State v. Platte Valley Public Power & Irr. Dist.

• Citation: 23 N.W.2d 300,147 Neb. 289
• Decision Date: 31 May 1946
• Docket Number: 32059.
• Court: Supreme Court of Nebraska
• Parties: STATE v. PLATTE VALLEY PUBLIC POWER & IRRIGATION DIST. et al.

23 N.W.2d 300

147 Neb. 289

STATE v. PLATTE VALLEY PUBLIC POWER & IRRIGATION DIST. et al.

No. 32059.

Supreme Court of Nebraska

May 31, 1946

[Copyrighted Material Omitted]

Syllabus by the Court.

1. The school lands of this state are held in trust by the state under a contractual and constitutional obligation to refrain from disposition or alienation of the use of this property except as allowed by the Enabling Act and the Constitution.

2. By the provisions of section 1, article VII, of the Constitution the Board of Commissioners there named, under the direction of the Legislature, has the power to lease said lands.

3. Legislative direction, as to the terms under which school lands shall be leased, is subject to and limited by the obligation to preserve the trust property inviolate.

4. The power of the Board of Commissioners named in section 1 article VII, of the Constitution in leasing said lands is subject to and limited by the terms imposed by the Legislature.

5. Anyone dealing with the school lands does so with knowledge of and subject to the trust obligations of the state and the legislative grant of power to the board as to the terms and conditions of the lease.

6. The law enters into and becomes a part of the contract.

7. A lease made subject to the above conditions constitutes a contract between the state and the lessee, and is personal property.

8. The property rights of the lessee therein are protected from invasion by the provisions of section 21, article I, of the Constitution.

9. The administrative determination of the value of school lands by appraisement as authorized by sections 72-204 and 72-205, R.S. 1943, is for the purpose of securing a value as a basis for fixing the annual rent.

10. The legislative intent was that the appraised value should be at all times the fair market value of the leased premises.

11. The administrative determination of value for rent purposes does not fix the value which the state must receive for the land when it is taken under eminent domain proceedings.

12. The state must receive the fair market value of the leased premises at the time of the taking, less certain reservations noted in the opinion.

13. The state is without power to alienate school lands without receiving their full value; it cannot reduce that value nor alienate it in part by lease, and school lands cannot be taken from the state by judicial process, unless that value is paid to the state.

14. The board under the leasing provisions of the statute is without authority to sell directly or in effect a part of the fee.

15. The land which the state leases constitutes the trust property.

16. Certain improvements placed on the land by the lessee remain the property of the lessee and do not become a part of the trust property of the state.

17. A tenant for a term has a property right which is protected by section 21, article I, of the Constitution.

18. If a leasehold interest is taken, or injured, the lessee is entitled to a sum which will restore the money loss consequent to the taking or injury. This consists generally of the fair market value of the leasehold or unexpired term of the lease, and is said to be the difference between the rental value of the remainder of the term and the rent reserved in the lease.

19. Under the provisions of the lease here involved there can be no difference between the rental value of the remainder of the term and the rent reserved in the lease, unless it be shown that the value of the use based upon the fair market value of the land is more than the six percent required by the statute as the rental value of the land.

20. Where the rent reserved equals or exceeds the rental value, the lessee has suffered no loss and cannot recover.

21. Under the provisions of section 72-240, R.S. 1943, a lessee has merely a right to a lease provided no other person offers a higher bid and return to the state. That right is not to be considered in determining the value of the leasehold when taken under eminent domain proceedings.

22. Under the provisions of section 72-223, R.S. 1943, a condemnor cannot acquire any mineral rights in the lands taken, and the value of mineral rights, if any, is to be excluded in determining the fair market value of the land.

23. Where the possibility of nonuser for the purposes for which the land is taken, and a reverter to the state under the provisions of section 72-223, R.S. 1943, is so remote that it has no substantial determinative value, it is not to be taken into consideration in determining the fair market value of the land taken.

24. Where the reverter has a substantial determinative value, that value should be excluded in determining the fair market value of the land taken.

25. The Constitution requires that an owner of property taken under eminent domain proceedings shall be paid for what is taken from him. The measure of compensation for the property taken is the owner's loss, not the taker's gain.

26. Under the provisions of section 72-225, R.S. 1943, the value of the interest of the state and the lessee shall be separately assessed.

27. The sum of the value of the separate interests may, if the evidence justifies, be more than the value of the land as an unencumbered whole.

Walter R. Johnson, Atty. Gen., Robert A. Nelson, Asst. Atty. Gen., and H. Emerson Kokjer, Deputy Atty. Gen., for appellant.

Beeler, Crosby & Baskins and V. H. Halligan, all of North Platte, and Gerald J. McGinley, of Ogallala, for appellees.

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

SIMMONS Chief Justice.

In this action, school lands, which were under lease, were taken by eminent domain. Trial was had to a jury and awards of damage made to the state and the lessee. The state appeals. The condemnor cross-appeals. We reverse the judgment of the trial court and remand the cause.

The parties to this action are the state; Sylvester L. Meyers, hereinafter referred to as the lessee, and his wife; and the Platte Valley Public Power and Irrigation District, a corporation, hereinafter referred to as the condemnor.

The land involved in this action is a part of the school land of the state under grant from the United States. It consists of 204.90 acres of bottom hay land, and 67.32 acres of river accretion land.

As of January 1, 1934, this land was leased to the lessee by written instrument as follows:

'Know All Men by These Presents: That I, Harry P. Conklin Commissioner of Public Lands and Buildings, in pursuance and by virtue of the power and authority vested in me by the laws of the State of Nebraska, and in consideration of the rents to be paid and conditions to be complied with by Sylvester Leroy Myers hereinafter contained, do lease and let unto the said Sylvester Leroy Myers all that certain tract or parcel of land, situated in the County of Keith and State of Nebraska, and described as follows, to-wit: Gov't. Lots 2 & 3--NE 1/4 SW 1/4--S 1/2 SW 1/4 of Section No. 8, Township No. 13 Range No. 36 and appraised at Six hundred fourteen & 70/100 Dollars, upon the terms and conditions only, however, that the said lessee shall and will promptly pay semi-annually in advance, on the first day of January and July in each year, to the County Treasurer of said County of Keith for the use of said lands, the full annual rate of six per cent upon the aforesaid appraised value of said lands, and that he shall, in like manner pay semi-annually, in advance, the annual rate of six per cent upon the appraised value of said lands, which may or shall hereafter be made; that he will not commit any waste or spoil in or upon said lands; that the Board of Educational Lands and Funds may, when they deem it to the best interests of the state, cause said lands to be reappraised according to the law in force at the time such reappraisement is made, and that the valuation made by the said Board shall be the basis of the rental after such reappraisement, and that at the expiration of twenty-five years from and after the first day of January next ensuing after the date of this lease, or sooner, with the consent of the Commissioner he will peaceably and quietly leave, surrender, and yield up all and singular the said lands and premises. And that in case of any default on the part of the said lessee to pay the rental or any part thereof, as above stated, for the period of six months from the time it becomes due and payable, this lease may be forfeited and fully set aside, as provided by law, and the land revert to the State the same as though it had never been leased, and be subject to lease or sale to other parties. No assignment of this lease shall be valid unless the same be entered of record in the office of Commissioner of Public Lands and Buildings, and all the rental due the State shall have been paid.

'By order of the Board of Educational Lands and Funds.

'In Witness Whereof, I hereunto set my hand and affix my official seal, at the City of Lincoln, this 1st day of January A. D. 1934.

'All coal, oil, salt, mineral and other natural resources are reserved by the state as provided by law.

'Harry P. Conklin

'Commissioner of Public Lands and Buildings.

'(Recorded in Book 20, Page 223-1)

'By J. H. Wehn, Deputy'

The lessee entered into possession and has paid the stipulated rentals.

At the trial all parties asked the witnesses to fix the value of the land as of April 15, 1945. We shall refer herein to values with reference to that date, unless otherwise indicated. The rental being paid at that date was $186.30 per annum. All the land was taken under the condemnation proceeding. Consequential damage to other land is not involved. Proceedings in condemnation were first had in the county court of Keith County. The...