Opinion ID: 1239050
Heading Depth: 6
Heading Rank: 1

Heading: Third-party purchasers

Text: The superior court concluded that the litigation risk of recovering land purchased by third parties would be very high. It reasoned that the land conveyed to third parties would probably be considered sold under Weiss. It also determined that, because most of the purchasers did not buy the land with knowledge of the breach of trust, these sales would probably be upheld under basic principles of trust law. [16] The trial court further noted that such purchasers might also raise other valid defenses, such as the statute of limitations. Weiss argues that this analysis is incorrect. He asserts that under a long-standing per se rule ... conveyances of federal trust lands in breach of trust are void, regardless of the actual state of knowledge of the conveyees. Weiss supports this position by citing cases from Nebraska and Arizona dealing with land granted by Congress to states for the purpose of supporting public schools. This argument is not persuasive. The trial court reasonably interpreted Weiss as supporting the view that land transferred to third parties would be considered sold for purposes of reconstituting the trust. It also did not err in concluding that under the bona fide purchaser doctrine many if not most of these sales would be valid because the purchasers had neither actual nor constructive notice of any breach of trust. Precedent relied on by Weiss involving school land trusts in Nebraska and Arizona does not contradict this conclusion. The holdings in those cases rely on the detailed procedures for disposal of trust land contained in the enabling acts and state constitutional provisions governing those land trusts. E.g. Gladden Farms, Inc. v. State, 129 Ariz. 516, 633 P.2d 325, 327-30 (1981); Murphy v. State, 65 Ariz. 338, 181 P.2d 336, 353-54 (1947); State ex rel. Ebke v. Board of Educ. Lands & Funds, 154 Neb. 244, 47 N.W.2d 520, 522-23 (1951). The AMHEA differs from these laws because it explicitly permits trust lands to be sold, leased, mortgaged, exchanged, or otherwise disposed of in such manner as the Legislature of Alaska may provide. AMHEA § 202; see also State v. University of Alaska, 624 P.2d 807, 815 n. 11 (Alaska 1981) (noting that the Nebraska Constitution specifically provides for a method of management and disposal of school lands, while the Alaska Constitution has left these determinations to the legislature). While we noted in Weiss that precedent involving school trust land supported our reliance on basic trust law principles, Weiss, 706 P.2d at 683 n. 3, this reliance does not imply that application of such principles yields the same result regardless of the nature of the trust at issue. The superior court properly applied basic principles of trust law under the specific terms of the AMHEA to determine that the plaintiffs would face a high risk of recovering land conveyed to many third-party purchasers.