Gladden Farms, Inc. v. State, 15374

• Decision Date: 15 June 1981
• Docket Number: No. 15374,15374
• Citation: 129 Ariz. 516,633 P.2d 325
• Parties: GLADDEN FARMS, INC., an Arizona corporation, and Saylor Farms, an Arizona corporation, Petitioners, v. STATE of Arizona; Hon. Bruce Babbitt, Governor of the State of Arizona; State Land Department of the State of Arizona; Joe T. Fallini, State Land Commissioner; Arizona Division of Emergency Services; Charles A. Ott, Jr., Director of Arizona Division of Emergency Services; Hon. Marilyn Riddel, Judge of the Superior Court of Maricopa County, Respondents.
• Court: Arizona Supreme Court

Page 325

633 P.2d 325

129 Ariz. 516

GLADDEN FARMS, INC., an Arizona corporation, and Saylor Farms, an Arizona corporation, Petitioners, v. STATE of Arizona; Hon. Bruce Babbitt, Governor of the State of Arizona; State Land Department of the State of Arizona; Joe T. Fallini, State Land Commissioner; Arizona Division of Emergency Services; Charles A. Ott, Jr., Director of Arizona Division of Emergency Services; Hon. Marilyn Riddel, Judge of the Superior Court of Maricopa County, Respondents.

No. 15374.

Supreme Court of Arizona, In Banc.

June 15, 1981.

Rehearing Denied July 21, 1981.

James H. Green, Jr., Phoenix, for petitioners.

Robert K. Corbin, Atty. Gen. by Karen L. Schroeder, Asst. Atty. Gen., Phoenix, for respondents.

CAMERON, Justice.

This is a petition for special action filed by Gladden Farms and Saylor Farms, both Arizona corporations, to void the sale to the Arizona Division of Emergency Services of 105.18 acres of state trust land which had been previously leased to petitioners. We accepted this petition and the petitions in City of Sierra Vista v. Babbitt, 129 Ariz. ---, 633 P.2d 333 (1981), No. 15360, and Arizona State Land Department v. Superior Court, 129 Ariz. ---, 633 P.2d 330 (1981), No. 15320, both filed this day, pursuant to Art. 6, § 5 of the Arizona Constitution and Rule 1, Rules of Procedure for Special Actions, 17A A.R.S., because of the importance of the question regarding the sale of trust lands to state agencies without advertisement, auction and bid, and because there is no equal, plain, adequate or speedy remedy by appeal.

We must answer only one question and that is whether the sale of school trust lands without public auction to state agencies such as the Arizona Division of Emergency Services violates the New Mexico-Arizona Enabling Act of 1910.

The facts necessary for a determination of this matter are as follows. In March and December of 1978, Allenville, Arizona, a small all Black community located on the Gila River, 11/2 miles south of Buckeye and 35 miles west of Phoenix, Arizona, was flooded by the overflow from the Gila River. The residents of Allenville were forced from their homes and were temporarily housed by the Division of Emergency Services.

The Division, after consultation with the United States Corps of Engineers, determined that it would be impractical to make the area safe from future flooding and that relocation was the only economically justifiable alternative, either in other dwellings in the Buckeye Valley or metropolitan Phoenix, or by "constructing a replacement community outside the floodplain." Relocation in Buckeye or Phoenix was rejected because of a "lack of suitable and affordable housing" and because to do so "would have destroyed the unique community cohesion which has developed in Allenville." It was therefore decided to relocate the former inhabitants of Allenville. The Division of Emergency Services was to purchase the land and then convey and transfer the land in individual tracts to the former residents of Allenville.

The Division applied to the State Land Department to purchase 105.18 acres of trust land occupied by the petitioners, Gladden Farms and Saylor Farms, pursuant to a valid lease from the State Land Department. Even though this area was state trust land, the purchase by the Division was to be without public auction for the appraised value of the land as specifically allowed by A.R.S. § 37-132(A)(4). The application was on a form titled "Application to purchase the state land for public use without public auction by a governmental agency of the State or a political subdivision or municipal corporation thereof." A certificate of purchase for 75.54 acres was issued by the State Land Department which indicated that the land was appraised at approximately $1,464.00 per acre. Petitioners in their pleadings indicated that they were and are willing to bid more than the appraised value for the land in question should it be sold at public auction.

Petitioners unsuccessfully sought relief from the State Land Department and then appealed to the Superior Court. From an adverse ruling in the Superior Court, this petition for special action was filed which we accepted. In the meantime, the State has issued a patent to the Division for 75 of the 105 acres.

On 20 June 1910, the Congress of the United States passed the Enabling Act for the admission into the Union of New Mexico and Arizona. Sections 1-18 of the Enabling Act referred exclusively to New Mexico, while sections 19-35 referred exclusively to the State of Arizona. It provided that under 9,000,000 acres of federal land were to be given to the new State of Arizona in trust for the support of the common schools. The Enabling Act was accepted by the people of Arizona, Ariz. Const. art. 20, P 12, and the terms of the Act cannot be altered, changed, amended or disregarded without an act of Congress. The Enabling Act is one of the fundamental laws of the State of Arizona and is superior to the Constitution of the State of Arizona, in that neither the Arizona Constitution nor laws enacted pursuant thereto may be in conflict. Murphy v. State, 65 Ariz. 338, 181 P.2d 336 (1947).

The practice of granting newly admitted states title to federal lands in trust for certain designated public purposes has been in existence since the Northwest Ordinance of 1787. The new states have not always treated the trust lands in the manner in which Congress intended, and certain abuses and fraud have occurred. Because of past abuses, Arizona and New Mexico, as the last of the 48 contiguous states to enter the Union, were provided with an Enabling Act somewhat stricter than those under which previous states had entered the Union.

Section 28 of the New Mexico-Arizona Enabling Act reads in part as follows:

"Said lands shall not be sold or leased, in whole or in part, except to the highest and best bidder at a public auction to be held at the county seat of the county wherein the lands to be affected, or the major portion thereof, shall lie, notice of which public auction shall first have been duly given by advertisement * * *."

Article 10 of the Arizona Constitution, entitled "State and School Lands," incorporates the Enabling Act with certain minor exceptions.

The limits of the Act were soon tested by the new states. New Mexico, in 1915, provided by statute that the Commissioner of Public Lands could use 3% of the annual income from the sale and lease of the trust lands to give publicity to such resources in the hope of attracting buyers and settlers. While recognizing that a private proprietor of the lands might, in the wise administration of the property, advertise their advantages, the United States Supreme Court struck down the statute as being violative of the trust. Ervien v. United States, 251 U.S. 41, 40 S.Ct. 75, 64 L.Ed. 128 (1919).

In 1938, this court decided the case of Grossetta v. Choate, 51 Ariz. 248, 75 P.2d 1031, in which the question of an easement over state trust lands was considered. We followed the case of Ross v. Trustees of University of Wyoming, 30 Wyo. 433, 222 P. 3 (1924), opinion on rehearing 31 Wyo. 464, 228 P. 642 (1924), which held, in construing similar provisions of the Wyoming Enabling Act, that the power of a state to provide highways for public use is like the power of taxation and is essential to the existence of government. The Wyoming court allowed the appropriation of trust lands in Wyoming for highway purposes without compensation. We likewise held that the state could obtain a right of way over state trust land without complying with the restrictions contained in the Enabling Act. We were careful in Grossetta, supra, to distinguish the facts from a decision of the Montana Supreme Court which had rejected an attempt to condemn trust lands for dam and reservoir sites without public auction. State v. District Court, 42 Mont. 105, 112 P. 706 (1910). We stated:

" * * * In that case the fee of the land was sought, while here only an easement is asked. Our section 3005, supra, provides for the case where the fee is granted by requiring the sale to be in conformity with the law as to appraisement, notice of sale, etc. It is probable that, if the supervisors were asking for the fee, this is the only way to obtain it, but they are not asking the land department for the fee. * * * (S)ince there is nothing in the Enabling Act limiting the power of the legislature to grant rights of way easements over the public lands for public highways, it can have no application here." 51 Ariz. at 253-54, 75 P.2d at 1033.

Later, in State v. State Land Department, 62 Ariz. 248, 156 P.2d 901 (1945), we carried the reasoning of Grossetta and Ross, supra, further, holding that the state was not required to pay

"any purchase price, rental, royalty or other charge for the taking or use of school and institutional lands or the natural products thereof for the establishment, construction, maintenance or repair of state highways." 62 Ariz. at 256, 156 P.2d at 904.

Later, the New Mexico Supreme Court, in construing the same provision in their part of the Enabling Act, held that while trust lands could be sold to the New Mexico Highway Commission for rights of...