Colman v. Utah State Land Board
Colman v. Utah State Land Board
Opinion of the Court
Plaintiff seeks review of a decision of the Utah Land Board which rejected his ap
The position of the plaintiff is that because he filed the first application for an oil and gas lease on the land in question, in which he offered $1 per acre, the Land Board was compelled to approve it solely because of his priority in filing. The Board rejected his contention and ruled that the leasing on the land was subject to competitive bidding and so proceeded.
Title to the land in question was transferred by the federal government to the state of Utah on February 9, 1961, as so-called “school lands” under the Dawson Acts, 43 U.S.C. § 870 (1958). At that time there were unexpired federal-granted leases for gas and oil drilling on this land. The leases expired July 31, 1962, but the Land Board was not notified and did not learn of this fact until March 27, 1963. Four days thereafter, April 1, 1963, plaintiff filed his application for a lease. Since on several occasions (the record refers to seven instances) the Land Board had failed to receive notice of expiration of federal-granted oil and gas leases on land conveyed to the State, and because the Board was uncertain as to the proper procedure in such cases, it deferred action on the plaintiff’s application and requested an opinion of the Utah Attorney General as to the proper treatment of such applications under the Land Board Act.
In support of his position that the Board was compelled to grant him the lease because of priority of application, the plaintiff argues that this land does not meet the requirement of Section 65-1-45, just referred to, asserting that it had not “ * * * become available for leasing by the state because they are newly acquired * * * ” and is therefore not covered by the competitive bidding procedure. He rationalizes his position as fair and reasonable by asserting that anyone interested in a particular tract of land can determine, by periodic examinations of records kept by the Department of the Interior, and/or the Land Board, when a tract of land previously under federal lease becomes available for
Before considering Section 65 — 1—45, relied on by the plaintiff, and upon which the Land Board based its decision, we digress to comment on Section 65-1-88. Attention has been called to the latter section as giving some plausibility to the plaintiff’s position because it provides that, “Except as otherwise provided by section 65-1-45, * * * oil and gas leases * * shall be issued to the applicant first' applying for the lease who is qualified to hold a lease under the act.”
it must be conceded that subsequent Ian-guage seems to imply that the application prior in time should be granted. But the provision we regard as important here, and upon which the opinion of the Attorney General and the action of the Land Board pursuant thereto was based, is in the second paragraph of Section 45, which provides that: “In all cases where lands become available for leasing by the state because they are newly acquired or because a previous mineral lease is cancelled or otherwise terminated by the board, such lands shall be offered for mineral lease by the following procedure * * * ” and sets forth requirements that notice be given that the land has so become available for leasing and allowing 15 days for the filing of sealed bids; and for awarding the lease to the highest bidder.
As to this land having been “newly acquired,” it is true that the State had obtained title to it two years before. But when it “became available for leasing” is quite another matter. We think it involves no strained analysis of the facts here shown to agree with the conclusion of the Land Board that “the obvious construction requires the statute to be interpreted as providing that * * * the date upon which the Land Board first receives actual no
It is not disputed that the Land Board carried forward with dispatch the procedure for leasing these lands after March 27, 1963, when it first received notice that the federal leases had expired. We perceive no dereliction of the Land Board in the performance of its duty in that regard.
The statutes we have ’ referred to should be considered together and in connection with the entire act and harmonized insofar as possible with the carrying out of the responsibilities the Land Board is charged with of managing the public lands of the State in the most prudent and profitable manner possible. Viewed in conformity with that objective, it appears to be intended that when mineral leasing rights are “first available for leasing” they should be put on the open market and an opportunity for competitive bidding be given. This safeguards the interests of the State by getting the best price a qualified bidder will pay, and also protects the interest of all persons who might be interested by allowing them a fair opportunity to bid.
Support of the Land Board’s action is also found by noting particularly the wording of Section 65-1-45: that the “applications shall be considered in the order filed.” This does not seem to be a mandate that the applications must be granted in that order. Although it does appear to indicate that, all things else being comparatively equal, as among qualified appli
From the dispute that has arisen over the situation at hand, it is obvious that our statutes leave something to be desired as to certainty. Where such uncertainty exists the interpretation and application of statutes adopted by the administrative agency is usually looked upon with some indulgence.
Finally, plaintiff advances an argument that inasmuch as his application was filed first, the Land Board is “estopped” from refusing him the lease because of the way it has handled similar cases in the past. Even under the facts as he asserts them to be, there could be no estoppel because the requisite elements are not present.
The order of the Land Board is affirmed. No costs awarded.
. The procedure for review of the Land Board decision is set forth in Rule 65B (b) (2); (3), U.R.C.P.
. The Land Board reguested an opinion from the Attorney General and acted in conformity therewith: See Opinion 63-030, 1964 Biennial Report of the Attorney General 224.
. Sec. 65-1-88, U.C.A.1953 as an amendment to Sec. 65-1-45 by the 1959 Legislature S.L.U.1959, Ch. 132, at 302-03. However, tlie first five paragraphs of the statute were codified as Sec. 65-1-45, U.C.A.1953, while Sec. 4 as enacted was codified as Sec. 65-1-88, U.C.A.1953. The 1963 Legislature amended Sec. 65-1-45, U.C.A.1953 by adding a new subsection (c) and moving the original (e) to subsection (d). S.L.U.1963, Cb. 167, at 573.
. 1964 Biennial Report of tlie Utah Atty. Gen. 224, at 226-7, incorporated by reference into Finding of Fact 8 of the Land Board in this case.
. See Jacobson v. State Land Board, 12 Utah 2d 307, 366 P.2d 70 (1961) for a discussion of state management of lands encumbered with federal leases, which leases are subject'to the provision and terms of the Mineral Leasing Act, 30 U.S.C.A. § 226-1.
. See Holmberg, Historical Uncertainty of Federal Lease Titles, 10th Annual Rocky Mtn. Mineral Law Inst. 313, 336-38 (1965), in which the author cites excellent authorities to the effect that federal oil and gas lease records are often incomplete and confused and are not records of which others are charged with notice.
. See Lagoon Co. v. Utah State Fair Assn., 117 Utah 213, 214 P.2d 614 (1950); cf. State By and Through Road Comm. v. Salt Lake City Public Bd. of Ed., 13 Utah 2d 56, 368 P.2d 468 (1961).
. Ogden Union Ry. & Depot Co. v. Utah State Tax Comm., 16 Utah 2d 255, 399 P.2d 145 (1965) (on rehearing).
. See 4 Davis, Administrative Law Treatise, § 30.08 at 236.
. See McKnight v. State Land Board, 14 Utah 2d 238, 381 P.2d 726, 731 (1963); 4 Davis, op. cit. supra note 5, at 213-14.
. For elements of estoppel, see Migliaccio v. Davis, 120 Utah 1, 8, 232 P.2d 195, 198; as to whether the public agency may be estopped, see Udall v. King, 113 U.S.App.D.C. 397, 308 F.2d 650 (1962); cf. Barash v. Seaton, 103 U.S.App.D.C. 159, 256 F.2d 714(1958).
. See Olson Constr. Co. v. State Tax Comm., 12 Utah 2d 42, 361 P.2d 1112, 1113 (1961); see also Utah Hotel Co. v. Industrial Comm., 107 Utah 24, 151 P. 2d 467, 153 A.L.R. 1176; cf. Moog Industries v. F. T. C., 355 U.S. 411, 413-414, 78 S.Ct. 377, 2 L.Ed.2d 370, see generally 1 Davis, op. cit. supra note 5, § 5.09.
Dissenting Opinion
(dissenting) :
The majority opinion is correct in stating that the crucial question is whether the subject lands became available for leasing by the State because they were newly acquired. The majority holds that they were and, therefore, the Land Board properly denied plaintiff’s application and followed the statutory competitive bidding procedure.
Considerable emphasis has been placed upon the words “become available for leasing” while the importance of the words “because they are newly acquired” have been minimized in the majority opinion. It states “ * * * it appears to be intended that when mineral leasing rights are ‘first available for leasing’ they should be put on the open market and an opportunity for competitive bidding be given. * * * ” This, evidently, without relation to when the lands are acquired by the State and under what circumstances.
The construction placed upon Section 65-1-45 completely emasculates its provision and provisions of related statutes regarding the priority of applications. The opinion further states that “* * * [i]t would be both illogical and impractical to suppose that the statute was intended to have any such arbitrary effect as to compel acceptance of an application to lease solely on the basis of priority of filing, especially where the rental offered is so greatly disparate from what could be obtained from the open market, as it was here. If it were so, the ability of the Board to manage such lands in the best interest of the State would be hampered greatly.”
Unless I misinterpret the majority opinion, its effect would permit the Land Board
Prior to its amendment in 1959
Except as otherwise provided in this chapter, applications to lease shall he considered in the order filed; provided, that when simultaneous applications are filed the land board may, if deemed advisable by it, let the land to the person who will pay the highest rental therefor; and provided further, that applications to lease land already under lease shall not be received before sixty days prior to the expiration of said lease, and all such applications received .within said sixty days shall be considered simultaneous.
Thus it is apparent that prior to 1959 the first qualified applicant was to be given preference in all instances with only one exception — where the filings were simultaneous as defined by the statute. In 1959 the legislature (undoubtedly prompted by the 1958 Dawson Acts) made two more exceptions: (1) Where lands become available for leasing because they are newly acquired and (2) where the lands become available for leasing because a previous mineral lease is canceled or otherwise terminated by the Board (not mentioning the United States).
It is true that the phrase “shall be considered” is somewhat nebulous. However, prior to 1959 it must be construed as mandatory rather than directory language. The word “shall” is ordinarily considered as mandatory and particularly when it is used in a statute which is addressed to public officials.
Further indication that the legislature intended that preference should be given to
The same 1959 Act also contained what is now Section 65-1-88, the first part of which provides:
Except as otherwise provided by section 65-1-45, Utah Code Annotated 1953, as amended by this act, oil and gas leases in units not exceeding 640 acres or one section, whichever is larger, shall be issued to the applicant first applying for the lease who is qualified to hold a lease under this act.
* * * (Emphasis added.)
The same 1959 Act also provided:5 Yearly rental for state oil and gas leases shall be one dollar ($1.00) per acre or fraction thereof for each lease year. * * *
Also important is a 1963 legislative enactment again amending Section 65-1-45
(c) At the discretion of the land board, leases for minerals other than oil and gas may be offered at public auction upon such terms, conditions, and minimum bid as may be prescribed by the board. (Emphasis added.)
It is apparent from the foregoing that, the legislature evidently has a different notion than the majority opinion as to how-oil and gas leases should be leased to provide the State with the greatest benefit possible. If the legislature deemed it to be in the best interest of the State to have competitive bidding in all instances, it could, very easily have so provided. ' Instead, over-the years, it has seen fit to retain the priority mandate.
Mention is made in the majority opinion that the federal mineral leases of the-subject land terminated July 27, 1962, but that the Land Board was not notified of' this fact until March 27, 1963, after which it “carried forward with dispatch the procedure (competitive bidding) for leasing-these lands.” The opinion quotes with approval the conclusion of the Land Board' that “the date upon which the Land Board, first receives actual notice of the expiration or cancelation of a federal lease * * *' is the date upon which the Land Board should assume jurisdiction and control over-
The foregoing is based upon fallacious reasoning as applied in the instant case where we are dealing with a situation where the lease was not canceled but terminated at the expiration of‘the term. In .such a situation the federal government is not required to give any “actual notice” of ■the termination. As a matter of fact, the Dawson Acts
In the instant case, the patent to the subject lands was evidently issued in February, 1961. At that time, title in the fee vested in the State, and it had complete control and management over the lands, subject only to the terms of the outstanding lease. True, the Land Board could not lease the oil and gas rights while the federal lease was in force and effect, but the same is true if there were an outstanding State lease of State lands. It is hard to see the difference between a State lease and a federal lease where the State receives the fee-title to the land and succeeds the United States as lessor.
The subject lands cannot be considered as “newly acquired.” The State held the fee title for over two years before the lands were put up for bid. The lands did not become available for leasing because they were "newly acquired,” but rather because the lease expired.
For the foregoing reasons, the decision of the Land Board should be reversed.
(commenting) :
The main opinion seems to be somewhat inconsistent and discouraging to an applicant in urging at one point that the administrative agency’s interpretation should be viewed with indulgence and its discretion recognized in carrying out its policies and responsibilities, which may have justified deviations in seven identical cases, but not in case of this eighth one which actually had priority of time over one of the others, but was processed later. The main opinion technically may be correct as to administrative construction, but if so, there would seem to be no justification for continued approval of the other seven, although those matters are not before us.
The dissent of Mr. Justice CALLISTER appears to be more logical and reasonable in legislative construction than that of the main opinion. The latter would seem to penalize the poor prospector in favor of a richer nonprospector, who may not have been diligent in searching out natural resources at all, and seems to fly in the teeth of Archer v. Utah State Land Board, recently decided by this court and reported at 15 Utah 2d 321, 392 P.2d 622 (1964).
. Laws of Utah 1959, Ch. 132, § 1.
. Smith v. Nebraska Liquor Control Comm., 152 Neb. 676, 42 N.W.2d 297; In re O’Rourke, 9 Misc. 564, 30 N.Y.S. 375; see also State v. Zeimer, 10 Utah 2d 45, 347 P.2d 1111, 79 A.L.R.2d 821 (1960).
. 82 C.J.S. Statutes § 382, p. 892.
. 82 C.J.S. Statutes § 382, p. 893; Broadbent v. Gibson, 105 Utah 53, 140 P.2d 939.
. 65-1-91, U.C.A.1953.
. Laws of Utah 1963, Ch. 167, § 1. Effective date May 14, 1963.
. 43 U.S.C.A. §§ 870 and 871a.
. Conclusion of Law #3 of the Board.
Reference
- Full Case Name
- William J. COLMAN, Plaintiff, v. UTAH STATE LAND BOARD, Defendant
- Cited By
- 11 cases
- Status
- Published