Opinion ID: 2606626
Heading Depth: 1
Heading Rank: 2

Heading: interpretation of state contracts

Text: In this analysis of the State oil and gas lease form, we construe a document entered into between two negotiating participants. The rules should not differ in logic and principle as normally applied to any bilateral contract, with particular recognition that the lease form is take it or leave it for oil companies who do business with the State. This is a contract case involving a product sale, and legal interpretations and conclusions should not be different from the result had two private parties been involved, or were a private royalty interest holder the present plaintiff. The law does not accept different standards of contractual interpretation for the government in business enterprise than afforded citizens who enter into identical relationships. The State of Wyoming wrote and required the lease form; there were no bilateral negotiations of any provision. As such, no greater benefit than linguistically justified should be afforded by judicial construction and interpretation. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, 17 U.S. 518, 4 L.Ed. 629 (1819). Even before Trustees of Dartmouth College, the United States Supreme Court said: This is a contract; and although a state is a party, it ought to be construed according to those well established principles which regulate contracts generally. Huidekoper's Lessee v. Douglass, 3 Cranch 1, 70, 7 U.S. 1, 70, 2 L.Ed. 347, 369 (1805). Consistent with this position, the Supreme Court again enunciated in Ohio Life Insurance and Trust Company v. DeBolt, 16 Howard 416, 429, 57 U.S. 416, 429, 14 L.Ed. 997 (1853):    If the contract [made by the state] was within the scope of the authority conferred by the constitution of the State, it is like any other contract made by competent authority, binding upon the parties. Nor can the people or their representatives, by any act of theirs afterwards, impair its obligation. When the contract is made, the Constitution of the United States acts upon it, and declares it shall not be impaired, and makes it the duty of this court to carry it into execution. That duty must be performed. In Davis v. Gray, 16 Wall. 203, 233, 83 U.S. 203, 233, 21 L.Ed. 447 (1872), the Court again stated: That the Act of incorporation and the land grant here in question were contracts, is too well settled in this court to require discussion. Fletcher v. Peck, 6 Cranch, 137 [3 L.Ed. 162]; N.J. v. Wilson, 7 Cranch, 166 [3 L.Ed. 303]; Dartmouth Coll. v. Woodward, 4 Wheat., 518 [4 L.Ed. 629]; Bk v. Knoop, 16 How., 369 [14 L.Ed. 977]. As such, they were within the protection of that clause of the Constitution of the United States which declares that no State shall pass any law impairing the obligation of contracts. United States v. Diamond Coal & Coke Co., 254 Fed. 266, 268 (C.C.A.Wyo.), rev'd on other grounds 255 U.S. 323, 41 S.Ct. 335, 65 L.Ed. 660 (1918), involved an appeal from the United States District Court, District of Wyoming, wherein the Court of Appeals discerned:    The equitable claims of a nation or a state appeal to the conscience of a chancellor with the same, but with no greater or less force, than would those of a private citizen under like circumstances, and, barring the effect of mere delay, they are judicable in a court of chancery, to whose jurisdiction the nation or state voluntarily submits them, by every principle and rule of equity applicable to the rights of a private citizen under similar circumstances. The general rule is similarly stated: As to its contract, the state should be held to the same rules and principles of construction and application of contract provisions as govern private persons and corporations in contracting with each other. 72 Am.Jur.2d States, Territories, and Dependencies § 73, p. 468. See also 81A C.J.S. States § 168, p. 632. Wyoming cases, although not specifically directed to an exception criterion are not inapposite. Wyoming Game & Fish Commission v. Mills Company, Wyo., 701 P.2d 819 (1985); State Highway Commission of Wyoming v. Brasel & Sims Construction Co., Inc., Wyo., 688 P.2d 871 (1984); National Surety Co. v. Morris, 34 Wyo. 134, 241 P. 1063 (1925); State ex rel. Fitch v. State Board of School Land Commissioners of Wyoming, 27 Wyo. 54, 191 P. 1073 (1920).