State ex rel. Walker v. Board of Com'rs for Educational Lands and Funds

• Court: Nebraska Supreme Court
• Writing for the Court: YEAGER, J.
• Citation: State ex rel. Walker v. Board of Com'rs for Educational Lands and Funds, 3 N.W.2d 196, 141 Neb. 172 (Neb. 1942)
• Decision Date: 20 March 1942
• Docket Number: 31295.
• Parties: STATE ex rel. WALKER v. BOARD OF COM'RS FOR EDUCATIONAL LANDS AND FUNDS et al.

3 N.W.2d 196

141 Neb. 172

STATE ex rel. WALKER v. BOARD OF COM'RS FOR EDUCATIONAL LANDS AND FUNDS et al.

No. 31295.

Supreme Court of Nebraska

March 20, 1942

Appeal from District Court, Lancaster County; Polk, Judge.

Syllabus by the Court.

1. A general demurrer admits the truth of all material facts well pleaded, and the intendments and inferences that fairly and reasonably may be drawn therefrom.

2. All funds belonging to the state for educational purposes the interest and income whereof only are to be used, are by the terms of the Constitution trust funds and the state is the trustee thereof.

3. The state as trustee of public property and funds cannot be sued without its consent.

4. A constitutional provision is not self-executing if it indicates a line of policy or principles, without supplying the means by which such policy or principles are to be carried into effect, or if the language of the Constitution is directed to the legislature, or it appears from the language used and the circumstances of its adoption that subsequent legislation was contemplated to carry it into effect.

5. While there is a solemn and sacred obligation on the part of the state imposed by the Constitution to replace shortages in the permanent school fund, the constitutional provision fixing the obligation not being self-executing, the courts are without power to compel performance of the obligation.

Sterling F. Mutz, of Lincoln, for appellant.

Walter R. Johnson, Atty. Gen., and Edwin Vail, Asst. Atty. Gen., for appellees.

Heard before SIMMONS, C. J., and ROSE, PAINE, CARTER, MESSMORE, and YEAGER, JJ.

YEAGER Justice.

As pleaded in the petition, this is an action by the state of Nebraska on relation of Raymond H. Walker, plaintiff and appellant against the board of commissioners for educational lands and funds and the individual members of the board and the state board of equalization and assessment and the individual members of this board, defendants and appellees.

The petition sets forth that Raymond H. Walker is a resident, inhabitant, citizen and taxpayer of the state of Nebraska and of the public school district of the city of Lincoln; that he has children of school age attending the public schools, and that the action is brought on behalf of the said Walker and all others similarly situated and all public school districts which are beneficiaries of the permanent school trust fund of the state of Nebraska.

The petition sets forth that demand was made upon the attorney general that he institute the action, but such demand was refused.

The action as pleaded is, first, to require the board of commissioners for educational lands and funds to make accounting of the permanent school trust fund of the state, in which fund it is charged that shortages exist, and then certify such shortages to the state board of equalization and assessment; and, second, that mandamus issue requiring that the said state board of equalization and assessment make provision for a levy of taxes to take care of and replace the shortages in the permanent school trust fund. Known shortages in the amount of $269,824 were alleged which with interest would amount to $668,542.28. It was further alleged that the known and the unascertained shortages would exceed $2,000,000, all of which occurred prior to the incumbency of the individually named defendants.

To the petition the defendants separately demurred. The ground of the demurrers was that the petition did not state facts sufficient to constitute a cause of action. The demurrers were sustained and, the plaintiff having elected to stand on his petition, the petition was dismissed. From this dismissal the plaintiff has appealed.

To an understanding of the matter presented, an examination of certain constitutional provisions relative to the creation of the board of commissioners for educational lands and funds, its functions, and the accumulation and creation of the lands and funds to be administered by the board and also the matter of title to such lands and funds is required. It is necessary further to examine certain enactments of the congress of the United States.

On May 30, 1854, an act of congress was approved, the purpose of which was to permit the organization of the territories of Nebraska and Kansas. Section 16 of the act, 10 U.S.Stat. Large, p. 283, is as follows: "And be it further enacted, That when the lands in the said Territory shall be surveyed under the direction of the government of the United States, preparatory to bringing the same into market, sections numbered sixteen and thirty-six in each township in said Territory shall be, and the same are hereby, reserved for the purpose of being applied to schools in said Territory, and in the States and Territories hereafter to be erected out of the same." As will be observed, sections sixteen and thirty-six of each township, were to become school-lands after survey and before organization. After organization into territories or states the lands were to become school-lands of the territories or states.

By act of congress, approved April 19, 1864 (13 U.S.Stat. p. 47), which was the act enabling Nebraska to gain statehood, sections sixteen and thirty-six of each township were granted to the state for support of common schools, except in cases where sales had been made, and in that event other lands, equivalent in area, in subdivisions of not less than quarter-sections, were granted in lieu of the lands sold (sec. 7). Further, by the act it was provided that 5 per cent. of the proceeds of sales of all public lands lying within the state which had been or would be sold by the United States prior to or subsequent to the admission of Nebraska into the Union, less incidental expenses, should be paid to the state for the support of the common schools (sec. 12).

Nebraska was admitted into the Union on March 1, 1867, and assumed the privileges and duties of statehood, including those imposed by the congressional enabling acts which included the acceptance of the lands and funds for the support of the common schools of the state.

For the evident purpose of preserving and protecting the lands and funds thus granted to the state by congressional act, there was written into the Constitution of 1866, or the first Constitution, the following provision: "The principal of all funds arising from the sale, or other disposition of lands or other property, granted or intrusted to this state for educational and religious purposes, shall forever be preserved inviolate and undiminished; and the income arising therefrom shall be faithfully applied to the specific objects of the original grants or appropriations. The legislature shall make such provisions by taxation or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state; but no religious sect or sects shall ever have any exclusive right to, or control of, any part of the school funds of this state." Const.1866, art. VII, sec. 1.

By the adoption of the Constitution of 1875 the Constitution of 1866 was amended with regard to school-lands and funds, their uses, and supervision and control thereover. The pertinent provisions are sections 1, 2, and 3, art. VIII, and they are the following:

"The governor, secretary of state, treasurer, attorney-general and commissioner of public lands and buildings shall, under the direction of the legislature, constitute a board of commissioners for the sale, leasing, and general management of all lands and funds set apart for educational purposes, and for the investment of school funds in such manner as may be prescribed by law.

"All lands, money, or other property granted, or bequeathed, or in any manner conveyed to this state for educational purposes, shall be used and expended in accordance with the terms of such grant, bequest, or conveyance.

"The following are hereby declared to be perpetual funds for common school purposes, of which the annual interest or income only can be appropriated, to-wit: First. Such per centum as has been, or may hereafter be granted by congress on the sale of lands in this state. Second. All moneys arising from the sale or leasing of sections number sixteen and thirty-six in each township in this state, and the lands selected, or that may be selected in lieu thereof. Third. The proceeds of all lands that have been, or may hereafter be granted to this state, where, by the terms and conditions of such grant, the same are not to be otherwise appropriated. Fourth. The net proceeds of lands and other property and effects that may come to the state,...