Colman v. Utah State Land Board

403 P.2d 781, 17 Utah 2d 14, 23 Oil & Gas Rep. 1001, 1965 Utah LEXIS 436
CourtUtah Supreme Court
DecidedJune 30, 1965
Docket10132
StatusPublished
Cited by11 cases

This text of 403 P.2d 781 (Colman v. Utah State Land Board) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colman v. Utah State Land Board, 403 P.2d 781, 17 Utah 2d 14, 23 Oil & Gas Rep. 1001, 1965 Utah LEXIS 436 (Utah 1965).

Opinions

CROCKETT, Justice:

Plaintiff seeks review of a decision of the Utah Land Board which rejected his ap[16]*16plication for an oil and gas lease on a 320-acre tract of state-owned land in Uintah County.1

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.2 On May 7, 1963, he issued his opinion that the leasing should be under the bidding procedure set forth in paragraphs b and c of Section 65-1-45, U.C.A.1953 (1963 Supp.), because the leasing rights in such lands were “newly acquired” within the meaning of that statute. The Board so proceeded, offering the lease to the public on bids. The plaintiff refused to participate, and the lease was granted to the high bidder at $12 per acre.

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 [17]*17leasing by the State, and that this "first applicant” rule is intended to reward alertness and initiative in doing so.

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.” 3 Both the plaintiff and the Land Board have correctly assumed that the critical problem is whether the lands in question should be treated as having “become available for leasing * * because they are newly acquired” and are thus governed by 65-1-45. If they are, they fall within the first clause of Section 65-1-88 just quoted, that is, “Except as otherwise provided by Section 65-1-45 * * *,” which exception has the effect of directing us to look at the latter section to see what is “otherwise provided” therein. It states that “[Applications to lease shall be considered in the order filed * * And

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[18]*18tice of the expiration or cancelation of a federal lease * * * is the date upon which the Land Board should assume jurisdictional control over the lands, and is the date upon which the lands which are newly acquired first become available for leasing.” 4 Looking at the situation realistically one will realize that the date of “actual notice” is the very first time the Land Board could do anything about leasing such land. In spite of the fact that the State took title in February, 1961, the State acquired it subject to the outstanding federal leases, and of course could not itself grant a similar lease until the federal leases expired.5

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.6 On the other hand, it appears to have been well advised in seeking the opinion of the Attorney General and in acting in conformity therewith.

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[19]

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Colman v. Utah State Land Board
403 P.2d 781 (Utah Supreme Court, 1965)

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Bluebook (online)
403 P.2d 781, 17 Utah 2d 14, 23 Oil & Gas Rep. 1001, 1965 Utah LEXIS 436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colman-v-utah-state-land-board-utah-1965.