text:
    Lawrence PEDERSON, Plaintiff and Respondent, v. The FEDERAL LAND BANK OF ST. PAUL, a body corporate; and Amerada Petroleum Corporation, a corporation, Defendants and Appellants, and Hunt Oil Company, a corporation, Defendant and Respondent.
    No. 7524.
    Supreme Court of North Dakota.
    Sept. 24, 1955.

      E. C. Rudolph, Ray, for plaintiff and respondent.
    Strutz, Jansonius & Fleck, Bismarck, for defendant and respondent Hunt Oil Co.
    Harold J. Fisher, Williston, and John S. Miller, T.ulsa, Okl., for Amerada Petroleum Corp., defendant and appellant.
    Walter O. Burk,. Williston, and Robert J. Barry, St. Paul, Minn., for Federal Land Bank of St. Paul, defendant and appellant.
    Michael A. Schmitt, Harold W. Lee, and Stanley F. Casey, St. Paul, Minn., of cottn-sel for Federal Land Bank of St. Paul.
   MORRIS, Judge.

This is an action to quiet title to the northeast- quarter of section twenty-three, township one hundred fifty-seven, range ninety-five in Williams County brought by the plaintiff Lawrence Pederson whose complaint alleges that he is the absolute owner. The defendant Hunt Oil Company alleges in its answer that the ownership of the plaintiff is subject to an oil and gas lease dated May 25, 1948, from the plaintiff Lawrence Pederson and Thelma Skjel-stad Pederson, his wife, to the Hunt Oil Company covering the land in question and recorded in the office of the register of deeds of Williams County on August 25, 1948, in Book 4 of Miscellaneous on page 26, which lease fan for a primary term of ten years and as long thereafter as oil, gas, casing-head gas, casing-head gasoline Or any of them is produced. The plaintiff does not question the execution of this lease and as between the plaintiff and the Hunt Oil Company there is no issue. The Hunt Oil Company by its answer also challenges the answers and counterclaims of the defendant Federal Land Bank of St. Paul and the defendant Amerada Petroleum Corporation.

The defendant Federal Land Bank answered and counterclaimed, its contention being that it is the owner of fifty per cent of all the right and title to all oil, gas, and minerals in or under the land in question, together with a surface 'easement of ingress and egress.

The Amerada Petroleum Corporation filed an answer and counterclaim with'respect to the plaintiff and a cross complaint against its codefendant Hunt Oil Company. The Amerada Petroleum - Corporation makes substantially the same allegations as does the Federal Land Bank of St. Paul and further alleges that it claims an interest in the property by virtue of an oil and gas lease dated May 3, 1951, executed and delivered to it by the Federal Land Bank of St. Paul,- as lessor, which was recorded in the office of the register of deeds of Williams County May 18, 1951.

The pleadings disclose that the issues in this case arise between Lawrence Pederson and his lessee, Hunt Oil Company, on the one hand, and the Federal Land Bank of St. Paul and its lessee, Amerada Petroleum, Corporation, on the other. The trial court ‘rendered judgment quieting title in the plaintiff to the entire property against the claims of the defendants, except that of the Hunt Oil Company which was adjudged to be the owner of a valid and subsisting oil, gas, and .mineral lease. The Federal Land' Bank.of St. Paul and the Amerada Petroleum Corporation appeal.

In 1913 Olaf T. Hoaas became the owner of the land involved in this action. On November 7, 1917, he executed a mortgage to the Federal Land Bank of St. Paul. On December 11, 1934, the land was sold to the County of Williams for unpaid taxes levied in 1933. On August 6, 1942, Olaf T. Hoaas and Pettrine Hoaas, his wife, conveyed the land to the Federal Land Bank of St. Paul by quitclaim deed which was.recorded March 8, 1946. On.the same date the mortgage was satisfied of record by recording a release of mortgage that had been executed by the Federal Land Bank of St. Paul on Üecember 15, 1942. On October 1, 1942, an auditor’s tax deed was issued to Williams County and recorded October 10, 1942.

On November 14, 1942, the plaintiff Lawrence Pederson signed an ' offer to purchase the bank’s interest in land which was addressed to the Federal Land Bank of St. Paul on a printed form in which the names, description,, and consideration were inserted ,on the. typewriter. The offer was for the sum o'f, $75, The printed form .following the description provided:

“Excepting and reserving to the Bank' and its successors arid assigns fifty percent (50%) of all right and title in and to any and all oil, gas and other minerals in or under the foregoing described land with such easement-for ingress, egress and use of surface as may be incidental or'necessary to use of such rights.”

Then followed in black type this statement :

“It is expressly understood that this offer is for only such right, title, and interest as the Bank may have in said .‘land.” ; ’

■On the back of this instrument, and following a number of provisions that have rio bearing on this case, there appears this provision in black type:

“I fully understand that the Bank may not' own all of any mineral rights in the real estate described herein, and that any provisions herein with respect to mineral rights to be included in the sale have reference to only such mineral rights as the Bank owns, as disclosed by the public records.”

Near the end the printed form was filled out as follows:

“I was induced to make this offer at the solicitation of * * * Calvin' Olson (Fieldman of Federal Land Bank) * *

The instrument was witnessed by Calvin Olson. On November 23,. 1942, the Federal Land Bank wrote the plaintiff stating that his offer

“has been accepted by this bank in accordance with the terms outlined by you, with the understanding that the Bank will issue á quitclaim deed and will not be responsible in any way for title or tax situation.
“You have been informed that Williams County has taken tax title to the tract which you are purchasing, and the Bank, by accepting your offer and agreeing to quitclaim, relinquishes its right to demand reconveyance from, the' County upon payment of the accrued taxes and thereby authorizes you to arrange for your own conveyance from the County.”

On November 30, 1942, the Federal Land Bánk executed a deed purporting to “Convey and Quit Claim” to the plaintiff the land herein involved,

“Excepting and reserving to the Bank and its successors and assigns 50% of all right and title in and to any and all oil, gas and other minerals in or under the foregoing described land, with such easement for ingress, egress and use of surface as may be incidental or necessary to use of such rights. The foregoing exception and reserva-' tion (if any) and the resulting' remainder of mineral rights to be included in the sale (if any) shall each and all be with reference only to such min-' eral rights as the Bank may 'owri¡ as disclosed by the public records.”

On November 14, 1942, the plaintiff signed an application addressed to the county commissioners of Williams County to repurchase the land for two hundred dollars, the appraised value thereof, as the successor in interest of the former owner. The' application ■ with the Federal Land Bank’s letter of November 23 attached is in the office of the county auditor of Williams County. The board of county commissioners of Williams County acted favorably upon the plaintiff’s application and on January 11, 1943, he entered into a contract for deed with the county. This contract was fulfilled and on January 29, 1946, the county issued its deed whereby it did grant, bargain, sell, and convey to the plaintiff the land in' question. This deed contains no exceptions or reservations.

When the tax deed was issued to Williams County on October 1, 1942, it conveyed to the county “the absolute property in fee to the county, free from all encumbrances whatsoever.” Section 57-2809, NDRC 1943. This deed vested in the county a new, complete, and paramount title under an independent grant from the sovereign authority which extinguished all prior titles. Ulrich v. Amerada Petroleum Corp., N.D., 66 N.W.2d 397; Baird v. Stubbins, 58 N.D. 351, 226 N.W. 529, 65 A.L.R. 1009; State v. Griggs County, 72 N.D. 587, 10 N.W.2d 245; Peterson v. Reishus, 66 N.D. 436, 266 N.W. 417, 105 A.L.R. 724; Nelson v. Murton, 68 N.D. 108, 277 N.W. 390; Buman v. Sturn, 73 N.D. 561, 16 N.W.2d 837; Coverston v. Grand Forks County, 74 N.D. 552, 23 N.W.2d 746; Northwestern Mutual Savings & Loan Association v. Hanson, 72 N.D. 629, 10 N.W.2d 599; Conlin v. Metzger, 77 N.D. 620, 44 N.W.2d 617.

After its title had been extinguished and on November 30, 1942, the Federal Land Bank gave to' Lawrence Pederson a quitclaim deed containing the reservation hére-tofore'quoted. At'that time the only right which the Federal Land Bank had with respect to the land was such right as it might assert under Section 19, Chapter 286, SLND 1941, which provides:

“The owner, or his successor in interest, shall have the right 'to repurchase all real estate heretofore or hereafter, forfeited to the, county under tax deed proceedings, so long as the tax title thereto remains in the county. Such purchase may be for cash or upon contract for deed- made by and between the Board of County Commissioners and the owner, or his ■successor in interest. The consideration of such contract shall include: (1) The total amount required to be paid in the notice to effect a redemption. (2) The total amount of all subsequent taxes with interest, penalties and costs. Provided that if the fair market value of such property at the time of the repurchase thereof, is less than the total amount to be paid to effect a redemption, together with all subsequent taxes, interest, penalties and costs, the Board shall fix a fair and just 'sales price for such property, and shall require the owner to pay at least twenty-five (25%) percent of the total contract in cash and the remainder shall be payable in not to exceed ten (10 annuaLequal installments as the Board of County Commissioners may determine, which installments shall bear interest at four (4%) percent per , annum until paid in full. Such contract shall further provide that if the vendee or his successor in interest, fails to pay one or more of the installments, when due with interest, the Board of County Commissioners may -cancel such contract and thereupon- all' -payments and improvements made by the vendee of his -successor'in interest, shall'-be forfeited to the county as liquidated damages for breach of contract unless otherwise expressly' provided. That • upon the full performance of such contract, the,county shall execute and deliver a deed to the purchaser which shall he executed in the same manner as tax deeds and •shall have the same legal effect as pre'scribed by the terms of this Act.”

The right of a former owner or his successor. in interest to repurchase land, title to which .has been lost to the county through tax deed proceedings, first appeared in Chapter 238, SLND 1939. Concerning that right we said:

“That statute has no connection with or effect upon the vesting of title in the county. It confers an additional right (erroneously designated as a right of redemption) upon the former owner, making him a preferred purchaser without profit to the county. It is a special statute giving him a second chance as a special act of grace.” Buman v. Sturn, 73 N.D. 561, 16 N.W.2d 837, 842.

The law thus stated has been approved in later cases under later statutes. See Ulrich v. Amerada Petroleum Corp., N.D., 66 N.W.2d 397, and cases cited therein. In that case we held that the statute giving the former owner ,the additional privilege of repurchase did not thereby grant to him a vested interest in the property. This is also the holding of Yates v. Hawkins, 46 N.M. 249, 126 P.2d 476.

In view of the fact that the issues in the case arise out of the reservation in the quitclaim deed given by the Federal Land Bank after it had lost absolute title to the county and at a time when its only right was one of repurchase, further consideration of the nature of that right is appropriate. A study of the statute discloses that right of repurchase is restricted to the owner or his successor in interest. It-is expressed.in the singular and in the alternative. The question naturally arises: Is it a right that is divisible by being split up into separate interests or rights or is it a right which can be exercised by the owner alone or by him transferred once and in toto? Or viewing it from the standpoint of the county, can the county be compelled to sell through separate transactions to the owner and a successor or- numerous successors in interest? The section of the statute in question contemplates but one contract of sale which must include the total amount due the county for taxes, interest, penalties, and costs or, in other words, what the county has invested in the land. But if the fair market value of the property is less than the amount the county would be entitled to as its investment at the time of repurchase, the commissioners have the power to fix a fair and just sales price of the property. The wording of this provision contemplates clearly the sale of all of the property and not a sale in parts. The county commissioners have power to make but one sale and that is a sale of all of the property.

The right conferred by the repurchase statute is in the nature of an option.

“An option to purchase property is a mere privilege given by the owner, to the optionee and does not constitute the optionee a purchaser of said property nor give him any right to or interest in the property until he accepts that privilege by exercising his right of option within the time specified and before it is cancelled.” Larson v. Wood, 75 N.D. 9, 25 N.W.2d. 100, 101. Also Hultberg v. City of Garrison, N.D., 56 N.W.2d 319.

In MacRae v. MacRae, Tex.Civ.App., 144 S.W.2d 320, 324, the court considered a Texas statute providing for forfeiture of the sale of state public school land for nonpayment of interest and providing that upon forfeiture the original purchaser could have the land reappraised and could repurchase it. The court held that the original purchaser’s right in and to the land was terminated except for the preference right of repurchase and said:

“This right was in the nature of an option. It is clear this right was not a title. Save as above stated, his right in and to the land was terminated by such forfeiture.”

To the same effect: Boykin v. Southwest Texas Oil & Gas Co., Tex.Com.App., 256 S.W. 581.

The deed given by the Federal Land Bank to the plaintiff purports to convey and quitclaim to him the land in question. It indicates an intention to convey -to the plaintiff the right of repurchase. This intention is further indicated by other evidence which we will discuss later. The right of repurchase, being indivisible, was not subject to being excepted or reserved to the grantor in part. The deed conveyed the entire right of repurchase to the plaintiff who thereby became the successor in interest of the owner, the Federal Land Bank. The significance of the exception and reservation in this deed diminishes when we consider the fact that it was a clause employed at that time by the bank in preparing all deeds and contracts for deeds.

The subject of the reservation or exception must he out of the thing conveyed. Thornhill v. Ford, 213 Miss. 49, 56 So.2d 23; Phillips v. Johnson, 202 Okl. 645, 217 P.2d 520; 16 Am.Jur., Deeds, Section 298; 26 C.J.S., Deeds, § 139. The. Federal Land Bank had no title to the land at the time it gave a quitclaim deed. It therefore could reserve or except no part of the land. Its only right was that of repurchase from the county, no part of which was subject to exception or reservation. The entire right of repurchase passed to Pederson. This was clearly the understanding that the bank had of the transaction when in its letter to Ped-erson it said:

“and the Bank, by accepting your offer and agreeing to quitclaim, relinquishes its right to demand reconveyance from the County upon payment of the accrued taxes and thereby authorizes you to arrange for your own conveyance from the County.”

The appellants argue that if it is held that the • quitclaim deed- did not reserve to the bank an interest in real estate, it nevertheless constituted a contract between the grantor and grantee which gave to Pederson the right to repurchase the land subjéct to the reservation and when the repurchase was consummated the Federal Land Bank became, in equity, the owner of -fifty per cent of the mineral rights. It is further asserted that the bank became the owner of fifty per cent of the minerals by an implied grant from the plaintiff. It is also argued that the deed from the county to the plaintiff created a cotenancy with the bank and the plaintiff as cotenants. Other arguments presented by the appellants are that the deed from the county to the plaintiff created a constructive trust under which the plaintiff held .fifty per cent of the minerals for the benefit of the bank and that the plaintiff is estopped to deny the validity of the reservation or the bank’s title to fifty per cent of the minerals. Much of appellants’, argument is based on the erroneous assumption that the right to -repurchase is an interest in real estate which is -divisible by creating severances through conveyances or reservations and exceptions of interests in the real estate itself.

The appellants’ most potent argument, if borne out by facts, is set forth in the bank’s brief as follows:

“the Bank-was the'owner of a valuable right with respect to the minerals, as well as with-respect to all other, interests in the land. That was the right to repurchase said mineral rights along with the surface and all other interests. The parties to the transaction understood that and contracted with that fact in mind. The Plaintiff contracted that if the Bank would place him in a position to repurchase the property in accordance with the statute, the Bank would be the owner of one-half of the mineral rights in said property.”

In support of this contention Greene v. White, 137 Tex. 361, 153 S.W.2d 575, 583. 136 A.L.R. 626, is cited and emphasized. In that case the court applied the rule that the grantee in a deed accepted by him is a party to the deed even though he does not sign it and he is concluded by the recitals ini the deed and by reservations contained therein in favor of the grantor. The court further held that assuming the grantor’s. lack of title to the land which he undertook to convey to the grantee by deed poll with express reservations of a vendor’s lien, certain timber rights, and all minerals, such lack of title in the grantor would not prevent the reservations from being contractually binding upon the grantee. It should be noted that the reservations in that case were rights or interests which were separable or severable from the thing granted or transferred. They were rights which were properly the subject of exception or reservation. Here ¡the only thing involved-is the entire and inseparable right to repurchase alb of the property.- As a transfer of that right to the plaintiff the quitclaim deed did not and could not reserve tó the grantor a separate fight of -repurchase. As to the right of repurchase it was a transfer to the plaintiff of all or nothing. The deed conveyed all. The clause on which the appellants rely reserved nothing that was subject to exception or reservation.- In Greene v. White, supra, the reservation involved rights that could have been reserved if the grantor had title. In’this case the bank had only the right of' repurchase which was the only thing that the parties intended should.be conveyed to the plaintiff, no part of which could be reserved.

Tbe deed involved in Greene v. White, supra, was the result of a compromise settlement of a disputed title. The opinion states':

“While Álex Garrett did not sign the deed, he was a party to it as grantee, and. further became a party to the deed and contract by executing the vendor’s lien notes given as purchase money. The terms, provisions and obligations of the deed. are in our opinion; subject to qualification as hereinafter made on accohnt of the homestead question, binding upon both of the parties to it. The instrument is.' contractual in nature, representing and setting forth the agreement of the grantor and the grantee as to what' the interests, rights and obligations of said parties- shall thereafter be -with respect to the land. It was executed in settlement, 'of - conflicting claims of the parties. Garrett was in . possession of the land, claiming to have ac~ quired a right or title to it by possession. The right or title claimed by him was not evidenced, however, by any formal or final determination of the sufficiency of his possession to give him a limitation title. The evidence in the record as to his possession up to that time is such that the question of its sufficiency was a question of fact, subject to determination either for or against him by a court or jury.'Greene’s claim of title to the land was also at that time subject to ’dispute and tó the hazard of a decision of the facts against him. He had record title to the land through the deed from Huff-hines, if the land was within the bounds of the Davenport survey, but the evidence does not conclusively show that it was so located. In this situation, the deed was executed, setting out the agreement of the parties that Garrett should pay to Greene a stated sum evidenced by notes, that thereafter the title to the surface should be in Garrett and the title to the minerals and merchantable timber' in Greene, the latter warranting to defend the premises unto Garrett against all claims.”

The contract in that case is clear, unambiguous; 'and subject tó -but one construction. ' The reservation contained in the' deed was also concise, clear, and definite and operated with respect to rights and interests which were proper ‘subjects of reservation. This is not the situation here.

In an attempt to show that the bank comes within the purview of Greene v. White, supra, it is argued that this record shows that the quitclaim deed was the result of a contract to convey to Pederson the bank’s right to repurchase the land at private sale- ánd that as a part of that contract the-parties- agreed that one-half of the minerals would -be owned by each. If it were -shown clearly that the parties intended to make such a contract and did in fáct make such a contract pursuant to which the quitclaim deed was executed- and delivered, equity would afford the hank relief. The burden of proof is on the bank. The relief it seeks is in the nature of specific performance. Before equity will grant such relief, the contract under which the relief is sought must be clearly and definitely established. 49 Am.Jur., Specific Performance, Section 169; 81 C.J.S., Specific Performance, § 143.

It should also be noted that the reservation wag limited “to such mineral rights as the Bank may own.” Ordinarily the term “mineral right” implies an interest in' minerals, including oil and gas. See Sheppard v. Stanolind Oil & Gas Co., Tex.Civ.App., 125 S.W.2d 643; Schlittler v. Smith, 128 Tex. 628, 101 S.W.2d 543. The bank seems to have been in doubt as to whether it had any mineral rights, either to sell or reserve, for it added to its reservation this proviso:

“The foregoing exception and reservation (if any) and the resulting remainder of mineral rights to be included in the sale (if any) shall each and all be with reference only to such mineral rights as the Bank may own, as disclosed by the public records.” " -

This provision would hardly have been placed in the deed to guard against spectral liabilities. It applies to minerals reserved as well as to minerals sold. At the time the deed was made the bank had no mineral rights as that term is commonly understood to either sell or reserve. We see in the reservation and its accompanying provision no evidence of an agreement by Pederson to repurchase the property in his own name and then convey fifty per cent of the minerals to the Federal Land Bank. If he did not so agree, this court will not in effect make a conveyance for him by decreeing the Federal Land Bank to be the owner of one-half of the minerals.

To sustain its position the bank goes back to the purchase agreement which contains the same reservation as' does the ’ deed and urges that it is further evidence that the bank was to own fifty per cent of' the minerals after Pederson had repurchased from the county. -This reservation- is subject to infirmities similar to those affecting the reservation in the deed. It is suggested that these reservations must have been inserted for a purpose and that the only purpose could be that the parties agreed that after the repurchase the bank was to own' half of the minerals and that the reservations establish that this was the intention of the parties to which a court of equity should give effect. There are, however, two other possible explanations. One is that it was the policy of the Federal Land Bank to insert such reservations in agreements and conveyances pertaining to the sale of its lands and that the agents of the bank pursued the úsuál policy in this case as a matter of course. If that be the-explanation, it does not indicate a- special ’agreement between the bank and Pederson that after Pederson' repurchased from the county and obtained from it absolute title the bánk should -nevertheless own and be entitled to-have conveyed to itfifty per cent of the minerals. The instruments prepated by the bank in this ease contain so many carefully worded safeguards against possible liabilities that it is fair to" assume .that if the bank intended to claim the right now asserted in its behalf which is not covered by' the usual-provisions, reservations, and covenants of its instruments it would have provided for the affirmative right to have fifty per cent of the minerals conveyed to it after repurchase. ‘

A second alternative explanation for the., insertion of the reservations in the agreement to purchase and in the quitclaim deed, being the- one adopted by the trial court in his memorandum opinion,, is this :• Many county tax deeds are void because of defects in the proceedings leading up to -their issuance. In event the tax deed proceedings were: void the county would have no title, the title would remain in the Federal Land Bank. In this event the quitclaim deed would- be a valid conveyance of the bank’s title and the reservation would be as valid and efféctive as that of any other conveyance executed according to the established policy of the bank. All o'f. the mineral rights, as well as the-surface,, would be owned by the bank- and disclosed by the public records. .The mineral rights would then be conveyed and reserved according to the terms of the agreement of purchase and the deed and no repurchase from the county would be involved. In other -words, the reservation was intended to be exactly what it purports -to be, á reservation of fifty per cent of the mineral rights the bank then owned as disclosed-by the public records.

We again refer to the letter from the. bank to Pederson accepting his offer to purchase in which the bank further disclaims its responsibility for title or. taxes. It states that by agreeing to quitclaim it relinquishes its right to demand conveyance-, from the county.. Here again the bank shows concern for its possible liabilities-against which it has so carefully guarded, yet makes no reference to-the right which it now claims, to have title to a -part of the property that Pederson was to obtain from the county conveyed to thq bank after repurchase.

It is strongly urged that equity impels us to hold that the bank is the owner of -fifty per cent of the minerals, on the ground of estoppel. There is no intimation of fraud, misrepresentation,, or concealment on.the part of Pederson in connection with the transaction. He did. nothing to mislead the bank. It had at least an equal opportunity with Pederson to know all of the facts as well as the law involved. Under such conditions there can be no estoppel. 19 Am.Jur., Estoppel, Section 87; 31 C.J.S., Estoppel, § 90; Pomeroy’s Equity Jurisprudence, Fifth Edition, Sections 807, 821; Mott v. Nardo, 73 Cal.App.2d 159, 166 P.2d 37.

The general equities of- this case do not. favor the bank. Pederson received no unconscionable bargain. Prior to‘his repurchase the fair market value of the property was determined by appraisement to be two hundred 'dollars." That- was all of the property, including all the mineral's.. He .had already paid the Federal Land Bank seventy-five dollars for .its right of repurchase. He paid two hundred seventy-five dollars for property of the fair value of - two hundred dollars. The transaction has not resulted in unjust enrichment of the plaintiff. The appellants have failed to establish a valid reservation, of an interest in the property and have not proved a contract under which, in equity, the Federal Land Bank of St; Paul would be entitled to a judgment declaring it to be the owner-'of fifty per cent of the mine'rals. The judgment is affirmed.

BURKE, C. J., and SATHRE, JOHNSON and GRIMSON, JJ., concur.


source: Caselaw Access Project

author: BURKE, Chief Justice.

license: Public Domain

text:
    Albin L. CARLSON et al., Plaintiffs and Appellants, v. TIOGA HOLDING CO., et al., Defendants and Respondents.
    No. 7429.
    Supreme Court of North Dakota.

    July 26, 1955.
    Rehearing Denied Oct. 11, 1955.

      Bjella & Jestrab, Williston, for appellants.
    Joseph P. Stevens, Minot, H. G. Nilles, Fargo, on the brief, for respondents.
   BURKE, Chief Justice.

Plaintiffs brought this action to nullify a declaration of trust and conveyances of certain mineral interests made pursuant to such declaration upon the ground that both the declaration and the conveyances violate express provisions of the statutes of this state. Upon trial of the action the court found against the plaintiffs- and awarded: judgment in favor of the defendants. Plaintiffs .have appealed from the judgment and have demanded a trial anew in this court.

The avowed purpose of the trust was to pool the oil and gas interests of the parties thereto so they “may share in the income derived therefrom upon such lands as may produce oil, gas or other minerals (except coal).” The agreement provided that it should “be limited to and include forty parties of the second part, no more and no less, each of which shall, in addition to executing this agreement, transfer to the trustee, for the benefit of the trust, the one half interest in oil, gas or other minerals (except coal) in one quarter section of land.” The agreement also provided that the beneficial interest in the trust estate should -be divided into one thousand shares; that each of the forty parties of the second, part should receive twenty shares, upon conveying the prescribed, mineral interest and executing the trust agreement, and that the trustee should Receive two .hundred shares as compensation for managing, collecting and distributing the 'trust income. Certificates of beneficial interest' were to be issued. These certificates were transferable and would entitle “the owner and holder thereof to a share of all revenues derived from the sale of oil, gas and other minerals (except co.al) produced on the lands described in the agreement.” As to termination the agreement provided:

“The term for which this trust agree-' ment shall exist is for a period of ten years, unless, prior thereto actual drilling has been commenced, or oil, gas, or other minerals (except coal) are being produced upon any of the lands conveyed to the trustee in accordance with this agreement, then and in that event, this agreement shall remain in force and effect so long as oil, gas or other minerals (except coal) are being produced therefrom.
“At the end of the term, of this agreement, the trustee shall by proper mineral deed transfer to the then owner and holder of the legal title of the property, from which a portion of the oil, gas or mineral (except coal) rights were transferred to the trustee-in pursuance hereof, all of the rights so obtained under this agreement, and in the event of the failure or neglect to do so, the holder of the title to the property, may upon making a showing to the District Court, of the County in which such lands are located, that this agreement has terminated by and in accordance with the terms thereof, obtain an order directing the Clerk of said District Court to execute such a deed which shall have the same force and effect as if executed by said trustee.
“At the termination of this trust agreement, the trustee shall distribute all of the assets of said trust except as herein provided for, to the holders of' the certificates of - beneficial interests in said trust, in proportion to their interests.”

The plaintiffs are parties to this -trust agreement- and each has conveyed to the trustee one half interest in the oil, gas and other minerals (except coal) in a -quarter section of land. The defendants are the trustee and other parties to the trust agreement.

The mineral interests conveyed tó the trustees are interests in real property. Northwestern Improvement Co. v. Morton County, 78 N.D. 29, 47 N.W.2d 543; Beulah Coal Mining Co. v. Heihn, 46 N.D. 646, 180 N.W. 787. This trust therefore is one to hold real property, to receive the rents and profits thereof and to distribute them to the beneficiaries of the trust.

The plaintiffs assert that this trust suspends the absolute power of alienation of the trust property for a period longer than that permitted by statute and that the trust is therefore void.' The statute in effect at the time of the execution of the trust instrument was Section 47-0227, NDRC 1943. This statute provides:

“Except in the single case mentioned in-section 47-0413, the absolute power of alienation cannot be suspended, by any limitation or condition whatever,for a longer period than as follows:
“1. During the continuance of the lives of persons in being at .the creation of the limitation or condition; or
“2. For a period not to exceed twenty-five years from the time of the creation of the suspension.”

Section 47-0413, mentioned in the quoted statute relates to a contingent' remainder created upon a prior remainder arid is not pertinent here.

The absolute power of alienation is suspended when there are no persons in being by whom an absolute interest in possession can be conveyed. Section 47-0231, NDRC 1943.

The first question then is: Are there persons in being during the duration of the trust who can convey an absolute interest in possession with respect to the real property interests held by the trustee.

Section 59-0314, NDRC 1943 provides:

“Except as otherwise provided in this chapter, every express trust in real property, valid as such in its creation, vests the whole estate in the trustees, subject only to the execution of the trust. The beneficiaries take no estate or interest in the property but may enforce the performance of the trust.”

Section 59-0319, NDRC 1943 provides:

“If a trust in relation to real property is expressed in the instrument creating the estate, eyery transfer or other act of the trustee in contraven,tion of the trust is absolutely void.”

.The trust instrument in this case requires the trustee to hold the trust property intact during the continuance of .the trust. A conveyance by the trustee, therefore, of any of the trust property, while the trust was in effect would, under the. statute, be absolutely void. The beneficiaries, having. no -estate or interest in the trust property, have no power to convey. It is clear therefore that this trust suspends the absolute power of -alienatiqn of the trust .property during the duratipn of the trust. Penfield v. Tower, 1 N.D. 216, 46 N.W. 413; Hagen v. Sacrison, 19 N.D. 160, 123 N.W. 518, 26 L.R.A.,N.S., 724.

The next question is: Is this period of suspension of alienation longer than' that permitted by statute? - The duration of-the trust -is not limited upon lives in being-or for twenty-five years. The' limitation is for ten years and for as long thereafter as oil and gas may be produced from the trust property.

The test of whether the absolute power to alienate has been suspended beyond the statutory limit is not whether the suspension may terminate before the expiration of the statutory limit but whether there is any possibility that the suspension may continue beyond it. If such possibility exists the suspension is void. 70 C.J.S., Perpetuities, § 48, page 646. Ford v. Yost, 299 Ky. 682, 186 S.W.2d 896, 162 A.L.R. 149; In re Hartwig’s Estate, 119 Mont. 359, 175 P.2d 178; Monarski v. Greb, 407 Ill. 281, 95 N.E.2d 433; In re Carlson’s Will, Sur., 111 N.Y.S.2d 591.

The trust under consideration and the suspension of the absolute power of alienation under it may by the terms of the trust continue indefinitely. No one can say how long that may be. It clearly violates the statute prohibiting the suspension of the absolute power of alienation for a longer period than that of lives in being or twenty-five years.

The defendants contend, however, that the trust is a business or “Massachusetts Trust” and that such a trust does not suspend the power of alienation because there are persons in being who may unite and by their united action terminate the trust at any time 'and that thereupon the trustee may make conveyances of the trust property in accordance with the" directions contained in the trust instrument. This contention cannot be sustained under the statutes of this state. The trustee is bound by the trust instrument. Under the provisions of Section 59-0319, NDRC 1943, süpra, any act by the trustee in contravention of the trust is absolutely void. He has no power therefore' to agree to a termination of the trust prior to the time provided for its dissolution by the trust instrument itself. As was said in Penfield v. Tower, 1 N.D. 216, 221, 46 N.W. 413. “The trust is indestructible during its continuance, even with the consent of all the trustees and all the beneficiaries.” Construing an identical statute, the Court of Appeals of New York in Douglas v. Cruger, 80 N.Y. 15, 19, said:

“The purpose of the statute was to make these trust estates and trust interests indestructible and absolutely inalienable during the existence of the trust * *

See also Restatement of the Law of Property Vol. IV (Appendix Chapt. 13, Sec. 64) 2792.

We are satisfied therefore that the declaration of trust of the Tioga Holding Company is void and that plaintiffs are entitled to judgment as prayed for in their complaint.

The judgment of the district court is therefore reversed.

■ GRIMSON,' JOHNSON, SATHRE and MORRIS, JJ., concur.


author: SATHRE, Judge. BURKE, Chief Justice SATHRE, Justice.

text:
    Application of Carl M. HVIDSTEN, doing business as Hvidsten Transport, Grafton, North Dakota Transport, Inc., Moorhead, Minnesota, Dan Dugan, doing business as Dugan Oil and Transport Company, Sioux Falls, South Dakota; Lester A. Wilsey, doing business as Indianhead Truck Line, St. Paul, Minnesota; and all other persons similarly situated and adversely affected, relative to Special Certificate No. 175, praying for the setting aside of the Findings of Fact, Conclusions, and Order and the Amended Findings of Fact, Conclusions, and Order In Case No. S-874, and the Findings of Fact and Conclusions and Order in Case No. S-1142, and for a Cease and Desist Order thereunder. Ernest D. NELSON, Elmer W. Cart, and E. H. Brant, as members of the Public Service Commission of the State of North Dakato, and E. G. Balsam, L. W. Balsam, S. F. De France, and V. L. De France, a partnership, doing business as Balsam & De France, Appellants, v. Carl M. HVIDSTEN, doing business as Hvidsten Transport; Transport, Inc., a corporation, Dan Dugan, doing business, as Dugan Oil & Transport Company, Lester A. Wilsey, doing business as Indianhead Truck Line; Great Northern Railway Company, a corporation, Northern Pacific Railway Company, a corporation; Chicago, Milwaukee, St. Paul & Pacific Railroad Company, a corporation; and Minneapolis, St. Paul & Sault Ste. Marie Railroad Company, a corporation, Respondents.
    No. 7387.
    Supreme Court of North Dakota.
    April 18, 1955.
    Rehearing Denied Oct. 26, 1955.

      Johnson & Rausch, Bismarck, for appellants Balsam & De France.
    R. W. Wheeler, Commerce Counsel, Bismarck, for appellant Public Service Commission. '
    Alan Foss, Fargo, tor respondent Hvid-sten Transport.
    Clifford Jansonius, Bismarck, for respondent Transport, Inc. , ,
    John S. Whittlesey, Fargo, for respondent Dan Dugan Oil & Transport.
    Myron H. Bright, Fargo, for respondent Indianhead Truck Line.
    Herbert G. Nilles-, Fargo, for respondents Great ‘ ¡Northern' Ry., Northern 'Pac. Ry., Chicago, .M., St. P. & P. Ry. Co, and Minneapolis, St. P.- & S. S. M. R. Co.(
   SATHRE, Judge.

The certified record on this appeal, is lengthy, but the facts necessary,to a.determination of the issues presented are substantially as follows: On February 7,, 1934 the Board of Railroad Commissioners (now Public Service Commission) of the State of North Dakota issued to the Northern Truck Line of Williston, North Dakota Special Certificate No. 175 authorizing the transportation of property in intra-state commerce in the vicinity of Williston, North Dakota. This certificate was issued under authority of Chapter 164 of the Session Laws of 1933-.. The proceedings in this matter was -assigned Case No: S-240.

On March 18, 1946 the Public Service Commission, after notice and hearing approved a sale and transfer by Northern Truck Line of said-Special Certificate No. 175 to Northern Transportation Company.

This matter was assigned Case No. S-874. Notice of hearing in this matter was sent to representatives of all North Dakota railroads, but none of the railroads appeared at the hearing. The commission made its findings of fact, conclusions and order as follows:

“That special certificate No. 175 authorized the transportation of general commodities in load lots of 5000 lbs. of more, from and within the territory described as follows-:
“Bounded on the east by Williams, Mountrail, Divide, Burke County line;’ on the north by the International Boundary Line; on the west by the North Dakota-Montana State Line; on the south by the county road running east of Fairviéw, Montana, to a junction of U. S. Highway No. 85 and State Highway No. 23, except that the transportation of livestock, heavy setup machinery, agricultural products of all kinds, sand, gravel, brick, tile arid emigrant movables máy be transported' -in¡both -truck loads and in less thap truck loads to and -.from a distance of 25 miles.from Williston, the base of operation; and, further, that • household .goods may be transported to.ancl.from any place within the state in load lots .of 3000 lbs or more.” ,,

Thereafter on May 24, 1946 upon request of the' purchaser of said Certificate No. 175, Northern Transportation Company, the Commission issued amended findings of fact, conclusions and order in said case S-874, without further notice of hearing in the matter. This amended order describes special certificate No. 175 as follows:

“That Special Certificate No. 175 authorizes the transportation of general commodities in load lots of 5000 lbs., or more, from and within a territory described as follows:
“ ‘Bounded on the east by the Williams-Mountrail-Divide-Burke County Lines; on the north by the International Boundary Line; on the west by the North Dakota-Montana State Line; on the south' by a county road running east of Fairview, Montana, to a Jet. with U. S. Highway No. 85 'and State Highway No. 23.’
except that livestock, heavy set-up machinery, household goods, ' emigrant movables and petroleum products in bulk may be transported' between points and places within the State of North Dakota.”

In November 1950 the Northern Transportation Company as seller and E. G. Balsam, L. W. Balsam, S. F. De France and V. L. De France, a partnership doing business as Balsam & De France, as buyers, made application, to the Public Service Commission for authority by the Northern Transportation Company to sell and transfer to Balsam & De France said Special Certificate No. 175. Notice of hearing .on this application was given to all of the railroads in the State and they appeared and protested the transfer of said Certificate to Balsam & De France.

Thereafter and on March 14, 1951 the Commission issued findings of fact, and conclusions, and made its order that said, certificate No. 175 be reissued and transferred to Balsam & De France. The’certificate thus reissued was in all respects identical with the certificate issued and transferred to the Northern Transportation Company under the amended order of May 1946,

No appeal was taken from this order by the railroads or by any other carriers.

On' May 4, 1951 Hvidsten Transport, Transport Inc., Dugan Oil and Transport Co., and Indianhead Truck Line filed with the Commission a complaint alleging that the Public ■ Service Commission by its amended order of May 24, 1946 in the matter of the sale of Special Certificate No. 175 by Northern Truck Line to ¡Northern Transportation Company to Balsam & De France, unlawfully enlarged and extended the operating rights of said Northern Transportation Company under said Certificate in vio.lation of Séction 49-1810, 1949 Supp.NDRC 1943;’TfeLif the present assignees of .sard” Special Certificate No,..-175, Balááni & De France were permitted to operate to the extent that the authority of said Certificate hád been unlawfully enlarged, such operation would result in irreparable harm, injury, damage to the applicants and to the general public.

Balsam & De France answered denying generally the allegations of the application.

The railroad respondents were permitted to intervene in this proceeding and joined in the application of the four motor carriers.

On January 29, 1952 the Commission issued its order dismissing the application of the said motor carriers. Thereafter the motor carriers and the railroads appealed from the decision of the' Commission to the district court of Burleigh County. The matter was heard before the Hon. Geo. Thom Jr., District Judge/upon the certified record and transcript of proceedings had before the Public Service Commission.

The district court found as a fact that the original certificate No. 175 authorized freight service only in the vicinity of Wil-liston and made conclusions of law that the authority to transport petroleum and petroleum' products existed only from and to that' territory or zone. ' The court upheld, however, the Commission’s finding that the Certificate was not restricted as to commodities. It also concluded that the motor carrier respondents could not complain, of the amended order of the Public Service Commission in case No. S-874 issued May 24, 1946 since the record shows that their certificates of authority were issued subsequent to the issuance and transfer of Certificate No. 175 to Northern Transportation Company. With reference to the railroad respondents however the court found that no notice of hearing was given them before making the amended order in Case S-874 on May 24, 1946, and concluded that the amended order unlawfully enlarged and extended the operating authority of Special Certificate No. 175 to the extent that it provided:

“Except that livestock, heavy set-up machinery, household goods, emigrant movables and petroleum products in bulk may be transported between points and places within the State of North Dakota.”

The court then directed that the proceedings be remanded to the Commission for deletion of that portion of • authority just quoted and ordered the Commission to draw the Certificate issued to Balsam &. .De France so as to limit the authority to and from and within the following .zone:

“Bounded on the east by Williams, Mountrail, Divide, Burke County lines; on the north by the International Boundary Line; on the west by the North Dakota-Montana State Line; and on the south by a county road running east of Fairview, Montana to a junction of U. S. Highway No. 85 and State Highway No. 23”.

From this judgment" both the Public Service. Commission and Balsam & De France appealed" to the Supreme Court.

The specifications of error as set forth by the appellants, the Public Service Commission and Balsam & De France may be summarized in three propositions:

“1. Whether or not special certificate No. 175,, as originally issued in 1934 authorized the transportation of freight between all points and places in the State, or whether it was limited to service to and from the vicinity of Williston.
“2. Whether or not the railroad respondents are now barred from objecting to the amended order of the Public Service Commission, dated May 24, 1946 in tase S-874 on the ground of laches.
“3. Whether or not the amended order issued by the Public Service Commission on May 24, 1946 in case S-874 unlawfully extended the authority of special certificate No. 175 beyond the scope of the notice given to the railroad respondents.”

We shall" first Consider the second proposition urged by the appellant.

It is established by" the undisputed facts, the substance of which has been set out herein, that the railroad respondents were served ■with notice of the hearing upon the application of Northern Transportation Company for authority to sell and assign Certificate No. 175 to Balsam & De France. The hearing was had before the Public Service Commission on February 7, 1951, at Dickinson, North Dakota. The railroads appeared at the hearing by their counsel, participated in the proceedings and objected to the transfer of Special" Certificate No. 175 from Northern Transportation Company to Balsam & De France. They, contended that the amended order of May 24, 1946 was an enlargement of the authority under original certificate No. 175; that no notice of any hearing thereon had been served on the railroads, and that the Commission was without jurisdiction to make said amended order. . . ,

The Public Service Commission issued its findings of fact and order, Ma'rch 14, 19J1, approving the transfer of. Special Certificate No. 175 to Balsam & De France. True an4 , complete copies of, the order were sent .by registered mail to the attorneys .for all the railroad respondents qn March 20, 1951. Under, Section 28-3215 NDRC 1943 the railroad respondents had the right of appeal from said order. '

Said Section 28-3215 provides:

“Any party to any proceeding heard by an administrative agency, except in cases where the decision of the administrative .agency is declared final by any other statute, may. appeal from such decision within thirty days after notice thereof has been given. * *

The order of the Public Service Commission issued March 14, 1951 was a final order. The Commission had jurisdiction over the subject matter and had power to issue such order under Section 49-1810 NDRC 1943 as amended by Chapter 277 Session Laws of 1945 which provides:

“Special common motor carriers may transport commodities within their authority, in any quantity but only from or , to that territory or zone for which they heretofore lawfully served, proved or hereafter may prove,. public convenience and necessity. A special common motor carrier shall have the authority :
“1. To transport household goods, emigrant movables, livestock, and farm supplies, or other special commodities or., general commodities in truckloads as defined by the commission, from or to points not in such -zone or between points on Class A routes, by the" authority and under the conditions and rules set by the commission;
«2 * * *»

The railroads were parties to the proceedings in which the order was issued. They did not appeal from the order and it became final when the time, for appeal had elapsed.

The present appeal was taken by the Public Service Commission and Balsam & De France-from the judgment of‘the district court which reverséd the order of the Public' Service Commission made January 29, 1952 in- the matter of' the application of the four motor carriers for a “Cease and Desist” order against Balsam & De France. The railroad respondents, as interveners, joined in the application of the motor carriers and collaterally challenged the order of the Commission made March 14, 1951 in the matter of transfer of Certificate No. 175 to Balsam' & De France. No appeal was' taken from that order and it had become final. As a general rule an order or determination of an administrative body having jurisdiction under authority of law is not subject to collateral attack in the absence of fraud or bad faith.

In 73 C.J.S., Public Administrative Bodies and Procedure, § 145, page 478, it is stated:

“As a general rule, the decisions or orders of an administrative body are, in the absence of evidence to the contrary, presumptively correct and valid. Thus there is .a presumption that legal duties and statutory requirements were complied with, that facts justifying a ruling were in existence, and that there was sufficient evidence on which to base the decision of the agency. So also, the action of an administrative board or officer, when done in the course of official duty, is generally presumed to have been done in good faith and imports verity. Unappealed-from orders must be assumed to be fair, just and reasonable, but the presumption in favor of an administrative decision is more potent with respect to a finding of .fact than it is with respect to a question of law.”

In the-same volume, same subject, § 146, Collateral Attack, 'pages 479, 480 the rule is stated as follows:

“The order or determination of an administrative-'body, acting within its. .jurisdiction and under authority of law, is not subject to collateral attack, in the absence of fraud or bad .faith, the only' method of attack available being by appeal as provided by statute. The rule 'is particularly applicable, where' the question in issue is one that requires-'a 'background of ‘Specialized experience, so that the admiiiistrative agency is peculiarly qualified to determine it.”

See also Application of M. & S. Transport Co., 153 Neb. 260, 44 N.W.2d 585.

Since the order of March 14, 1951 had become final and no appeal having been taken therefrom, the railroads were not in position to challenge it by collateral attack in the subsequent proceedings brought by the four motor carriers. It follows therefore that the judgment of the district court erroneously held that the order of the Public Service Commission of March 14, 1951 was void.

With reference to the four motor carriers, Hvidsten Transport, Transport Inc., Dugan Oil and Transport Company and Indianhead Truck Line, the record shows that their operating certificates were issued after the amended order of May 24, 1946, and subsequent to the reissuance of Special Certificate No. 175 to .Northern Transportation Company., They were not at that time in the transportation business in North Dakota and were not in position to attack the amended order of May 24, 1946 and the reissuance thereunder of Special Certificate No. 175. The district court held:

"That since the petitioners, now appellants, were not holders of any certificates and were not engaged in the transportation of goods in North Dakota .at the time of the amended findings in case No. S-874 they cannot be heard to complain of the orders of the Public Service Commission therein; that they are not such interested parties as to have any right to complain thereof, and object thereto. * * * ”

The four motor carriers took no cross-¿ppeal from the judgment of the district court and must therefore be deemed to be bound thereby.

In the joint briéf.of the railroads-and the four motor carriers, it is stated: ■

“Respondents' agree with appellant, Balsam & De France, when it states on pages 93 and 94 of its brief, that many issues have been eliminated. The issue of whether or not the motor carrier respondents were entitled to notice in the 1951 transfer hearing is now out of the case.”

In view of our conclusion herein it will not be necessary to consider the other specifications, urged by appellants.

After a careful consideration of the lengthy record we are agreed that the judgment of the district court should be reversed, except as to the dismissal of the complaint of the four motor carrier respondents.

The case is remanded to the district court with directions to .enter judgment reinstating. the findings and order of the Public Service: Commission made March 14, 1951.

It is so ordered.

MORRIS and GRIMSON, JJ., concur.

JOHNSON, J., did not participate.

BURKE, Chief Justice

(dissenting).

The original certificate of public convenience and necessity in this case was issued to Northern Truck Line of Williston on February 7, 1934. Early in 1946 an application for authority to sell the Northern Truck Line to Northern Transportation was filed with the Public Service' Commission. Notice of hearing upon this application wás served upon all railroad carriers in the state. The only issue specified for consideration and determination upon such hearing was whether the sale should be authorizéd. None of the railroad carriers appeared or filed any objections to the transfer and on ■ March 18, 1946, the sale was-authorized by order of the commission. Thereafter on May 24, 1946, without any notice or hearing the commission entered an order which substantially enlarged the territory authorized to be served by virtue of the transferred certificate of public convenience and necessity.

Section 28-3208 NDRC 1943 provides in part:

. “Whenever an administrative agency, * *, . * shall hold any hearing or make any independent investigation upon the claim or request ,of any person, no decision shall be made by the agency' until all parties iii interest shall have been furnished with a written specification of the issues which are to be considered and determined * * ⅜ >?

It is clear that the order of the commission enlarging the territory authorized to bé served by the Northern Transportation Company was issued in violation of the provisions of the above statute. .

“A -public utility commission, being unknown to the common law, derives its authority wholly from constitutional or statutory provisions, and it possesses only such powers as are thereby conferred, * *

73 C.J.S., Public Utilities, § 38, p. 1064; Petition of Village Board of Wheatland, 77 N.D. 194, 42 N.W.2d 321; State ex rel. Lemke v. Chicago & N. W. R. Co., 46 N.D. 313, 179 N.W. 378. And "where power is given a commission to do a certain act in a certain manner, the- manner prescribed is the measure of the power given.” 73 C.J.S., Public Utilities, § 39, p. 1076.

In the Wheatland case, supra, 77 N.D. at page 218, 42 N.W,2d at page 335, we quoted with approval from 42 Am.Jur. (Public Administrative Law, Sec. 68) 379 saying;

“The powers- conferred upon the commissioners ‘must be exercised in .accordance with the statute bestowing such powers and they can. act only in the mode ’ prescribed by the statute * * *. They cannot rightfully dispense with any of the-essential forms of proceedings whidh the legislature has prescribed for the prfrpose of in-. vesting them with power to.act.’”

In my opinion the legal principles above stated are correct and for that reason it is' my conclusion, .that-the order of .the commission enlarging the territory to be served by the Northern Transportation Company was wholly void because the commission had no power to issue it. ■

In November 1950, an application was made- to .the Public Service Commission for authority to transfer the certificate, here in question, from Northern Transportation Company to Balsam and De France. A notice of hearing upon the application was served upon all the railroads doing business in the state. In that notice the only issue specified for consideration and determination w;as whether the transfer should be authorized. Upon the hearing upon such transfer the railroads attempted to inject into the cáse the question of whether public convenience and necessity existed for the authority conferred by the certificate. The commission sustained all objections to the reception of evidence concerning this issue and after the close of the hearing ordered the transfer of the certificate to Balsam and De France. No appeal was taken from this order. It is my view" that ’ the evidence concerning " public convenience and necessity was properly excluded. The sole issue before the commission as specified in. the notice of hearing was whether the certificate as amended in 1946 should be transferred. At that hearing the commission had no power to consider or decide any other issue.

It is the opinion of the majority that because the railroads attempted to raise the question of' public convenience and necessity at this hearing and, after the evidence on this question was excluded and an -order made directing' the transfer of the certificate, failed to* áppeal from the order, they waived any right to attack the validity of the certificate. I cannot agree with this conclusion because, as I see it, a reconsideration of the question of public convenience, and necessity or a consideration and determination of the validity of the certificate could only: bé had<'at a hearing at which those issues' had been specified-as the= issues to be considered and determined. ..Neither an attempt to raise an issue which could' not be considered, nor the failure to raise another such issue, can constitute a waiver or create an estoppel. The railroads therefore had the right to challenge the validity of the 1946 certificate directly in this proceeding. That certificate is void and the judgment of the district court to that effect should he affirmed.

On Petition for Rehearing

SATHRE, Justice.

The railroad respondents have filed a petition for rehearing. It is stated that review of the Supreme Court’s decision of April 18, 1955 indicates that the decision turned upon the fact that the railroad respondents failed to appeal from the order of the Public Service Commission dated March 14, 1951 in case .No. S-1142 and therefore said respondents cannot, now gol-laterally attack that decision in the absence of fraud or bad faith. It is stated:

“The Court states that the railroad respondents appeared in Case No. S-1142 and failed to appeal from an adverse decision. That is correct. It also indicates however, that the issue presented in the instant case was also presented in that case. That is incorrect.”

Case No. S-1142 is the record made in the matter of the application of Northern Transportation Company to. sell Special Certificate No. 175 to. Balsam & De France. This is the . identical certificate sold by Northern Truck Line to Northern Transportation Company and whjch was amended without notice to the railroads by the order of the Commission issued May 24, 1946. The railroads stipulated, however, that after the entry of the amended order dated May 24, 1946, copies -of it were mailed to representatives of all North Dakota railroads. The notice of hearing upon the application for authority by Northern Transportation Company to sell Certificate No. 175 to Balsam & De France described the area of operating authority in the identical language of the amended certificate as follows:

“Notice of Hearing
“Notice is hereby given that the Application of John P. Neadors, Bert Ell-ingson, and A. J. Bartlett, -dba Northern Transportation Company, Willis-ton, North Dakota to sell and Balsam & De France, Miles City, Montana to buy Special Certificate No. 175 authorizing motor freight service for the transportation of general commodities, to, from and within a territory described as follows:
“ ‘Bounded on the east by the Williams-Mountrail-Divide-Burke County Lines; on the north by the International Boundary Line; on the west by the North Dakota-Montana State Line; and on the south by a county road running east of Fairview, Montana, 'to a Jet.” with US Hwy. No. 85 and St. Hwy. No. 23,’
“Except that livestock, heavy setup machinery, -household goods, emigrant movables and petroleum products in bulk may be transported between points and places within the State of of North Dakota, will be considered and public hearing held thereon by the Public Service Commission of'the State of North Dakota, on the 6th day of February, 1951 at 10:30 A.M., Mountain Standard Time, at the courthouse at Dickinson, North Dakota, at which time and place all interested parties may be hear.d and offer evidence for or against the granting of the application: .• -
“Dated at Bismarck, North Dakota, this 15th day of January, 1951.”

The notice was served upon all the railroads in the State, including the respondents herein.

The railroads appeared generally at the hearing and submitted to the jurisdiction of the Commission. They objected to the transfer of the certificate to Balsam & De France. They sought to introduce evidence of convenience and necessity which involved the state-wide operating authority granted by the certificate. The Commission refused to admit such testimony. Counsel for the railroads then made.offers of proof as follows:

“First, we offer to show the nature and extent of the railways’ service furnished in this area which is aífécted in the whole state of North Dakota, by time tables showing the freight trains and freight movements and facilities supplied by the railway companies for the transportation of the commodities described in Special Certificate No. 175.” -

Objection was made to the offer and sustained.

Counsel for the railroads:

“We now offer to show, and ask the reporter to copy into -the record copies of Special freight operators certificates, No. 554, Crosby Transfer Company; No. 47, Culp Truck Lines; No. 639 Kasper Filkowski; No. 286, Reinhart Grishkowsky; 194 Hart Motor .Express; 666 Hart Motor Express; No. 251, J. H. Maas; 507,
“A1 Redmond; No. 260, Lorenz So-witch';
“And then interstate freight operators as follows: Certificate No. 4 Dakota Transfer & Storage Company; No. 52 Hart Motor Express; 273 Houck Transport Company; 252Hvid-sten Transport; 196 H. F. Johnson, Inc.; 291 John H. King, Sidney, Montana ;
“Alsq Class A.. Certificates as follows: 44 and 329, Culp Truck Lines; 313 Dakota Transfer & Stórage Company; 326 Minot-Portal Transfer Service; 90, Stanley Transfer;
“All of which certificates are certificates issued to operators who furnish transportation services for all or part of the general commodities and other sub-. jects of transportation ’ which are referred to in special certificate No. 175; and they, together with the railroad transportation facilities heretofore referred to, are offered for the purpose of showing that the public is adequately served without the issuance, or approval of the transfer of certificate No. 175.”

Ojection was made to the offer and sustained.

Counsel for the railroads:

“And further we offer to show generally that the transportation facilities of the kind and character described-in Certificate No. 175 are adequate and •that no public convenience or necessity exists for the continuance of this certificate or the transfer thereof; that the .effect of the approval of this would simply be to put another competitor in the transportation field who would attempt to take business away from carriers who are now adequately taking care of the public.”

Objection was made as follows:

. “That is obj ected to on the ground and for the reason that the question of convenience and necessity and adequacy of present facilities is not an issue before the Public Service Commission at this time.” “Objection sustained.”

The railroads contend that the Public Service Commission exceeded its statutory authority in amending special Certificate No. 175 ex parte and thereby enlarging the scope of activity permitted under it’so as to provide

“that livestock, heavy set-up machinery, household goods, emigrant movables and petroleum products in bulk may be transported between points and places within the State of North Dakota.”

The railroads are not now in a position to challenge the authority so granted. ’ Certificate No. 175 was originally issued on February 7, 1934, pursuant to the authority provided in Chapter 164 SLND 1933. The realities are that although the original certificate was restrictive in form, certificate holders were permitted to operate on a state-wide basis. From, 1942 to 1946 the Northern Truck Liné transported quantities of petroleum products in bulk under the authority of Certificate No. 175. On March 18, 1946, the Commission after notice and hearing authorized the ¡ sale and transfer of the certificate from the Northern Truck Line to Northern Transportation Company. Thereafter the purchaser- ■ asked that the certificate be amended so ■ as to broaden its authority to include state-wide operations. The railroads had been made parties to the proceedings to transfer the-certificate to the Northern Transportation Company but received no notice of any application to amend it. ■ However, copies of the amended certificate were furnished to the attorneys for the railroads shortly after it was issued on May 24, 1946. The only statute dealing with the amendment of a certificate by the Commission is Section 49-1816 NDRC 1943 which provides:

“The commission, at- any time, for good cause, may suspend -and, upon not less than five days’ notice to the grantee of any certificate, and on opportunity to be heard, may revoke or amend any certificate.”

The Commission is clearly vested with general power to amend a certificate and the only party to whom this statute requires notice to be given is the grantee. In this case the grantee was the .applicant .for the amendment. When original Certificate No. 175 was issued the Commission obtained jurisdiction of the subject matter and of the parties, including the railroads. • The only position of the railroads that is at all tenable is that they being parties who might be affected by the extension of competitive service permitted by the amendment were entitled to be heard and that in the absence of notice the amendment was not binding upon them. This contention can only go to the personal jurisdiction of the Commission over the railroads. It does not involve jurisdiction over the subject matter which fell within the general powers of the Commission. See Application of Hvidsten, 78 N.D. 56, 48 N.W.2d 26.

“A failure to comply with- the requirements as to notice and process may result in a failure to acquire jurisdiction, ' but if • a general appearance is entered, jurisdiction of the person is conferred even though it was not acquired by proper service of notice or process. A general appearance without objection waives all irregularities preceding the hearing.” 42 Am.Jur., Public Administrative Law, Section 121.

Our attention has been called to Petition of Village Board of Wheatland, 77 N.D. 194, 42 N.W.2d 321. In that case objection to the jurisdiction of the Commission was made by special appearance and we held that the objection was not waived by participating in the trial on the, merits after the objection had been overrulécl.

In November 1950 the Northern Transportation Company by application -to the Public Service Commission sought authority- to .sell and transfer the-.certificate to Balsam & De France. (Case No. S-1142) The certificate to be so transferred was not the,-.original restricted certificate but th,e amended and enlarged certificate und.er which the Northern Transportation Company had operated at least part of the time since its issuance in 1946. Noticp of hearing on this application for transfer was given to parties concerned, including 'the railroads. The notice of hearing served upon the railroads set forth the amended and the enlarged certificate verbatim. The railroads did not 'appear specially and object to the transfer of the enlarged' certificate on 'the, grouhd that it was issued without jurisdittion but appeared generally and ffes'isted the- transfer. It is clear from the record that the main reason for resisting the transfer was that the certificate permitted competitive transportation of petroleum and petroleum products on a state-wide basis. The railroads sought to challenge the public convenience and necessity of operations that might be conducted under the amended, certificate. This went not to jurisdiction but to merits of the operation permitted by the certificate.

The railroads contend that the Northern Transportation Company made little use of its authority under the certificate from 1946 when it obtained it until 1951 when it sold it to-Balsam & De France. This was undoubtedly the basis for the railroads’ attempt to resist the transfer on the ground .of lack of public convenience and necessity but that contention goes to the merits rather than to the jurisdiction of the Public Service Commission. It is also argued that if the Commission had at the hearing in 1951 righted the wrong it had committed by issuing the e5c parte amended and enlarged certificate no hardship would have ensued, an argument which again pertains to the merits and emphasizes the fact that if the railroads had then raised the question of lack of jurisdiction, as they clearly had the right and opportunity to do, no hardship would have ensued to Balsam & De France, who the record shows relied upon transfer to them of the amended certificate and thereafter engaged in the transportation of-petroleum products in bulk out of Fargo and Grand Forks.' It is clear to us that the railroads', having had the opportunity to raise the' qfiestioh of the authority of the Commission to make thé ex parte amended and extended' order when they appeared before the Commissibn and resisted on the merits the transfer.to Balsam & De France, by their general appear^ anee waived their objections to the jurisdiction of the Commission rising out of the issuance of the ex parte order and cannot now be heard to challenge the validity of that, order on the ground that the Commission had no jurisdiction to make it.

In the case of Grubb v. Public Utilities Commission of Ohio, 281 U.S. 470, 50 S.Ct. 374, 378, 74 L.Ed. 972, the Supreme Court of the United States speaking through Justice Van Devanter said’:

“The thing presented for adjudication in the case in the state, court was the validity of the order, and it was incumbent on the appellant to present in support of his asserted right'of attack every available ground of which he had knowledge. He was not at liberty to prosecute that right by piecemeal, as by presenting a part only of 'the available grounds and reserving others for. ^another suit, if failing in that. Werlein v. City of New Orleans, 177 U.S. 390, 398, et seq., 20 S.Ct. 682, 44 L.Ed. 817; United States v. California and Oregon Land Co., 192 U.S. 355, 358, 24 S.Ct. 266, 48 L.Ed. 476.
“As the ground just described was available but not put forward the hppel-lant must abide by the rule that a judgment upon;the merits.in one suit is res judicata in another where the pátties and subject-matter.are-the same, not only as respects matters actually presented to sustain or defeat the right asserted, but also as respects any-other available matter which .might have, been presented to that end. Baltimore S. S. Co. v. Phillips, 274 U.S. 316, 319, 47 S.Ct. 600, 21 L.Ed 1069; United States v. Moser, 266 U.S. 236, 241, 45 S.Ct. 66, 69 L.Ed. 262; Cromwell v. County of Sac, 94 U.S. 351, 352, 24, L.Ed. 195.”

Rehearing denied.

MORRIS and. GRIMSON, JJ., concur;.

JOHÑSON, J., did not participate


author: MÓRRIS, Judge.

text:
    Wendelin HAMAN, Claimant and Appellant, v. McHENRY COUNTY, a political subdivision of the State of North Dakota, the Board of County Commissioners of McHenry County and the State Highway Commissioner of the State of North Dakota, Respondents.
    No. 7542.
    Supreme Court of North Dakota.
    Oct. 26, 1955.

      Friederich & Ziegler, Rugby, for claimant and appellant.
    Leslie R. Burgum, Atty. Gen., Vernon R. Pederson, Sp. Asst. Atty. Gen., J, C. Mclntee, State’s Atty. of McHenry County, Towner, for respondent S. W. Thompson as State Highway Commissioner.
   MÓRRIS, Judge.

The state highway commissioner sought to obtain from Wendelin Haman .35 acres of land for- highway purposes. The commissioner being unable -to purchase the land, proceedings in the nature of eminent domain were' brought before the board of county commissioners of McHenry County pursuant to Section 24-0119, NDRC 1953-Supp. A public hearing was held before the board on -July 7, 1954, and an award of three hundred dollars made to the landowner. The landowner appealed to the district court, whereupon the commissioner moved to dismiss the appeal on the ground that the district court had no jurisdiction to hear and determine it. At the hearing on the motion the commissioner sought dismissal of the appeal, on the grounds that the notice of appeal was not served within the time prescribed by law and that the appellant owner had failed to file an undertaking for costs that complied with statutory requirements.

The order from which this appeal is taken recites:

“The above entitled matter having regularly come on for a hearing before this Court on the 18th day of November 1954, upon a motion of the Respondents for a dismissal of an appeal from an award made by the Board of County Commissioners of McHenry County, North Dakota on the 7th day of July 1954, in a condemnation proceeding wherein the State Highway Commissioner sought,to condemn certain lands belonging to the Claimant-Appellant;
“Ray R. Friederich appearing as attorney for the Claimant-Appellant and Victor V. Stiehm, State’s Attorney of McHenry County and Vernon R. Peder-son, Special Assistant Attorney General for the State Highway Department entering a special appearance for Respondents and objecting to the jurisdiction of this Court to hear this appeal, alleging that said appeal was not taken within the statutory time required by law and having moved for a dismissal of the appeal as aforesaid;
“And the Respondents herein having filed in support of said motion to dismiss, affidavits of one Anton Burk-hard, County Auditor of McPIenry County and S. W. Thompson, State Highway Commissioner, and the Court having duly considered same and heard the arguments and received the briefs of the respective counsel, and being fully advised in the premises, having found the service of the Notice of Appeal to have been made after the statutory time for taking said appeal, and the Court being therefore without jurisdiction ⅛ the matter, and having filed its Memo-Decision to that effect;'
“It Is Hereby Ordered that said appeal be and is in all things dismissed.”

The authority of the state highway commissioner to acquire land for use as a part of the state highway system derives from-Chapter 177, SLND 1953, which is now Chapter 24-01, NDRC 1953 Supp. If the-commissioner is unable to purchase the land', at what he deems a reasonable valuation he-may on petition proceed before the commissioners of the county where the land is. situated to have a proper award made by the commissioners in the manner provided? by Chapter 7 of Title 24, NDRC 1943. See Section 24-0119, NDRC 1953 Supp. The award appears to have been made by the-board of county commissioners of Mc-Henry County on July 7, 1954. This is-shown by a written award signed by the-members of the county board. The award', bears no filing date. The affidavit of the-county auditor made in connection with the-motion to dismiss confirms the date of the award but does not state when or where, if at all, the award was filed.

Section 24-0716 dealing with procedtire-for the ascertainment of damages by the-board of county commissioners, or in some-instances- by the board of township supervisors, provides:

“The board having jurisdiction shall assess the damages at what it deems, just and right to each individual claimant with whom it cannot agree. The-board of township supervisors shall de‘posit a statement of the amount of' damages assessed with the township clerk, and the board of county commissioners shall deposit the same with the-county auditor. The auditor or clerk shall note the time of filing the same.”

The provision for filing appears to have-been disregarded by the county auditor.

Section 24 — 0722, NDRC 1943, provides. that any person who feels himself aggrieved', by any determination or award of damages..

'"within thirty days after the filing of such determination or award of dam■ages, as provided in this chapter, may ■appeal therefrom.”

'Section 24-0723 provides that an appeal •may be taken “by the service and filing of a .notice of appeal and an undertaking for •costs.”

Section 24-0724, NDRC 1943, contains the ^provision that

“If the appeal is taken to the district court, the notice of appeal and undertaking shall be filed with the clerk of such court and the undertaking must be approved by the judge thereof or by the county auditor.”

The provisions of Chapter 24-07 to which •we have referred are designed to govern 'boards of county commissioners and township supervisors in the acquisition of rights •of way for highways and apply to state highway system acquisitions by references ■contained in Section 24 — 0119, NDRC 1953 Supp. heretofore noted and by Section 24-<0123, NDRC 1953 Supp. which provides:

“Any party aggrieved by the proceedings of the commissioner in the taking of land or materials, or by- the estimate of damages and the award of the board of county commissioners ■ shall have the remedies provided in this title for appeal from any determin•ation of a board of county commissioners in the taking of land for highway-•purposes. Service of a written or printed notice of such appeal shall be made ■upon the chairman of the board of county commissioners and the commissioner. An appeal-from-the award by the board ■of county commissioners, without filing •a cost bond, may be taken by the commissioner, by service of notice of appeal upon the chairman of the board of county commissioners and the owner of the property, in the manner provided by law for the service of a summons > in a civil action. Upon any appeal, the commissioner, on ■ application to the judge of the district court, shall be granted' a special term of court, in the manner provided in cases of eminent domain in the title judicial procedure, civil.”

In this case the notice of appeal and undertaking were served on the state highway commissioner and were filed in the office of the clerk of the district court of McHenry County on August 9, 1954. August 8 fell on Sunday. The landowner had thirty days in which to appeal. If that period began to run on July 9 or thereafter the service and -filing were in time. If the thirty day-period began to run on the date of .the award, July 7, .as the commissioner contends, the appeal was not taken in time.

The burden is on the commissioner, as movant for the dismissal of the appeal, to show that the period within which an appeal might be taken began to run more than thirty days prior to the - service of the notice of appeal and undertaking. Knutsen v. Krook, 111 Minn. 352, 127 N.W. 11, 20 Ann.Cas. 852. In an attempt to sustain this burden and support the contention that the period began to run from the date of the award by the board of county commissioners he points to Section 24-0122, NDRC 1953 Supp. which provides:

“At the expiration of thirty days from the award by the board of county commissioners from which no appeal ■has been taken as provided in section 95 of this Act (24-0123),-whenever such money shall have been deposited in the office of the clerk of court, the receipt of the owners of said property, or of such clerk of court, shall be recorded in the office of the register of deeds of the county in which such real estate is situated, and the title to the land or materials thereupon shall' be vested in the state.”-

The most that can be said for the ■ commissioner’s position is that there appears to be a possible inconsistency between Section 24 — 0122, NDRC 1953 Supp. and the appellate procedure provided by Chapter 7 of Title 24 when applied to an award that was not filed in -the office of the county auditor on the day it was made by the county commissioners. , Section 24-0122 permits the recording of a receipt of the clerk of court and the vesting of title in the state at the expiration of thirty days from the award while an appeal may he taken within thirty days after the filing of the award in the office of the county auditor, which may 'or may not be filed on the day the award is made. Sections 24-0716 and 24-0722, ND RC 1943. The fight of appeal is plainly provided for by these sections and insofar as there appears to be any inconsistency, Section 24-0122 must yield. The right of appeal is remedial and favored in the law. Kneeland v. Ethicon Suture Laboratories, 113 Cal.App.2d 335, 248 P.2d 447; Tims v. Holland Furnace Co., 152 Ohio St. 469, 90 N.E.2d 376; Perry v. Baskey, 158 Ohio St. 151, 107 N.E.2d 328; Beronio v. Pension Commission of City of Hoboken, 130 N.J.L. 620, 33 A.2d 855; Wadleigh v. State, 108 Kan. 682, 197 P. 217; In re Petition to Enlarge, etc., 232 Minn. 329, 45 N.W.2d 555; 4 C.J.S., Appeal and Error, § 20.

“The right of appeal is remedial, and in doubtful cases the doubt should be resolved in favor of the right whenever the substantial interests of a party are affected by a judgment * * *." People v. Bank of San Luis Obispo, 152 Cal. 261, 92 P. 481, 482.

Under the provisions of Section 24-0716, NDRC 1943 the statement of the amount of damages assessed by the board of county commissioners must be filed with the county auditor who shall note the time of filing. Under Section 24-0722, NDRC 1943 a person aggrieved by the awarded damages may appeal within thirty days after the filing of the. award. We deem the provision with regard to filing important for it fixes the place to which the property owner may go to ascertain what award has been made. There is no provision in the statute for giving him notice of the award. It is not made available to him in any other manner than by filing in the office of the county auditor. Until that act has been performed an award-that has'been made has no definite place of repose. In this case the record is silent as to . the time of filing. The only document from which it might be inferred that the award was filed at all is a receipt of the county treasurer acknowledging that he received from the county auditor three hundred dollars on behalf of the clerk of court for the condemnation of the land in question. This receipt is dated July 9, 1954. If we assume that the award was filed by the auditor on the date that he paid the amount awarded and the receipt was issued, the thirty day period for appeal would expire on August 8, 1954, but that date being on Sunday, the appellant would have the following'day within which "to perfect his appeal. Section 1-0305, NDRC 1943. This the landowner did by serving and filing a notice of appeal and undertaking on August 9. The court erred in determining that the notice of appeal was served after the statutory time for taking the appeal had expired.

The trial court dismissed the appeal on the sole ground that the notice of appeal was not served within the time prescribed by statute. As to the contention that the undertaking was defective, he ruled in open court that he would permit the undertaking to :be corrected. The commissioner contends that the undertaking was so defective as to amount to no undertaking at all and .that under our holding in Peterson v. State Highway Commissioner, N.D., 63 N.W.2d 138, the failure to file an undertaking for costs renders the appeal ineffective. In that case no undertaking at all was either served or filed and its absence was held to be jurisdictional. In this case an undertaking was both served and filed. The question is whether the undertaking was so defective as to.be a complete-nullity.

This is an appeal from a determination of the board of county commissioners to the district court. We do not have a statute specifically authorizing the amendment of .such appeals as we do in cases where appeals are taken to the supreme court. See Section 28-2726, NDRC 1943 and McLean v. Underdal, 73 N.D. 74, 11 N.W.2d 102. Nevertheless, where upon an appeal from a decision of the board of county commissioners to the district court pursuant to the provisions .of Section 24-0123, NDRC 1953 Supp. a valid notice of appeal has been timely served and filed but the accompanying undertaking for costs is defective but not void, the appellate court has jurisdiction of the appeal and may permit the undertaking to be corrected or amended. 3 Am.Jur., Appeal and Error, Section 510; 4 C.J.S., Appeal and Error, §' 567. In this case a valid notice of appeal was served and filed in time. The commissioner claims the undertaking was fatally defective in that the obligee named - therein was McHenry County and contends that the undertaking should be in favor of him as obligee and that McHenry County was not a proper party to this appeal. . He also points out that the undertaking was not approved by the judge or county auditor as required by Section 24-0724, NDRC 1943. . These contentions compel further resort to the applicable statutes. We have .already pointed out that Section 24-0123, NDRC 1953 Supp. provided that a party aggrieyed by the proceedings before the board of county commissioners should “have the remedies provided in this title for appeal from any determination of a board of county commissioners in the taking of land for highway purposes.” It is further provided “Service of a written or printed notice of such appeal shall be made upon the chairman of the board of county commissioners and the commissioner.” It should be noted that nothing is said about serving an undertaking for costs. Section 24-0724, NDRC 1943 requires it to be filed with the clerk of the district■ court. The lack of a requirement for service of an unr dertaking is further emphasized by the provision of Section 24-0123 that: 1

“An appeal from the award by the board of county commissioners, without filing a cost bond, may be taken by the commissioner, by service of notice of appeal upon the chairman of the board of county commissioners and the owner of the property, in the manner provided by law for the service of a summons in a civil action.”

This section clearly discloses that either upon appeal by the owner of the property or by the commissioner the notice of appeal must be served upon the chairman of the board of county commissioners, thus indicating an intention that the county be made a party to the appeal, at least to the extent of permitting the board, to appear and defend its action, although as we held in Lineburg v. Sandven, 74 N.D. 364, 21 N.W.2d 808, judgment may be rendered against the state highway commissioner alone.

We have searched in vain for a statutory provision requiring the state highway commissioner to be named in the undertaking for costs as an obligee. Section 24-0723, NDRC 1943 provides:

“The undertaking shall be made in favor of the county or township, as the case may be, and shall be conditioned for the payment of all costs that may arise upon such appeal if the determination appealed from shall be affirmed.”

The landowner in this case has meticulously followed the available statutes in making the undertaking for costs run in favor of the county and in serving the notice of appeal upon both the chairman of the board .of county commissioners and the state highway commissioner. There may be an omission in the statute since there is no provision requiring an undertaking for costs in favor of the commissioner although it would seem that the court in the exercise of his discretion might properly require that the commissioner be indemnified. That appears to be what the court did in this case. But the failure to indemnify the commissioner in the first instance when an undertaking has been filed that corresponds to statutory requirements is not a jurisdictional defect that would render the undertaking filed equivalent to no undertaking at all. The court was not without jurisdiction for the reason that no undertaking was filed, as was the case in Peterson v. State Highway Commissioner, supra.

The failure of the judge of the district court or the county auditor to approve the undertaking for costs is, a non-jurisdictional omission which may be supplied with the permission of the court granted upon the application of the appellant. In re O’Donnell's Estate, 318 Ill.App. 373, 48 N.E.2d 192.

' The notice of appeal having been served and filed in time and the're being no jurisdictional defect in the undertaking,' the court erred in dismissing the appeal. The order ap'pealed from is reversed.

BURICE, C. J., and SATHRE, JOHNSON and GRIMSON, JJ., concur.