Wyodak Chemical Co. v. Board of Land Commissioners of Wyoming

• Decision Date: 09 March 1937
• Docket Number: 1993
• Parties: WYODAK CHEMICAL COMPANY v. BOARD OF LAND COMMISSIONERS OF WYOMING, ET AL
• Court: Wyoming Supreme Court

65 P.2d 1103

51 Wyo. 265

WYODAK CHEMICAL COMPANY v. BOARD OF LAND COMMISSIONERS OF WYOMING, ET AL

No. 1993

Supreme Court of Wyoming

March 9, 1937

APPEAL from the District Court, Weston County; HARRY P. ILSLEY Judge.

Proceeding by the Wyodak Chemical Company against the Board of Land Commissioners of the State of Wyoming and others. From an adverse judgment, the Wyodak Chemical Company appeals.

Affirmed.

For the appellant, the cause was submitted upon the brief of E. E Wakeman and E. C. Raymond of Newcastle and Wilfrid O'Leary of Cheyenne.

When notice of appeal was filed with the Board of Land Commissioners, all further proceedings were automatically stopped and the board could proceed no further. As a result all that it did in advertising and selling the lease was void. The right of appeal provided by statute is general in its application to all state leases. Walls v. Evans, 38 Wyo. 103. The aggrieved party has thirty days within which to file a notice of appeal. No service of this notice need be made upon anyone. Sec. 91-307, R. S. 1931. The board made its decision on November 15, 1934. On December 8, 1934, the appeal was perfected. Sec. 91-801, R. S. 1931, gave appellant as assignee a preference that could not be taken away by any rule of the land board. Anchor v. Howe, 50 F. 367; 12 C. J. 845; Ry. Co. v. Davidson, 257 U.S. 506; St. Louis Packing Co. v. Houston, 215 F. 553; State v. Board, 128 N.E. 286. The qualifications of an applicant for a lease of state land are fixed by Sec. 91-109, W. R. S. 1931. A review of the state leasing laws, beginning with Chapter 6, page 269 of the Revised Statutes of 1899, will show no separate provisions for mineral leases. We direct particular attention to Sections 806, 812 and 813. Section 615, C. S. 1910, reflects the changes in the law to that date. Following the 1910 compilation, Chapter 38, Session Laws 1915, shows certain legislative amendments. The law was again amended by Chapter 62, Session Laws 1921, and further amended by Chapter 108, Laws 1929. In 1931, the law was amended by Chapter 45, Session Laws of Wyoming. The first enactment of a law distinguishing mineral leases from general leases was passed by the legislature of 1907, Chapter 81. Sections 619 and 620 of the compilation of 1910 show the provisions of the act of 1907 with reference to certain provisions. The qualifications of an applicant for any state lease are fixed by Sections 91-109 and 91-113, R. S. 1931. From the foregoing, we conceive it to be the law that the court should have held that the board erred in not granting this appellant a preferential right to a lease under his application. Section 91-801 gives the holder of an oil and gas lease a preferential right of renewal. If this section is construed with Section 91-113, then it may be that the board had a right to reject all bids and sell the lease at auction, but if it had that right under that section, then it most certainly is bound to grant a preference to the original lessee or his assignee, when such applicant offers to meet the highest annual rental offered by any other applicant. We believe that the preferential provision contained in Section 91-801 applies solely to mineral leases and that Section 91-113 applies exclusively to surface leases. This seems to us to be quite apparent when we find that Section 91-113 is Chapter 45 of the Session Laws of 1931, effective February 17, 1931, and that Section 91-801 is Chapter 95 of the Sessions Laws 1931, approved March 5 of that year. Surely the legislature would not have enacted the later statute, denominated it an act to amend and re-enact Section 716, C. S. 1920, which deals exclusively with mineral leases, with any thought that it would be construed with the previous act which deals with general leases. Bucknum v. Johnson, 21 Wyo. 36. It may be argued that no appeal was taken from the sale, but that position is untenable for this reason. The appeal must be taken from a decision of the board. Section 91-306, R. S. 1931. The sale was not a decision. It was an unjustified attempt by the board to carry out its own order, in the face of a pending appeal. The only thing this appellant could do to protect its interest and comply with the law, was to file its written bid agreeing to meet the terms offered by the highest bidder. This was done and its offer was ignored by the board. Appellant has over $ 70,000 invested in Weston County, Wyoming, and is actively engaged in mining, processing and selling bentonite. It is not a speculator, but a legitimate business enterprise and entitled to be encouraged in its efforts.

For the respondents, the cause was submitted on the brief of Bard Ferrall of Cheyenne.

The only question before the district court was whether the board acted illegally or abused its discretion in ordering the lease sold to the highest bidder. It seems proper to separate the problem into two parts: (1) Ignoring all proceedings following the board's order regarding sale to the highest bidder, was the decision of the board in ordering that the lease be sold to the highest bidder illegal or fraudulent, or a grave abuse of discretion? (2) Was the board precluded from holding a sale by reason of the mere filing of a notice of intent to appeal, although its order directing sale to the highest bidder was a valid order? In a contest proceeding before the Board of Land Commissioners involving a lease of state land the primary question is "from which party can the state derive the greatest revenue." All other matters are secondary. The action of the board in ordering a lease sold at public auction, unless illegal or fraudulent, will not be disturbed. We refer to Sections 3, 4 and 5 of Article 18 of the State Constitution as being pertinent to this question. We also cite the following decisions of this court: Bucknum v. Johnson, (Wyo.) 127 P. 904; Miller v. Hurley, (Wyo.) 262 P. 238. Wyodak Chemical Company had no preference right to a lease of the section. Section 91-801, R. S. 1931. McDougall v. Board, (Wyo.) 49 P.2d 663; Huckfeldt v. Board of Land Commissioners, 20 Wyo. 162. Section 91-191, R. S. 1931, provides that the term "state land" means all lands under the jurisdiction of the board. The mere filing of notice of intent to appeal did not preclude the board from holding a sale of the lease. Sections 91-307, 308, 309, R. S. 1931. Section 91-309 is the controlling section. The mere filing of a notice of intent to appeal is a preliminary step. The filing of the undertaking required by the court is necessary to complete the appeal. The appellant's contention that the mere filing of a notice of appeal can tie the hands of the board for a period of forty-five days, until the individual decides whether he cares to risk the filing of the undertaking required, is not a proper interpretation of the statutes. The bid of Busfield was the highest received at the sale. Appellant, having no preference right, cannot claim a right to a lease, unless it submitted a bid which was higher and better than appellee's. Section 91-114, R. S. 1931. Appellant's alleged offer, unaccompanied by the first year's rental, is meaningless. Walls v. Evans, (Wyo.) 265 P. 29; Thompson v. McKay, (Mich.) 117 N.W. 624.

BLUME, Chief Justice. KIMBALL, J., concurs. MR. JUSTICE RINER.

OPINION

BLUME, Chief Justice.

On April 16, 1929, the State Board of Land Commissioners of this state granted a mineral lease covering section 16, township 48 north, range sixty-five west, in Weston County, Wyoming, to one Jason F. Ralston, authorizing the lessee to remove bentonite from the land for a period of five years, the lease expiring April 15th, 1934, and providing for a rental of $ 100 per annum, payable annually in advance on April 15 of each year, that amount to be applied on a royalty, payable to the state, of two per cent of the value of bentonite mined. The lease was not in conformity with the statutes of this state, for it is provided by section 91-803, Rev. St. 1931, that the royalty on mineral or oil lands shall be not less than 5% of the gross output of mineral or oil from the lands. No bentonite was mined during the term of the lease. The lease was duly assigned on February 13, 1932, to Charles F. Martens and Leman Davis, and the assignment was approved by the Land Board on April 7, 1932. These assignees made a further assignment on October 5, 1933, to appellant, and approval of the board was given on October 9, 1933. On January 8, 1934, the Wyodak Chemical Company, the appellant, filed with the Commissioner of Public Lands an application for a lease of the land above mentioned, for the purpose of mining bentonite thereon, stating that it had purchased the former lease. The sum of $ 111 was remitted with the application to cover the fees and advance rental. The application was accompanied by a letter stating that appellant would commence to mine on this tract "within a year or so." On April 13, 1934, Edwin Busfield, respondent herein, also made application for a lease of the same land, remitting the sum of $ 211 to cover the fees and advance rental for the land. The appellant was notified of Busfield's filing. On May 1st, 1934, the Commissioner of Public Lands allowed Busfield's application with the recommendation that he should be required to pay a minimum royalty of 7 1/2%. Appellant, after notification of the action by the commissioner, took an appeal to the State Land Board, asking the reversal of the decision of the commissioner, and that it be granted a lease on the land. It did not offer to meet the amount of rental offered by respondent. The latter answered, asserting that no mining operations had been carried on or attempted under the former lease, and praying that the decision of the commissioner be upheld and that he be granted...