McKnight v. State Land Bd.

• Court: Utah Supreme Court
• Writing for the Court: NELSON; HENRIOD; McDONOUGH; CALLISTER
• Citation: McKnight v. State Land Bd., 381 P.2d 726, 14 Utah 2d 238 (Utah 1963)
• Decision Date: 17 May 1963
• Docket Number: No. 9728,9728
• Parties: d 238 R. S. McKNIGHT, Plaintiff, v. STATE LAND BOARD, Defendant, Erving Wolf, Intervenor.

Page 726

381 P.2d 726

14 Utah 2d 238

R. S. McKNIGHT, Plaintiff, v. STATE LAND BOARD, Defendant, Erving Wolf, Intervenor.

No. 9728.

Supreme Court of Utah.

May 17, 1963.

C. M. Gilmour, Salt Lake City, for plaintiff.

A. Pratt Kesler, Atty. Gen., Ronald N. Boyce, Asst. Atty. Gen., Salt Lake City, for defendant.

Sheridan L. McGarry Salt Lake City, for intervenor.

NELSON, District Judge.

This is a review by certiorari of the lawfulness of a decision of defendant, the State Land Board, denying plaintiff's applications particularly as to priority, for oil and gas leases on certain state lands, and awarding such leases to Erving Wolf, Intervenor, as a prior applicant.

The jurisdiction of the Court to review the decision is based upon its original jurisdiction to issue writs of certiorari as conferred by Section 78-2-2, U.C.A.1953, Article VIII, Sec. 4, of the Constitution of Utah, and Rule 65B(b), (2), (3) and (g), upon the alleged grounds that defendant as an inferior tribunal or board has exceeded its jurisdiction, abused its discretion and has not regularly and lawfully pursued its authority as conferred by the laws of the State of Utah.

The facts pertinent to the issues of this case, as disclosed by defendant's findings of fact, the transcript of testimony and the exhibits received in evidence are summarized as follows:

State Mineral Lease No. 3548, issued January 2, 1952, containing 703.40 acres in Section 36, T. 11 S., R. 25 E., S. L. M., State Mineral Lease No. 3783, issued January 2, 1952, containing 640 acres in Section 32, T. 15, S., R. 19 E., S. L. M., and State Mineral Lease No. 3782, issued January 2, 1952, containing 640 acres in Section 36, T. 15 S., R. 19 E., S. L. M., all expired on Feb. 1, 1962. Under the law, February 2, 1962, became a one day simultaneous filing period for new applications for oil and gas leases covering the land included in the aforesaid three expired mineral leases. (Findings 1-7).

On February 2, 1962, Erving Wolf, Intervenor, filed three separate applications for mineral leases covering said lands under applications numbers 19120, 19140 and 19141. (Finding 8).

On March 1, 1962, R. S. McKnight, plaintiff herein filed three applications with the State Land Board applying therein for oil and gas leases on the three tracts of land upon which the prior applications, numbered 19120, 19140 and 19141 had been filed.

Formal hearing before defendant, under the authority of Section 65-1-9 and 10, U.C.A.1953, was conducted March 22, 1962. Bryant H. Croft, Esq., a member presiding. Thereafter the defendant, on June 14, 1962, concluded and adjudged that Erving Wolf, Intervenor, was entitled in preference and priority to plaintiff to the issuance of oil and gas leases covering the state lands in question.

Joseph Sherman, R. J. Hollberg and Paul S. Callister also filed on one or all of the land covered in applications Nos. 19120, 19140 and 19141 and were given priority over plaintiff, but each one has either withdrawn his application or has failed to perfect the same. This limits the action to the plaintiff and the defendant and the Intervenor, herein.

In its Findings entered June 14, 1962 the defendant stated:

'9. * * * Each of three applications filed in the name of Erving Wolf on said tracts were on obsolete application forms; each had been signed in blank prior to February 2, 1962 by Erving Wolf in the presence of Miles A. Williams, a duly authorized Notary Public for the State of Utah; each had been filled out on February 2, 1962 on behalf of Erving Wolf by Miles A. Williams or his employee, Veiness Jones; and each was notarized by Miles A. Williams in the following words: 'Subscribed and sworn to before me this 2nd day of February, 1962, at Salt Lake City, Utah."

'10. Erving Wolf was not in Salt Lake City, Utah on February 2, 1962; he did not subscribe and swear to said applications on said date; but he did confer with Miles A. Williams by telephone at various times on said date about various lease applications including those described above.

'11. Each of the three applications filed by Erving Wolf, namely application numbers 19120, 19140, 19141 were each deficient in the following particulars:

a. They were not on current forms provided by the State Land Board.

b. They did not include an offer to accept all of the requirements of the provisions of Title 65, Chapter 1, Utah Code Annotated, 1953, as amended, governing the issuance of oil and gas leases and operations thereunder.

c. They were not accompanied with a statement under oath, over the applicant's signature, of his qualifications as an Applicant for Oil and Gas Leases as defined in Section 65-1-87 and as required by Section 65-1-88, UCA, 1953 as amended.'

The defendant further stated in the Findings of Fact:

'26. On March 1, 1962, R. S. McKnight, 220 Atlas Building, Salt Lake City, Utah; filed three applications with the State Land Board applying therein for oil and gas leases on the same three tracts of land upon which the prior applications, numbered 19120, 19140, 19141, of Erving Wolf, Joseph Sherman and R. J. Hollberg, Jr. had been filed.

'27. The applications of said R. S. McKnight were complete and not deficient as to form in any particular.'

Defendant considered that Erving Wolf, Intervenor, was the high bidder and gave him a period of ten days from receipt of letter dated June 25, 1962, within which to file corrected applications for oil and gas leases without loss of priority and with the corrected applications to retain the original filing date of February 2, 1962. Wolf filed applications on July 3, 1962, for oil and gas leases of the lands in question dated July 2, 1962, which applications were accompanied by a statement under oath of his qualifications under the Act, to-wit: that on July 2, 1962, he was a citizen of the United States, and which applications also included his offer to accept all of the requirements of the Act.

Plaintiff claims he was the first qualified applicant to apply for oil and gas leases on the State lands here involved. He maintains the State Land Board correctly found that the Erving Wolf applications filed February 2, 1962, were deficient for the reasons stated in its Findings, but asserts the legal conclusion reached by the Land Board that the deficiencies in Wolf's applications, 'may be corrected by amendment or completion' and that if done within ten days after notice they 'shall retain their original filing time' is clearly contrary to the statute which specifically provides (1) that oil and gas lease applications 'must be accompanied * * * with a statement under oath over the applicants signature of his qualifications as required by this Act' and (2) that such leases 'shall be issued to the applicant first applying for the lease who is qualified to hold under this Act.'

The plaintiff admits the amendments may be made within the time allowed by the Department but he claims such application can only take effect and be regarded as filed from the date of such amendments.

To determine if the plaintiff is correct in his contentions it is necessary for us to examine the statutes governing herein and the applicable rules of the Land Board adopted by it to implement and apply the statutes.

The Statute involved states:

'65-1-86, Oil and gas leases--Mineral interests--Provisions of act controlling--No oil and gas leases of land or mineral interests belonging to the state of Utah shall be made or issued from and after the effective date of this act except in the form and manner provided by this act; * * *.'

'65-1-87. Qualifications of applicants for oil and gas leases.--Oil and gas leases shall be issued only to applicants therefor who at the time of filing application and at the time of acceptance of application for lease by the state are either citizens of the United States, or associations of such citizens, or corporations organized under the laws of the United States or any state or territory thereof: * * *.'

'65-1-88, Applications for oil and gas leases--Royalty--Determination of average production.--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. Applications for lease shall be on forms to be provided by the state land board and shall include applicant's name, address and offer to accept all of the requirements of this act. Applications must be accompanied by payment of the filing fee and rental for the first year together with a statement under oath over applicant's signature of his qualifications as required by this act. Applications filed by an attorney in fact acting in behalf of the applicant shall not be accepted unless there is sufficient evidence on file with the land board that the applicant authorized the attorney in fact to apply for and execute the lease on his behalf. * * *' (underlining added)

The State Land Board based and justified its action on Rule 6 of the Board's Rules and Regulations. Rule 6 provides as follows:

'Applications for mineral leases will be received for filing in the office of the State Land Board during office hours. Except as hereinafter specifically provided, all such applications received, whether by U. S. Mail or by personal delivery over the counter, shall be immediately stamped with the exact date and time of filing. All applications presented for filing at the opening of the office for business on any business day shall be stamped received as of 8:30 A.M. of that day. In the same manner all applications received in the first delivery of U. S. Mail of each business day shall be stamped received as of 8:30 A.M. of that day. The time indicated on the time stamp shall be deemed the time of filing unless the Director shall determine that the application is deficient in any...