                                No. 8 4 - 5 1 1
                IN THE SUPREME COURT OF THE STATE OF MONTANA




               Plaintiff and Appellant,
   -vs-
HAROLD V. KRUSE and NAOMI
J. KRUSE, Husband and Wife,
   and
ROBERT M. WILLETT, BRUCE MICHEL
ROBERTS,
   and
All other Persons claiming interest
in described real property,
               Defendants and Respondents.
...........................
KRIS ROBERT HIRT,
               Intervenor and Respondent,


JAMES B. WALTERS, LEE McDONALD
and RICK HILDEBRAND AND SANDY
HILDEBRAND, Husband and Wife,
               Defendants and Appellants.



APPEAL FROM:     District Court of the Nineteenth Judicial District,
                 In and for the County of Lircoln,
                 The Honorable Robert M. Bolter, Judge presiding.
COUNSEL OF RECORD:
         For Appellants:

               Sverdrup & Spencer, Libby, Montana
               Fennessy, Crocker & Allen, Libby, Montana
         For Respondents:
               Allen L. McAlear, Bozeman, Montana


                                Submitted on Briefs:       May 9, 1955
                                                  ~ecided: January 8, 1986

Filed:    JAN 8 - I986


                 -   -
                                Clerk
Nr. J u s t i c e W i l l i a m E . Hunt, S r . d e l i v e r e d t h e O p i n i o n o f t h e
Court.



         The      appellant,          James    Walters,       brought           a    quiet     title

a c t i o n i n April. 1 9 8 1 i n I ; i n c o l n County D i s t r i c t C o u r t .            The

named d e f e n 6 a n t s m a d e      no a p p e a r a n c e and t h e C i s t r i c t C o u r t

o r d e r e 6 t i t l e q u i e t e d i n a p p e l l m t VJalters on J u n e 8 ,              1981.

I n February 1983, t h e respondent,                      K r i s I-Tirt,       fil-ed a motion

and    action         to   set a s i d e t h a t decree.               The D i s t r i c t     Court

c r d e r e d t h e d e c r e e s e t a s i d e and t h e p a r t i e s t h e n p r o c e e d e d

on t h e o r i g i ~ a l q u i e t t i t l e a c t i o n a s i f a n a p p e a r a n c e had

heen      made.            The       District        Court    quieted           title     in     the

respondent, K r i s Roberts H i r t .                 This appeal followed.

         W e affirm.

         The i s s u e s p r e s e n t e d f o r rev: ' e w a r e :

         1.     Whether       t h e District Court e r r e d               in       setting aside

t h e q u i e t t i t l e decree.

         2.     Whether       t h e r e wwas   e v i d e n c e of f r a u d         sufficient tc

a l l o w t h e q u j e t t i t l e d e c r e e t o be set a s i d e .

         3.     Whether          a    diligent         search          was      performed         in

accorCance w i t h Rule 4 0 ( 5 ) ,            b4.R.Civ.P.

         The f i r s t i s s u e i s w h e t h e r t h e D i s t r i c t C o u r t e r r e d . i n

s e t t i n g a s i d e t h e q u i e t t i t l e decree.       Our d i s c u s s i o c o f t h i s

issue         controls      an6      renders     a    discussion           of   the     remaining

i s s u e s unnecessary.

         T h i s m a t t e r c o n c e r n s a two p a r c e l t r a c t cf r e a l p r o p e r t y

located         i n Lincoln          County,    Montana.              In   1958,      Harold     and

h'aomi        Kruse    purchased        the     property       from F o r r e s t       and     Vera

Sund.         The d e e d was r e c o r d e d i n L i n c c l n County.

         In     1 9 7 2 , t h e K r u s e s s o l d t h e p r o p e r t y by c o n t r a c t f o r

d e e d to Robert W i l - l e t t .        The c o n t r a c t was h e l d i n escrow i n
Bonners        Ferry,        Idaho.            The c o n t r a c t made      no p r o v i s i o n    fcr

payment o f t a x e s .             I n 1 3 7 3 , W i l l e t t a s s i g n e d t h e c o n t r a c t to

Bruce and K r i s F o b e r t s .              The R o b e r t s ' m a r r i a g e was d i s s o l v e d

and     as    part      of        the    divorce        settlement         Eruce    assigned         his

i n t e r e s t . t o R r i s i n December 1974, and t h e n e x e c u t e d a q u i t

c l a i m d e e d t o h e r i n August                 1975.      Pris      i s now K r i s I I i r t ,

respondent.            T h e r e was no n o t i c e o f a n y o f t h e s e t r a n s a c t i o n s

r e c o r d e d i n L i n c o l n County where t h e l a n d i s l o c a t e d .

        L i n c o l n County c o n t i n u e d t o a s s e s s t a x e s on t h e p r o p e r t y

t o t h e F r u s e s a s r e c o r d owners.             The 1976 t a x e s were n o t p a i d

and i n J u l y        1977,        t h e p r o p e r t y was o f f e r e d       for public tax

sale.        No b i d was r e c e i v e d on t h e p r o p e r t y and L i n c o l n County

became t h e p u r c h a s e r .

        In     J a ~ u a r y 1980,         L e e McDonald         purchase2         the     property

from L i n c o l n County v i a a t a x deed. p r o c e d u r e .                    The t a x d e e d

contained         an      incorrect             and     incomplete          description.              In

Februs-ry 1 9 8 1 ,          the        appellant,       James W a l t e r s ,     purchased         the

p r o p e r t y from M c D o ~ a l d . b 7 a l t e r s r e c o r d e d h i s d e e d .

        IE A p r i l 1981, W a l t e r s f i l e d a c o m p l a i n t t o q u i e t t i t l e

t o t h e property.                H e named a s d e f e n d a n t s i n t h a t a c t i o n t h e

Kruses,        Willett,            Bruce       Poberts,        and        "all    other     persons,

        "
~lnknown.

        On J u n e 8 ,        1981, t h e D i s t r i c t C o u r t , h a v i n g d e t e r m i n e d

that     the     defendants              had     been    duly      served,        yet     failed      to

a p p e a r a n d w e r e i n d e f a u l t , and h a v i n g d e t e r m i n e d t h a t p r o o f

t o the satisfaction of                     t h e c o u r t h a v i n g been made,            ordered

title        quieted      in       the    appellant.           Appellant,          Walters,         then

conveyed two p a r c e l s t o R i c k a n d Sandy H i l d e b r a n d .                  That deed

was      recorded            in     Cctober           1981.          In     the    meantime          the

respondent,          Rris Hirt,            h a d b e e n p a y i n g on h e r c o n t r a c t h e l d

i n e s c r o w i n t h e I d a h o bank.                The r e s p o n d e n t b e l i e v e d . t h a t
the     escrow        arrangement             included        payment      of      taxes.        In

September          1982,    respondent's           f r i e n d who     lived       next   to   the

p r o p e r t y a d v i s e d h e r t h a t somecr,e was l i v i n g end b u i l d i n g on

the property.

        I n February 1983, K r i s I T i r t f i l e d c o n s o l i d a t e d motions

to    s e t a s i d e h e r d e f a u l t a n d t o i n t e r v e n e ir, t h e o r i g i n a l

q u i e t t i t l e acrtion,       a t h i r d p a r t y c o m p l a i n t on q u i e t t i t l e ,

and a n a c t i o n t o s e t a s i d e t h e t a x d e e d .              She a l l e g e d tha.t.

the     tax        sale     and      subsequent           transfers         were     void.     for

irregularities              incl-uding          lack     of      definite          description,

failure        to    give       proper        notice,      fraud     on     the     court,     and

failure       to    use     proper       tax    deed     procedure.             She named      the

appellant, h i s predecessor,                   McDcna.ld, a n d t h e H i 1 d e b r a . r . d ~ a s

defendants.

        I n November 1983, t h e C i s t r i c t C o u r t s e t a s i d e i t s J u n e

1981,        decree       that     had        quieted      title      in     the     appellant.

Appellant, Walters,               t h e n moved t o s e t a s i d e t h i s judgment i n

f a v o r c f t h e respondent., H i r t .             T h i s m o t i o n was d e n i e d .   The

a p p e l l a n t t h e n f i l e d a n amended c o m p l a i n t and t h e n a t t e r went

to trial.           I n J u l y 1984, t h e D i s t r i c t C o u r t i s s u e d f j - n d i n g s

o f f a c t and c o n c l u s i o n s o f law.          The c o u r t found. t h a t L i n c o l n

County d i d n o t h a v e j u r i s d i c t i o n t o i s s u e a t a x d e e d b e c a u s e

t h e n o t i c e w a s m e t e r i a l . l y d e f e c t i v e i n s t a t i n g t h e amount d u e

and    in     s e t t i n g f o r t h t h e clescription.            As    a r e s u l t of    the

defects,       t h e c o u r t found t h a t K r i s R o b e r t s d i d not. l o s e h e r

r i g h t t o redeem t h e p r o p e r t y by payment o f d e l i n q u e n t t a x e s

and    that     upon       payment       of    those     taxes     she     sh.ould h a v e     the

title        quieted       in     her    favor      on     the     land      not.    previously

conveyed t o t h e H i l d e b r a r i d s .

        As    t o t h e l a n d conveyed t o t-he I I i l d e b r a n d s ,          the court

f o u ~ dt h a t    title       should remain           i n th.e HiLZebrands a s bona
fide purchasers              for    val-ue, b u t       that      the    appellant Walters

should! pay H i r t          For t h e p r o p e r t y      h e had conveyed t o them.

J u d g n e n t was e n t e r e d q u i e t i n g t i t l e i n t h e r e s p o n d e n t s u b j e c t

t o t h e Hildebrand's             G r   a p p e l l a n t ' s r i g h t t o redeem by p a y i n g

t h e r e s p o n d e n t f o r t h e p a r c e l upGn which t h e Hil.debrands had

constructed buildings.                     Both t h e a p p e l l a n t s and H i l d e b r a n d s

a p p e a l ~ d . Subsequently t h e Hildebrands s e t t l e d t h e i r d i s p u t e

and d i s m i s s e d t h e i r    appeal.

        The f i r s t i s s u e w e m u s t d e c i d e i s w h e t h e r t h e D i s t r i c t

Court e r r e d i n s e t t i n g a-side t h e q u i e t t i t l e decree.

        The r e s p o n d e n t , i n h e r c o n s o l i d a t e d m o t i o n and a c t i o n t o

set     aside        the    quiet         title     decree,        also       challenge6          the

underlying           tax      deed         procedure           under        which      lGcDonald,

appellant's           prezecessor           in     title,       claimed        his     interest.

However,        as    the     District          Court    found,        the    description          of

property         claimed          under      the     tax       deed     procedure          was     so

6eficient         that      there        could     be    no     valid       transfer       of     any

i n t e r e s t under any k i n d o f a c t i o n .            The n o t i c e p u b l i s h e d i n

the    tax     deed procedure              referred       to    Section       25     and    not    to

S e c t i o n 2 6 , t h e s e c t i o n i n which t h e l a n d l i e s .            In addition

t h e d e s c r i p t i o n r e f e r r e d t o a " T r a c t 1" i n H.E.S.           735--there

i s no T r a c t 1 i n H . E . S .         735.     T o compounl t h e d i f f i c u l t y i n

locating t h e land, t h e description 2id not indicate north o r

south f o r t h e township, o r e a s t o r w e s t f o r t h e range.

        Fe    agree        with    the     Cistrict        Court      that     the    nctice       of

application           fcr     tax        deed     was    so     vague,        incomplete          and

e r r o n e o u s t h a t i t d o e s n o t a d e q u a t e l y i d e n t i f y t h e l a n z and

is therefore           f a t a l l y defective.            Y e t t e r v.    G a l l a t i n County

(Kont. 1 9 8 2 ) , 645 P.26 941, 9 4 2 , 39 St.Rep.                         905, 907.

        D e f e c t i v e n o t i c e of a p p l i c a t i o n f o r a t a x deed d e p r i v e s

t h e county t r e a s u r e r of          jurisdiction         t o i s s u e t h e t a x deed.
Edwards   v.   Walters   (Kont.   1983),   664   P.2d   332,   937,   40

St.Rep.   914, 921.   Because no valid tax deed has been issued

respondent's right to redeer, the property has not. terminated.

Section 15-18-101, MCA.

     Because of our holding a-s to the first issue it is not

necessary to discuss the second and third issues.

     The judgment of the District




We Concur:
