                             No.    93-637

          IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1994



SPAIN-MORROW RANCH, INC., a Montana
corporation, and ROGER VAN DYKEN, Lessee,
         Plaintiffs and Respondents,
    v.
LAWRENCE E. WEST and IRIS J. WEST.
husband and wife, and CMC HEARTLAND
PARTNERS.




APPEAL FROM:   District Court of the Eighteenth Judicial District,
               In and for the County of Gallatin,
               The Honorable Larry W. Moran, Judge presiding.


COUNSEL OF RECORD:
          For Appellants:
               Wayne Jennings, Attorney at Law,
               Bozeman, Montana
          For Respondents:
               Edmund P. Sedivy, Jr., and Lynda S . Weaver,
               Morrow, Sedivy & Bennett, Bozeman, Montana


                               Submitted on Briefs:    March   24,   1994

                                             Decided: April 12, 1994
Filed:
Justice Terry N. Trieweiler delivered the opinion of the Court.
     Plaintiffs Spain-Morrow Ranch, Inc., and Roger Van Dyken filed
a complaint in the Eighteenth Judicial District Court in Gallatin
County against defendants Lawrence E West, Iris J. West, and CMC
                                    .
Heartland Partners to quiet title to a parcel of land and set aside
a tax deed delivered to Lawrence West and Iris West.         Wests
counterclaimed to quiet title in their favor.   The District Court
granted Spain-Morrow Ranch, Inc., and Roger Van Dykenrsmotion for
summary judgment and denied Westsr motion for summary judgment. We
affirm the judgment of the District Court.
     The dispositive issue on appeal is whether the District Court
properly concluded that plaintiffs were occupants of the abandoned
railroad right-of-way, and therefore, entitled to notice of the
pending issuance of a tax deed.
                        FACTUAL BACKGROUND
     The land which is the subject of this dispute consists of 3.27
acres of railroad right-of-way abandoned in 1978 by the Chicago,
Milwaukee, St. Paul and Pacific Railroad Co.     The 100-foot-wide
strip of land runs north and south through an agricultural parcel
currently owned by Spain-Morrow Ranch, Inc., and farmed by its
lessee, Roger Van Dyken.      They have operated under a lease
agreement since 1968.
     In legal proceedings for its reorganization, the Chicago,
Milwaukee, St. Paul and Pacific Railroad Co. received authority to
abandon its former railroad line in Gallatin County, Montana on
May 8, 1978.   CMC Heartland Partners is the successor in interest

                                  2
to the railroad, but did not claim any right, title, or interest in
the property in this proceeding.
     Gallatin County acquired an interest in the right-of-way by a
tax sale certificate on July 12, 1986. On August 3, 1992, Lawrence
West and Iris West tendered $223.17 to satisfy delinquent taxes and
received an assignment of the tax sale certificate from Gallatin
County.   On September 10, 1992, Wests filed an affidavit of proof
of service of notice of pending tax deed which identified CMC
Heartland Partners as an owner to whom notice was required and
given.    Wests   further identified the right-of-way        land   as
unoccupied.   No notice was given to Spain-Morrow or Van Dyken.
Gallatin County issued a tax deed to Wests on October 22, 1992.
     Spain-Morrow   and   Van   Dyken   filed   their   complaint   on
January 29, 1993.   They alleged that they possessed and occupied
the right-of-way land and that Wests* failure to provide them with
notice upon application for a tax deed rendered the tax deed void.
Spain-Morrow further alleged ownership in fee simple of the
right-of-way land as evidenced by a warranty deed recorded at the
Gallatin County Clerk and Recorder's office.
     The District Court filed a notice of entry of default against
CMC Heartland Partners on April 22, 1993. On October 27, 1993, the
District Court granted Spain-Morrow and Van Dykenfs motion for
summary judgment based on its determination that Spain-Morrow and
Van Dyken were woccupants** the right-of-way and further, that
                          of
Spain-Morrow was an **interested party. **      The District Court
concluded that Wests' failure to comply with the statutory notice
requirement deprived Spain-Morrow and Van Dyken of their redemption
rights and declared the Wests' tax deed void as a matter of law.
                          STANDARD OF REVIEW
     Our review of a summary judgment order is de novo.    Minnie v. Ct
                                                                      iy

ofRoundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214.       Summary

judgment is proper only when no genuine issue of material fact
exists and the moving party is entitled to a judgment as a matter
of law.   Rule 56(c), M.R.Civ.P.     The initial burden is on the
moving party to establish that there is no genuine issue of
material fact; and once met, the burden shifts to the party
opposing the motion to establish otherwise.      Thelen v. Cy of Billings
                                                           it
(1989), 238 Mont. 82, 85, 776 P.2d 520, 522.
     Did the District Court properly conclude that Spain-Morrow and
Van Dyken were occupants of the abandoned railroad right-of-way,
and therefore, entitled to notice of the pending issuance of a tax
deed?
     The procedure for obtaining an ownership interest in land sold
for taxes is set forth in Title 15, Chapters 17 and 18 of the
Montana Code Annotated.    Section 15-18-111(1), MCA, provides:
     [Rledemption of a property tax lien acquired at a tax
     sale or otherwise may be made by the owner, the holder of
     an unrecorded or improperly recorded interest, &&     ,
     occupant of the property, or any interested party within
     36 months from the date of the first day of the tax sale
     or within 60 days following the giving of the notice
     required in 15-18-212, whichever is later.      [Emphasis
     added].
Section 15-18-212(4), MCA, provides:
          The notice required under subsections (1) and (2)
     must be made by certified mail, return receipt requested,
     to each interested party and the current occuwant, if
     any, of the property. [Emphasis added].
The notice must provide "that a tax deed will be issued to the
purchaser or assignee unless the property tax lien is redeemed
prior to the expiration of the redemption period."          Section
15-18-212 (1)(b), MCA.
     Wests contend that subsection (2) of 5 15-18-111, MCA, applies
in this case, rather than subsection ( ) Subsection (2) pertains
                                      1.

to I*property subdivided as a residential or commercial lot" and
does not give a right of redemption to *toccupants.flWests argue
that since the parcel in question contains less than 20 acres, it
is a subdivision according to 5 76-3-103(14), MCA, of the Montana
Subdivision and Platting Act, and that since it was used as a
railroad right-of-way, it is commercial property. However, we note
that the deed which created the right-of-way is dated March 28,
1910, and that the subdivision statute relied on by Wests was not
enacted until 1973.      Section 76-3-206, MCA, of the same Act
provides that it is not applicable to deeds executed prior to
July 1, 1974. Furthermore, the railroad abandonedthe right-of-way
in 1978, and there is no indication in the record that it was ever
used for commercial purposes since that date. The only evidence is
that it has been used for agricultural purposes.       In     15-1-
101(l)(d), MCA, which defines "commercialm*
                                          when used in connection
with taxation, "agricultural lands1I are specifically excluded.
Therefore, we conclude that the land in question was not a
ÿÿ commercial     lot,"     and    that    subsection   (I),     rather   than
subsection      (2),   of the redemption statute applied and required
notice to the lvoccupant the property."
                       of
     Wests also argue that there are material facts in dispute
which preclude dismissal of the case by summary judgment.                 They
argue that when they inspected the railroad parcel before receiving
the assignment in August 1992, it did not appear to be occupied.
In an affidavit, Irene West stated that during the on-site
inspection,       she     observed   the     right-of-way   to    be   clearly
distinguishable from either of the adjoining grain crops, and that
the right-of-way consisted of grass and weeds which showed no signs
of tilling, cultivation, plowing, or other agricultural activity.
She observed no cattle in the field, but noted the irrigation wheel
line stretching across the entire field, including the former
right-of-way. She stated that in November 1992 she observed that
someone had begun to plow the right-of-way parcel.
     Spain-Morrow produced affidavits establishing that since 1978
it has removed the old railroad fence and posts and has gradually
reclaimed the railroad bed through removal of rock and leveling.
They stated that since 1990 Spain-Morrow and Van Dyken have treated
the railroad parcel and agricultural parcels as one contiguous
field for both crops and pasture. The affidavits also established
that the parcel is, and during all relevant times was, enclosed by
Spain-Morrow's fence and was irrigated.
     Wests introduced photographs of the property taken during the
first   week      of    November     1992,   and   Spain-Morrow    introduced
photographs taken on November 11, 1992. These photographs clearly
show that there were no buildings on the land; that the field,
including the railroad parcel, was completely surrounded by fence;
that there are cattle grazing on the entire field; and that
Spain-Morrow's   irrigation   equipment   passes   over   the   former
right-of-way.
     In his affidavit, Van Dyken accounts for the different
appearance of the railroad parcel, when observed by Mrs. West, by
stating that it was heavily infested with weeds, quack grass, and
gravel which prevented high-yield crop production, butthat in the
years 1991 and 1992, the railroad parcel was seeded in barley. The
barley was harvested by raising the header on the combine to leave
as much of the underlying quack grass as possible.    The parcel was
then treated with herbicide to kill the quack grass, and later,
cattle were pastured on the whole field.
     The District Court found that Spain-Morrow and Van Dyken were
occupants of the property during the time Wests' applied for the
tax deed based on the following visible signs:
     1.   Removal by plaintiffs of the old railroad fences and the
leveling of the former railroad bed to integrate with plaintiffs'
adjoining lands;
     2.   Placement of fencing around the perimeter of the entire
parcel, including the abandoned right-of-way;
     3.   Placement of a wheel-driven irrigation system spanning
the entire parcel, including the abandoned right-of-way; and
        4.   Planting, harvesting, pasturing, and general farming of
the abandoned right-of-way in concert with plaintiffs* adjoining
land.
     We conclude that these findings were uncontroverted by
substantial evidence and do establish occupancy.
     Wests rely on our prior decisions in Van V a t v B a n County
                                               os . lie

(1946), 118 Mont. 375, 167 P.2d 563, and Shumakerv.Dacy (1953), 126

Mont. 477, 253 P.2d 1053, for the proposition that agricultural use
of land alone is insufficient to establish occupancy. However, the
facts in those cases are distinguishable from the facts in this
case.
        In Van Voast, the person who claimed to "occupy" the land for

which a tax deed was issued had leased the land for grazing cattle.
However, there was evidence that the land was
        unenclosed, unimproved, and uncultivated grazing land
        located in what is called **opencountryn where everyone
        ran their livestock and that the cattle and horses of
        various persons, including those of plaintiff as well as
        those of his neighbors, roamed and grazed thereon.
Van Voast, 167 P.2d at 565.     While the plaintiff had at one time

erected some fencing, it did not completely enclose the subject
property, and by the time in question, had deteriorated to the
point of being ineffective. Furthermore, by the time in question,
the lease pursuant to which Van Voast obtained his right to use the
grazing land had expired.     By then he had obtained other pasture
land for grazing and this Court simply concluded that there was
insufficient evidence to establish that he remained in possession
of the property after the expiration of his lease.            The facts in
that case are strikingly different from those in this case where
the right-of-way had been integrated with plaintiffs1 ranching
operation, had been completely fenced, was irrigated, and was being
used for agricultural purposes at the time that notice should have
been sent.    We conclude that Van Voast is not inconsistent with our

holding in this case.
        Likewise, in Shumakr, the evidence established that while the

property may have been used for grazing, it was not completely
fenced and there was no evidence of other agricultural improvements
to the land.      This Court held that a fence on one side of the
property and occasional grazing were not sufficient indicia of
occupancy to put the sheriff on notice that the person who claimed
to be the occupant was entitled to be notified of the pending tax
deed.    Improvements to this land, on the other hand, provided clear
notice that it was occupied.        In fact, nine days after the tax deed
was     issued in this case, Lawrence West           called   Louis Spain,
president of Spain-Morrow, to notify him he had                acquired an
interest in the land by tax deed and offered to sell the land to
Spain-Morrow for $18,000.          He advised Spain that if he was not
interested in buying the strip for that amount, he would sell it to
some other "s. o.b.   *I   for building a house.   Apparently after the tax
deed was acquired, West had no doubt that Spain-Morrow would have
an interest in continued occupation of the land.          The facts in this
case are significantly different than those in Shumaker.
     We conclude that the uncontroverted facts were sufficient to
establish that plaintiffs occupied the land for which a tax deed
was issued to Wests at a time when notice was required to the
property's occupants.     In recent decisions, we have required that
the procedural steps set forth in tax deed statutes be strictly
followed.     Moran v Robbin (Mont. 1993), 863 P.2d 395, 50 St. Rep.
                    .
1417.     Because Spain-Morrow and Van Dyken were occupants of the
abandoned railroad right-of-way, they were entitled to notice of
the impending tax deed. Because Wests failed to give proper notice
to Spain-Morrow Ranch, Inc., or Roger Van Dyken, the District Court
correctly concluded that the tax deed issued to Wests was void.
Because CMC Heartland, the record owner of the property           in
question, failed to appear and its default was entered, the
District Court correctly granted summary judgment to plaintiffs and
quieted title in favor of Spain-Morrow Ranch, Inc.
        Based upon our previous discussion and conclusions, we also
conclude that the District Court correctly denied Westsn motion for
summary judgment   .
        The judgment of the District Court is affirmed.
We concur:




             P
                                          April 12, 1994

                                  CERTIFICATE OF SERVICE

I hereby certify that the following certified order was sent by United States maii, prepaid, to the
following named:


Wayne Jennings
Attorney at Law
P.O.Box 1625
Bozeman, MT 59715

Edmund P. Sedivy, Ir.
Morrow, Sedivy & Bennett, P.C.
P.O.Box 1168
Bozernan, MT 59771-1168

                                                    ED SMITH
                                                    CLERK OF THE SUPREME COURT
                                                    STATE OF MONTANA
