Campbell v. Muleshoe Cattle Co.

• Decision Date: 31 January 1923
• Docket Number: Civil 2013
• Citation: 24 Ariz. 620,212 P. 381
• Parties: THOMAS E. CAMPBELL, ERNEST R. HALL, W. J. GALBRAITH, C. W. FAIRFIELD and RAYMOND EARHART, Constituting the State Land Department of the State of Arizona, and RUDOLPH KUCHLER, State Land Commissioner, Appellants, v. MULESHOE CATTLE COMPANY, a Corporation, Appellee
• Court: Arizona Supreme Court

212 P. 381

24 Ariz. 620

THOMAS E. CAMPBELL, ERNEST R. HALL, W. J. GALBRAITH, C. W. FAIRFIELD and RAYMOND EARHART, Constituting the State Land Department of the State of Arizona, and RUDOLPH KUCHLER, State Land Commissioner, Appellants, v. MULESHOE CATTLE COMPANY, a Corporation, Appellee

Civil No. 2013

Supreme Court of Arizona

January 31, 1923

APPEAL from a judgment of the Superior Court of the County of Maricopa. F. H. Lyman, judge. Judgment reversed and case ordered dismissed.

Mr. W J. Galbraith, Attorney General, Mr. George R. Hill, and Mr F. W. Perkins, Assistant Attorneys General, and Mr. John C Gung'l, Special Counsel, for Appellants.

Messrs Boyle & Pickett and Mr. D. B. Morgan, for Appellee.

OPINION

ROSS, J.

The appellee, Muleshoe Cattle Company, applied to the state land department and the state land commissioner for the renewal of a lease that it, and its assignors, had held and enjoyed from the state, of three sections of land, to wit, 25, 26, and 35, township 12 south, range 21 east, in Cochise county, from April 20, 1916, for the term of five years; and, not being in default in any of the stipulations of the lease, contends it was entitled to a renewal thereof. The application for renewal was made upon a form furnished by the land commissioner, and was filed with the commissioner May 20, 1920. On June 29, 1920, E. A. Schilling filed with the commissioner an application for an original lease of the same sections. November 5, 1920, the commissioner approved the application of the Muleshoe Cattle Company, and thereafter, on November 11th, delivered to it for execution, properly filled out, a regular lease form for grazing lands, to expire June 30, 1925, or for five years, and fixed therein the sum of $19.20 per annum as the rental for each section.

November 5, 1920, Schilling, being dissatisfied with the rejection of his application and the allowance of the application of the Muleshoe Cattle Company, appealed from the decision of the commissioner to the state land department, and thereafter, on June 20, 1921, the members of the state land department held a hearing upon the conflicting applications. Later, April 5, 1921, the department rendered its decision annulling the decision of the commissioner and ordered that lease of said three sections be given to Schilling. From this decision of the state land department the Muleshoe Cattle Company appealed to the superior court of Cochise county. Subsequently, on September 17, 1921, the court dismissed the appeal upon the ground that chapter 166, Laws of 1919, giving the right of appeal, was null and void. And said order of dismissal, not being appealed to the Supreme Court, has become final.

November 12, 1921, the Muleshoe Cattle Company instituted this suit in mandamus in the superior court of Maricopa county, setting forth in its complaint in ample detail all the above facts, to compel the state land department and the state land commissioner to reappraise the rental value of the premises, in the event no reappraisement had been made, and to execute a lease thereof to it. The defendants filed an answer in which they specially demurred to the petition upon several grounds, and, also, for want of facts. The defendants set out in their answer as a defense, among others, facts concerning the use by Schilling of the said premises for grazing purposes prior to the date of leases to the Muleshoe Cattle Company's assignors, a hearing and investigation thereof by the department, and a determination of the facts in favor of Schilling. The plaintiff demurred to the answer of the defendants. The court overruled defendants' demurrers, and sustained the demurrer of the plaintiff to the defendants' answer. The defendants choosing to stand upon their demurrers and answer and refusing to amend upon motion of the plaintiff, Muleshoe Cattle Company, judgment was entered in its favor commanding defendants to reappraise the rental values of said premises and thereupon to make and execute renewal leases thereof to the plaintiff, and to tender and deliver such leases upon plaintiff's acceptance thereof by the payment of all lawful fees and rentals due or payable.

The defendants appeal. Their assignments involve a construction of certain sections of the Land Code: Chapter 5, Laws 1915, and amendments; the Enabling Act, § 28, p. 104, Civ. Code 1913; and sections 3 and 10, art. 10, of the Constitution.

Section 28 of the Enabling Act provides that none of the granted lands to the state shall be sold or leased "except to the highest and best bidder at a public auction" after advertising in newspapers for the time and manner specified therein; "provided, that nothing herein contained shall prevent said proposed state from leasing any of said lands referred to in this section for a term of five years or less without said advertisement herein required." Section 3, article 10, of the Constitution, re-enacts, or reaffirms, section 28 of the Enabling Act. Section 10, Id., is a mandate to the legislature to enact proper laws for the sale of state lands, or the leasing thereof, for terms not longer than five years, for the protection of bona fide residents and lessees, in such manner that such lessees, in case of lease to others, shall be paid for improvements by succeeding lessees the value of improvements and rights, and providing that actual bona fide residents and lessees shall have preference to renewal of their leases at a reassessed rental, fixed as provided by law.

The legislature, in conformity with the mandate of the Constitution, enacted chapter 5, Laws of Second Special Session of 1915, and in sections 30 and 31, as amended by chapter 166, Laws of 1919, and section 37, as amended by chapter 79, Laws of 1921, provided for the filing of applications with the land commissioner for leases, and the rights of those applying for renewals. Those sections are as follows:

"Sec. 30. Application for Lease. -- All state lands shall be subject to lease, as in this act provided, but no state lands shall be leased for a longer term than twenty years, provided, that when any state land is leased for a term exceeding five years, then such lease shall be granted in accordance with the provisions of the Constitution, the Public Land Code, and the rules and regulations of the state land department, of the state of Arizona, and the rental of the same shall be subject to reappraisal and readjustment at the end of each five-year period of such lease. All applications for lease shall be made on blank forms to be prepared and furnished by the commissioner and shall be signed and sworn to by the applicant and filed with the commissioner at the state land office."

"Sec. 31. Two or More Applicants. -- In case two or more applicants apply to lease the same land, the commissioner shall approve the application of one who, after investigation or hearing by the commissioner, shall appear to have the best right to such lease, provided, that time or order of filing applications shall not be a controlling or a determining factor in deciding who is entitled to such lease, but if it should appear that none of the applicants has any right or equities superior to those of another, the commissioner, may, at a stated time, and after due notice to all such applicants, receive sealed bids submitted in accordance with such rules and regulations as the commissioner may adopt, and shall approve the application of the bidder, who in all respects, is eligible to hold a lease upon the land, and will pay the highest annual rental therefor; provided that the commissioner shall have the right to reject all the bids submitted, and provided further, that any person occupying a United States homestead, lying adjoining, shall, upon application as in this act provided, have a preference right to lease such number of adjoining acres as is necessary for the personal use of such homesteader."

"Sec. 37. Preferred Rights to Renew. -- Upon application made to the commissioner, not less than thirty (30) nor more than sixty (60) days prior to the expiration of the lease, the lessee shall have a preferred right of renewal, bearing even date with the expiration of the old lease, for such term not longer than five (5) years, as the commissioner may deem proper, at a reappraised rental; provided, that if the commissioner does not deem the continued leasing of said land to be for the best interest of the state, said lease shall not be renewed. And provided further that the preferred right to renew shall not attach to any lease to a lessee not an actual bonafide resident of the state."

The appellee bases its right to a renewal lease, or a new lease, upon the provisions of section 10, article 10, of the Constitution, and section 37, Laws of 1915. We state his contention in his own language:

"It is inevitable from the foregoing provisions that the department may in its discretion determine whether or not the land shall be leased at all, or whether or not such is for the best interest of the state. If it determines that...