J-A14013-16
                             2017 PA Super 74


CORNWALL MOUNTAIN INVESTMENTS,                IN THE SUPERIOR COURT OF
L.P., AND RANGE RESOURCES –                         PENNSYLVANIA
APPALACHIA, LLC

                    v.

THOMAS E. PROCTOR HEIRS TRUST,
INTERNATIONAL DEVELOPMENT
CORPORATION, PENNLYCO, LTD.,
VIRGINIA ENERGY CONSULTANTS, LLC,
ATLANTIC HYDROCARBON, LLC, CHIEF
EXPLORATION AND DEVELOPMENT, LLC,
QUEST EASTERN RESOURCE, LLC, AND
EXCO HOLDING (PA), INC.

                    v.

SOUTHEASTERN ENERGY PRODUCTION
COMPANY

APPEAL OF: TRUSTEES FOR MARGARET
O.F. PROCTOR TRUST

                                                   No. 1706 MDA 2015


              Appeal from the Order Entered September 3, 2015
              In the Court of Common Pleas of Lycoming County
                       Civil Division at No(s): 11-00718



BEFORE: BOWES, OTT AND PLATT,* JJ.

OPINION BY BOWES, J.:                             FILED MARCH 21, 2017

     The Trustees of the Margaret O.F. Proctor Trust (“Trustees”) appeal

from the final order granting judgment on the pleadings in favor of Cornwall




* Retired Senior Judge assigned to the Superior Court.
J-A14013-16



Mountain     Investments,        L.P.   and    Range   Resources–Appalachia,   LLC

(collectively “Cornwall”),1 in this action to quiet title to subsurface minerals,

oil, and gas lying beneath three thousand acres in Lycoming County (“the

Property”). After thorough review, we affirm.

       On October 27, 1890, Thomas E. Proctor purchased approximately

7000 acres of unseated land2 located in Cogan House Township and Lewis

Township from Harriet Land by general warranty deed.3            Four years later,

____________________________________________


1
 Cornwall entered into an oil, gas, and coalbed methane lease with Range
Resources on April 30, 2007.
2
   “Seated land was property that had been developed with residential
structures, had personal property upon it that could be ‘levied upon for the
tax due’, or was producing regular profit through cultivation, lumbering, or
mining.” Herder Spring Hunting Club v. Keller, 143 A.3d 358, 363 (Pa.
2016) (quoting Robert Grey Bushong, Pennsylvania Land Law, Vol 1, §
469(II) at 500-501 (1938)). In contrast, unseated land is described as
"wild" land and includes all land that did not meet the requirements for
being seated. Id. § 469(IV) at 501.
3
  The Proctor Heirs Trust pled that it owned 100% of the oil, gas, and
minerals beneath the Property. See Answer of Proctor Heirs Trust at ¶2.
Trustees herein maintained, however, that Thomas Proctor purchased this
acreage subject to a prior reservation in the deed recorded by Clarence
Biddle, a predecessor of Harriet Land. According to Trustees, in an 1867
deed to S. Bennet, a copy of which was appended to the Answer, Mr. Biddle
excepted and reserved for himself and his heirs “all ores of iron, lead, copper
and other minerals which may be discovered produced or found on said
lands and also three-fourths part of all mineral coals & all oils which may be
discovered or produced on said lands.” Thus, Trustees contended that the
interest Mr. Proctor acquired from Harriet Land only included the surface, the
natural gas, and one-fourth of the coal and oil, and that when Mr. Proctor
subsequently conveyed the surface estate to Elk Tanning, reserving all
natural gas, oil, and minerals, the reservation only consisted of natural gas
(Footnote Continued Next Page)


                                           -2-
J-A14013-16



Mr. Proctor and his wife conveyed that acreage, part of which consisted of

the Property herein, to Elk Tanning Company, but reserved “all the natural

gas, coal, coal oil, petroleum, marble and all minerals of every kind and

character in, upon, or under the said land.” Proctor died in 1894, and his

heirs inherited the reserved subsurface estates.    In 1978, Margaret O. F.

Proctor placed her alleged 1/16th interest in that mineral estate in a trust.

In 1980, the remaining heirs conveyed their claimed 15/16th interest to the

Proctor Heirs Trust.

      In 1903, Elk Tanning conveyed the surface of the 7,000-acre property

to Central Pennsylvania Lumber Company, “subject to all the exceptions,

reservations, covenants, stipulations, agreements” contained in the deeds

recited therein, one of which was the Proctor deed. By deed dated July 24,

1919, Central Pennsylvania Lumber Company conveyed to Henry Hess, Dorr

Wolfe and John Blair, as trustees of the Cornwall Mountain Club, 2,813.75

acres of that property located in Cogan House and Lewis Townships, subject

to among other reservations, reservations for rights of way for wagon roads,

as well as timber, trees, logs, wood and other forest products.     David M.

                       _______________________
(Footnote Continued)

and a one-fourth interest in coal and oil. In determining, however, whether
all indispensable parties had been joined in the action, the trial court found
that any interest reserved by Mr. Biddle was lost in a June 1890 tax sale
whereby Harriet Land acquired title to both the surface and the mineral
estates, which she then sold to Thomas Proctor.           Trustees have not
challenged that finding on appeal.



                                            -3-
J-A14013-16



Wolfe and the members of the Cornwall Mountain Club conveyed that

property to the Cornwall Mountain Club, a corporation, by deed dated July 9,

1920, “EXCEPTING AND RESERVING, NEVERTHELESS, unto Thomas E.

Proctor, his heirs and assigns, all the natural gas, coal, coaloil [sic],

petroleum, marble and all minerals of every kind and character, in, upon or

under the said lands hereinbefore mentioned and described, and every part

thereof, or which may at any time hereinafter be discovered in, upon or

under said lands, or any part thereof, with the right to enter upon said lands

for purposes of exploration, and for the taking away the said natural gas,

coal, coal oil, petroleum, marble or other minerals . . . .as in the deed from

Thomas E. Proctor and wife to Elk Tanning Company.”

       The Property consists of 2,842 acres, comprising Warrants 5751 (1170

acres), 5753 (716 acres), part of 5666 (545 acres), part of 5668 (240 acres)

in Lewis Township, and a four acre parcel in Warrant 5666, located in Cogan

House Township, designated by the Lycoming County Assessment Office as

tax parcel 24-248-100.4        Cornwall pled that Thomas Proctor and his heirs

held the only reservation or interest in the minerals, which included the oil

and gas.


____________________________________________


4
  Defendants International Development Corporation and Pennlyco claim
ownership of a portion of Warrant 5753 by virtue of 2000 and 1992 quitclaim
deeds respectively.



                                           -4-
J-A14013-16



       There is no indication in the record that the mineral rights in the

Property were separately assessed for tax purposes prior to 1930.

Assessment records from 1930 and 1931 reveal, however, that the surface

and subsurface estates were separately assessed for tax purposes, and the

subsurface mineral rights estate was identified as belonging to “Thomas E.

Proctor & Heirs.” In both 1930 and 1931, the mineral rights were assessed

at $.50 per acre with the surface assessed at $1.00 per acre.

       On June 13, 1932, the mineral rights estate was sold to the surface

owner, Cornwall Mountain Club, at a tax sale. The treasurer subsequently

issued five deeds conveying the mineral rights of the unseated land, which

were recorded. Thereafter, according to Cornwall, its predecessor Cornwall

Mountain Club owned both the surface and the mineral rights in the

Property, including the oil and gas interests.     Cornwall Mountain Club

transferred title to Cornwall Mountain Investments, L.P. on June 14, 2010,

by general warranty deed.

       On April 29, 2011, Cornwall commenced this quiet title action against

the Proctor Heirs Trust5 and the other defendants to resolve competing

claims of ownership to the gas on the property.        Southwestern Energy

intervened, and Trustees herein were joined. Cornwall claims ownership of

____________________________________________


5
 The trustees of the Proctor Heirs Trust have also appealed at No. 170 MDA
2015, and are advancing identical arguments on appeal.



                                           -5-
J-A14013-16



both the surface and the subsurface mineral rights, including oil and gas

rights, from the tax sale conducted in 1932.6 Range Resources joined the

proceedings and asserted a claim to the gas and oil as Cornwall’s lessee.

       Trustees trace their ownership of gas to the 1894 deed conveying the

surface of the Property to Elk Tanning Company, but reserving to Thomas E.

Proctor and his heirs the rights to “all the natural gas, coal, coal oil,

petroleum, marble, and all minerals of every kind and character in, upon, or

under the said land.”          1894 Deed.        Trustees maintain that the term

“minerals” as used in the 1930 and 1931 assessments and the 1932 tax

deed did not include their interests in the oil and gas.        Accordingly, they

contend that the 1932 tax deeds did not convey to Cornwall Mountain Club

any right, title or interest in the oil or gas. Answer, 6/18/14, at ¶2.

       In support of their position, Trustees invoked the presumption under

Pennsylvania law that oil and gas are not included in a reservation of

minerals. Additionally, they argued that the oil and gas at issue herein were

undiscovered at the time of the tax sale and could not be valued or

assessed. The Trustees also pled that the Proctor heirs did not receive the

constitutionally-mandated notice of the tax sale, and that there were

additional irregularities in the sale that rendered it void.     Finally, Trustees

____________________________________________


6
   Cornwall also claimed title through adverse possession, but voluntarily
discontinued that claim on or about July 15, 2015.



                                           -6-
J-A14013-16



alleged that four-fold taxation, not title divestiture, was the only statutory

remedy for failure to pay taxes. New Matter, 6/18/14, at ¶12. The Trustees

also filed counterclaims against Cornwall and Range Resources and cross-

claims against the other defendants.

       On January 14, 2014, Cornwall moved for partial judgment on the

pleadings based on the 1932 tax sale.7 The trial court granted the motion

on August 4, 2014, concluding that the assessment of an interest described

as “Mineral Rights Only” included oil and gas. Moreover, the court declined

to invalidate the tax sale based on an assessor’s alleged inability to value

the oil and gas interest, and held further that, the tax sale could not be

invalidated by retroactively applying Independent Oil & Gas Association

of Pennsylvania v. Bd. of Assessment Appeal of Fayette County

(“IOGA”), 814 A.2d 180 (Pa. 2002).             In addition, the trial court found no

proof that the Proctor heirs did not receive proper notice of the tax sale.

       Trustees moved for reconsideration, alleging that the trial court erred

in requiring it to prove the lack of proper notice to avoid judgment on the

pleadings. The court granted reconsideration on September 4, 2014, limited

to whether the taxing authority’s failure to provide proper notice of the tax

sale rendered it void. The court concluded that there was a dispute of fact
____________________________________________


7
 The trial court refers to “tax sales” since five parcels of mineral rights were
sold at the June 13, 1932 tax sale. For convenience, we refer to the
multiple sales on that date as the 1932 tax sale.



                                           -7-
J-A14013-16



as to the validity of the tax sale, and thus judgment on the pleadings was

improper.

     Range Resources filed a motion for reconsideration of that decision.

On March 31, 2015, the trial court reinstated partial judgment on the

pleadings, based on a finding that the six-year statute of limitations barred

any challenge to the adequacy of the notice of the tax sale.     On July 30,

2015, Cornwall and Range Resources filed another motion for judgment on

the pleadings as to the pending counterclaims and cross-claims, which was

granted on September 3, 2015, based upon the court’s prior finding that

Cornwall owned the right to the oil and gas.

     The Trustees timely appealed and they present four questions for our

review:

  1. Because of the presumption that an instrument conveying
     “minerals” does not convey oil or gas, absent clear and
     convincing proof of a contrary intention, did the trial court
     erroneously enter judgment on the pleadings, finding that tax
     assessment and sale of “Mineral Rights Only” conveyed oil and
     gas rights?

  2. Because political subdivisions cannot tax subsurface oil and gas,
     and because any assessment would have been otherwise invalid
     because there was no basis to assess or value the oil and gas at
     issue, did the trial court erroneously hold that a tax sale could
     divest title to oil and gas?

  3. Where political subdivisions conducting a tax sale (i) failed to
     give proper pre-sale notice to the owners of subsurface oil and
     gas rights in the manner required by governing statutes and (ii)
     resorted to constructive notice by publication that runs afoul of
     constitutional due process guarantees, did the trial court



                                    -8-
J-A14013-16



      erroneously enter judgment on the pleadings declaring that the
      sale nevertheless divested title to oil and gas?

   4. Because the expiration of a statute of limitations cannot render a
      void tax sale valid, and because the statute of limitations does
      not preclude assertion of a defense to a quiet title action, did the
      trial court err in entering judgment on the pleadings based upon
      expiration of a six-year statute of limitations?

Appellants’ brief at 4-5.

      In deciding whether judgment on the pleadings is warranted in favor of

a plaintiff, the trial court is limited to the pleadings, i.e., the complaint,

answer and new matter, and any relevant documents properly attached to

those pleadings. Furthermore, the trial court must draw all inferences and

assume all concessions in favor of the non-moving party. Judgment on the

pleadings should only be granted when there are no genuine issues of fact

and the moving party is entitled to judgment as a matter of law.

Consolidation Coal Co. v. White, 875 A.2d 318, 325 (Pa.Super. 2005).

      In reviewing the grant of judgment on the pleadings, “our scope of

review is plenary.” Mellon Bank, N.A. v. National Union Ins. Co., 768

A.2d 865, 868 (Pa.Super. 2001).       “We must determine whether the trial

court's ruling was based on a clear error of law or whether the pleadings

disclosed facts which properly should go to the jury.” Id. We will reverse

only if the trial court committed a clear error of law or if the pleadings

disclose facts that should be submitted to a trier of fact. Sisson v. Stanley,

109 A.3d 265, 274 (Pa.Super. 2015).



                                     -9-
J-A14013-16



       In September 2016, the parties requested and were afforded the

opportunity to file supplemental briefs addressing the impact of the Supreme

Court’s intervening decision in Herder Spring Hunting Club v. Keller, 143

A.3d 358, 372 (Pa. 2016), on the instant appeal.         At issue therein was

whether a 1935 tax sale of unseated land conveyed only the surface estate

or the entire warrant, which included a subsurface mineral estate. Our High

Court found that, since neither the owners of the subsurface rights nor the

purchasers of the surface rights in 1899 reported the severance and transfer

of the property interests to the taxing authorities as statutorily required, the

commissioners assessed and taxed the warrant in its entirety.8 When taxes

on the surface estate became delinquent and the property was sold at a tax
____________________________________________


8
   In Herder Spring Hunting Club v. Keller, 143 A.3d 358, 368 (Pa.
2016), the Court delineated the requirements of the Act of 1806:

       “[I]t shall be the duty of every holder of unseated lands” to
       provide the county commissioners with a signed statement
       describing the tract of land and “the name of the person or
       persons to whom the original title from the commonwealth
       passed, and the nature, number, and date of such original title.”

Regarding future transfers, the Act provided:

       It shall be the duty of every person hereafter becoming a holder
       of unseated land, by gift, grant, or other conveyance to furnish a
       like statement, together with the date of the conveyance to such
       holder, and the name of the grantor within one year, from and
       after such conveyance.

Act of 1806 Section 1. The penalty for failure to report was four times the
amount of tax for which the land would have been liable.



                                          - 10 -
J-A14013-16



sale, the purchaser acquired the entire property including subsurface mineral

rights that were not separately assessed.

       As in Herder Spring, we are dealing with interests in unseated land

sold at tax sale.      However, our High Court expressly limited its holding

therein to quiet title actions involving formerly unseated land sold at tax sale

prior to 1947, where the tax sale involved assessments that did not

specify whether they involved the surface or subsurface rights.9 Due

to the separate assessment of mineral and surface rights herein, and the

fact that only the mineral rights estate was sold at tax sale, Herder

Springs, while instructive, is not on all fours with this case.

       The Trustees attempt to distance themselves from Herder Spring by

alleging irregularities in the assessments of the mineral rights and

subsequent tax sale in this case, including: a valuation that was performed

outside the cycle for triennial assessments; assessments recorded in

different handwriting than the other entries; assessments of mineral rights

lying only beneath the surface of the Cornwall Mountain Club property; the

subsequent conviction of the county treasurer of sixteen counts of fraud and

____________________________________________


9
  Trustees alleged that, “Upon information and belief, the heirs of Thomas E.
Proctor and/or their agents notified the appropriate authorities of their right,
title, and interest in and to the subject property’s natural gas, coal, and oil
rights.” Trustees New Matter, ¶85; Thomas Proctor Heirs New Matter, ¶54.
Assuming that to be true, it is of no consequence in light of our legal
disposition.



                                          - 11 -
J-A14013-16



forgery in connection with his official duties for crimes commencing as early

as 1932; and the lack of compliance with the statutory notice requirements

for the sale of unseated interests in land.        Herder Spring did not involve

such collateral attacks on the tax sale, and consequently, there was no issue

as to whether such attacks were time-barred.

        Nonetheless, several of the legal issues herein were addressed and

resolved in Herder Spring, and we thus rely on portions of the Supreme

Court’s analysis herein. The Court construed the Act of 1815, § 4, as set

forth at 72 P.S. § 6091, and its decision in Bannard v. New York State

Natural Gas Corporation, 293 A.2d 41, 49 (Pa. 1972), as precluding any

challenge to irregularities in assessment or in the process affecting title in

the purchaser after the two-year redemption period.10            The Court also

rejected a challenge to the validity of the tax sale in that case based on the

holding in Independent Oil & Gas Assn of Pa. v. Bd. of Assessment

Appeals, 814 A.2d 180 (Pa. 2002) (“IOGA”), that there was no statutory
____________________________________________


10
     The Act of 1815 provided that after two years:

        In no other case and on no other plea, shall an action be
        sustained . . . [and] no alleged irregularity in the assessment, or
        in the process or otherwise, shall be construed or taken to affect
        the title of the purchaser, but the same shall be declared to be
        good and legal.

Herder Spring Hunting Club v. Keller, 143 A.3d 358 (Pa. 2016) (quoting
Act of 1815). A five-year redemption period applied if the property was
purchased by the county commissioners at tax sale.



                                          - 12 -
J-A14013-16



authority for the assessment and taxation of oil and gas in the ground. The

Herder Spring Court affirmed its holding in Oz Gas v. Warren Area

School District, 938 A.2d 274 (Pa. 2007), that IOGA is to be applied

prospectively only. Finally, the Herder Spring Court concluded that notice

by publication for the sale of unseated land for delinquent taxes was

“reasonable given the difficulties of ascertaining ownership information

relating to unseated owners,” the protection afforded by the two-year

redemption period, and that such notice did not deprive a property owner of

due process.

      First, we examine whether oil and gas were included in the assessment

of minerals.   If so, we must determine whether the 1932 tax sale validly

conveyed the rights to the hard minerals and oil and gas to Cornwall

Mountain Club.   If there are any genuine issues of material fact regarding

either issue, judgment on the pleadings is not appropriate.

      The Trustees’ initial position herein is that the 1932 assessment and

sale of “Mineral Rights Only” did not include or convey the subsurface oil and

gas. They cite Butler v. Charles Powers Estate, 65 A.3d 885, 889 (Pa.

2013), where the Supreme Court upheld the vitality of the presumption

announced in Dunham & Shortt v. Kirkpatrick, 101 Pa. 36 (Pa. 1882)

(“Dunham Rule”), for the proposition that a reference to “minerals” in a

reservation in a private deed does not include oil and gas, and contend that

it applies to a treasurer’s deed. Trustees attempt to distinguish Bannard,

                                    - 13 -
J-A14013-16



where our High Court held that the Dunham Rule does not apply to tax

sales, and argue that Bannard only means that the assessment rather than

the deed controls.   They assert that the Bannard Court did not preclude

application of the rebuttable Dunham presumption in the context of a tax

sale, but simply found the presumption rebutted in that instance by evidence

that oil and gas rights were included in the assessment.

      Cornwall relies upon Bannard, Butler, and their progeny for the

proposition that the Dunham Rule only applies to reservations of minerals in

transactions between private individuals. In seeking to apply it to tax deeds,

they maintain that Trustees are extending application of the rule. Cornwall

asserts that an assessment of “minerals” in Bannard included the oil and

gas, and cites Bannard as rejecting the notion that only minerals known to

exist at the time and having value were included in the assessment.

      We begin our analysis with Butler, which involved a deed executed in

1881, that reserved to the grantor the subsurface and removal rights of

"one-half [of] the minerals and Petroleum Oils" contained beneath the

subject property. The issue therein was whether that reservation included

the natural gas contained in the Marcellus Shale Formation. The Supreme

Court upheld the trial court’s application of the entrenched Dunham Rule,

finding that for purposes of private deed transfers, natural gas and oil are

presumptively not considered minerals.       Absent clear and convincing parol

evidence produced by the proponent of the reservation to the contrary, the

                                    - 14 -
J-A14013-16



Butler Court reaffirmed that the term “mineral” in a private deed did not

include oil or gas.11        Since the reservation therein did not specifically

reference natural gas, any natural gas found within the Marcellus Shale

beneath the subject land was not intended by the executing parties to the

deed to be encompassed within the reservation.

       We are not dealing herein with a reservation in a private deed and the

issue is not the intent of the grantor at the time of such a reservation. We

read Butler as affirming the continued vitality of the rebuttable presumption

of the Dunham Rule, but only with regard to reservations in conveyances

between private individuals. We find Bannard, an ejectment action, to be

more closely aligned with the instant case and controlling herein.

       In Bannard, the grantor reserved coal, fire-clay, oil, gas and other

mineral rights when he conveyed his surface rights.          That interest was

described and assessed as a mineral estate. Years later, when taxes were

not paid on the mineral estate, it was sold at a tax sale.      As herein, the

treasurer's deed and its underlying assessment referred only to “minerals.”

____________________________________________


11
    As our High Court acknowledged in Butler v. Charles Powers Estate,
65 A.3d 885, 886-887 (Pa. 2013), various Pennsylvania statutes, such as
the Municipalities Planning Code, define natural gas as a mineral. See 53
P.S. §10107; see also Huntley & Huntley, Inc. v. Borough of Oakmont,
964 A.2d 855, 858 (Pa. 2009) (recognizing that while natural gas may be
classified as a mineral under the Municipalities Planning Code, "Pennsylvania
common law has applied a rebuttable presumption in the context of a private
deed conveyance that the term 'mineral' does not include oil or gas.").



                                          - 15 -
J-A14013-16



The appellants maintained, as the Trustees contend herein, that based on

the Dunham presumption, the tax sale did not convey the rights to the oil

and gas. The Bannard Court rejected that position, holding that “In a tax

sale, . . . the presumption does not obtain: the deed is based on the

assessment and conveys the interests in land which are properly included

within the assessment.” See Wilson v. A. Cook Sons Co., 148 A. 63 (Pa.

1929) (finding oil and gas are minerals and tax sale of minerals transferred

those interests).   We find Bannard and Wilson controlling on this issue,

and hence, find no merit in Trustees’ claim that oil and gas were not

minerals sold in the 1932 tax sale of minerals.

      Trustees contend further that since oil and gas beneath the surface

had no taxable value, an assessment of minerals would not include them.

The same argument was advanced and rejected in Herder Spring. Therein,

the owners of the mineral rights relied upon F.H. Rockwell & Co. v.

Warren County, 77 A. 665, 666 (Pa. 1910), in support of their contention

that a mineral tax sale did not encompass their interest in oil and natural

gas because those rights had no taxable value in 1935.     They maintained

that only minerals that were in current production or deemed to have value

through evaluation of neighboring properties were taxable and subject to a

tax sale. The Court disagreed, stating that the issue was not whether the

minerals had an assessable value, but whether the assessment addressed

the warrant as a whole or merely the surface estate. Otherwise, the Court

                                    - 16 -
J-A14013-16



reasoned, courts today would face the issue as to whether certain minerals

had taxable value more than one hundred years ago.12              Our High Court

reasoned that owners of oil and gas interests had a duty to notify the taxing

authority of their separate estate in oil and gas, regardless of whether oil

and gas were being developed.             Thus, the lack of taxable value did not

determine the nature of the interest assessed and sold at tax sale.           For

these reasons, we find that the tax sale of the minerals included the oil and

gas interests.

       We turn now to the first of two attacks by the Trustees on the validity

of the tax sale: that the assessment of their oil and gas interest was not

statutorily authorized. They cite IOGA, supra, for the proposition that oil

and gas interests cannot be taxed while in the ground and allege the trial

court erred in refusing to apply IOGA retroactively. Since Lycoming County

and the municipalities lacked the authority to assess such interests, Trustees



____________________________________________


12
   Our High Court reasoned that such a theory “could lead to a windfall for
fee simple owners, who years after the tax sale of the entire property could
claim that the prior tax sale should be deemed to have exempted specific
mineral rights that at the time of the sale had no value, but today are
coveted, with Marcellus Shale being an obvious example. Such a theory
would result in chaos whereby courts today would be required to determine
whether certain minerals or other subsurface rights would have had taxable
value in the late 1800s.” Herder Spring Hunting Club v. Keller, 143 A.3d
358, 373-74.
.



                                          - 17 -
J-A14013-16



maintain that the tax sale of their oil and gas interest for nonpayment of

taxes was invalid.

         In Oz Gas, supra, our High Court refused to apply IOGA retroactively

to invalidate years of tax assessments on oil and gas.          Trustees argue,

however, that since the instant case involves a determination of whether an

unlawful tax assessment can divest a landowner of his property, not a

retroactive refund of taxes, Oz Gas is not controlling on the retroactivity

issue.     Trustees assert that the factors determining whether a decision

should be retroactively applied, which were identified in Chevron Oil v.

Huson, 404 U.S. 97 (1971), must be analyzed on a case-by-case basis.

Appellants’    brief   at 25-26      (citing   Christy v. Cranberry Volunteer

Ambulance Corps, Inc., 856 A.2d 43 (Pa. 2004) (recognizing that

generally Pennsylvania applies decisions involving changes in the law in civil

cases retrospectively, i.e., to cases pending on appeal). On the facts herein,

Trustees contend that analysis of the Chevron Oil factors militates in favor

of a retroactive application of IOGA.13

____________________________________________


13
  The Chevron analysis for determining retroactivity as a jurisprudential
matter looks to:

         (1)   whether the decision established a new principle of law;

         (2) a balancing of the merits by looking at the history of the
         rule in question, its purpose and effect, and whether retroactive
         application will further or retard its operation; and
(Footnote Continued Next Page)


                                          - 18 -
J-A14013-16



      Our Supreme Court rejected that same argument in Herder Springs,

based on its reasoning in Oz Gas. The Herder Spring Court reiterated the

“need to protect taxing authorities’ reliance on oil and gas taxes,” and

concurred in the Oz Gas trial court’s prediction that "[r]etroactive

application of IOGA would, in effect, invalidate each of those tax sales,

perhaps leading prior owners to seek return of the properties lost to those

tax sales." Herder Spring, supra at n.15 (quoting Oz Gas at 279). Our

High Court agreed that these consequences favor a prospective application

of IOGA.

      We reach the same result when we analyze the Chevron Oil factors

on the facts herein. It is beyond cavil that IOGA established a new principle

of law as it decided an issue of first impression that was not foreshadowed.

In IOGA, our High Court held there is no statutory authority for the taxation

of oil and gas beneath the surface.              However, at the time of the tax sale

herein, the prevailing law in this Commonwealth was that oil, gas, and coal

underlying unseated lands were minerals, that they constituted real estate,

and were subject to taxation as real estate. F.H. Rockwell & Co., supra

(recognizing oil, gas and coal are minerals, and holding “If oil, gas, and
                       _______________________
(Footnote Continued)


      (3) an evaluation of the equities involved.

Oz Gas v. Warren Area School District, 938 A.2d 274, 276 (Pa. 2007).




                                           - 19 -
J-A14013-16



minerals are reserved from the grant of the surface of several tracts of

unseated land[,] . . . they can be taxed as” an estate in land.). The Court

in Rockwell reasoned that “tax is assessed upon the property” and

“property could consist of the entire tract, or of the surface, or of the

minerals,” depending on whether there had been a severance. Id. at 666.

“The right to sever being established, the power to tax the severed estate

necessarily attaches.” Id. Thus, IOGA was a clear departure from prior law.

      Secondly, we fail to see how retroactive application of IOGA would

further its operation on the facts herein. Although the decision determined

that there was no statutory authority for imposing taxes on oil and gas that

had not been removed from the subsurface, the fact remains that taxes had

been assessed and interests conveyed for their non-payment for almost a

century pursuant to what was then the law.

      Third, the relevant equities weigh heavily in favor of prospective

application   because,    as   the   Oz   Gas   Court   noted,   prior   to   IOGA,

municipalities, courts, and the legislature reasonably believed oil and gas

interests were subject to taxation. Similarly, tax sale purchasers reasonably

believed that assessments of mineral rights included oil and gas interests.

IOGA was based on statutory interpretation, not constitutional rights. While

in the instant case, retroactive application of IOGA might not have any

negative effect on the public till, it would wreak havoc on almost one

hundred   years   of     property    conveyances   in   this   Commonwealth,      a

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consequence the Herder Spring Court found weighed heavily in favor of

prospective application only. We find no error in the trial court’s holding that

IOGA does not apply retroactively to invalidate the 1932 tax sale on this

basis.

         Trustees also challenge the validity of the 1932 tax sale based on

notice that they maintain was both constitutionally deficient and statutorily

defective.     They contend first that notice by publication alone does not

satisfy the mandates of due process, and hence, such notice of the 1932 tax

sale was so constitutionally deficient as to render the sale void. Mullane v.

Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).                They

allege that since the assessments reference “Thomas E. Proctor & Heirs” as

the mineral rights owners, the officials in Lycoming County knew the heirs

had an interest in the property and could have provided notice to the Proctor

heirs with reasonable effort.

         We find no merit in this claim.   Our High Court in Herder Spring,

supra at 378, noted that constructive notice through publication was

sanctioned for in rem actions in 1935, and the Court declined to “upset that

conclusion based on preconceived notions of what is reasonable in the age of

the Internet.” In so holding, the Court relied upon City of Philadelphia v.

Miller, 49 Pa. 440 (Pa. 1865), for the proposition that notice by publication

was sufficient to satisfy due process requirements for tax sales of unseated

land pursuant to the Act of 1815, given the difficulties of ascertaining the

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owner of unseated land and the protection afforded by the two-year

redemption period. The Court held therein that even if the owner “received

no notice of sale, it required of him no great measure of diligence to look

after his interests within two years.” City of Philadelphia, supra at 451.

      Second, Trustees argue that the notice did not comply with the

statutory requirements, and hence, the sale did not divest their interest in

oil and gas.    Trustees point to the statutory mandate that notice be

published no later than sixty days prior to the tax sale, and evidence that

that the earliest notice was not published until May 26, 1932, only eighteen

days before the June 13, 1932 sale.        Cornwall contends that only three

weeks’ notice was required under the applicable statute, to which Trustees

counter that the earliest notice was given less than three weeks before the

sale. The trial court initially discounted this dispute in granting judgment on

the pleadings, finding no proof of a lack of notice. Upon reconsideration, the

court reversed itself, conceding that, in requiring proof, it had failed to apply

the proper standard for entry of judgment on the pleadings.

      We agree with the trial court that there is a factual dispute as to

whether the notice complied with the applicable statute.         However, that

factual issue is of no consequence as the prevailing law at the time, the Act

of March 9, 1847, P.L. 278, as amended by the Act of March 26, 1925,

provided that the failure to advertise the sale of unseated land did not




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invalidate a tax sale.     See also Laird v Hiester, 24 Pa. 452 (Pa. 1855).

Thus, this alleged deficiency offers no basis for relief.

         Similarly, Trustees allege that the assessments were invalid as there

were irregularities in the process. Trustees point to the fact that the 1930

assessment      was   generated   outside   the   statutorily-mandated   triennial

assessment cycle. Although such a variation is permitted if mineral interests

were developed from the property during that year, they direct our attention

to Cornwall’s concession that no oil and gas was produced on the property

that year.      Additionally, Trustees contend that the assessments of the

mineral estates improperly mirrored the Cornwall Mountain Club’s ownership

of the surface parcels.

         Cornwall counters that Herder Spring barred challenges to tax sales

based upon irregularities in the number of acres in the various warrants and

violations of the triennial assessment rules under the two-year redemption

period of the 1815 Act or the statute of limitations.       Trustees argue that

Herder Spring did not address invalid tax assessments such as the 1930

assessment herein, which were conducted outside the triennial assessment

cycle.      Trustees challenge Cornwall for maintaining that the statutory

scheme satisfies due process and, at the same time, asserting that

compliance with those provisions is but a mere formality.

         The law recognizes a presumption of the regularity of the acts of public

officers.    Curtis Bldg. Co. v. Tunstall, 343 A.2d 389, 390 (Pa.Cmwlth

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1975). Nonetheless, that presumption is rebuttable. Although the pleadings

raise disputed issues of fact regarding irregularities in the assessment

process, the critical question is whether such irregularities in the assessment

would, as a matter of law, render the tax sale void and legally insufficient to

convey title to the oil and gas. If the answer is in the affirmative, judgment

on the pleadings would not be proper. If such irregularities only rendered

the sale voidable within the period for challenging the tax sale, a time that

has long since expired, they would not provide a basis to deny judgment on

the pleadings. See Ryan v. Bruhin, 88 Pa. Super. 61, 67 (Pa.Super. 1926)

(“The Act of March 13, 1815 (sec. 4) is explicit in providing that ‘no alleged

irregularity in the assessment, or in the process or otherwise, shall be

construed or taken to affect the title of the purchaser, but the same shall be

declared to be good and legal.’”).

      In granting partial judgment on the pleadings, the trial court relied

upon Poffenberger v. Goldstein, 776 A.2d 1037 (Pa.Cmwlth. 2014), for

the proposition that a six-year statute of limitations barred Trustees from

collaterally attacking the validity of the 1932 tax sale. Trustees argue that

the court’s reliance is misplaced as it was in dicta only that the

Poffenberger court noted that challenges based on “the procedural

irregularity” of a tax sale, including deficiencies in notice, were barred by the

statute of limitations.    In support thereof, Trustees point out that, in

Poffenberger, the Court ultimately entertained the challenge to the validity

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of the 1985 tax sale despite the fact that the six-year statute of limitations

should have barred the action.14

       This is an action to quiet title, not an action to upset a tax sale. The

purpose of a quiet title action is to settle competing claims to interests in

property or to determine right or title or the validity of any deed affecting

any interest in land.        Quiet title actions can be used to determine the

respective interests of different parties claiming an interest in oil and gas

rights, and these actions have become more common in this Commonwealth

as landowners seek to enter into gas leases. Title searches incident to such

leases may reveal competing claims to the gas rights or royalties.

       A quiet title action is the appropriate forum for testing the validity of

titles obtained at tax sales. Price-Jeffries Co. v. Tillman, 312 A. 2d 494

(Pa.Cmwlth. 1973).        Former owners may use a quiet title action to attack

defects in tax sales that would invalidate the deed by which they lost title,

and purchasers at tax sales can file such an action to clear or confirm the

deed by which they obtained title.                 Pa.R.C.P 1061(b)(4).   Despite a

presumption of good title in the possessor of a tax deed, the presumption
____________________________________________


14
   The Poffenberger Court held that the six-year statute of limitations
applicable to an action to set aside a tax sale in 1985 governed the sale that
took place that year. Similarly, it concluded that the statute of limitations in
1964 governed the 1964 tax sale, and regardless of its duration, it had
expired by 1997. In this case, the tax sale took place in 1932, and we
believe the statute of limitations then applicable governs herein and has
certainly expired.



                                          - 25 -
J-A14013-16



falls when the regularity of the deed is questioned.     See Curtis Building

Co. v. Tunstall, 343 A. 2d 389 (Pa.Cmwlth. 1975).

      We agree with the trial court that Trustees are time-barred from

challenging procedural irregularities in the notice, assessment, and tax sale

process.   Those procedural irregularities, had they been timely challenged

after the tax sale, may have been sufficient to upset the sale. Trustees are

correct, however, that statutes of limitation and repose do not preclude one

from defending a quiet title action on the basis that a tax sale was void, i.e.,

where there were jurisdictional defects. The propriety of judgment on the

pleadings herein turns on whether the Trustees pled any basis for finding the

1932 tax sale void.

      In Trexler v. Africa, 33 Pa.Super. 395, 410 (1907), this Court relied

upon the Supreme Court’s decision in McReynolds et al. v. Longenberger,

57 Pa. 13, 27 (1868), in identifying the requisites to a valid tax sale. Our

High Court concluded therein that "the authority of the treasurer to sell

unseated lands for taxes depends upon facts; viz., that the land was

unseated at the time of the assessment; that a tax appears to have been,

and was in fact assessed upon it by the proper assessing officers, and that

the tax had been due for one whole year, and remains unpaid.”          If these

facts were not established, this Court held in Trexler that the tax sale was

void and the five-year time limitation of the Act of 1804 on an action to




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recover land sold at tax sale did not apply.       We reasoned that, “the five

years' limitation will not breathe life into a void tax title.” Id. at 410.

       The following cases illustrate what facts will render a tax sale void.

Tax sales have been voided where seated property was improperly treated

as unseated as in Weaver v. Meadville Lumber Mfg. Co., 61 Pa. Super.

167 (Pa.Super. 1915); where unseated property was not correctly identified

as in City of Philadelphia v. Miller, supra (tax sale void where land was

assessed to “John Turnbull” instead of warrantor “James Tremble”); where

the taxes were paid as in Albert v. Lehigh Coal & Nav. Co., 246 A.2d 840

(Pa. 1968) (1870 and 1878 tax sales of unseated land held to be void as the

taxes had been paid and credited to the wrong tract of land); or where the

deed was forged as in Reck v. Clapp, 98 Pa. 581 (Pa. 1881) (a forged deed

conveys no title); or where the treasurer lacked the authority to conduct the

sale at the time, as in Brown v. Day, 78 Pa. 129 (Pa. 1875) (tax sale void

where treasurer mistakenly credited tax payment to wrong property).15

____________________________________________


15
   In the portion of their brief devoted to their argument that the tax sales
were void due to the lack of statutory notice, Trustees insert a footnote
pointing to notations in the 1932 tax sale record indicating that the taxes
were “paid.” They suggest that these entries, “at a minimum,” raise a
genuine issue of fact as to whether the delinquent taxes were paid prior to
the tax sale.
      The entries in the Lycoming County tax record indicate that the taxes
were paid on June 13, 1932, the date of the tax sales, and a handwritten
note adjacent to the entries references “Cornwall Mountain Club.” R. 1251a.
The trial court found that the paid notation reflected Cornwall’s payment of
(Footnote Continued Next Page)


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J-A14013-16



      All of the requirements for a valid sale set forth in Trexler were

satisfied in this case. We acknowledge that the Trustees pled that the tax

deeds were the product of fraud and/or want of authority by the treasurer,

who subsequently was convicted of embezzlement, forgery and falsification

of records.      Margaret O.F. Proctor Trust’s Answer, New Matter, and

Counterclaims to Cornwall Mountain Investments, L.P.’s Amended Complaint

in Action to Quiet Title, 6/18/14, at ¶61. However, this averment lacks the

requisite particularity to set forth a claim for fraud.   See Pa.R.C.P. 1019.

Moreover, no reasonable inference can be drawn from this allegation that

the treasurer forged or falsified the records herein.

      Additionally, Trustees argue that the manner and timing of the

assessment of the mineral rights corresponding to the surface estate of the

Cornwall Mountain Club, and only those mineral rights, were instigated by

Cornwall in order to precipitate a tax sale, the purpose of which was to

permit Cornwall to gain title to the severed subsurface rights. That may be

true, however, an improper motive is not a reason to void the sale.



                       _______________________
(Footnote Continued)

the taxes, and that the record did not raise a genuine a genuine issue of fact
whether the delinquency was cured prior to the tax sale. We agree. The
treasurer’s deeds recite that no person appeared to pay the taxes assessed,
and thus, the treasurer sold the mineral estate to the highest bidder,
Cornwall Mountain Club, who paid the delinquent taxes and costs of the
proceedings.



                                           - 28 -
J-A14013-16



      We conclude that the pleadings and the documents appended thereto

do not set forth a basis to invalidate the tax sale. Either the Proctor heirs or

the surface owners were obligated under the 1806 statute to notify the

taxing authority of their severed property interests so that they could be

separately assessed. In fact, notice was given and a separate assessment of

the mineral rights and the surface estate was conducted. The mineral rights

included the natural gas. The taxes assessed to the minerals in the name of

Thomas E. Proctor Heirs were overdue and unpaid for more than a year. A

tax sale was conducted on June 13, 1932, after advertisement in local

newspapers.    Cornwall Mountain Club acquired the mineral rights in the

Property by submitting the highest bid at the tax sale. The tax sale deed

issued, was delivered to the purchaser, and subsequently filed of record.

The Trustees have not alleged any defect in the treasurer’s deed.         Their

forbearers did not seek to upset the tax sale or redeem the Property’s

mineral rights within the allotted time. Moreover, there is no indication that

the Trustees herein, the trustees of the Proctor Heirs Trust, or any heir of

Thomas Proctor paid taxes on Proctor’s reserved interest in the Property

before or after 1930.

      In short, the motivation for the assessment and tax sale of the mineral

rights beneath the Property is not relevant because assessment of the

Proctor Heirs’ mineral estate was statutorily authorized, it was conducted by




                                     - 29 -
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the person charged with that duty, and when the taxes were not paid, sale

of the mineral rights at tax sale was proper.

      For all of the foregoing reasons, we conclude that the tax sale of

minerals encompassed the Trustees’ oil and gas interests, the assessment of

those interests was authorized, the Trustees’ challenge to the tax sale based

on alleged procedural irregularities in the assessment and notice is time-

barred, and the pleadings do not assert any basis upon which to void the

1932 tax sale. Hence, judgment on the pleadings in favor of Cornwall was

properly entered.

      Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 3/21/2017




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