussion.
I t i s a g r e e d by t h e p a r t i e s t h a t t h e t r i a l c o u r t
p r o p e r l y found t h a t t h e law of a c c r e t i o n a p p l i e d and must
t h e r e f o r e be followed i n determining ownership. They d i s -
a g r e e a s t o t h e law i n Montana, however. Appellants argue
t h a t t h i s C o u r t s h o u l d e n l a r g e o u r h o l d i n g i n Smith v .
Whitney ( 1 9 3 7 ) , 1 0 5 Mont. 523, 74 P.2d 450, t h e p r e v a i l i n g
law on a c c r e t i o n . I n Smith w e h e l d t h a t , " U n l e s s e x c e p t e d
o r reserved, accretions o r t h e r i g h t t h e r e t o pass t o a
p u r c h a s e r o r a p a t e n t e e a l t h o u g h n o t d e s c r i b e d i n t h e deed
o r o t h e r i n s t r u m e n t of conveyance, i f t h e conveyance de-
s c r i b e s t h e adjoining r i p a r i a n land. (Citations omitted.)"
105 Mont. a t 528. T h i s p r i n c i p l e o f r e t e n t i o n by a s e l l e r
of a c c r e t e d l a n d s p e c i f i c a l l y by r e s e r v a t i o n i n t h e deed h a s
been t h e law of t h i s S t a t e .
Appellants ask us t o consider s i g n i f i c a n t a g r a n t o r ' s
f a i l u r e t o i n c l u d e any a c c r e t e d l a n d i n t h e l e g a l d e s c r i p -
t i o n of t h e l a n d h e conveys, c i t i n g J o n e s v . J o h n s t o n ( 1 8 5 5 ) ,
59 U.S. 1 5 0 , 1 5 L.ed. 320; J e f f e r i s v . E a s t Omaha Land Co.
( 1 8 9 0 ) , 134 U.S. 178, 1 0 S.Ct. 518, 33 L.ed. 872; and S t e v e n s
v . Arnold ( 1 9 2 3 ) , 262 U.S. 266, 43 S.Ct. 567, 67 L.ed. 965.
S e e a l s o 78 Am J u r 2d, Water, S 4 1 4 .
W e f i n d o u r h o l d i n g i n Smith v . Whitney, s u p r a , con-
t r o l s h e r e and t h a t a c c r e t e d l a n d s p a s s w i t h t h e r i p a r i a n
upland property u n l e s s excepted o r reserved. Therefore, t h e J a c k s o n s , by t h e i r conveyances i n 1964 and 1974, which d i d
n o t e x c e p t o r r e s e r v e any a c c r e t i o n s i n S e c t i o n 36, conveyed
t h e a c c r e t i o n s t o Andrew J a c k s o n , J r . , and h i s w i f e ~ a r j o r i e ,
who t h e n conveyed them t o H o l l y S u g a r . The 1976 boundary
agreement and q u i t c l a i m deed t h e n conveyed Tract D to t h e
S t a t e o f Montana. W e next address appellants' claim of acquiring accreted
l a n d by a d v e r s e p o s s e s s i o n . To o b t a i n a d v e r s e p o s s e s s i o n of a c c r e t e d l a n d i n Montana, where t h e a d v e r s e c l a i m i s n o t
founded on a w r i t t e n i n s t r u m e n t , t h e c l a i m a n t must occupy,
improve, e n c l o s e , and pay t a x e s on t h e p r o p e r t y i n q u e s t i o n
f o r a p e r i o d of n o t l e s s t h a n f i v e y e a r s i n a h o s t i l e and
c o n t i n u o u s manner. Townsend v . Koukol ( 1 9 6 6 ) , 148 Mont. 1,
416 P.2d 532. Here, a p p e l l a n t s d o n o t m e e t t h e r e q u i r e -
ments. T h e i r c l a i m of h o s t i l e p o s s e s s i o n , by k e e p i n g S t e i n -
b e i s s e r o f f t h e p r o p e r t y , w a s based on t h e f a c t t h e y l e a s e d
t h e p r o p e r t y from t h e S t a t e . The h o s t i l e and c o n t i n u o u s
occupancy of t h e l a n d i n S e c t i o n 36 must a l s o f a i l f o r t h e r e
was no proof of t a x e s p a i d , a l t h o u g h t h e J a c k s o n s c l a i m t h a t
t h e y t h o u g h t t h e y were p a y i n g t a x e s . S e c t i o n 36 i s t a x
exempt s c h o o l t r u s t l a n d and no t a x e s a r e p a i d on such l a n d .
These s c h o o l t r u s t l a n d s a r e l e a s e d t o h e l p r a i s e s c h o o l
funds.
A p p e l l a n t s r a i s e t h e q u e s t i o n of whether t h e S t a t e
l e a s e bars t h e i r claims. The D i s t r i c t C o u r t h e l d t h a t i t
d i d , and w e a g r e e . S e c t i o n 93-2512, R.C.M. 1947, now s e c -
t i o n 70-19-412 MCA, p r o v i d e s t h a t p o s s e s s i o n of a t e n a n t i s
deemed p o s s e s s i o n o f t h e l a n d l o r d . H e r e , t h e uncontradicted
t e s t i m o n y of S t e i n b e i s s e r i s t h a t t h e J a c k s o n s r e l i e d on t h e
l e a s e t o keep him o f f t h e l a n d . Too, t h e l e a s e c l e a r l y
s t a t e d t h a t i t c o v e r e d a l l l a n d w e s t of t h e Yellowstone
R i v e r i n S e c t i o n 36. Further, i n the lawsuit against ~ o l l y Sugar i n 1975, t h e y d e f e n d e d t h e i r ownership of t h e l e a s e i n
S e c t i o n 36 a g a i n s t H o l l y S u g a r . The C o u r t r u l e d t h a t t h e y
w e r e t h e owners o f t h e l e a s e . W e n e x t d i r e c t o u r c o n s i d e r a t i o n t o whether l a c h e s b a r s
t h e Jacksons' claims. From 1961, when t h e lease w a s r e w r i t t e n t o c o v e r t h e added a c r e a g e on t h e w e s t bank of t h e r i v e r i n
S e c t i o n 36, t h e J a c k s o n s have a c c e p t e d t h e t e r m s o f t h e
lease and have n o t n o t i f i e d t h e S t a t e of any a d v e r s e c l a i m s
against the State. The t r i a l c o u r t found i t would b e i n e q u i -
t a b l e t o c l a i m p r o p e r t y t h e y have c o n t i n u o u s l y l e a s e d f o r 1 5
y e a r s w i t h o u t n o t i f y i n g t h e l e s s o r t h a t t h e y claimed owner-
s h i p of t h e p r o p e r t y . W agree with the t r i a l court i n e
applying t h e d o c t r i n e of laches t o t h e f a c t s here.
W e h e l d i n Montgomery v . Bank of D i l l o n ( 1 9 4 3 ) , 1 1 4
Mont. 395, 408-09, 136 P.2d 760, q u o t i n g from R i l e y v .
B l a c k e r ( 1 9 1 5 ) , 5 1 Mont. 364, 370, 152 P. 758, 759:
". . . ' " E q u i t y a i d s o n l y t h e v i g i l a n t ; " and i t [ l a c h e s ] e x i s t s when t h e r e h a s been u n e x p l a i n e d d e l a y of s u c h d u r a t i o n o r c h a r a c t e r a s t o r e n d e r t h e enforcement of t h e a s s e r t e d claim i n e q u i t a - ble.' . . ." Next r a i s e d i s whether t h e S t a t e of Montana's c l a i m i s
b a r r e d by t h e d i s c l a i m e r o f i n t e r e s t by t h e S t a t e Department
of Revenue. The d i s c l a i m e r of i n t e r e s t w a s f i l e d by a n
a t t o r n e y i n t h e Department o f Revenue. The d i s c l a i m e r was
i n t e n d e d t o i n d i c a t e t h a t no t a x e s w e r e owed on t h e l a n d .
I t was n e v e r s i g n e d . The S t a t e was a l l o w e d t o amend i t s
p l e a d i n g s under Rule 1 5 , M.R.Civ.P., t o withdraw t h e c o n s e n t
due t o mistake. No d e f a u l t of t h e S t a t e w a s e n t e r e d . The
w a i v e r was n o t g i v e n a p p e l l a n t s p r i o r t o t h i s a c t i o n . There
was no showing made t h a t t h e y were m i s l e d i n t o b e l i e v i n g t h e
S t a t e had no i n t e r e s t i n t h e i r a c t i o n . The a p p l i c a t i o n s t o
withdraw t h e d i s c l a i m e r and f i l e a n answer w a s made l o n g
before trial. The t r i a l judge p r o p e r l y d e c i d e d t h i s i s s u e
i n favor of t h e S t a t e .
The f i n a l i s s u e r a i s e d i s whether t h e S t a t e o f Montana's
c l a i m i s b a r r e d by t h e s t a t u t e of l i m i t a t i o n s . The S t a t e
g a i n e d ownership t o T r a c t D t h r o u g h t h e 1976 boundary a g r e e - ment and q u i t c l a i m deed from H o l l y S u g a r . The t r i a l c o u r t
c o r r e c t l y found t h a t s e c t i o n 93-2501, R.C.M. 1947, now
s e c t i o n 70-19-302 MCA, d i d n o t apply t o t h i s claim.
The D i s t r i c t C o u r t ' s award of t h e p r o p e r t y a c c o r d i n g t o
t h e 1976 boundary a g r e e m e n t i s a f f i r m e d .
W e concur:
Chief J u s t i c e
Justices Mr. Justice John C. Sheehy specially concurring:
Under Section 14, 1867 Organic Act, the United States entrusted every tract numbered Section 16 or 36 inviolable from any tricks by deed or ruse, lawless or statutory, when it created the Montana Territory. Likewise, our Enabling Act states in Section 10 and 11, for education of our children, the same traCts shall not be conveyed, deeded or lost, unless the permanent school fund gets full market cost. Our duty then is to guard against depletion of trusted lands by any means, and that includes accretion. Here the result is just by reason of the trade completed by the state which cannot be unmade. I concur in the result.