State ex rel. Ebke v. Board of Educational Lands and Funds of Neb.

• Decision Date: 09 July 1954
• Docket Number: No. 33559,33559
• Citation: 65 N.W.2d 392,159 Neb. 79
• Parties: STATE ex rel. EBKE v. BOARD OF EDUCATIONAL LANDS AND FUNDS OF NEBRASKA et al.
• Court: Nebraska Supreme Court

Page 392

65 N.W.2d 392

159 Neb. 79

STATE ex rel. EBKE v. BOARD OF EDUCATIONAL LANDS AND FUNDS OF NEBRASKA et al.

No. 33559.

Supreme Court of Nebraska.

July 9, 1954.

Syllabus by the Court.

1. The provision of the Enabling Act making the grant of public school lands, and of the Constitution of 1866 designating the lands, and the subsequent act admitting the state into the Union under the Constitution constituted a contract between the state and the national government with regard to such grant.

2. The title to the state school lands was vested in the state upon an express trust for the support of common schools without right or power of the state to use, dispose of, or alienate the lands or any part thereof except as allowed by the Enabling Act and the Constitution.

3. The public school lands of the State of Nebraska are a trust held by the state and by constitutional provision are in the control of the Board of Educational Lands and Funds, which board is subject to control by the Legislature within constitutional limitations.

4. The public school lands of the state are held in trust for educational purposes by the terms of Article VII, section 9, of the Constitution of this state.

5. As a trustee of the public school lands and the income derived therefrom, the state is required to administer the trust estate under the rules of law applicable to trustees acting in a fiduciary capacity.

6. An action for a declaratory judgment was brought to test the validity of statutes dealing with the leasing of school lands, such statutes were declared unconstitutional, and as a result thereof the lease which the litigant sought to acquire was ordered to be sold at public auction. All leases previously issued under such statutes were void which necessitated the same to be sold at public auction by the administrative action of the Board of Educational Lands and Funds. It was this administrative and independent action of such board which caused the accrual to be made to the school lands trust fund, and not the litigation which was incidental to the creation of the fund and in no manner augmented it. Under the circumstances the litigant is not entitled to an allowance for attorney's fees and expenses of the litigation to be paid out of the trust fund.

7. Where litigation is conducted solely for the benefit of a litigant and not for the benefit of the school lands trust fund and the litigant is not a beneficiary of the trust fund, such litigant is not entitled to have attorney's fees and expenses of litigation paid out of the trust fund.

8. It is the practice in this state to allow the recovery of attorney's fees and expenses only in such cases as are provided for by statute, or where the uniform course of procedure has been to allow such recovery.

Clarence S. Beck, Atty. Gen., Robert A. Nelson, Asst. Atty. Gen., Richard H. Williams, Asst. Atty. Gen., for appellants.

Davis, Healey, Davies & Wilson and Robert A. Barlow, Jr., Lincoln, for appellee.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.

MESSMORE, Justice.

This appeal results from the decision of this court in State ex rel. Ebke v. Board of Educational Lands and Funds, 154 Neb. 244, 47 N.W.2d 520, modified at 154 Neb. 596, 47 N.W.2d 526, hereinafter referred to as the Ebke case, and involves a judgment for attorney's fee and expenses incurred in the above-mentioned litigation.

When the trial court entered judgment on the mandate in the Ebke case, leave was granted the relator and his attorney to file an application for expenses and attorney's fee which were necessitated by the Ebke litigation against the respondents constituting the Board of Educational Lands and Funds of the State of Nebraska; the State Treasurer, although a member of the Board, separately as being intrusted with the ministerial duty of keeping an accurate and correct account of the receipts, disbursements, and balances on hand in the perpetual school trust fund; and the Attorney General, also a member of the Board, separately as the legal adviser of the respondents. Notice was given the Attorney General as provided by statute. The relator, Fred Ebke, and his attorney, Paul W. White, filed an application in the district court for allowance and recovery of expenses and attorney's fee. This application set forth the following: That in the second amended petition for declaratory judgment filed in the above-entitled case the relator alleged that relator was a citizen, a resident, and a taxpayer of School District No. 20 of Deuel County, Nebraska; that he was married and had been a resident of the State of Nebraska for over 30 years; that he was a taxpayer of the State of Nebraska, and a taxpayer of School District No. 20 of Deuel County, Nebraska; and that he was prosecuting the action as an individual, a taxpayer, a citizen, and on behalf of all other citizens, residents, taxpayers, and parents having children attending public schools, 'and also for and on behalf of each and every public school district which is or may become a beneficiary of the perpetual school fund of the State of Nebraska.' The application set forth the purpose of the litigation, the proceedings had therein, and the result obtained, asserting that an increase in the Nebraska school lands trust fund in excess of four million dollars resulted from the Ebke litigation; that further increases will occur in the future; and that during the course of this successful litigation Paul W. White acted as attorney for the relator Ebke and had received no remuneration for his services.

The respondents filed objections to the above application. The same, insofar as necessary to consider in this appeal, are as follows: The benefits which have accrued to the Nebraska school lands trust fund through the sale of leases at public auction were not the direct result of the litigation herein conducted by the relator and his attorney; and the litigation herein was conducted for the personal benefit of the relator and not for the benefit of the trust. Upon hearing held on the application and the objections thereto, the district court entered a decree allowing the applicants' expenses in the amount of $625, and attorney's fee in the amount of $60,000 to be taxed as costs in this action, and decreeing that the custodian of the Nebraska temporary school lands fund, the defendant Treasurer of the State of Nebraska, be directed and ordered to pay said amount, together with all costs of this present action, out of the Nebraska temporary school lands fund, said amount being a legitimate and just charge against said fund.

The respondents filed a motion for new trial and an amended motion for new trial which were overruled. From the order overruling the motions for new trial, the respondents appeal.

Hereafter respondents will be referred to as appellants; the Board of Educational Lands and Funds of the State of Nebraska as the Board; the relator Ebke as appellee Ebke, or Ebke; and attorney Paul W. White as appellee White, attorney White, or Ebke's attorney, or when both appellees Ebke and White are used together, as appellees.

At the regular session of the Legislature in 1947, legislative bill No. 33 was enacted, being Laws 1947, chapter 235, page 743, relating to the leasing of public school lands of the state. Section 7 of the act, later designated as sections 72-240 and 72-240.01, R.R.S.1943, purported to grant to existing leaseholders an absolute right to renewal of their leases provided the existing lease-holders conformed to certain standards as set forth in the act.

The record in the Ebke case shows that on December 31, 1924, the Commissioner of Public Lands and Buildings leased Section 36, Township 13, Range 44, Deuel County, Nebraska, to one W. E. Scott for a term of 25 years. On July 2, 1947, shortly after the effective date of legislative bill No. 33, Ramey C. Whitney procured an assignment of this lease for a consideration of $10,000. On July 12, 1949, approximately 6 months prior to the expiration of this lease by its terms, Fred Ebke filed an application for a lease on this property, setting forth therein an offer to pay a bonus of $2,500 in addition to the annual rent to procure the lease, and in addition, set forth objections to the application of Whitney for a renewal of the lease. The Board overruled the objections to Whitney's application, denied Ebke's application, and granted Whitney's application for a renewal of the lease. Ebke then filed his petition in the district court for Lancaster County for a declaratory judgment, the purpose of the action being to obtain an interpretation and construction, and to test the validity of chapter 235, Laws 1947, and chapter 212, Laws 1949, enacted by the Legislature, designated as sections 72-240 and 72-240.01, R.R.S.1943. The trial court found against Ebke and declared sections 72-240 and 72-240.01, R.R.S.1943, to be valid and legal statutes fully in keeping and accord with the provisions of the Constitution of Nebraska, and enforceable according to their terms. Ebke then appealed to this court. This court reversed the decision of the trial court, holding that the provisions of sections 72-240 and 72-240.01, R.R.S.1943, were violative of Article VII, § 9, of the Constitution of Nebraska which provides: 'All funds belonging to the state for educational purposes, the interest and income whereof only are to be used, shall be deemed trust funds held by the state, and the state shall supply all losses thereof, that may in any manner accrue, so that the same shall remain forever inviolate and undiminished; and shall not be invested or loaned * * *.' This court also held that the lease involved in the Ebke case was issued without authority of law. This holding required that the lease be sold at public auction.

Pursuant to the judgment rendered in the Ebke case, the lease as described therein was offered at public auction and a 12-year lease...