915 N.W.2d 134
N.D.2018Background
- Greggory Tank sued to quiet title to a 16% royalty interest in McKenzie County oil production; several defendants claimed an 11% royalty based on a recorded 1938 assignment by Hagen J. Carlson and Esther Carlson.
- Tank’s chain of title traces via county records to a federal patent and includes McKenzie County’s 1931 tax foreclosure and subsequent county sale of the property (tax deed issued 1941; county sold property in 1945).
- Defendants relied on the 1938 assignment as originating their royalty interest and pleaded MRTA, statute of limitations, adverse possession, and laches as defenses.
- On cross-motions for summary judgment the district court granted judgment quieting title for the defendants, without detailed analysis; Tank appealed.
- On appeal the Supreme Court found no evidence the Carlsons ever held the royalties pre-1931, and applied precedent holding a post-tax-lien severance cannot defeat title conveyed by the county tax deed.
- The Court reversed, quieted title to Tank, and remanded to determine whether Tank may recover past royalty payments (issues of laches and factual prejudice remain for the district court).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of defendants’ 1938 severance of royalties | Tank: 1938 conveyance post-dated 1931 tax lien foreclosure, so county’s subsequent tax deed defeated any later severance | Defs: 1938 assignment severed an 11% royalty and traces an unbroken chain of title to them | Held: Tank; Payne controls — post-tax-lien conveyance cannot sever royalties once county acquired title/color of title by tax deed; defendants produced no record showing Carlsons ever had the royalty interest |
| Burden of proof after tax deed | Tank: Tax deed creates presumptive title in grantee; challengers must overcome it | Defs: District court placed burden on Tank to invalidate defendants’ title | Held: Tax deed presumptively grants entire estate; burden lies on challengers to overcome it; district court erred in shifting burden |
| Application of Marketable Record Title Act (MRTA) | Tank: MRTA doesn’t apply because defendants did not record required affidavit of possession | Defs: MRTA bars Tank’s claim | Held: Tank; defendants conceded no MRTA affidavit recorded, so MRTA does not apply |
| Adverse possession / statute of limitations as bar to Tank’s claim | Defs: They possessed royalties and are protected by adverse possession / 20-year statute | Tank: Unaccrued royalties are not possessible until severed; thus those defenses fail | Held: Tank; royalties cannot be "possessed" until minerals are extracted and royalties accrue, so adverse possession and statutory-bar defenses fail |
| Laches as a defense to quiet-title action | Defs: Delay bars Tank’s quiet-title claim | Tank: No duty to sue against claims that cannot ripen into valid title | Held: Tank; laches improper as a bar to the quiet-title claim because defendants’ claimed royalty rights could not ripen into adverse title; laches as to past royalty payments remains a factual question for trial/remand |
Key Cases Cited
- Payne v. A.M. Fruh Co., 98 N.W.2d 27 (N.D. 1959) (post-tax-lien conveyances cannot sever interests that the county acquired by tax deed; tax deed creates presumptive title to entire estate)
- Nystul v. Waller, 84 N.W.2d 584 (N.D. 1957) (tax deed conveys title or color of title to whole estate, including minerals)
- Finstrom v. First State Bank of Buxton, 525 N.W.2d 675 (N.D. 1994) (unaccrued royalties are interests in real property; once severed and accrued they become personal property)
- Corbett v. La Bere, 68 N.W.2d 211 (N.D. 1955) (accrued royalties are personal property; unaccrued royalties remain part of the lessor’s estate)
- Grandin v. Gardiner, 63 N.W.2d 128 (N.D. 1954) (owner of legal title is not required to sue every adverse claimant whose claim cannot ripen into valid adverse title)
- Black Stone Minerals Co., L.P. v. Brokaw, 893 N.W.2d 498 (N.D. 2017) (MRTA requires compliance with affidavit-of-possession recording; failure to comply prevents MRTA protection)