Commonwealth of Pennsylvania, Pennsylvania Game Commission v. Thomas E. Proctor Heirs Trust

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

COMMONWEALTH OF : CIVIL ACTION NO. 1:12-CV-1567

PENNSYLVANIA, PENNSYLVANIA :

GAME COMMISSION, : (Chief Judge Conner)

:

Plaintiff :

:

v. :

:

THOMAS E. PROCTOR HEIRS :

TRUST and MARGARET PROCTOR :

TRUST, :

:

Defendants :

MEMORANDUM

Millions of acres of Pennsylvania land are situated above the Marcellus

Shale, an underground sedimentary rock formation spanning multiple states and

containing massive reserves of natural gas. Experts conservatively value that gas in

the hundreds of billions of dollars. Relatively new methods of drilling—most

notably hydraulic fracturing or “fracking”—have unlocked the potential to tap these

subsurface gas reserves. To no one’s surprise, the ability to reach this lucrative

natural resource has engendered heated ownership disputes like the one before this

court.

Plaintiff, Commonwealth of Pennsylvania, Pennsylvania Game Commission

(“Game Commission”), claims that it owns both the surface and subsurface rights

for numerous tracts of land in Sullivan and Bradford Counties in northeastern

Pennsylvania. Defendants, Thomas E. Proctor Heirs Trust and Margaret O.F.

Proctor Trust (collectively, “Proctor Trusts”) disagree, contending that they hold

superior title to the subsurface estates underlying these tracts. A lengthy and

complex legal battle has ensued, culminating in cross-motions for partial summary

judgment regarding a bellwether tract of land in Bradford County. (Docs. 94, 123).

Chief Magistrate Judge Susan E. Schwab issued an extensive report, (Doc. 155),

recommending that the cross-motions for summary judgment be denied. Both

parties have filed objections to Judge Schwab’s report.

I. Factual Background and Procedural History1

We need not repeat the comprehensive factual and procedural background

Judge Schwab supplied, (see Doc. 155 at 1-10, 19-24), familiarity with which is

presumed. The following is a consolidated version of undisputed facts most

pertinent to the parties’ objections and pending Rule 56 disputes. These factual

details primarily relate to the Josiah Haines warrant—the bellwether tract that is

the focus of cross-motions for partial summary judgment.

In 1893, Schrader Mining & Manufacturing Company conveyed the Josiah

Haines warrant—located in LeRoy Township, Bradford County—to Thomas E.

Proctor (“Proctor”) and Jonathan A. Hill (“Hill”). (Doc. 95 ¶ 5). The following year,

1 Local Rule 56.1 requires that a motion for summary judgment pursuant to

Federal Rule of Civil Procedure 56 be supported “by a separate, short, and concise

statement of the material facts, in numbered paragraphs, as to which the moving

party contends there is no genuine issue to be tried.” LOCAL RULE OF COURT 56.1.

A party opposing a motion for summary judgment must file a separate statement

of material facts, responding to the numbered paragraphs set forth in the moving

party’s statement and identifying genuine issues to be tried. Id. Unless otherwise

noted, the factual background herein derives from the parties’ Rule 56.1 statements

of material facts. (See Docs. 95, 121, 125, 129). To the extent the parties’ statements

are undisputed or supported by uncontroverted record evidence, the court cites

directly to the Rule 56.1 statements.

Proctor and Hill and their wives deeded the property to Union Tanning Company

(“Union Tanning”), “reserving” the subsurface rights to minerals, oil, gas, coal, and

petroleum (hereinafter “mineral rights” or “subsurface estate”).2 (Id. ¶¶ 8-9). This

conveyance effectively severed the surface and subsurface estates of the Josiah

Haines warrant, vesting those rights in separate owners. In 1903, Union Tanning

conveyed its surface ownership interest in the Josiah Haines warrant to Central

Pennsylvania Lumber Company (“CPLC”), excepting the rights to certain tree bark

and conveying the property “subject to” all prior exceptions and reservations. (Id.

¶¶ 13-15). In June 1908, Calvin H. McCauley, Jr. (“McCauley”), purchased the

Josiah Haines warrant at the Bradford County treasurer’s sale (hereinafter “tax

sale” or “treasurer’s sale”) when the property was sold to recover unpaid taxes for

1907. (Id. ¶¶ 23, 25). Exactly what interest—whether only surface rights or both the

surface and subsurface estates—this 1908 tax sale conveyed is the gravamen of the

instant dispute.

2 Proctor and Hill used the term “reserving” in their 1894 deed to Union

Tanning, but they should have used “excepting” with regard to their preservation of

mineral rights. The terms “reservation” and “exception” have distinct legal

meanings. A reservation in a deed creates a new right or interest in real property

that did not previously exist at the time of the conveyance. See Lauderbach-Zerby

Co. v. Lewis, 129 A. 83, 84 (Pa. 1925). A common example of a reservation is a newly

created easement for the grantor in land conveyed, which right did not exist before

the conveyance. See, e.g., Baptist Church in Great Valley v. Urquhart, 178 A.2d 583,

586 (Pa. 1962). An exception, on the other hand, retains for the grantor title to an

existing interest excluded from the transfer. See Lauderbach-Zerby Co., 129 A. at

84; Ralston v. Ralston, 55 A.3d 736, 741-42 (Pa. Super. Ct. 2012). An exception “is

always part of the thing granted, it is the whole of the part excepted” from the

conveyance. Lauderbach-Zerby Co., 129 A. at 84. Hence, it is more accurate to

state that Proctor and Hill “excepted” the mineral rights from their conveyance to

Union Tanning.

In December 1910, McCauley and his wife—in consideration of a recited

payment of $1.00—quitclaimed all interest in numerous properties, including the

Josiah Haines warrant, to CPLC. (Id. ¶ 31). Finally, in 1920, CPLC conveyed its

interest in the warrant to the Game Commission, “subject to” the prior 1894 Proctor

and Hill mineral rights exception and any exceptions or reservations in the 1903

deed from Union Tanning to CPLC. (Id. ¶¶ 37-38).

Since 1980, Proctor’s heirs, who comprise the Proctor Trusts, have been

leasing the Josiah Haines warrant for oil and gas development. (Id. ¶¶ 46-47). The

Proctor Trusts and the Game Commission now seek to quiet title to the subsurface

estate of the warrant, asking the court to enter judgment as a matter of law as to

ownership thereof.

II. Legal Standards

A. Review of a Magistrate Judge’s Report and Recommendation

When a party objects to a magistrate judge’s report and recommendation, the

district court must review de novo the challenged portions of the report. 28 U.S.C.

§ 636(b)(1)(C); Brown v. Astrue, 649 F.3d 193, 195 (3d Cir. 2011); LOCAL RULE OF

COURT 72.3. Uncontested portions of the report are reviewed for “clear error on the

face of the record.” Clouser v. Johnson, 40 F. Supp. 3d 425, 430 (M.D. Pa. 2014)

(quoting Cruz v. Chater, 990 F. Supp. 375, 375-78 (M.D. Pa. 1998) (quoting FED. R.

CIV. P. 72(b) advisory committee’s note to 1983 amendment)).

B. Summary Judgment

Through summary adjudication, the court may dispose of those claims

that do not present a “genuine dispute as to any material fact” and for which a

jury trial would be an empty and unnecessary formality. FED. R. CIV. P. 56(a).

The burden of proof tasks the non-moving party to come forward with “affirmative

evidence, beyond the allegations of the pleadings,” in support of its right to relief.

Pappas v. City of Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); see also Celotex

Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The court is to view the evidence “in

the light most favorable to the non-moving party and draw all reasonable inferences

in that party’s favor.” Thomas v. Cumberland County, 749 F.3d 217, 222 (3d Cir.

2014). This evidence must be adequate, as a matter of law, to sustain a judgment in

favor of the non-moving party on the claims. Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.

574, 587-89 (1986). Only if this threshold is met may the cause of action proceed.

See Pappas, 331 F. Supp. 2d at 315.

Courts are permitted to resolve cross-motions for summary judgment

concurrently. See Lawrence v. City of Philadelphia, 527 F.3d 299, 310 (3d Cir. 2008);

see also Johnson v. Fed. Express Corp., 996 F. Supp. 2d 302, 312 (M.D. Pa. 2014);

10A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2720 (3d

ed. 2015). When doing so, the court is bound to view the evidence in a light most

favorable to the non-moving party with respect to each motion. FED. R. CIV. P. 56;

Lawrence, 527 F.3d at 310 (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245

(3d Cir. 1968)).

III. Discussion

The parties’ numerous objections to Judge Schwab’s report3 can be distilled

into several fundamental disagreements: first, whether Judge Schwab was correct

in determining that there is a genuine dispute of material fact as to the character—

seated or unseated—of the land constituting the Josiah Haines warrant when

assessed in 1907 and sold at the 1908 tax sale; second, whether there is a material

factual dispute regarding an agency relationship between the 1908 tax-sale

purchaser (McCauley) and CPLC; third, whether language in the 1920 deed

prevented the Game Commission from obtaining title to the subsurface estate; and

3 The parties filed their cross-motions for partial summary judgment shortly

after the Supreme Court of Pennsylvania issued its seminal decision in Herder

Spring Hunting Club v. Keller, 143 A.3d 358 (Pa. 2016). Judge Schwab, aware of the

importance of Herder Spring, provided a detailed recitation of the facts and

holdings of that case. (See Doc. 155 at 4-8). Accordingly, we presume familiarity

with Herder Spring and the “title wash” concept discussed at length therein. See

Herder Spring, 143 A.3d at 366-68.

fourth, whether federal due process concerns affect the validity of the 1908 tax sale.4

We address these intricate disputes seriatim.

A. Character of the Land

The Game Commission’s claim to the subsurface estate underlying the Josiah

Haines warrant relies entirely on the premise that the 1908 tax sale “washed” the

title and rejoined the previously severed surface and subsurface estates, thereby

giving good title to the entire warrant to McCauley, the tax-sale purchaser.

According to the Game Commission, Herder Spring’s endorsement of the title-wash

phenomenon squarely answers the ownership claims in this case. The Game

Commission contends that because the warrant was unseated and assessed as such,

and because there is no evidence that Proctor and Hill reported their subsurface

interest for separate assessment to the Bradford County commissioner, the warrant

4 Judge Schwab also addresses the Proctor Trusts’ motion to strike the Game

Commission’s expert evidence and recommends striking portions of that evidence.

(See Doc. 155 at 11-17 & nn.8-9). The Game Commission objects to this

recommendation, but after de novo review we are in complete agreement with

Judge Schwab’s analysis and conclusions, and we will adopt them as our own. In

particular, we note that the Game Commission misapprehends Rule 56 standards

and procedure when it repeatedly claims that the court is “the trier of fact.” (See,

e.g., Doc. 142 at 1, 5, 10; Doc. 158 at 17, 19). The court is not the trier of fact in this

case. That task is the sole province of a jury, and indeed a jury trial has been

demanded. (See Doc. 66 at 29). The court’s role at summary judgment is to

determine whether a genuine dispute of material fact exists such that trial is

required. See Anderson, 477 U.S. at 249. We acknowledge the Game Commission’s

related assertion that its expert’s report merely seeks to clarify the complex title-

transfer issues in this case. Nevertheless, we agree with Judge Schwab that the

conclusions set forth in the report regarding the legal effect of the 1908 tax sale and

ownership of the disputed mineral rights impermissibly usurp the role of the court

in this quiet title action.

was properly assessed as a whole in 1907 and sold as a whole at the 1908 treasurer’s

sale.

The Proctor Trusts counter that there is ample evidence that the Josiah

Haines warrant was actually seated in character when it was assessed for 1907

taxes. Thus, it was improperly sold as unseated at the 1908 treasurer’s sale.

According to the Proctor Trusts, the 1908 treasurer’s sale was void because of this

error, and the sale did not divest Proctor and Hill of their subsurface rights. Judge

Schwab found that there is a genuine dispute of material fact regarding the

character of the land when classified as unseated by the county assessor in 1907,

precluding summary judgment.

Our analysis of this classification dispute is informed by Pennsylvania’s

historical treatment of land as seated and unseated. Prior to 1947, Pennsylvania’s

real property taxing practices varied depending on whether land was noticeably

occupied or developed (“seated”) or wild and undeveloped (“unseated”). Herder

Spring, 143 A.3d at 363-64. This distinction directly impacted the parcel owner’s

potential tax liability. Owners of seated land could be held personally liable for the

taxes assessed on their plot. Id. at 364. Because unseated land was deemed to be in

its natural condition and owners often resided in another county or state, taxes for

unseated lands were “imposed on the land itself”; owners were not held personally

responsible. Id.; Northumberland County v. Phila. & Reading Coal & Iron Co., 131

F.2d 562, 565-66 (3d Cir. 1942). The county in which the unseated land was located,

consequently, could sell that land at a treasurer’s sale to recover any unpaid taxes—

“the logical method of collection.” See Northumberland County, 131 F.2d at 565-66.

County land assessors were responsible for “travers[ing] the county” to

determine whether land was seated or unseated and for reporting such distinctions

to the county commissioner for taxation purposes. Herder Spring, 143 A.3d at 364;

see also McCall v. Lorimer, 4 Watts 351, 353 (Pa. 1835). It was the duty of the

assessor to designate the land as seated if the assessor found “such permanent

improvements as indicate a personal responsibility for the taxes,” and, if no such

improvements were evident, to designate the land as “unseated.” Hutchinson

v. Kline, 49 A. 312, 313 (Pa. 1901) (per curiam); Dolph v. Everhart, 19 A. 431, 432-33

(Pa. 1890). Hence, the distinction between seated and unseated land was in the

“eye of the assessor.” Hutchinson, 49 A. at 313; Stoetzel v. Jackson, 105 Pa. 562, 567

(1884).

To prompt a “seated” designation, the appearance of the land itself must

have indicated a visible “substantial occupancy.” See Rosenburger v. Schull, 7

Watts 390, 394 (Pa. 1838). Substantial occupancy was evidenced by regular and

continuous use of the land. Watson v. Davidson, 87 Pa. 270, 270 (1878); see George

v. Messinger, 73 Pa. 418, 422-23 (1873). Importantly, neither actual residence nor

developments made to increase the value of the land were prerequisites to seating a

tract. Watson, 87 Pa. at 271, 274. Land could be seated if the property was used for

resource-extraction endeavors like lumbering or mining, so long as the landowner

or agent “carrie[d] on the business for so long a time and in such a manner

continuously, from year to year, as to show an actual and permanent occupancy of

the tract.” Id. at 274; see Herder Spring, 143 A.3d at 363 (citing Robert Grey

Bushong, Pennsylvania Land Law, Vol. 1 § 469(II) at 500-01 (1938)).

1. Game Commission’s Objection

The Game Commission objects to Judge Schwab’s determination that a

genuine dispute of material fact exists as to the character of the land for the 1907

assessment. The Game Commission contends that evidence offered by the Proctor

Trusts is insufficient as a matter of law to find the Josiah Haines warrant seated in

1907, and that Judge Schwab erred by holding otherwise. We disagree.

As Judge Schwab noted, the Proctor Trusts have proffered competent

evidence that significant bark-peeling and lumbering activities occurred on the

Josiah Haines warrant in 1905, 1906, and 1907. In 1905, tanbark5 was harvested

from 60 acres of the warrant, yielding 300,900 net tons of bark and 189,500 feet of

hemlock lumber. (Doc. 95 ¶ 18). The following year, tanbark was harvested from

201 acres, producing 1,000,000 net tons of bark. (Id. ¶ 19). Finally, in 1907, tanbark

was harvested from 149.5 acres, yielding 104,300 net tons of bark. (Id. ¶ 20).

What both parties fail to observe is that, when these annual bark-peeling

figures are added together, they equal 410.5 acres—the exact acreage of the Josiah

Haines warrant. (See, e.g., Doc. 97-1 at 43; Doc. 98-1 at 70, 71, 92, 101). In other

words, by 1907, CPLC had stripped the entire Josiah Haines warrant—section by

section—of all its hemlock bark. This conclusion is buttressed by CPLC’s plat

5 The bark from hemlock, which contains high levels of tannin, was utilized

extensively in the tanning industry in northeastern United States in the 1800s and

early 1900s. For an expansive discussion of this process, see Hugh O. Canham,

Hemlock and Hide: The Tanbark Industry in Old New York, NORTHERN WOODLANDS,

Summer 2011, https://northernwoodlands.org/articles/article/hemlock-and-hide-the-

tanbark-industry-in-old-new-york.

“No. 15,” which divides the warrant into three distinct sections and indicates that a

different portion was “peeled as of” 1905, 1906, and 1907, resulting in the whole

warrant being peeled by 1907. (See Doc. 104-7 at 2). It is likewise corroborated by

the December 9, 1920 affidavit of A.R. Spicer, “First Vice President” and “General

Land & Timber Superintendent” of CPLC, who averred that “all of the Hemlock

bark has been removed from” the “410.5” acres comprising the Josiah Haines

warrant. (Doc. 98-1 at 100-01).

It is true that the Proctor Trusts have provided little in the way of describing

how the land may have appeared to an assessor following CPLC’s bark-peeling

activities. Nonetheless, scholars have indicated that hemlock peeling could have

substantial effects on the character of the land. As explained by Hugh O. Canham,

emeritus professor of forest and resource economics at the S.U.N.Y. College of

Environmental Science and Forestry, the common method of harvesting tanbark

was to cut down the hemlock trees, strip their bark, and leave the wood—which was

less desirable than pine—to “rot in the forest.” Canham, Hemlock and Hide: The

Tanbark Industry in Old New York, supra note 5. This process resulted in “clearcut”

hemlock forests and “denuded hillsides, with rotting hemlock trees stripped of their

bark[.]” Id. “Each acre of these woods produced only twelve cords of bark,

meaning that the average tannery consumed more than one hundred acres each

year. Immense waste resulted, as the strippers took only the bark, leaving the

bared logs to rot in the woods.” Robert Kuhn McGregor, Changing Technologies

and Forest Consumption in the Upper Delaware Valley, 1790-1880, 32 J. FOREST HIST.

69, 77 (1988). Indeed, tanneries’ extensive hemlock-bark consumption “devastated

large portions of the region’s forests.” Id. Additionally, due to the dusk-to-dawn

nature of peeling work, bark peelers would “set up camps in the forest” during the

peeling season, harvesting tanbark and sending it off to tanneries via horse-drawn

wagons or sleds. Canham, Hemlock and Hide: The Tanbark Industry in Old New

York, supra note 5.6

We have little doubt that a reasonable juror could find that when the Josiah

Haines warrant was assessed for taxes in 1907, the appearance of the land to the eye

of the assessor would have implicated a “seated” designation. There is significant

evidence regarding “actual and permanent occupancy of the tract, with the use

thereof,” such that the assessor’s classification of the tract as unseated could

reasonably be questioned. See Watson, 87 Pa. at 270, 274. The Game Commission’s

argument that the facts in this case differ from those in Messinger and Watson is

unavailing. Under Pennsylvania law, what matters is not the type of improvement

or business being carried on, but “the permanent occupancy and possession with

the means afforded thereon for the collection of taxes.” Id. at 274. We cannot say

that timber removal coupled with sustained and comprehensive bark-peeling

activities on the Josiah Haines warrant would be insufficient to seat the land. Judge

Schwab’s determination on this account is not erroneous.

6 We do not rely on the cited scholarly articles as evidence in this case. We

provide this information simply to demonstrate that, were we to “give [the Proctor

Trusts] an opportunity to properly support or address” the bark-peeling process

and its effects on the land, such evidence could be supplemented. See FED. R. CIV.

P. 56(e)(1). We need not take this step, however, because of our conclusion in

Section III(A)(2), infra.

2. Permissibility of the Classification Challenge

Whether the Proctor Trusts can assert this argument to attack the 1908

treasurer’s deed over a century after the assessment and tax sale is a different

matter. After exhaustive review of relevant state and federal cases, as well as the

legislative history of the applicable statute, we conclude that the Proctor Trusts’

challenge is foreclosed by law.

Our starting point is the critical statute at issue, the Act of June 3, 1885 (“Act

of 1885” or “the Act”), which provides:

All sales of seated or unseated lands within this

commonwealth which shall hereafter be made for

arrearages of taxes due thereon, shall be held, deemed

and taken to be valid and effective irrespective of the fact

whether such lands were seated or unseated at the time of

the assessment of such taxes. Provided, That nothing in

this act contained shall validate or authorize the sale of

any land which was in fact seated at the time of the

assessment of the taxes thereon, in any case where there

was sufficient personal property on the premises to pay

all the taxes assessed thereon, liable under the laws of this

commonwealth to have been seized therefor.

72 PA. STAT. AND CONS. STAT. ANN. § 5933. The first sentence of the Act generally

puts an end to attacking the validity of tax sales based on “the fact” of whether the

land was really seated or unseated at the time of its assessment. Its phrasing is

clear and unambiguous. However, the second sentence—the exception to the

general rule—has injected needless confusion into state and federal jurisprudence.

In Northumberland County v. Philadelphia and Reading Coal & Iron Co.,

131 F.2d 562 (3d Cir. 1942), the court of appeals examined this exception in the

context of a corporate-reorganization bankruptcy appeal; the case did not involve

validity of a tax-sale title. The debtor coal company claimed that, because land

which it had owned but had failed to pay taxes on for years 1937 and 1938 had been

assessed as unseated, it was not liable for those taxes and was not obligated to pay

them as an administrative expense. Northumberland County, 131 F.2d at 563-64.

The county rejoined that, although placed on the unseated list, the land was “in fact

seated” and the county had evidence to prove it; thus, the coal company was

obligated to pay the county approximately $174,000 in overdue taxes. Id. at 564.

The court described the question before it as “whether there is personal liability on

the part of the owner for taxes assessed upon Pennsylvania land which has been

assessed as unseated but which was at the time of assessment in fact seated.” Id.

After a lengthy recitation of tax treatment of unseated land in Pennsylvania,

the court agreed with the county. Id. at 564-66. It explained that the Act of 1885,

“while validating sales of lands as seated or unseated which were not so in fact,

made it clear that the validation did not extend to lands which were in fact seated if

there was sufficient personal property on the premises liable to pay the taxes.” Id.

at 567. The court then broadly pronounced, “The act . . . clearly contemplated

that the true character of the land as seated should always be open to inquiry in

determining the validity of proceedings taken to collect the taxes upon it.” Id.

(emphasis added). The court thus held that it was error to reject “evidence as to the

actual character of the land” at the time of assessment and remanded the case for a

further hearing to “determine whether the lands here in controversy were in fact

seated or unseated.” Id. at 568.7

Conspicuously absent from the Northumberland County decision is any

discussion of Pennsylvania cases which interpreted and applied the Act. See id. at

564-68 & nn.12-15 (citing Pennsylvania cases dating from 1822 to 1869). The

Northumberland County court mentions only a single Pennsylvania case postdating

the Act: Dolph v. Everhart, 19 A. 431 (Pa. 1890). See id. at 566, 568 n.19. But Dolph

is cited merely to describe how a tract is determined to be seated or unseated, not

when or how challenges to such a determination can be asserted following a tax sale

of the land, as informed by the Act of 1885. See id.

This omission is a glaring one. Multiple Pennsylvania appellate court cases

have directly addressed ramifications of the Act of 1885 on assessor classifications of

land as well as the validity of subsequent tax-collection proceedings. Most notably,

eight months before the Third Circuit decided Northumberland County, the

Pennsylvania Supreme Court analyzed these salient issues in Scott v. Bell, 25 A.2d

308 (Pa. 1942). Scott is directly on point and it controls our determination in the

instant case.

7 The Northumberland County court’s reliance on numerous Pennsylvania

cases predating the Act of 1885 undoubtedly informed this conclusion. See id. at

564-68 & nn.12-15 (citing Pennsylvania cases spanning from 1822 to 1869). Those

decisions, which permitted fact-intensive challenges to assessors’ classification of

land (and often resulted in tax titles being invalidated), were part of the impetus for

the Act. See Scott v. Bell, 25 A.2d 308, 309, 310 (Pa. 1942).

In Scott, the state supreme court considered whether the deed from a

treasurer’s sale of unseated land could be attacked as invalid by proffering evidence

that “the lots when assessed were in fact seated land.” Scott, 25 A.2d at 309. The

trial judge had considered evidence of the land’s appearance and found, as a fact,

that the land was unseated in character. Id. Based on this factual finding, the trial

court held that the treasurer’s sale passed good title to the tax-sale purchaser. Id.

The supreme court concluded that such factual findings were unnecessary

because the Act of 1885 controlled and validated the treasurer’s deed. Id. The court

first observed that, prior to the Act’s passage, “the sale of land as unseated when it

was in fact seated, or the converse, passed no title[.]” Id. (citations omitted). But by

enacting this statute,

the legislature in effect provided . . . that where land was

“regularly assessed, either as seated or unseated, and

where the procedure leading up to the sale was regular

and followed the assessment, then the sale so made should

be valid and effective, ‘irrespective of the fact whether

such lands were seated or unseated at the time of the

assessment;’ in other words, irrespective of whether the

assessor, in determining the status of the property made a

mistake or not.” That act made an important change in

the law by validating sales which followed the assessment

and it furnished some protection to purchases at tax sales

by foreclosing litigation as to whether the assessor had

erred in determining whether the land was in fact seated or

unseated, a question which was often close and technical.

Id. (emphasis added) (quoting Pittsburgh Hunting Club v. Snyder, 51 Pa. Super.

174, 182 (1912)). Prior to the Act of 1885, the court explained, determining whether

land was seated or unseated in character was “highly technical” and often created

an issue of fact for the jury, which “led to so much litigation that the tax titles were

looked on with suspicion and the collection of taxes was made difficult.” Id. The

Act of 1885 was intended to address these concerns and to “declare that . . . it

should not be necessary or material to go behind the assessment and inquire into its

correctness.” Id. at 310 (alteration in original) (quoting Snyder, 51 Pa. Super. at

181).

Scott provides insight not only into the legislative intent behind the Act of

1885, but also as to what its exception means. Scott implies that the exception

operated to invalidate tax sales in the rare situation where land was regularly

assessed as seated or unseated but then sold at a tax sale as the opposite, failing to

“follow” its assessment. See id. at 309 (citing Snyder, 51 Pa. Super. at 182). A

perfect illustration of these circumstances is provided in Snyder, the Pennsylvania

Superior Court case cited extensively by Scott.

In Snyder, the land at issue had been regularly assessed as seated from 1894

to 1900 and the hunting club owners had paid the taxes levied on them each year.

Snyder, 51 Pa. Super. at 178. In 1900, although the land was again assessed as

seated and placed on the seated list, the county supervisor, “either by mistake or

ignorance of his proper function,” returned the land as unseated to the county

treasurer for an unpaid road tax. Id. The property was then sold as unseated for

unpaid 1900 taxes by the county treasurer at a 1902 tax sale, and the hunting club

owners challenged the validity of that sale. Id. at 176, 178.

In holding that the treasurer’s deed did not pass title to the tax-sale

purchaser, the Snyder court was careful to explain why the Act of 1885 did not

validate the sale. See id. at 180-83. Prior to passage of the Act, the court noted,

“there naturally arose many contests as to whether or not a tract assessed, returned

and sold as unseated, was in point of fact seated land, or vice versa.” Id. at 181. The

court then reviewed the statute and its effect on such disputes, explaining that,

except in “the single instance covered” by the Act’s exception, “it should not be

necessary or material to go behind the assessment and inquire into its correctness.”

Id. at 181-82 (emphasis added). The court reasoned that when land is regularly

assessed as seated or unseated, and “where the procedure leading up to the sale

was regular and followed the assessment,” the tax sale would be valid and effective

“irrespective of whether the assessor, in determining the status of the property made a

mistake or not.” Id. (emphasis added). The case before the Snyder court was one of

those rare situations where the treasurer’s sale was invalid, despite the Act of 1885,

because the property at issue had been “suddenly shifted from its assessed class to

the other[.]” Id. at 182. That is, the land had been regularly characterized and

assessed as seated, but then suddenly sold by the county treasurer as unseated.

Because the sale did not follow the assessment, it was void. Id.

Similarly, in Weaver v. Meadville Lumber Manufacturing Co., 61 Pa. Super.

167 (1915), the court examined the validity of a tax sale for land assessed as seated

but “improperly returned as unseated” and “placed on the unseated land tax return

and sold as unseated land[.]” Weaver, 61 Pa. Super. at 169. The court found that

such a sale was void. Id. at 171 (citing Snyder, 51 Pa. Super. 174). The Weaver

court explained that the Act of 1885 “provided that the fact whether lands were

seated or not at the time of assessment, should not invalidate the assessment, in

other words, when a sale followed the assessment it was valid whether the assessor

had correctly named the land or not[.]” Id. at 170 (emphasis added). The court

reasoned that “[w]hen the assessor has by virtue of his office stamped the land as

seated or unseated, that fixes the method to be employed thereafter in the collection

of taxes against it.” Id. at 171. “[T]he class wherein [the land] was placed should be

consistently followed and . . . there could be no passage from one class to the other

or shifting from one class to the other” during tax-sale proceedings. Id. In

circumstances like Weaver and Snyder, where the tract was improperly shifted

from one classification to the other and did not follow the assessment, the

subsequent tax sale was not effective to pass title even when considering the Act of

1885. See id. at 170-71.

Finally, in Blair v. Pennsylvania Turnpike Commission, 33 A.2d 490 (Pa.

Super. Ct. 1943), which postdates Northumberland County, the Superior Court

examined the same issue: whether land clearly characterized and assessed as

seated, which was later sold as unseated for unpaid taxes, could convey good title to

the tax-sale purchaser. Blair, 33 A.2d at 493. Relying on Scott, the court held that

such a sale was ineffective to pass title. Id. The court reasoned that the Act of 1885

generally validated tax sales “where the land is regularly assessed, either as seated

or unseated, and where the procedure leading up to the sale is regular and follows

the assessment . . . whether the land was seated or unseated at the time of the

assessment.” Id. (citing Scott, 25 A.2d 308). The Blair court cautioned, however,

that “the sale must follow the assessment in order to be valid, and there can be no

valid sale of land for taxes on unseated land, where the assessment was on seated

land.” Id. (emphasis added). The court further emphasized that there existed

“ample personal property” on the land in the form of cut stone to pay any taxes

owed. Id.

The only case we have uncovered reaching a different result is Bannard

v. New York State Natural Gas Corp., 293 A.2d 41 (Pa. 1972). Bannard is easily

distinguishable. In Bannard, a newly created subsurface estate—which had no

development, improvement, or mineral extraction until 1957—was assessed and

erroneously placed on the seated list in 1900. Bannard, 293 A.2d at 44, 49-50. The

surface tract also appeared on the seated list that year. Id. at 44. In 1901, the seated

list indicated that the mineral estate had been moved to the unseated list, but there

is no evidence that this change in designation ever occurred. Id. Thus, from 1901 to

1915, the mineral estate continued to be assessed as seated and to appear on the

seated list. Id. at 44-45.

In 1916, the mineral tract was sold as unseated by the county treasurer for

unpaid 1913 and 1914 taxes. Id. at 45. The Bannard court held that the mistaken

placement of the undeveloped mineral tract on the seated list did not invalidate the

treasurer’s sale of the property as unseated, finding that “unseated” was the

manner in which the mineral tract “should have been assessed for tax purposes.”

Id. at 50 (citing Act of 1885; Blair, 33 A.2d at 493; Scott, 25 A.2d 308). The court

concluded that “because of the [Act of 1885], the assessment of the tract on the

seated list was not fatal to the title acquired” from the 1916 treasurer’s sale. Id.

Blair, however, holds the opposite, to wit: “[T]he sale must follow the assessment in

order to be valid, and there can be no valid sale of land for taxes on unseated land,

where the assessment was on seated land.” Blair, 33 A.2d at 493; see also Snyder,

51 Pa. Super. at 182 (explaining that a tract cannot be “suddenly shifted from its

assessed class to the other” at a tax sale). Because the mineral estate had unseated

characteristics and was supposed to be moved to the unseated list but erroneously

never was, the Bannard court found that such a minor error was not a fatal defect

to the treasurer’s deed acquired by the tax-sale purchaser. See Bannard, 293 A.2d

at 44, 50. The facts of Bannard are obviously different from the case at bar, and we

do not waver in our application of Scott to the instant issue. See infra pp. 22-23.

Legislative history from the time of the Act’s passage in the Pennsylvania

Senate is consonant with our conclusions. When asked to explain the bill,

Pennsylvania Senator James Wilson Lee provided the following synopsis:

There is a division of lands in making assessments into

seated and unseated. That distinction is very clear in the

law, but it is very little understood by assessors. Very

frequently land is assessed as seated when it is really

unseated, and assessed as unseated when it is really

seated. As every one knows who is acquainted with this

law, if the land is sold as unseated when it is really seated,

that is a defect in the title and no title is passed. In

counties like Venango, tract numbers are not kept very

distinctly, there is a great deal of land that is not assessed

properly, there is hardly one sale in ten that is valid, simply

because of this defect in assessment. The lands are sold as

seated when they are actually unseated, and sold as

unseated when they are actually seated. That renders the

treasurer’s sale invalid. There is no reason why that sort of

defect should render the sale invalid. . . . It renders many

treasurers’ sales uncertain and, there should be some

amendment provided.

LEGIS. REC., S. 110th Assy., 1st Sess., at 2089 (Pa. May 28, 1885) (emphasis added).

Senator Lee’s remarks indicate that assessors frequently misclassified land and that

these classification errors were creating numerous title defects, engendering

uncertainty in tax-sale titles. Hence, the backdrop of the Act of 1885 adds clarity to

its purpose, namely: to remedy title-defect issues created by assessors’ chronic

misclassifications of land.

Pennsylvania cases, together with the Act’s legislative history, counsel that

assessor-classification mistakes, which occurred regularly, are irrelevant so long as

the tax sale was regular and followed the assessment. The Act drastically reduces

the need “to go behind the assessment and inquire into its correctness.” Scott, 25

A.2d at 310 (quoting Snyder, 51 Pa. Super. at 181). In sum, it permits a challenge to

the validity of tax-sale proceedings based on the land’s classification only in rare

circumstances where (1) land was characterized and assessed as seated and then

improperly sold for unpaid taxes as unseated, or vice versa; and (2) in the case of

seated land being sold as unseated, there was sufficient personal property on the

land to pay the taxes.

The case sub judice is nearly identical to Scott, which compels our conclusion

on this state-law issue. See West v. Am. Tel. & Tel. Co., 311 U.S. 223, 236 (1940)

(“[T]he highest court of the state is the final arbiter of what is state law. When it has

spoken, its pronouncement is to be accepted by federal courts as defining state

law[.]”); Hunt v. U.S. Tobacco Co., 538 F.3d 217, 220 (3d Cir. 2008) (“[T]he state’s

highest court is the best authority on its own law.” (citation omitted)). From 1895 to

1907, the Josiah Haines warrant was assessed as unseated and regularly appeared

on the Bradford County unseated assessment books. (See Doc. 99-1 at 15; Doc. 100-

1 at 3, 7, 11, 15, 19; Doc. 101-1 at 3, 6, 9, 12, 15; Doc. 102-1 at 3, 6). The property was

then sold as unseated at the 1908 treasurer’s sale for unpaid 1907 taxes, following its

regular unseated designation and assessment. The Proctor Trusts contend that the

assessor’s classification of the warrant in 1907 was a mistake because substantial

bark-peeling and logging activities seated the land, and, consequently, the 1908

treasurer’s sale of the land as unseated was void. This contention is the

quintessential post-hoc, fact-intensive challenge to the assessor’s classification (and

validity of the subsequent tax sale) that is foreclosed by the Act of 1885 and Scott.

Even if the Bradford County assessor was mistaken about the character of

the Josiah Haines warrant in 1907, the Proctor Trusts cannot challenge the validity

of the treasurer’s sale by proffering evidence that the assessor misclassified the

tract. See Scott, 25 A.2d at 309; Snyder, 51 Pa. Super. at 182; Keta Gas & Oil Co.

v. Proctor, No. 1975 MDA 2018, 2019 WL 6652174, at *3-4 (Pa. Super. Ct. Dec. 6,

2019) (nonprecedential) (citing Scott, 25 A.2d at 309). Permitting this specific

method of collateral attack would ignite endless litigation concerning technical,

fact-based determinations made by assessors in centuries past. See Scott, 25 A.2d

at 309. It would concomitantly call into question the validity of innumerable tax-

sale titles that followed such assessments. These are the precise problems the

General Assembly endeavored to remedy by passing the Act of 1885. See id. at 309,

310.

B. Agency and 1908 Treasurer’s Sale

The parties’ second major point of contention involves the intricacies of the

1908 tax sale. The Proctor Trusts assert that McCauley, the tax-sale purchaser, was

acting as an agent for CPLC when he bought the Josiah Haines warrant from the

county treasurer. They maintain that his purchase of the property at the tax sale—

for a sum that equaled the unpaid taxes and fees—amounted to nothing more than

a redemption, giving CPLC exactly the same title it held prior to the treasurer’s

sale.8 In other words, CPLC, through McCauley, redeemed its surface interest only

and did not divest Proctor and Hill of their subsurface rights.

Judge Schwab found that there is a genuine dispute of material fact as to

McCauley’s status as an agent for CPLC. Judge Schwab also determined that if the

land were actually unseated in character, it does not matter whether or not

McCauley was an agent of CPLC; the 1908 tax sale was not a redemption because

CPLC was not barred from acquiring both the surface and subsurface estates at the

sale (whether directly or through an agent).

The Game Commission argues that Judge Schwab erred by concluding that

there is a genuine factual dispute as to whether McCauley was acting as CPLC’s

agent. The Proctor Trusts challenge Judge Schwab’s conclusion that if the land

were unseated, McCauley’s status as an agent is irrelevant. We find both objections

to be without merit.

1. Question of Agency

We begin with a brief reiteration of the title-transfer details. In 1894, the

surface and subsurface estates of the Josiah Haines warrant were severed when

Proctor and Hill conveyed the surface estate to Union Tanning and retained the

mineral rights. CPLC bought the surface estate from Union Tanning in 1903.

8 A redemption operates to “set aside or annul” the tax sale, leaving the title

“precisely as though the sale had not been made.” Yocum v. Zahner, 29 A. 778, 779

(Pa. 1894).

When taxes were not timely paid on the Josiah Haines warrant in 1907, the entire

property9 was sold by the county treasurer at the 1908 unseated-land tax sale for

unpaid 1907 taxes. McCauley purchased the property at that tax sale and, two years

later, quitclaimed it to CPLC, who later conveyed it to the Game Commission.

The corresponding tax records from the Bradford County unseated-land

assessment books provide the following relevant information. Each year from 1895

to 1902, Union Tanning paid taxes to Bradford County on the Josiah Haines

warrant.10 (Doc. 99-1 at 15; Doc. 100-1 at 3, 7, 11, 15, 19; Doc. 101-1 at 3, 6).

Beginning in 1903 and continuing through 1906, CPLC regularly paid the taxes on

the property. (Doc. 101-1 at 9, 12, 15; Doc. 102-1 at 3). For the 1907 tax year, the

notation in the assessment books where tax-payment information was normally

entered indicates that the property was “sold” on June 8, 1908, to “Calvin H.

McCauley Jr.” (Doc. 102-1 at 6). Thereafter, for tax years 1908 through 1910, taxes

on the Josiah Haines warrant were once again regularly paid by CPLC. (Doc. 102-1

at 10; Doc. 104-1 at 3, 6).

9 As previously mentioned, the parties dispute whether the entire warrant

was sold at the 1908 tax sale. For the reasons appearing infra, we find that both the

surface and subsurface estates were sold by the county treasurer in 1908.

10 For tax years 1895 and 1896, the Bradford County unseated land

assessment books inadvertently referred to the 410-acre Josiah Haines warrant as

the “Joseph Haines” warrant. (See Doc. 99-1 at 15; Doc. 100-1 at 3). That error was

corrected in 1897, (see Doc. 100-1 at 7), and the entries remained accurate through

1901, (see id. at 11, 15, 19; Doc. 101-1 at 3). Beginning in 1902 and continuing

through 1906, the tract is again mislabeled as the “Joseph Haines” or “Joseph

Hines” warrant in the unseated assessment books. (See Doc. 101-1 at 6, 9, 12, 15;

Doc. 102-1 at 3). For tax years 1907 through 1910, the name is once more corrected

to “Josiah Haines.” (See Doc. 102-1 at 6, 10; Doc. 104-1 at 3, 6).

The Game Commission posits that, because the evidence of McCauley’s

agency proffered by the Proctor Trusts was not “in the public record of Bradford

County” and thus not available to a title examiner, it has no bearing whatsoever on

the validity of the 1908 tax-sale title. (See Doc. 157 ¶¶ 30-34; Doc. 158 at 15).

According to the Game Commission, the public record of Bradford County at the

time of the 1908 tax sale “is the only relevant record,” so there is no evidence

probative of McCauley’s purported agency. (Doc. 158 at 16). For this sweeping

proposition, the Game Commission relies exclusively on Proctor v. Sagamore Big

Game Club, 166 F. Supp. 465 (W.D. Pa. 1958), aff’d, 265 F.2d 196 (3d Cir. 1959). That

reliance is misplaced.

We first note that Sagamore is a six-decades-old case from the Western

District of Pennsylvania that is not binding on this court. More importantly, it is

entirely inapposite. In Sagamore, following a 1914 tax sale at which McCauley

purchased the at-issue property, he conveyed the parcel to bona fide third-party

buyers, the Eisenhuths.11 Sagamore, 166 F. Supp. at 479. He did not quitclaim the

property back to CPLC following the two-year redemption period, as occurred in

the case at bar.

The Game Commission takes the Sagamore court’s focus on the public

record out of context. In Sagamore, the court was concerned with the contents of

11 As in the case sub judice, CPLC was the record owner prior to the 1914 tax

sale. See Sagamore, 166 F. Supp. at 479. We note that there was a prior tax sale of

the property, see id. at 468-69, but this fact has no bearing on the Game

Commission’s “public record” argument.

the public record because the dispositive agency-related question was whether the

Eisenhuths could have known of McCauley’s alleged agency and any possible title

defect it may have created. See id. at 479-80. Finding that the public record

controlled, the court referenced cases addressing notice of title defects in relation to

good-faith purchasers for value. Id. (citing Pa. Range Boiler Co. v. City of

Philadelphia, 23 A.2d 723 (Pa. 1942); Woods v. Farmere, 7 Watts 382, 385 (Pa. 1838)).

These cases are irrelevant to our analysis because there is no independent, third-

party purchaser in the matter at bar. McCauley quitclaimed the property back to

CPLC for a recited payment of $1.00. Consequently, and unlike the Eisenhuths in

Sagamore, CPLC would have had actual notice of McCauley’s agency if such a

relationship existed. The public record, therefore, is not “the only” relevant source

of information or evidence on the question of agency.

We agree with Judge Schwab that the Proctor Trusts have put forth

considerable evidence that McCauley was acting as an agent for CPLC when he

bought the Josiah Haines warrant at the 1908 tax sale. (See generally Doc. 95 ¶ 26).

For instance, from 1904 to 1916, McCauley purchased at tax sales more than 100

properties that were previously owned by CPLC and later quitclaimed those tracts

back to CPLC. (See id. ¶ 27). CPLC’s articles of incorporation and other internal

documents, as well as additional historical records predating the tax sale, identify

McCauley as CPLC’s “Real Estate Agent.” (See id. ¶ 26(a)-(i); Doc. 121 ¶ 26(a)-(i)).

McCauley also appeared as an attorney for CPLC in state court proceedings shortly

after the time of purchase. (Doc. 95 ¶ 26(l)). In 1914, McCauley even executed a

notarized declaration stating that he was acting in trust for CPLC when he

purchased six properties in Elk County from the county treasurer using funds

provided by CPLC. (Id. ¶ 26(o)). Perhaps most significantly, following McCauley’s

acquisition of the warrant at the 1908 tax sale, CPLC, not McCauley, paid the

property taxes in 1908, 1909, and 1910. (Doc. 102-1 at 10; Doc. 104-1 at 3, 6). The

Game Commission offers no explanation as to why a corporation would pay real

estate taxes for a piece of land it purportedly did not own. The only logical

conclusion is that McCauley was acting as CPLC’s agent when he purchased the

Josiah Haines warrant at the 1908 treasurer’s sale. That such evidence was not

recorded and publicly available to a title examiner is of no moment. CPLC—

McCauley’s alleged principal—bought the property from McCauley in 1910 and had

actual notice of any purported agency that existed.12

The question becomes whether the existence of an agency relationship

between McCauley and CPLC has any legal significance for the validity or scope of

the 1908 treasurer’s deed. We have already determined that the tract’s unseated

classification is not subject to the Proctor Trusts’ specific collateral attack. After

comprehensive review of the relevant law, we agree with Judge Schwab that even if

12 We are unconcerned with notice to subsequent buyers, namely the Game

Commission. The issue, as we discuss in more depth below, is what effect an

agent’s purchase may have on an unseated tax sale induced by his principal’s

default. Notice of a potential agency-related defect for later buyers is irrelevant

here. If the tax sale acted as a redemption only, there would be no rejoined

subsurface to convey to subsequent buyers. Proctor and Hill, moreover, recorded

their mineral interest when it was severed. So, if the title were not washed but a

later deed purported to convey the entire warrant, any buyer would have had

record notice of the Proctor and Hill exception. See 21 PA. STAT. AND CONS. STAT.

ANN. § 351.

McCauley were CPLC’s agent, that fact has no legal effect on the 1908 tax sale of the

unseated Josiah Haines warrant.

2. Effect of Purported Agency

As an initial matter, we concur with Judge Schwab that the record is devoid

of evidence tending to show that the 1907 assessment of the Josiah Haines warrant

did not encompass the entire property. (See Doc. 155 at 70-83). There is simply no

evidence that Proctor or Hill ever separately reported their subsurface interest to

the county commissioner, that the mineral rights were ever independently assessed,

that any separate taxes were imposed or paid thereon, or that any challenge was

raised to the absence of a separate assessment. (See id.); see also Herder Spring,

143 A.3d at 368, 372-75; Keta Gas & Oil Co., 2019 WL 6652174, at *4-5. In the

absence of record evidence to the contrary, we are compelled to find as follows:

what was offered for sale in 1908 by the Bradford County treasurer was the entire

Josiah Haines warrant—both surface and subsurface.

What was offered for sale, however, is not dispositive as to what interest the

tax sale effectively conveyed. Pennsylvania law instructs that “one cannot, by a

purchase at a tax sale caused by his failure to pay taxes which he owed the state, or

which he was otherwise legally or morally bound to pay, acquire a better title, or a

title adverse to that of other parties in interest[.]” Powell v. Lantzy, 34 A. 450, 451

(Pa. 1896) (emphasis added) (citing Chambers v. Wilson, 2 Watts 495 (Pa. 1834);

Coxe v. Wolcott, 27 Pa. 154 (1856)). This rule “rests upon the principle that one

cannot profit by his own wrong, and build up or acquire a title founded upon his

own neglect of duty.” Id. Instead, such a purchase “operates as a payment only,”

i.e., a redemption. Id. (citation omitted). The Powell court, however, limited

application of this rule to cases where the purchaser had some duty to pay the tax.

Id. This duty could arise by law, contract, or equity. Id. The Proctor Trusts’

redemption-only argument, therefore, hinges on whether CPLC had any duty or

obligation to pay the 1907 taxes on the warrant.

We reiterate the relevant title history. CPLC bought the surface rights from

Union Tanning, which had purchased the newly created surface estate from

Proctor and Hill. There is significant evidence that both Union Tanning and CPLC

reported their unseated property interest to the Bradford County commissioner as

required by the Act of 1806. Specifically, the Bradford County unseated-land

assessment books show that, beginning in 1895 and continuing through 1906, taxes

on the Josiah Haines warrant were regularly assessed to, and paid by, Union

Tanning and CPLC. These records compel the conclusion that the companies

properly reported their unseated interests to Bradford County. The Game

Commission does not argue otherwise. (See Doc. 95 ¶¶ 11, 17; Doc. 121 ¶¶ 11, 17). It

is also uncontested that in 1907, CPLC did not pay the taxes assessed on the

warrant, causing the property to be sold by the Bradford County treasurer at the

1908 tax sale. And CPLC’s failure to pay the 1907 taxes appears to have been an

intentional and quite strategic act of default.13

Viewing the evidence in a light most favorable to the Proctor Trusts, as

required at the Rule 56 stage, we are left with the following rendition of facts.

CPLC, surface owner of the unseated Josiah Haines warrant, reported its interest

and regularly paid assessed taxes from 1903 through 1906. In 1907, after stripping

the warrant of its valuable tanbark, CPLC intentionally failed to pay the assessed

taxes. CPLC’s default induced a treasurer’s sale of the land the following year.

CPLC then employed McCauley, its agent, to (1) purchase that property, (2) hold it

for the two-year redemption period, and then (3) quitclaim it back to CPLC. With

the title ostensibly washed and the surface and subsurface rejoined, Proctor and

Hill’s mineral rights were extinguished and were now vested in CPLC. The entire

warrant, i.e., the reunited surface and subsurface estates, was subsequently

conveyed to the Game Commission approximately ten years later.

13 There is substantial evidence that CPLC deliberately defaulted on the 1907

taxes. In the early 1900s, CPLC owned vast amounts of land in Bradford County

and beyond. (See, e.g., Docs. 99-1, 100-1, 101-1, 102-1, 104-1); Sagamore, 166 F.

Supp. at 469; Cornwall Mountain Invs., L.P. v. Thomas E. Proctor Heirs Tr., 158

A.3d 148, 150-51 (Pa. Super. Ct. 2017). The corporation would fastidiously pay

annual taxes assessed on its properties, but then suddenly fail to do so, causing a

tax sale. (See Doc. 95 ¶ 16; Doc. 102-1 at 6; see generally Docs. 99-1, 100-1, 101-1,

102-1, 104-1). CPLC’s president attested, as part of the Game Commission’s

purchase of other land, that CPLC “regularly and continuously paid all taxes

assessed and payable.” (Doc. 95 ¶ 16(e)). That is, of course, until it didn’t. For the

Josiah Haines warrant, default occurred in 1907, the very same year that CPLC

completed its extensive bark-peeling activities on the tract. Even the Game

Commission’s title attorney asserted, in 1930s correspondence to CPLC, that

CPLC’s defaults were strategic. (See Doc. 153 ¶¶ 63, 65, 67).

It is generally true that the owner of a surface or subsurface estate is not

barred from obtaining better title at a treasurer’s sale. See Herder Spring, 143 A.3d

at 367 (quoting Powell, 34 A. at 451 (quoting Coxe v. Gibson, 27 Pa. 160 (1856))). But

the Game Commission has not identified, nor can the court identify, a case applying

this proposition to circumstances mirroring those presented here. No case squarely

considers whether, under the foregoing facts, an agent who purchases at a tax sale

induced by his principal takes good title to the entire property or simply redeems

his principal’s prior interest.

For example, in Powell v. Lantzy, the unpaid taxes that induced the

treasurer’s sale arose prior to the ownership of, and through no fault of, the tax-sale

purchaser. See Powell, 34 A. at 451. In Hutchinson, taxes on unseated lands went

unpaid in 1890 and 1891, before any involvement or ownership by the eventual 1892

tax-sale purchaser. Hutchinson, 49 A. at 317. In Sagamore, delinquent taxes from

1892 induced the 1894 tax sale that divested Proctor of the interest he purchased in

1893. Sagamore, 166 F. Supp. at 468-69, 476.

In Reinboth v. Zerbe Run Improvement Co., 29 Pa. 139 (1858), the

circumstances were also different. The 1840 tax-sale purchaser, Christopher Geiger

(“Geiger”), held claim to the subject property based on prior conveyances, but there

were other putative owners who claimed title to portions of that land. Reinboth, 29

Pa. at 140, 144-45. The property went through two tax sales, one in 1824 and

another in 1840. Id. at 144-45. The 1824 tax-sale buyer was an unrelated third party

who purchased in good faith, and in 1829, Geiger directed his attorney to purchase

the property from the third-party buyer. Id. Geiger’s attorney then sought a

treasurer’s deed for the tract at the 1840 tax sale to eliminate any doubts as to

superiority of Geiger’s title. See id. at 142, 145. Reinboth is clearly distinguishable

because the first tax-sale purchaser was an independent third party.

The most analogous situation appears to be Coxe v. Gibson, 27 Pa. 160 (1856),

the case quoted by Powell for the proposition that “there [i]s nothing in reason or

law to prevent the holder of a defective title from purchasing a better one at a tax

sale.” Powell, 34 A. at 451 (quoting Gibson, 27 Pa. at 160, 165). In Gibson, William

A. Williams (“Williams”) bought the subject property at a tax sale in 1850 for unpaid

1848 and 1849 taxes. Gibson, 27 Pa. at 160. Williams made the tax-sale purchase at

the direction of Eli Felt (“Felt”), who had privately purchased the same land in 1848

and conveyed it to defendants the following year. Id. at 162. Felt directed the tax-

sale purchase to “confirm and strengthen” his own title, which he had already

transferred to new buyers. Id. The Pennsylvania Supreme Court held that Felt was

not prohibited by law or policy from “strengthening or perfecting his [1848] title,”

which Felt may have deemed “suspicious” and “defective” due to possible fraud by

its grantor. Id. at 165. The court further highlighted that at least a “portion of the

taxes for which [the land] was sold [at the tax sale] were assessed before Felt

became the owner.” Id. (emphasis added).

We find none of these cases on point. Accordingly, we revert to the original

question raised in Powell: whether CPLC owed any duty to pay the 1907 taxes such

that McCauley’s purchase acted merely as a redemption. This issue is purely a

matter of state law, and we believe it has ramifications for other pending and future

real property disputes in the Commonwealth. In the absence of controlling

precedent, it is our task to predict how Pennsylvania courts would rule if

confronted with this issue. After careful consideration, we predict that the state

supreme court would find no such duty, and conclude that McCauley’s purchase did

not act as a constructive redemption.14

Pennsylvania courts have repeatedly held that owners of unseated land had

no duty or responsibility to pay the taxes assessed thereon. Certainly, those owners

faced consequences if they did not pay, but we can find no case that equates the

need to pay taxes (to avoid a tax sale) and a legal duty or responsibility to do so. We

provide just a few examples. In 1841, the Pennsylvania Supreme Court explained

that “the land itself, and not the owner of it, is debtor for the public charge,” and is

looked to for any overdue payment. Strauch v. Shoemaker, 1 Watts & Serg. 166, 175

(Pa. 1841) (quoting Fager v. Campbell, 5 Watts 287, 288 (Pa. 1836)). In Gibson, the

court noted that the unseated land in question was sold for unpaid taxes, which

neither Felt nor his subsequent buyers “were bound to pay,” even though Felt was

the owner when overdue taxes accrued. Gibson, 27 Pa. at 165. Forty years later,

the Powell court reiterated that when taxes were assessed on unseated land, “there

14 We find no merit in the Proctor Trusts’ argument that, because the price

McCauley paid at the tax sale was equal to the unpaid taxes and costs owed, his

purchase was intended to be a redemption. (See Doc. 160 at 19 & n.4; Doc. 98-1 at

73). Not “every transfer of a treasurer’s deed made before the expiration of [the

redemption period] constitutes a redemption.” Gibson, 27 Pa. at 162. The relevant

statute mandated that, to redeem, the delinquent owner must pay the back taxes,

costs, and an additional percentage penalty. See id. at 163; 72 PA. STAT. AND CONS.

STAT. ANN. § 6091. McCauley’s purchase price did not equal the redemption money

and could not be considered a redemption on such grounds. See Gibson, 27 Pa. at

162-63.

was no personal responsibility on the owner” to pay them. Powell, 34 A. at 451

(citing Hunter v. Cochran, 3 Pa. 105 (1846) (per curiam); Russel v. Werntz, 24 Pa. 337

(1855); Logan v. Washington County, 29 Pa. 373 (1857)). The Herder Spring court

reaffirmed this premise over a century later, stating that “tax on unseated land was

the liability of the land rather than the owners.” Herder Spring, 143 A.3d at 364, 372

(citations omitted).

Mere ownership of the unseated land created no obligation on CPLC to pay

the assessed taxes. Thus, to succeed on their redemption-only argument, the

Proctor Trusts must establish that CPLC had some other legal or moral duty to pay

the taxes. See Powell, 34 A. at 451. Neither party has suggested that a “community

of interest” or fiduciary relationship existed between Proctor and Hill and CPLC

that would give “rise to a duty”; each owned a separate estate unconnected by joint

tenancy or tenancy in common. See id. at 451-52. There likewise was no contract

or other agreement obligating CPLC to pay the taxes.15 In sum, we can ascertain no

duty—legal, contractual, equitable, or otherwise—obligating CPLC to pay the 1907

taxes that would transform its 1908 tax-sale purchase through McCauley into a

redemption.

15 The absence of any contract or agreement renders the Proctor Trusts’

reliance on Coxe v. Wolcott unavailing. (See, e.g., Doc. 160 at 10, 20 n.5). In

Wolcott, the eventual beneficiary of the tax-sale title wash (Brewster Freeman) was

under a clear contractual duty: an “express promise” in writing to pay taxes on the

unseated land and to prevent a tax sale. Wolcott, 27 Pa. at 159. The Proctor Trusts

identify no such promise or agreement by CPLC regarding the Josiah Haines

warrant.

Finally, it does not appear that Pennsylvania prohibited the intentional use of

a tax sale to clear and to perfect titles. We observe that in Reinboth, the second tax

sale in 1840 was likely induced by Geiger’s attorney as “a measure of professional

precaution” to ensure that Geiger had good title to the entire property. See

Reinboth, 29 Pa. at 142, 145. This practice did not strike the Pennsylvania Supreme

Court as improper or even unusual. See id. at 145. Likewise, in Gibson, the court

remarked that purchasing a better title at a treasurer’s sale was “a very common

remedy for defective titles.” Gibson, 27 Pa. at 165. The court explained that when a

party with some claim to the land was “in default,” nothing prevented another party

in interest from purchasing the property at a tax sale to strengthen or improve its

title. Id. Proscribing this practice, the court reasoned, “would involve the absurdity

that each claimant would have a claim on his adversary to keep the taxes paid, and

failing to do so, acquire no title at a sale for their non-payment.” Id.

As applied to the instant case, CPLC had no obligation to ensure that Proctor

and Hill reported their mineral estate for separate assessment or paid taxes on that

interest. And because Proctor and Hill could have been deemed “in default” for

failing to report their severed estate and potentially pay taxes thereon, CPLC was

not barred from strengthening or perfecting its title by causing the 1908 tax sale and

purchasing the entire property at that sale. See Gibson, 27 Pa. at 165; Reinboth, 29

Pa. at 145. Consequently, it does not matter whether McCauley was acting as

CPLC’s agent. The Josiah Haines warrant was assessed as a whole and sold as a

whole; nothing in law prevented the surface owner, CPLC, from buying the entire

warrant at the 1908 tax sale, even if CPLC intentionally induced that sale.

C. Other Objections

The parties raise several additional objections to the report, but we find them

meritless. After de novo review, we agree with Judge Schwab’s outcomes on these

issues. We briefly set forth the objections and why we are overruling them.

1. Deed Language Identifying Proctor and Hill Exception

The Proctor Trusts maintain that the 1920 deed from CPLC to the Game

Commission specifically identifies the 1894 Proctor and Hill mineral estate

exception, thereby estopping the Game Commission from claiming that the

subsurface estate was conveyed in this sale. (See Doc. 160 at 20-25 (citing and

distinguishing, inter alia, Herder Spring, 143 A.3d at 378)). Judge Schwab rejected

this argument. (See Doc. 155 at 83-96).

We need not duplicate Judge Schwab’s excellent analysis, but instead hit the

high notes. The 1920 deed uses the words “subject to” before describing the

Proctor and Hill exception. (See Doc. 95 ¶ 38). We find that this unambiguous

language represents a protective measure taken by the grantor to guard against

breach-of-warranty claims. See Burns v. Baumgardner, 449 A.2d 590, 593 (Pa.

Super. Ct. 1982) (collecting cases); W. W. Allen, Annotation, Conveyance “subject to”

restrictions set forth in a recorded or other indicated instrument as imposing the

restrictions on the land conveyed, 84 A.L.R. Fed. 2d 780 § 2 (2011). It does not, as the

Proctor Trusts maintain, express an intent to limit the conveyance or reinvigorate

the Proctor and Hill subsurface interest. See Burns, 449 A.2d at 593. We recognize

that the agreement of sale utilizes different wording, which is more likely to

demonstrate an intent to create a new exception in Proctor and Hill. (See Doc. 95

¶ 35). However, the unambiguous language of the deed controls, not parol evidence

from the contract of sale. See Starling v. Lake Meade Prop. Owners Ass’n, 162 A.3d

327, 341 (Pa. 2017).16

The 1908 tax sale extinguished the mineral rights of Proctor and Hill.

Accordingly, there was no subsurface reservation or exception to which the 1920

conveyance was subject, regardless of the fact that the Proctor and Hill exception

was explicitly named. The tax sale rendered the “subject to” language in the 1920

deed identifying prior exceptions surplusage, representing nothing more than “a

wise precaution on the part of the grantor.” See Burns, 449 A.2d at 593 (citation

omitted); Herder Spring, 143 A.3d at 378. Hence, the 1920 deed conveyed the entire

warrant to the Game Commission, including the subsurface estate.

2. Due Process

The Proctor Trusts insist that Judge Schwab erred when concluding that

notice by publication of the 1908 tax sale satisfied federal procedural due process

requirements. This constructive notice, as Judge Schwab explained, conformed to

the prevailing practice and statutory requirements of the time. (See Doc. 155 at 54

& n.14); 72 PA. STAT. AND CONS. STAT. ANN. §§ 6001, 6002 (repealed in part by Act of

March 9, 1847, Pub. L. 278 § 1); Herder Spring, 143 A.3d at 365, 376, 377.

16 We additionally observe that creation of a new exception of the mineral

estate in Proctor and Hill in the 1920 deed is untenable because Proctor and Hill

were not parties to the conveyance and had become strangers to the title following

the 1908 tax sale. See In re Condemnation by Cty. of Allegheny of Certain Coal, Oil,

Gas, Limestone, Mineral Props., 719 A.2d 1, 3-4 (Pa. Commw. Ct. 1998). When a

deed attempts to reserve or except some interest in a third party, Pennsylvania

courts have held that the interest remains with the grantor. See id. at 4.

At the outset, we reject the Game Commission’s contentions that the Proctor

Trusts’ due process claim arises under 42 U.S.C. § 1983 or is barred by the statute of

limitations in the Act of 1815. As part of their quite title action, the Proctor Trusts

assert that the lack of adequate notice (i.e., due process) rendered the 1908 tax sale

void ab initio, which is a jurisdictional defect immune to statute-of-limitations

challenges. (See Doc. 155 at 44-49); Benoit v. Panthaky, 780 F.2d 336, 338-39 (3d Cir.

1985); Kendall v. Lancaster Expl. & Dev. Co., 323 F. Supp. 3d 664, 681 (M.D. Pa.

2018) (citing Kean v. Forman, 752 A.2d 906, 908 (Pa. Super. Ct. 2000)). The Proctor

Trusts’ due process claim is not grounded in Section 1983 and is not barred by any

limitations period invoked by the Game Commission.

As to the merits of the claim, we find that notice by publication was

constitutionally adequate under the unique circumstances of this case. The Proctor

Trusts rely heavily on Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306

(1950), and Mennonite Board of Missions v. Adams, 462 U.S. 791 (1983), to support

their due process challenge. Yet Mullane acknowledges that notice by publication

is constitutionally permissible when “it is not reasonably possible or practicable to

give more adequate warning.” Mullane, 339 U.S. at 317; see also Greene v. Lindsey,

456 U.S. 444, 449 (1982). Mennonite explains that constructive notice is sufficient if

the interested party “is not reasonably identifiable.” Mennonite, 462 U.S. at 798.

Such a situation could occur when persons whose property rights may be affected

are “missing or unknown,” and in those situations, use of an “indirect and even a

probably futile means of notification” is all that is possible and required. Mullane,

339 U.S. at 317 (citations omitted). Ultimately, notice is constitutional when, “with

due regard for the practicalities and peculiarities of the case,” the notice provided

reasonably conveys the necessary information and affords “a reasonable time for

those interested to make their appearance.” Id. at 314-15.

It is crucial to bear in mind the circumstances surrounding the 1908 tax sale,

because procedural due process questions are necessarily fact specific. See Tulsa

Prof’l Collection Servs., Inc. v. Pope, 485 U.S. 478, 484 (1988); Wright v. Corning, 679

F.3d 101, 108 (3d Cir. 2012) (citation omitted). At the time of sale, unseated land was

treated much differently than its seated counterpart. When unseated land was sold

for unpaid taxes, identification of the current owner or owners was irrelevant,

because unseated land was typically described in reference to its original

warrantee. See Herder Spring, 143 A.3d at 364; Heft v. Gephart, 65 Pa. 510, 516

(1870); Strauch, 1 Watts & Serg. at 175. “[I]t is immaterial, at the moment of sale,

what may be the state of the ownership [of the unseated land], or how many

derivative interests may have been carved out of it. With these the public has no

concern.” Strauch, 1 Watts & Serg. at 175. The identity of owners was often

unknown as well. See Morton v. Harris, 9 Watts 319, 325 (Pa. 1840) (noting that

“assessors and commissioners cannot know of all the transfers of title [of unseated

land] which take place”); Herder Spring, 143 A.3d at 378. County taxing authorities

instead relied on reporting by unseated landowners to determine how taxes were

assessed and how property was advertised for sale when those taxes went unpaid.

See Herder Spring, 143 A.3d at 368 (citing Act of 1804 and Act of 1806); Heft, 65 Pa.

at 516-17. Accordingly, when tax payment lapsed on unseated land, the county

treasurer had no reason or obligation to search public records for ownership

interests in the parcel to be sold. See Herder Spring, 143 A.3d at 368-69 (citing

Stoetzel, 105 Pa. at 567). Unseated tax-sale procedures, moreover, were well

established by 1908. For nearly a century, unseated land had been regularly sold

for delinquent taxes by county treasurers through identical methods and at the

same time of year, the second Monday in June on even-numbered years. Id. at 365;

72 PA. STAT. AND CONS. STAT. ANN. § 5981.

This antiquated process no longer exists; nevertheless, it was the system in

place at the time of the tax sale and the reasons for that system are relevant to the

adequacy of the notice provided. Pennsylvania’s historical treatment of unseated

land reflects “the practicalities and peculiarities” of the situation and informs

whether the notice given conveyed the required information to Proctor such that he

could make his appearance. Mullane, 339 U.S. at 314-15. In conducting a due

process assessment, courts must “look to the realities of the case” presented, and

the effect of notice “must be judged in light of its practical application to the affairs

of men as they are ordinarily conducted.” Greene, 456 U.S. at 450-51.

Notice by publication here—while not the best possible notice—was

constitutionally sufficient. Proctor was not a real estate novice. Per contra, he

owned and regularly conveyed vast amounts of real property in Pennsylvania.17

17 See, e.g., Herder Spring, 143 A.3d at 367 n.10; Cornwall Mountain, 158 A.3d

at 150-51; N. Forests II, Inc. v. Keta Realty Co., 130 A.3d 19, 25 n.4 (Pa. Super. Ct.

2015); Sw. Energy Prod. Co. v. Forest Res., LLC, 83 A.3d 177, 180 & n.3 (Pa. Super.

Ct. 2013); Sagamore, 265 F.2d at 201-02; Sagamore, 166 F. Supp. at 475, 477; Lester

L. Greevy Jr. & John A. Shoemaker, Shale Gas Ownership—Tax-Sale Titles: An

Historical Perspective of the Pennsylvania Title Wash, 85 PA. B. ASS’N Q. 106, 111, 112

(2014); (Doc. 95 ¶ 6).

There can be no doubt that Proctor was aware of the tax treatment of unseated land

and how unseated land ordinarily was assessed, taxed, advertised, described, and

disposed of by county treasurers for unpaid taxes. (See, e.g., Doc. 95 ¶ 6(a), (d)).

The United States Supreme Court has noted that individual characteristics of the

intended notice recipient may be relevant to the due process analysis. See Jones

v. Flowers, 547 U.S. 220, 230 (2006) (citations omitted). Even less sophisticated

unseated landowners were likely aware of these well-established procedures.

Furthermore, the advertisements placed in Bradford County newspapers for the

sale of the Josiah Haines warrant followed customary practice and provided the

date, time, and place of sale. (See Doc. 95 ¶ 24 & citations). Advertisements ran

weekly from the beginning of April through the first week in June, giving Proctor

more than adequate time to appear and to raise any objection he may have had to

the sale. (See id.); 72 PA. STAT. AND CONS. STAT. ANN. §§ 6001, 6002.

For treasurers’ sales in the 1800s and early 1900s, it was “not reasonably . . .

practicable to give more adequate warning” to unseated property owners. Mullane,

339 U.S. at 317. Notice by publication was the type of notice required, expected,

and relied upon at the time, and for good reason. Such notice was “reasonably

calculated to apprise interested” unseated landowners of the pending tax sale and

“afford them an opportunity to present their objections.” Id. at 314 (citations

omitted). Stated differently, notice by publication was “reasonably certain to

inform those affected.” Dusenbery v. United States, 534 U.S. 161, 170 (2002)

(quoting Mullane, 339 U.S. at 315). We hold that, under all the circumstances, the

constructive notice provided in this case satisfies the procedural due process

requirements of the Fourteenth Amendment.

IV. Conclusion

For these reasons, the court finds that the Proctor Trusts’ challenges to the

1908 tax sale and subsequent conveyances are without merit. The court will grant

the Game Commission’s motion (Doc. 123) for partial summary judgment. An

appropriate order shall issue.

/S/ CHRISTOPHER C. CONNER

Christopher C. Conner, Chief Judge

United States District Court

Middle District of Pennsylvania

Dated: December 18, 2019