Insights into Wyoming Tax Sales: Cases and Strategies
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WYOMING TAX SALES:
INCEPTION THROUGH
ANADARKO V. FAMILY TREE
GOALS FOR PRESENTATION
1.
Mechanics of tax sales
2.
Anadarko v. Family Tree
case
3.
Practice points
WHAT IS NOT COVERED
(AMONG OTHER ISSUES)
1.
Exhaustive review of Wyoming tax assessment, tax
sale or tax deed law
2.
Comprehensive review of applicable statutes
Redemption, Taxpayer remedies
Notice requirements
3.
Litigation strategies
ROADMAP OF PRESENTATION
I.
Wyoming case law & statutory mechanics of
tax sale/tax deeds
II.
Facts of Family Tree
III.
District court’s holding
IV.
Arguments of the litigants
V.
Discussion of case/Holding
VI.
Potential practice points
HISTORICAL POLICIES BEHIND TAX SALES
A rule of primary importance is, that the
execution of a tax deed must conform strictly to
the statute…
Black, Tax Titles, Section 208.
HISTORIC WYOMING CASE LAW
Statutory provision prerequisite to a tax title
must be literally, or at least substantially,
complied with … [because] the law favors the
owners.
Barlow v. Lonabaugh
, 156 P.2d 289 (Wyo. 1945)
WYOMING CASE LAW (CONTD.)
Knowing that tax titles are to some extent
uncertain, and that they usually depend on
numerous contingencies, he engages his means
in the speculation and assumes the liability of
having his title be worthless…
Board of County Com’rs v. Brewer,
62 P.2d 685 (Wyo. 1936)
(quoting
American Investment Co. v. Beadle County
, 5 S.D. 410)
STRICT COMPLIANCE
Historically, Grantees under a tax sale, or their
successors-in-interest, take vast majority of the
risks associated with failures in form, and
inconsistencies in assessment.
HISTORIC/STRICT CASE LAW
A tax deed may be set aside even after it has been of record over
five years, where it shows upon its face that the certificate was
assigned by the county for considerably less than the amount then
required for redemption.
Logsdon v. Hodges
, 114 P. 854 (Kan. 1911).
Tax deed not acknowledged by clerk of the district court, as required
by statute, void on its face.
Matthews v. Blake
, 92 P. 242 (Wyo. 1907).
HISTORIC/STRICT CASE LAW
This Court has held on many occasions that a tax deed issued without
strict compliance with the statutory requirements as to the service of
the notice of the expiration of the period of redemption is void.
Wittrock v. Weisz
, 73 N.W.2d 355 (N.D. 1955).
The title to be made under a tax deed is stricti juris. All the
requirements of the statute must be clearly and strictly complied with.
Bailey v. Smith
, 52 N.E. 948 (Ill. 1899).
HISTORIC/STRICT GENERAL RULES
I.
Extraordinary event
II.
Rigorous requirements to ensure
fairness
III.
Interpretation in favor of owner that
lost property
IV.
Risk is on the purchaser at tax sale
2 HURDLES TO OVERCOME
1.
Tax assessment/sale was legal and
constitutional
2.
Tax deed conforms to statute
DEED: VOID OR FAIR ON ITS FACE
Tax deed not acknowledged by clerk of the district court, as
required by statute,
void on its face
.
Matthews v. Blake
, 92 P. 242 (Wyo. 1907).
Where the statute directs the execution of a deed by a public
officer and requires it to be executed in a particular manner
and to be witnessed or acknowledged before a particular
officer, the witnessing or acknowledging of the deed in that
manner is a part of its execution, and without such witnessing
or acknowledgment is
void upon its face
.
Matthews v. Blake
, 16 Wyo. 116, 92 P. 242 (1907)
DEED: VOID OR FAIR ON ITS FACE
1913 tax deed failed to recite required notice was nonetheless held
to be
fair on its face
.
North American Realty Co. v. Brady
, 77 Colo. 56, 234 P. 1054 (1925).
In neighboring jurisdictions, a tax deed which is fair on its face, but
nonetheless contains improprieties, will require extrinsic evidence to
prove those improprieties could be fatal.
ASSESSMENT: VOID OR VOIDABLE
Taxes assessed in an incorrect name, deemed void.
McCarthy v. Union Pac. Ry. Co.
, 131 P.2d 326 (Wyo. 1942).
Failing to notify property owner resulted in void tax deed.
Thompson-Green v. Estate Drobish
, 2006 WY 126.
A voidable assessment is an assessment which “is made in good
faith but is irregular or unfair.”
Hackney v. McKenny
, 151 So. 524 (Fla. 1933)
.
WHY DO WE CARE?
Void deed is wholly ineffective to pass title.
Wayt v. Urbigkit
, 152 P.3d 1057 (Wyo. 2007).
The special statute of limitations runs only upon a sale regularly made
under the forms of law…
Matthews v. Blake
, 92 P. 242 (Wyo. 1907).
A tax deed, void on its face, will not set statute of limitations in motion.
Denny v. Stevens
, 75 P.2d 378 (Wyo. 1937).
The question then is, does possession under a tax deed, void upon its face, start
the running of the six years' statute of limitations? We are of the opinion that
this question must be answered in the negative.
Matthews v. Blake
, 16 Wyo. 116, 92 P. 242 (1907).
WHY DO WE CARE? (CONTD.)
“Voidable" operative to convey until set aside by a court.
•
A voidable deed is capable of being either avoided or
confirmed.
“Void" deed is legally invalid for any purpose whatsoever.
“The recording of a void deed is legally insufficient to create a legal title and
affords no protection to those claiming under it.”
See 23 Am.Jur.2d
Deeds
§ 163.
WYO. TAX SALES/TAX DEEDS
I.
W. S. § 39-13-101 - Assessment/Taxation
W. S. § 39-13-108
II.
W. S. § 34-2-131 through 135 – Tax Deeds
W. S. § 39-13-101, ET SEQ.:
AD VALOREM TAXATION
** W. S. § 39-13-101 , et seq. were amended in
latest legislative session. Several changes take
effect July 1, 2017.
W. S. § 39-13-108 – ENFORCEMENT OF
AD VALOREM TAXATION
(e)(ii) Tax sales of real property
(e)(iii) Process if property remains unsold
(e)(iv) (A) Following four (4) years from the date of
sale the county treasurer shall issue and record a
tax deed
W. S. § 39-13-108 – ENFORCEMENT OF
AD VALOREM TAXATION
(e)(vii)(B) Any grantee of a tax deed or county
commissioner's deed … are entitled to possession of
the real property conveyed by the deed and the deed
is
prima facie evidence of title
to the property
described subject to special assessments for local
or public improvements. The
burden of proof shall
be upon any party seeking to invalidate title
conveyed by a tax or county commissioner's deed…
W. S. § 39-13-108 – ENFORCEMENT OF
AD VALOREM TAXATION
(e)(vii)(D) No action for the recovery of real
property sold for the nonpayment of taxes shall
be maintained
unless commenced within six (6)
years after the date of sale for taxes.
WYOMING TAX DEEDS
In 1975, the Wyoming legislature codified
Wyoming law into Wyo. Stat. Ann. § 34-2-131
through 134.
W.S. § 34-2-131 – TAX DEEDS
Defines:
•
Tax deed
•
Former owner
•
Grantee
•
Possession
W.S. § 34-2-132 – TAX DEEDS: TWO YEAR
LIMITATION & POSSESSION
(a) No action, suit or other proceeding shall be commenced by the former
owner to set aside,
declare invalid or redeem from a tax deed or the sale
,
forfeiture, foreclosure or other proceeding upon which it is based or to
recover possession, quiet title or otherwise litigate or contest the title of the
grantee, if:
(i)
Two (2) years or more have elapsed after the date of recording
the deed
in the office of the county clerk for the county in which
the real estate described in the deed is situated; and
(ii) The grantee has been in
possession of the real estate
continuously for a period of at least six (6) months, at any time
after one (1) year and six (6) months
have elapsed since the date
of recording of the tax deed.
W.S. § 34-2-132 – TAX DEEDS: TWO YEAR
LIMITATION & POSSESSION (CONTD.)
(b) The limitation in subsection (a) of this section applies regardless
of whether the tax deed or any of the proceedings upon which it is
based are
void or voidable
for any reason, jurisdictional or
otherwise. If the deed is
executed substantially in the form
prescribed for the execution of tax deeds, the limitation shall apply
regardless of whether the deed is deemed void upon its face
. …
W.S. § 34-2-133 – TAX DEEDS:
POSSESSION
Possession by the grantee for a continuous period of not less than
six (6) months at any time after one (1) year and six (6) months have
elapsed since the date of
recording the tax deed extinguishes
forever all the claims, right, title and interest
,
including the right to
possession, of the former owner, and vests in the grantee any title
conveyed or purportedly conveyed by the tax deed.
Proof of
possession by the grantee and the record of the tax deed constitutes
conclusive evidence of the legality and effectiveness of the deed
and any proceedings upon which the deed is based, and of the title
of the grantee
. …
W.S. § 34-2-134 – TAX DEEDS:
LIBERAL CONSTRUCTION
This act shall be
liberally construed to effectuate the legislative
purpose of giving stability and effect to record titles
, of confirming
and clarifying the titles of persons in possession, of providing a
means of correcting procedural and jurisdictional defects without
necessity of resort to further proceedings, and of rendering tax titles
marketable and protecting purchasers thereof against remote
claims.
PRACTICE POINT
Even though W.S. § 34-2-131 through 135
enacted to codify Wyoming case law regarding
tax deed interpretation, must determine
statutes/constitution at the time of assessment,
sale and deed to determine what was required.
UPDATED GENERAL POLICIES
I.
Extraordinary event
II.
Rigorous requirements to ensure fairness
III.
Interpretations in favor of person that lost
their property
IV.
MOST risks on the purchaser at tax sale?
VOID AND VOIDABLE
i.
Void on face/Void
Never a conveyance of property, statute of
limitations never run
ii.
Fair on face/Voidable
Statute of limitations run, illegality must be
challenged timely
ANADARKO LAND CORP. V. FAMILY TREE CORP.,
2017 WY 24
ANADARKO LAND CORP. V. FAMILY TREE CORP.
1901 –
Patent from USA to Union Pacific Railroad Company,
conveying Section 7, T14N, R65W, 6
th
, P.M., Laramie County,
Wyoming.
1911 –
Laramie County assessed in-place minerals, remained unpaid
1912 –
Laramie County attempted sale, no bidders
1914 –
UPRC conveyed surface of Section 7 to Iowa Land & Livestock
1919 –
Iowa Land & Livestock purchased mineral estate from
Laramie County
1949 –
Commissioner’s Deed recorded in Laramie County
FACTS OF FAMILY TREE (CONTD.)
1971 – UPRC conveyed all right, title and interest in Section 7 to Union
Pacific Land Resources Corporation
2000 – Union Pacific Land Resources Corporation changed its name to
RME Land Corp.
2000 – RME Land Corp. entered into Settlement Agreement with Three
Sisters, LLC (claiming to be a successor of Iowa Land &
Livestock) wherein each party was vested ½ mineral interest in
Section 7
2002 – RME Land Corp. changed its name to Anadarko Land Corp.
2010 – Family Tree Corp. acquired a portion of the minerals beneath
Section 7 from successor of Iowa Land & Livestock
LARAMIE COUNTY DISTRICT COURT
•
June 24, 2014 – Family Tree filed quiet title action against
Anadarko and Three Sisters
•
Argued Settlement Agreement was void and was a cloud on its
mineral interest in Section 7
•
Anadarko (and Three Sisters) countered 1911 tax assessment
was unconstitutional and invalid
•
Family Tree responded by arguing assessment was valid, and
Anadarko was barred by the six-year statute of limitations
RULING OF THE DISTRICT COURT
•
Quieted title in Family Tree
•
Found tax assessment was valid
•
UPRC forfeited its right to redeem or recover property
•
Found Settlement Agreement a cloud on title
Anadarko and Three Sisters appealed
ISSUE ON APPEAL
The sole question Anadarko has presented on appeal is whether
Laramie County's 1912 tax sale of the Section 7 minerals and
the resulting tax deed were void ab initio. The answer to this
question is pivotal in resolving this title dispute because a void
deed is a nullity, making it ineffective to transfer title and
ineffective to set a statute of limitations running.
Anadarko Land Corp. v. Family Tree Corp.
, 2017 WY 24, 389 P.3d 1218 (2017)
ANADARKO’S ARGUMENTS ON APPEAL
1.
Wyoming Constitution and applicable statutes failed
to allow taxation of unproduced minerals
2.
Wyoming case law recognized illegality
3.
Neither statute of limitations, nor after-acquired
property saves Family Tree’s claim
ASSESSMENT NOT ALLOWED BY STATUTE OR
STATE’S CONSTITUTION
Wyo. Const. Article 15, § 3 (1910): Taxation and Revenue –
Mines – Taxation of
All mines and mining claims from which gold, silver and other
precious metals, soda, saline, coal, mineral oil or other valuable
deposit,
is or may be produced shall be taxed
in addition to the
surface improvements, and in lieu of taxes on the lands, on the
gross product thereof, as may be prescribed by law; provided,
that the product of all mines shall be taxed in proportion to the
value thereof.
ASSESSMENT NOT ALLOWED BY STATUTE OR
STATE’S CONSTITUTION
Chapter 164. Mines-Taxation, §2449 (1910 Wyo. Compiled Stat.)
Return for assessment.
In proportion to the value thereof the gross
product of all mines and mining claims from which gold, silver and other
precious metals, soda, saline,
coal, mineral oil, or other valuable deposit
is, or may hereafter be produced, while the same are being worked or
operated,
but not while the same are simply in course of development
,
shall be returned by the owner, owners, lessee or operator thereof for
assessment for taxation, assessed for taxation and taxed in the manner
provided for in this chapter, and such tax shall be in addition to any tax
which may be assessed upon the surface improvements of such mines
or mining claims, and
in lieu of taxes upon the land of such claims while
the same are being worked or operated
.
MILLIRON: ILLEGALITY OF TAXATION OF IN-PLACE
MINERALS IN WYOMING
It should be kept in mind that under the provisions of
§ 32-1001, Wyoming Complied Statutes, 1945, the
mineral interest on or under the lands is
only made
subject to assessment when and as such minerals
are produced
. Hence, any such property in minerals is
not made subject to assessment for taxation,
until
their actual production
.
Milliron Oil Company v. Connaghan
, 302 P.2d 256 (Wyo. 1956).
MILLIRON: ILLEGALITY OF TAXATION OF IN-PLACE
MINERALS IN WYOMING
This is made even more clear by § 32-1003, W.C.S. 1945, which
concerns the valuation of that class of property. That section
provides that the valuation of the minerals
are to be made only
when they are actually produced
. This being the case it is clear
that in the circumstances of this case where the mineral estate
has been severed from the surface estate, the mineral estate
has not as yet become subject to any assessment for taxation. In
the absence of any such assessment, there could have been no
delinquency and, consequently,
no valid sale for unpaid taxes
against the property
.
Milliron Oil Company v. Connaghan
, 302 P.2d 256 (Wyo. 1956).
ANADARKO’S ARGUMENT: MILLIRON CASE
Oct. 1913 - Hillberry contracted to purchase the subject lands from
Merrill, Merrill turned over possession of the subject
lands to Hillberry, but did not execute a deed.
•
Apparently, Hillberry assumed he was purchasing the minerals
along with the surface. Nevertheless, Hillberry did not pay for the
property until 1916 or 1917.
Dec. 1913 – Merrill executed a warranty deed in favor of The Mill
Iron Cattle Company
Sep. 1916 – Mill Iron Cattle Company conveyed mineral interest to
Mill Iron Oil Company.
ANADARKO’S ARGUMENT: MILLIRON CASE
Dec. 1916 – Mill Iron Cattle Company re-conveyed the surface back
to Merrill.
Dec. 1916 – Merrill conveyed all of his interest in the subject lands
to Hillberry
1932 – Hot Springs County, pursuant to unpaid taxes assessed in
1931, acquired the interest formerly owned by Hillberry
1936 – Hot Springs County later sold the same interest to Washakie
Livestock Company
1938 – Hillberry re-obtained property from Washakie Livestock Co.
ANADARKO: NEITHER STATUTE OF LIMITATIONS,
NOR ADVERSE POSSESSION APPLY
i.
Void on face/Void
Never a conveyance of property, statute of
limitations never run
ii.
Fair on face/Voidable
Statute of limitations run, but illegality
must be challenged timely
FAMILY TREE’S ARGUMENTS ON APPEAL
(1)
Under the law at the time, a 1911 tax assessment on
unproduced minerals was permissible
(2)
Tax deed issued by the county was “fair on its face”
(3)
Anadarko, or its predecessors-in-interest, failed to
timely assert its rights
ASSESSMENT ALLOWED BY CONSTITUTION
Wyo. Const. Article 15, § 3 (1910): Taxation and Revenue –
Mines – Taxation of
All mines and mining claims
from which gold, silver and other
precious metals, soda, saline, coal, mineral oil or other valuable
deposit, is or may be produced shall be taxed in addition to the
surface improvements, and in lieu of taxes on the lands, on the
gross product thereof, as may be prescribed by law; provided,
that the product of all mines shall be taxed in proportion to the
value thereof.
FAMILY TREE (CONTD.)
•
Tax deed was “fair on its face”
•
UPRC/Anadarko failed to timely assert its rights
No action for the recovery of real property, sold for nonpayment of taxes,
shall be maintained unless the same be brought within six years after
the date of sale for taxes aforesaid
1910 Wyoming Compiled Statutes, §2395
Action for the recovery of the title or possession of lands … can only be
brought within ten (10) years after the cause of action accrues.
Wyo. Stat. § 1-3-103.
WYOMING SUPREME COURT
HELD TAX DEED “VOIDABLE” NOT “VOID”
WE REJECTED FAMILY TREE’S
PROPOSED GROUND FOR FINDING A
TAX DEED VOID AS BEING TOO
NARROW, AND WE NOW REJECT
ANADARKO’S PROPOSED GROUND AS
TOO BROAD.
RELIED ON
LAKE CANAL RESERVOIR V. BEETHE
,
227 P.3D 882 (COLO. 2010).
We acknowledge that throughout our caselaw, we have been
imprecise in our use of the terms “void,” “voidable,” “void on its
face,” and “invalid.” … However, we take the opportunity today
to clarify our caselaw and hold that
the line between a void and
a voidable tax deed does not depend on the nature of the
evidence used to determine the deed’s defect, but rather on the
nature of the defect itself. A deed is void—and therefore not
subject to the statute of limitations—when the taxing entity
lacked the authority or jurisdiction to issue it.
Lake Canal Reservoir
, 227 P.3d at 889
LAKE CANAL RESERVOIR V. BEETHE
COLORADO SUPREME COURT
In sum, where the authority or
jurisdiction of a taxing entity is
entirely lacking
… the resulting deed is
void
. But where a taxing
entity
has the authority and jurisdiction to tax but has made
errors
in exercising that authority, the deed is
merely voidable
. As
applied here, we find that the assessment may have been faulty,
but it was not entirely without authority.
Lake Canal Reservoir
, 227 P.3d at 891
COLORADO SUPREME COURT
As noted above, the constitutional tax exemption is available only
for property used exclusively by its owner for reservoir purposes.
Given the evidence in the record that portions of the Reservoir
Tract were used for a variety of recreational and farming
purposes, the Weld County assessor may well have correctly
exempted only a portion of the Reservoir Tract.
…
While the
assessed tax may have been excessive, at least some of that
assessment was authorized
. The deficiencies of the assessment
here
speak to its scope rather than its underlying authority.
Lake Canal Reservoir
, 227 P.3d at 891
APPLICATION OF
LAKE CANAL RESERVOIR
BY
WYOMING SUPREME COURT
When the alleged defect is one in the tax assessment
itself, we will find a lack of authority or jurisdiction on
the part of the taxing entity only if there was a total
want of jurisdiction, meaning there was no arguable
basis for jurisdiction and the tax assessment was a
clear usurpation of power.
APPLICATION OF
LAKE CANAL RESERVOIR
BY COURT
Wyo. Const. Article 15, § 3 (1910):
All mines and mining claims from which
gold, silver and other precious metals, soda, saline, coal, mineral oil or other
valuable deposit, is or may be produced shall be taxed in addition to the
surface improvements, and in lieu of taxes on the lands, on the gross
product thereof, as may be prescribed by law; provided, that the product of
all mines shall be taxed in proportion to the value thereof.
Wyo. Const. Article 15, § 12 (1910):
The property of the United States, the
state, counties, cities, towns, school districts and municipal corporations,
when used primarily for a governmental purpose, and public libraries, lots
with the buildings thereon used exclusively for religious worship, church
parsonages, church schools and public cemeteries,
shall be exempt from
taxation
, and such other property as the legislature may by general law
provide.
HOLDING OF THE COURT
The error in the 1911 assessment was not, however, a
clear jurisdictional error. It was an error in the manner
of taxation—
in the when and how of the assessment
.
REASONING/POLICY ARGUMENT
•
Promote reliability on property records
The effort should be to prevent rather than allow hidden defects in the
evidence of public records. If voidable only, it is sufficient to authorize
the record, if not previously avoided.
Harney v. Montgomery
, 213 P. 378,
383 (Wyo. 1923).
Public policy requires that subsequent purchasers be able to rely on the
title shown in public records.
Grose v. Sauvageau
, 942 P.2d 398, 403
(Wyo. 1997).
WYOMING SUPREME COURT
We presume, however, that had Union Pacific timely
challenged the 1911 assessment, there is a fair
likelihood it would have succeeded in having the tax
set aside.
DISSENTING OPINION (JUSTICE FOX)
Tax assessment and tax deed - void
There is no dispute that Article 15, § 3 of the Wyoming
Constitution prohibits the taxation of minerals in place; and it
meant the same thing in 1911, even though it may have been
misunderstood at that time.
The 1911 tax assessment was not an error in the “when and
how;” it was a complete failure of authority to tax.
While I appreciate the value of finality in real estate transactions,
that may be a matter best left to the legislature.
WHAT DOES HOLDING MEAN IN PRACTICE?
•
How to apply: Narrow or broad, fact specific
•
Trend toward less strict interpretation of documents
•
Interpreted under modern statutes
•
Why not argue adverse possession under void tax sale
or void on its face tax deed?
POST
FAMILY TREE
GENERAL POLICIES
I.
Extraordinary event
II.
Rigorous requirements to ensure fairness
III.
Most of risk on the purchaser at tax sale?
IV.
Modern trend toward finality and reliance on
recorded records
THANKS AND QUESTIONS
Contact Info:
Eric Thompson
ethompson@akers-lawfirm.com
akers-lawfirm.com
(720) 488-0835
Discover the mechanics and legal nuances of tax sales through the Anadarko v. Family Tree case in Wyoming. Explore the historical policies, statutory provisions, and key rulings that shape tax sales in the state, along with practical practice points for legal professionals. Uncover the essential aspects and exclusions in tax assessment laws and litigation strategies.
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Presentation Transcript
WYOMING TAX SALES: INCEPTION THROUGH ANADARKO V. FAMILY TREE
GOALS FOR PRESENTATION 1. 1.Mechanics of tax sales Mechanics of tax sales 2. 2.Anadarko v. Family Tree Anadarko v. Family Tree case 3. 3.Practice points Practice points case
WHAT IS NOT COVERED (AMONG OTHER ISSUES) 1. 1. Exhaustive review of Wyoming tax assessment, tax Exhaustive review of Wyoming tax assessment, tax sale or tax deed law sale or tax deed law 2. 2. Comprehensive review of applicable statutes Comprehensive review of applicable statutes Redemption, Taxpayer remedies Notice requirements 3. 3. Litigation strategies Litigation strategies
ROADMAP OF PRESENTATION I. I. Wyoming case law & statutory mechanics of Wyoming case law & statutory mechanics of tax sale/tax deeds tax sale/tax deeds II. II. Facts of Family Tree Facts of Family Tree III. III.District court s holding District court s holding IV. IV.Arguments of the litigants Arguments of the litigants V. V.Discussion of case/Holding Discussion of case/Holding VI. VI.Potential practice points Potential practice points
HISTORICAL POLICIES BEHIND TAX SALES A A rule rule of of primary execution execution of of a a tax the the statute statute Black, Tax Titles, Section 208. Black, Tax Titles, Section 208. primary importance importance is, tax deed deed must must conform is, that strictly to to that the the conform strictly
HISTORIC WYOMING CASE LAW Statutory Statutory provision must must be be literally, complied complied with owners owners. . Barlow v. Lonabaugh Barlow v. Lonabaugh, 156 P.2d 289 (Wyo. 1945) , 156 P.2d 289 (Wyo. 1945) provision prerequisite prerequisite to to a a tax literally, or or at at least with [because] [because] the tax title title least substantially, substantially, the law law favors favors the the
WYOMING CASE LAW (CONTD.) Knowing Knowing that uncertain, uncertain, and numerous numerous contingencies, contingencies, he in in the the speculation speculation and having having his his title title be Board of County Com rs v. Brewer, Board of County Com rs v. Brewer, 62 P.2d 685 (Wyo. 1936) (quoting (quoting American Investment Co. v. Beadle County American Investment Co. v. Beadle County, 5 S.D. 410) that tax and that are to to some usually depend he engages engages his and assumes assumes the be worthless worthless 62 P.2d 685 (Wyo. 1936) tax titles titles are that they they usually some extent depend on his means means the liability liability of of extent on , 5 S.D. 410)
STRICT COMPLIANCE Historically, Historically, Grantees successors successors- -in in- -interest, risks risks associated associated with inconsistencies inconsistencies in in assessment Grantees under interest, take with failures assessment. . under a a tax take vast failures in in form, tax sale, sale, or or their vast majority majority of of the form, and their the and
HISTORIC/STRICT CASE LAW A tax deed may be set aside even after it has been of record over five years, where it shows upon its face that the certificate was assigned by the county for considerably less than the amount then required for redemption. Logsdon Logsdon v v. . Hodges Hodges, , 114 114 P P. . 854 854 (Kan (Kan. . 1911 Tax deed not acknowledged by clerk of the district court, as required by statute, void on its face. Matthews Matthews v v. . Blake Blake, , 92 92 P P. . 242 242 (Wyo (Wyo. . 1907 1911) ). . 1907) ). .
HISTORIC/STRICT CASE LAW This Court has held on many occasions that a tax deed issued without strict compliance with the statutory requirements as to the service of the notice of the expiration of the period of redemption is void. Wittrock Wittrock v v. . Weisz Weisz, , 73 73 N N. .W W. .2 2d d 355 355 (N (N. .D D. . 1955 1955) ). . The title to be made under a tax deed is stricti juris. All the requirements of the statute must be clearly and strictly complied with. Bailey Bailey v v. . Smith Smith, , 52 52 N N. .E E. . 948 948 (Ill (Ill. . 1899 1899) ). .
HISTORIC/STRICT GENERAL RULES I. Extraordinary event II. Rigorous requirements to ensure fairness III.Interpretation in favor of owner that lost property IV.Risk is on the purchaser at tax sale
2 HURDLES TO OVERCOME 1. 1. Tax assessment/sale was legal and Tax assessment/sale was legal and constitutional constitutional 2. 2. Tax deed conforms to statute Tax deed conforms to statute
Imperfect, Imperfect, but potentially effective potentially effective but Perfect, Perfect, above reproach once beyond reproach once beyond redemption redemption above Never effective Never effective TAX Illegal or Unconstitutional Legal/Constitutional ASSESSMENT ????? ????? DEED FORM Improper ????? ????? Proper, Valid on Face
DEED: VOID OR FAIR ON ITS FACE Tax deed not acknowledged by clerk of the district court, as required by statute, void void on on its its face face. Matthews Matthews v v. . Blake Blake, , 92 92 P P. . 242 242 (Wyo (Wyo. . 1907 1907) ). . Where the statute directs the execution of a deed by a public officer and requires it to be executed in a particular manner and to be witnessed or acknowledged before a particular officer, the witnessing or acknowledging of the deed in that manner is a part of its execution, and without such witnessing or acknowledgment is void void upon upon its Matthews v. Blake Matthews v. Blake, 16 Wyo. 116, 92 P. 242 (1907) , 16 Wyo. 116, 92 P. 242 (1907) its face face.
DEED: VOID OR FAIR ON ITS FACE 1913 tax deed failed to recite required notice was nonetheless held to be fair fair on on its its face face. North North American American Realty Realty Co Co. . v v. . Brady Brady, , 77 77 Colo Colo. . 56 56, , 234 234 P P. . 1054 1054 ( (1925 1925) ). . In neighboring jurisdictions, a tax deed which is fair on its face, but nonetheless contains improprieties, will require extrinsic evidence to prove those improprieties could be fatal.
ASSESSMENT: VOID OR VOIDABLE Taxes assessed in an incorrect name, deemed void. McCarthy v. Union Pac. Ry. Co. McCarthy v. Union Pac. Ry. Co., 131 P.2d 326 (Wyo. 1942). , 131 P.2d 326 (Wyo. 1942). Failing to notify property owner resulted in void tax deed. Thompson Thompson- -Green v. Estate Drobish Green v. Estate Drobish, 2006 WY 126. , 2006 WY 126. A voidable assessment is an assessment which is made in good faith but is irregular or unfair. Hackney v. McKenny Hackney v. McKenny, 151 So. 524 (Fla. 1933) , 151 So. 524 (Fla. 1933).
VOID VOID VOIDABLE VOIDABLE Imperfect, Imperfect, but potentially effective potentially effective Perfect, Perfect, above reproach once beyond reproach once beyond redemption redemption (Possession req.) (Possession req.) above Never effective Never effective but TAX Strictly Illegal or Unconstitutional Void Void Non Non- -fatal fatal error error Legal/Constitutional ASSESSMENT Voidable Voidable DEED FORM Void on its Face Fair on its Face Fair on its Face, or better
WHY DO WE CARE? Void deed is wholly ineffective to pass title. Wayt Wayt v v. . Urbigkit Urbigkit, , 152 152 P P. .3 3d d 1057 The special statute of limitations runs only upon a sale regularly made under the forms of law Matthews Matthews v v. . Blake Blake, , 92 92 P P. . 242 242 (Wyo (Wyo. . 1907 1907) ). . A tax deed, void on its face, will not set statute of limitations in motion. Denny Denny v v. . Stevens Stevens, , 75 75 P P. .2 2d d 378 378 (Wyo (Wyo. . 1937 1937) ). . The question then is, does possession under a tax deed, void upon its face, start the running of the six years' statute of limitations? We are of the opinion that this question must be answered in the negative. Matthews Matthews v v. . Blake Blake, , 16 16 Wyo Wyo. . 116 116, , 92 92 P P. . 242 242 ( (1907 1057 (Wyo (Wyo. . 2007 2007) ). . 1907) ). .
WHY DO WE CARE? (CONTD.) Voidable" operative to convey until set aside by a court. A voidable deed is capable of being either avoided or confirmed. Void" deed is legally invalid for any purpose whatsoever. The recording of a void deed is legally insufficient to create a legal title and affords no protection to those claiming under it. See See 23 23 Am Am. .Jur Jur. .2 2d d Deeds Deeds 163 163. .
WYO. TAX SALES/TAX DEEDS I. I. W. S. W. S. 39 W. S. 39-13-108 39- -13 13- -101 101 - - Assessment/Taxation Assessment/Taxation II. II. W. S. W. S. 34 34- -2 2- -131 through 135 131 through 135 Tax Deeds Tax Deeds
W. S. 39-13-101, ET SEQ.: AD VALOREM TAXATION ** W. S. ** W. S. 39 latest legislative session. Several changes take latest legislative session. Several changes take effect July 1, 2017. effect July 1, 2017. 39- -13 13- -101 , et seq. were amended in 101 , et seq. were amended in
W. S. 39-13-108 ENFORCEMENT OF AD VALOREM TAXATION (e)(ii) Tax sales of real property (e)(ii) Tax sales of real property (e)(iii) Process if property remains unsold (e)(iii) Process if property remains unsold (e)(iv) (A) Following four (4) years from the date of (e)(iv) (A) Following four (4) years from the date of sale the county treasurer shall issue and record a sale the county treasurer shall issue and record a tax deed tax deed
W. S. 39-13-108 ENFORCEMENT OF AD VALOREM TAXATION (e)(vii)(B) Any grantee of a tax deed or county commissioner's deed are entitled to possession of the real property conveyed by the deed and the deed is prima prima facie facie evidence evidence of of title described subject to special assessments for local or public improvements. The burden be be upon upon any any party party seeking seeking to to invalidate conveyed by a tax or county commissioner's deed title to the property burden of of proof invalidate title proof shall shall title
W. S. 39-13-108 ENFORCEMENT OF AD VALOREM TAXATION (e)(vii)(D) No action for the recovery of real property sold for the nonpayment of taxes shall be maintained unless unless commenced commenced within years years after after the the date date of of sale sale for within six six ( (6 6) ) for taxes taxes. .
WYOMING TAX DEEDS In In 1975 1975, , the Wyoming Wyoming law through through 134 the Wyoming Wyoming legislature law into into Wyo Wyo. . Stat 134. . legislature codified Stat. . Ann Ann. . 34 codified 34- -2 2- -131 131
W.S. 34-2-131 TAX DEEDS Defines: Tax deed Former owner Grantee Possession
W.S. 34-2-132 TAX DEEDS: TWO YEAR LIMITATION & POSSESSION (a) No action, suit or other proceeding shall be commenced by the former owner to set aside, declare declare invalid invalid or or redeem forfeiture, foreclosure or other proceeding upon which it is based or to recover possession, quiet title or otherwise litigate or contest the title of the grantee, if: (i) Two Two ( (2 2) ) years years or or more more have have elapsed the the deed deed in the office of the county clerk for the county in which the real estate described in the deed is situated; and (ii) The grantee has been in possession continuously continuously for for a a period period of of at at least after after one one ( (1 1) ) year year and and six six ( (6 6) ) months of recording of the tax deed. redeem from from a a tax tax deed deed or or the the sale sale, elapsed after after the the date date of of recording recording possession of of the least six six ( (6 6) ) months, months have elapsed since the date the real real estate estate any time months, at at any time
W.S. 34-2-132 TAX DEEDS: TWO YEAR LIMITATION & POSSESSION (CONTD.) (b) The limitation in subsection (a) of this section applies regardless of whether the tax deed or any of the proceedings upon which it is based are void void or or voidable voidable for any reason, jurisdictional or otherwise. If the deed is executed executed substantially prescribed prescribed for for the the execution execution of of tax tax deeds, regardless regardless of of whether whether the the deed deed is is deemed deemed void substantially in in the deeds, the the limitation limitation shall void upon upon its the form shall apply its face face. form apply
W.S. 34-2-133 TAX DEEDS: POSSESSION Possession by the grantee for a continuous period of not less than six (6) months at any time after one (1) year and six (6) months have elapsed since the date of recording recording the forever forever all all the the claims, claims, right, right, title title and and interest possession, of the former owner, and vests in the grantee any title conveyed or purportedly conveyed by the tax deed. Proof possession possession by by the the grantee grantee and and the the record conclusive conclusive evidence evidence of of the the legality legality and and and any any proceedings proceedings upon upon which which the the deed of of the the grantee grantee. the tax interest, , including the right to tax deed deed extinguishes extinguishes Proof of of constitutes the deed and of of the the title record of of the and effectiveness effectiveness of of the deed is is based, based, and the tax tax deed deed constitutes deed title
W.S. 34-2-134 TAX DEEDS: LIBERAL CONSTRUCTION This act shall be liberally purpose purpose of of giving giving stability and clarifying the titles of persons in possession, of providing a means of correcting procedural and jurisdictional defects without necessity of resort to further proceedings, and of rendering tax titles marketable and protecting purchasers thereof against remote claims. liberally construed construed to to effectuate stability and and effect effect to to record effectuate the record titles titles, of confirming the legislative legislative
PRACTICE POINT Even Even though though W W. .S S. . 34 enacted enacted to to codify codify Wyoming tax tax deed deed interpretation, interpretation, statutes/constitution statutes/constitution at at the sale sale and and deed deed to to determine 131 through through 135 case law law regarding must must determine determine the time time of of assessment, assessment, determine what what was 34- -2 2- -131 135 Wyoming case regarding was required required. .
UPDATED GENERAL POLICIES I. I. Extraordinary event Extraordinary event II. II. Rigorous requirements to ensure fairness Rigorous requirements to ensure fairness III. III. Interpretations in favor of person that lost Interpretations in favor of person that lost their property their property IV. IV. MOST risks on the purchaser at tax sale? MOST risks on the purchaser at tax sale?
VOID AND VOIDABLE i. i. Void Void on Never a conveyance of property, statute of limitations never run ii. ii. Fair Fair on on face/Voidable face/Voidable Statute of limitations run, illegality must be challenged timely on face/Void face/Void
ANADARKO LAND CORP. V. FAMILY TREE CORP., 2017 WY 24
ANADARKO LAND CORP. V. FAMILY TREE CORP. 1901 1901 Patent Patent from conveying conveying Section Wyoming Wyoming. . 1911 Laramie Laramie County 1912 1912 Laramie Laramie County 1914 1914 UPRC UPRC conveyed 1919 1919 Iowa Iowa Land Laramie Laramie County 1949 1949 Commissioner s Commissioner s Deed from USA Section 7 7, , T T14 USA to to Union 14N, Union Pacific N, R R65 65W, Pacific Railroad W, 6 6th th, , P P. .M M. ., , Laramie Railroad Company, Laramie County, Company, County, 1911 County assessed assessed in in- -place County attempted attempted sale, conveyed surface surface of of Section Land & & Livestock Livestock purchased County Deed recorded place minerals, minerals, remained sale, no no bidders bidders Section 7 7 to to Iowa Iowa Land purchased mineral mineral estate remained unpaid unpaid Land & & Livestock Livestock estate from from recorded in in Laramie Laramie County County
FACTS OF FAMILY TREE (CONTD.) 1971 1971 UPRC UPRC conveyed conveyed all Pacific Pacific Land Land Resources 2000 Union Union Pacific Pacific Land RME RME Land Land Corp 2000 2000 RME RME Land Land Corp Sisters, Sisters, LLC Livestock) Livestock) wherein Section Section 7 7 2002 2002 RME RME Land Land Corp 2010 2010 Family Family Tree Section Section 7 7 from all right, right, title Resources Corporation Corporation Land Resources Resources Corporation Corp. . Corp. . entered entered into into Settlement LLC (claiming (claiming to to be wherein each each party party was title and and interest interest in in Section Section 7 7 to to Union Union 2000 Corporation changed changed its its name name to to Settlement Agreement be a a successor successor of of Iowa was vested vested mineral Agreement with Iowa Land mineral interest with Three Three Land & & interest in in Corp. . changed changed its Tree Corp Corp. . acquired from successor successor of of Iowa its name name to to Anadarko acquired a a portion portion of of the Iowa Land Land & & Livestock Anadarko Land the minerals minerals beneath Livestock Land Corp Corp. . beneath
LARAMIE COUNTY DISTRICT COURT June 24, 2014 June 24, 2014 Family Tree filed quiet title action against Family Tree filed quiet title action against Anadarko and Three Sisters Anadarko and Three Sisters Argued Settlement Agreement was void and was a cloud on its mineral interest in Section 7 Anadarko (and Three Sisters) countered 1911 tax assessment Anadarko (and Three Sisters) countered 1911 tax assessment was unconstitutional and invalid was unconstitutional and invalid Family Tree responded by arguing assessment was valid, and Family Tree responded by arguing assessment was valid, and Anadarko was barred by the six Anadarko was barred by the six- -year statute of limitations year statute of limitations
RULING OF THE DISTRICT COURT Quieted title in Family Tree Quieted title in Family Tree Found tax assessment was valid Found tax assessment was valid UPRC forfeited its right to redeem or recover property UPRC forfeited its right to redeem or recover property Found Settlement Agreement a cloud on title Found Settlement Agreement a cloud on title Anadarko and Three Sisters appealed Anadarko and Three Sisters appealed
ISSUE ON APPEAL The The sole Laramie Laramie County's the the resulting resulting tax question question is is pivotal deed deed is is a a nullity, ineffective ineffective to to set sole question question Anadarko County's 1912 tax deed pivotal in in resolving nullity, making set a a statute Anadarko has 1912 tax tax sale deed were were void resolving this making it it ineffective statute of of limitations limitations running has presented presented on sale of of the the Section void ab ab initio this title title dispute ineffective to to transfer running. . on appeal appeal is is whether Section 7 7 minerals minerals and initio. . The The answer answer to to this dispute because because a a void transfer title whether and this void and title and Anadarko Land Corp. v. Family Tree Corp. Anadarko Land Corp. v. Family Tree Corp., 2017 WY 24, 389 P.3d 1218 (2017) , 2017 WY 24, 389 P.3d 1218 (2017)
ANADARKOS ARGUMENTS ON APPEAL 1. 1. Wyoming Wyoming Constitution to to allow allow taxation taxation of of unproduced 2. 2. Wyoming Wyoming case case law 3. 3. Neither Neither statute statute of of limitations, property property saves saves Family Constitution and and applicable applicable statutes unproduced minerals minerals law recognized recognized illegality illegality limitations, nor Family Tree s Tree s claim claim statutes failed failed nor after after- -acquired acquired
ASSESSMENT NOT ALLOWED BY STATUTE OR STATE S CONSTITUTION Wyo. Const. Article 15, Wyo. Const. Article 15, 3 (1910): Taxation and Revenue 3 (1910): Taxation and Revenue Mines Mines Taxation of Taxation of All mines and mining claims from which gold, silver and other precious metals, soda, saline, coal, mineral oil or other valuable deposit, is is or or may may be be produced produced shall shall be surface improvements, and in lieu of taxes on the lands, on the gross product thereof, as may be prescribed by law; provided, that the product of all mines shall be taxed in proportion to the value thereof. be taxed taxed in addition to the
ASSESSMENT NOT ALLOWED BY STATUTE OR STATE S CONSTITUTION Chapter 164. Mines Chapter 164. Mines- -Taxation, Taxation, 2449 (1910 Wyo. Compiled Stat.) 2449 (1910 Wyo. Compiled Stat.) Return Return for product of all mines and mining claims from which gold, silver and other precious metals, soda, saline, coal, coal, mineral mineral oil, is, or may hereafter be produced, while the same are being worked or operated, but but not not while while the the same same are are simply shall be returned by the owner, owners, lessee or operator thereof for assessment for taxation, assessed for taxation and taxed in the manner provided for in this chapter, and such tax shall be in addition to any tax which may be assessed upon the surface improvements of such mines or mining claims, and in in lieu lieu of of taxes taxes upon the the same same are are being being worked worked or or operated operated. for assessment assessment. . In proportion to the value thereof the gross oil, or or other other valuable valuable deposit deposit simply in in course course of of development development, upon the the land land of of such such claims claims while while
MILLIRON: ILLEGALITY OF TAXATION OF IN-PLACE MINERALS IN WYOMING It should be kept in mind that under the provisions of 32-1001, Wyoming Complied Statutes, 1945, the mineral interest on or under the lands is only subject subject to to assessment assessment when when and are are produced produced. Hence, any such property in minerals is not made subject to assessment for taxation, until their their actual actual production production. only made made such minerals minerals and as as such until Milliron Oil Company v. Connaghan Milliron Oil Company v. Connaghan, 302 P.2d 256 (Wyo. 1956). , 302 P.2d 256 (Wyo. 1956).
MILLIRON: ILLEGALITY OF TAXATION OF IN-PLACE MINERALS IN WYOMING This is made even more clear by 32-1003, W.C.S. 1945, which concerns the valuation of that class of property. That section provides that the valuation of the minerals are when when they they are are actually actually produced produced. This being the case it is clear that in the circumstances of this case where the mineral estate has been severed from the surface estate, the mineral estate has not as yet become subject to any assessment for taxation. In the absence of any such assessment, there could have been no delinquency and, consequently, no against against the the property property. are to to be be made made only only no valid valid sale sale for for unpaid unpaid taxes taxes Milliron Oil Company v. Connaghan Milliron Oil Company v. Connaghan, 302 P.2d 256 (Wyo. 1956). , 302 P.2d 256 (Wyo. 1956).
ANADARKOS ARGUMENT: MILLIRON CASE Oct Oct. . 1913 1913 - - Hillberry Hillberry contracted contracted to to purchase Merrill, Merrill, Merrill Merrill turned turned over lands lands to to Hillberry, Hillberry, but Apparently, Apparently, Hillberry Hillberry assumed along along with with the the surface surface. . Nevertheless, property property until until 1916 1916 or or 1917 Dec. 1913 Dec. 1913 Merrill executed a warranty deed in favor of The Mill Merrill executed a warranty deed in favor of The Mill Iron Cattle Company Iron Cattle Company Sep. 1916 Sep. 1916 Mill Iron Cattle Company conveyed mineral interest to Mill Iron Cattle Company conveyed mineral interest to Mill Iron Oil Company. Mill Iron Oil Company. purchase the over possession possession of of the but did did not not execute execute a a deed assumed he he was was purchasing Nevertheless, Hillberry Hillberry did 1917. . lands from the subject subject deed. . purchasing the the minerals did not not pay the subject subject lands from minerals pay for for the the
ANADARKOS ARGUMENT: MILLIRON CASE Dec. 1916 Dec. 1916 Mill Iron Cattle Company re Mill Iron Cattle Company re- -conveyed the surface back to Merrill. to Merrill. Dec. 1916 Dec. 1916 Merrill conveyed all of his interest in the subject lands Merrill conveyed all of his interest in the subject lands to Hillberry to Hillberry 1932 1932 Hot Springs County, pursuant to unpaid taxes assessed in Hot Springs County, pursuant to unpaid taxes assessed in 1931, acquired the interest formerly owned by Hillberry 1931, acquired the interest formerly owned by Hillberry 1936 1936 Hot Springs County later sold the same interest to Washakie Hot Springs County later sold the same interest to Washakie Livestock Company Livestock Company 1938 1938 Hillberry re Hillberry re- -obtained property from Washakie Livestock Co. obtained property from Washakie Livestock Co. conveyed the surface back
ANADARKO: NEITHER STATUTE OF LIMITATIONS, NOR ADVERSE POSSESSION APPLY i. i. Void Void on Never a conveyance of property, statute of limitations never run ii. ii. Fair Fair on on face/Voidable face/Voidable Statute of limitations run, but illegality must be challenged timely on face/Void face/Void
FAMILY TREES ARGUMENTS ON APPEAL (1) (1) Under Under the unproduced unproduced minerals (2) (2) Tax Tax deed deed issued (3) (3) Anadarko, Anadarko, or or its timely timely assert assert its the law law at at the minerals was issued by by the its predecessors predecessors- -in in- -interest, its rights rights the time, time, a a 1911 was permissible permissible the county county was 1911 tax tax assessment assessment on on was fair fair on interest, failed on its its face face failed to to
ASSESSMENT ALLOWED BY CONSTITUTION Wyo. Const. Article 15, Wyo. Const. Article 15, 3 (1910): Taxation and Revenue 3 (1910): Taxation and Revenue Mines Mines Taxation of Taxation of All All mines mines and and mining mining claims claims from which gold, silver and other precious metals, soda, saline, coal, mineral oil or other valuable deposit, is or may be produced shall be taxed in addition to the surface improvements, and in lieu of taxes on the lands, on the gross product thereof, as may be prescribed by law; provided, that the product of all mines shall be taxed in proportion to the value thereof.
FAMILY TREE (CONTD.) Tax deed was fair on its face Tax deed was fair on its face UPRC/Anadarko failed to timely assert its rights UPRC/Anadarko failed to timely assert its rights No action for the recovery of real property, sold for nonpayment of taxes, shall be maintained unless the same be brought within six years after the date of sale for taxes aforesaid 1910 Wyoming Compiled Statutes, 1910 Wyoming Compiled Statutes, 2395 2395 Action for the recovery of the title or possession of lands can only be brought within ten (10) years after the cause of action accrues. Wyo. Stat. Wyo. Stat. 1 1- -3 3- -103. 103.
