Court Opinion

ID: 9845834
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:29:11.842161+00
Date Added: 2024-06-11T09:16:23.349492
License: Public Domain

CALLISTER, Justice
(dissenting) :
The majority opinion is correct in stating that the crucial question is whether the subject lands became available for leasing by the State because they were newly acquired. The majority holds that they were and, therefore, the Land Board properly denied plaintiff’s application and followed the statutory competitive bidding procedure.
Considerable emphasis has been placed upon the words “become available for leasing” while the importance of the words “because they are newly acquired” have been minimized in the majority opinion. It states “ * * * it appears to be intended that when mineral leasing rights are ‘first available for leasing’ they should be put on the open market and an opportunity for competitive bidding be given. * * * ” This, evidently, without relation to when the lands are acquired by the State and under what circumstances.
The construction placed upon Section 65-1-45 completely emasculates its provision and provisions of related statutes regarding the priority of applications. The opinion further states that “* * * [i]t would be both illogical and impractical to suppose that the statute was intended to have any such arbitrary effect as to compel acceptance of an application to lease solely on the basis of priority of filing, especially where the rental offered is so greatly disparate from what could be obtained from the open market, as it was here. If it were so, the ability of the Board to manage such lands in the best interest of the State would be hampered greatly.”
Unless I misinterpret the majority opinion, its effect would permit the Land Board *21to completely ignore priority of applications, and, in all instances, resort to competitive bidding. This is in direct conflict with the expressed intention of the legislature.
Prior to its amendment in 1959 1 Section 65-1-45 read as follows:
Except as otherwise provided in this chapter, applications to lease shall he considered in the order filed; provided, that when simultaneous applications are filed the land board may, if deemed advisable by it, let the land to the person who will pay the highest rental therefor; and provided further, that applications to lease land already under lease shall not be received before sixty days prior to the expiration of said lease, and all such applications received .within said sixty days shall be considered simultaneous.
Thus it is apparent that prior to 1959 the first qualified applicant was to be given preference in all instances with only one exception — where the filings were simultaneous as defined by the statute. In 1959 the legislature (undoubtedly prompted by the 1958 Dawson Acts) made two more exceptions: (1) Where lands become available for leasing because they are newly acquired and (2) where the lands become available for leasing because a previous mineral lease is canceled or otherwise terminated by the Board (not mentioning the United States).
It is true that the phrase “shall be considered” is somewhat nebulous. However, prior to 1959 it must be construed as mandatory rather than directory language. The word “shall” is ordinarily considered as mandatory and particularly when it is used in a statute which is addressed to public officials.2 The two exceptions added by the 1959 Legislature do not make for naught the general provision relating to the preference to be given qualified applicants who are first in time. Exceptions extend only as far as their language fairly warrants, and all doubts should be resolved in favor of the general provision.3 An exception to a general provision of a statute is indicative of a legislative intent that the thing excepted would be within the general provision had not the exception been made.4 If the majority opinion is correct, insofar as it implies that the Land Board may exercise its discretion in all instances, the legislative enactment of the two exceptions was a needless gesture.
Further indication that the legislature intended that preference should be given to *22the first qualified applicant is found in the same 1959 Act which provided for the exceptions. This same Act amended Section 65-1-44 by inserting the following italicized words in a provision relating to appraisal of the rental value of lands to be leased for minerals: “ * * * If the board deems it advisable to lease any land for other than oil and gas, it shall cause the same to be appraised and determine the annual rental thereon, * *
The same 1959 Act also contained what is now Section 65-1-88, the first part of which provides:
Except as otherwise provided by section 65-1-45, Utah Code Annotated 1953, as amended by this act, oil and gas leases in units not exceeding 640 acres or one section, whichever is larger, shall be issued to the applicant first applying for the lease who is qualified to hold a lease under this act.
* * * (Emphasis added.)
The same 1959 Act also provided:5 Yearly rental for state oil and gas leases shall be one dollar ($1.00) per acre or fraction thereof for each lease year. * * *
Also important is a 1963 legislative enactment again amending Section 65-1-45 6 and which was in effect when the Land Board put up the subject lands for competitive bidding. This amendment added to the-section the following provision:
(c) At the discretion of the land board, leases for minerals other than oil and gas may be offered at public auction upon such terms, conditions, and minimum bid as may be prescribed by the board. (Emphasis added.)
It is apparent from the foregoing that, the legislature evidently has a different notion than the majority opinion as to how-oil and gas leases should be leased to provide the State with the greatest benefit possible. If the legislature deemed it to be in the best interest of the State to have competitive bidding in all instances, it could, very easily have so provided. ' Instead, over-the years, it has seen fit to retain the priority mandate.
Mention is made in the majority opinion that the federal mineral leases of the-subject land terminated July 27, 1962, but that the Land Board was not notified of' this fact until March 27, 1963, after which it “carried forward with dispatch the procedure (competitive bidding) for leasing-these lands.” The opinion quotes with approval the conclusion of the Land Board' that “the date upon which the Land Board, first receives actual notice of the expiration or cancelation of a federal lease * * *' is the date upon which the Land Board should assume jurisdiction and control over-*23the lands, and is the date upon which the lands which are newly acquired first be■come available for leasing.” The opinion then states that, A realistic look at the situation will reveal “that the date of 'actual notice’ is the very first time the Land Board •could do anything about leasing such land.”
The foregoing is based upon fallacious reasoning as applied in the instant case where we are dealing with a situation where the lease was not canceled but terminated at the expiration of‘the term. In .such a situation the federal government is not required to give any “actual notice” of ■the termination. As a matter of fact, the Dawson Acts 7 specifically provide that the patents issued to the State shall, if a lease is then outstanding, show the date when title vested in the State and the extent to which the lands are subject to prior conditions, limitations, easements, or rights, if .any. It is provided that the State shall succeed to the position of the United States .as lessor under such lease or leases. Certainly, the Land Board has only to examine a patent issued to the State and as•certain if there is a lease outstanding and, if so, should be able to ascertain from either the patent itself, or by routine inquiry, the term and conditions of the lease. Furthermore, the State, having succeeded the United States as lessor, receives the rentals .-•due under the lease and should be put on ■.notice if they stop that the lease is either terminated or canceled. As an aside, it would seem that under the Dawson Acts the State, once a patent is issued to it, is the proper party to cancel a lease if there is a default in its terms.
In the instant case, the patent to the subject lands was evidently issued in February, 1961. At that time, title in the fee vested in the State, and it had complete control and management over the lands, subject only to the terms of the outstanding lease. True, the Land Board could not lease the oil and gas rights while the federal lease was in force and effect, but the same is true if there were an outstanding State lease of State lands. It is hard to see the difference between a State lease and a federal lease where the State receives the fee-title to the land and succeeds the United States as lessor.
The subject lands cannot be considered as “newly acquired.” The State held the fee title for over two years before the lands were put up for bid. The lands did not become available for leasing because they were "newly acquired,” but rather because the lease expired.
For the foregoing reasons, the decision of the Land Board should be reversed.
HENRIOD, Chief Justice
(commenting) :
*24I do not participate in the outcome of this case, since I cannot determine the exact basis of the main opinion in the light of points made on appeal. If the opinion be predicated on the theory that the lands were “newly acquired” by “transfer of the mineral interests to the State of Utah by virtue of the expiration of the federal lease,”1 under 65-1-45, I think the opinion to be in error. Nothing was transferred to anyone by expiration of the lease. A barnacle simply was removed from the ship of reversion, which vessel always was there. There cannot be a transfer of a reversion by simple death of a lesser estate, and to attribute to the expiration of a lease the transfer of the fee or any part of it belies the concepts of tenure, which hardly could be said to have been changed by provisions of 65 — 1—45.
The main opinion seems to be somewhat inconsistent and discouraging to an applicant in urging at one point that the administrative agency’s interpretation should be viewed with indulgence and its discretion recognized in carrying out its policies and responsibilities, which may have justified deviations in seven identical cases, but not in case of this eighth one which actually had priority of time over one of the others, but was processed later. The main opinion technically may be correct as to administrative construction, but if so, there would seem to be no justification for continued approval of the other seven, although those matters are not before us.
The dissent of Mr. Justice CALLISTER appears to be more logical and reasonable in legislative construction than that of the main opinion. The latter would seem to penalize the poor prospector in favor of a richer nonprospector, who may not have been diligent in searching out natural resources at all, and seems to fly in the teeth of Archer v. Utah State Land Board, recently decided by this court and reported at 15 Utah 2d 321, 392 P.2d 622 (1964).

. Laws of Utah 1959, Ch. 132, § 1.

. Smith v. Nebraska Liquor Control Comm., 152 Neb. 676, 42 N.W.2d 297; In re O’Rourke, 9 Misc. 564, 30 N.Y.S. 375; see also State v. Zeimer, 10 Utah 2d 45, 347 P.2d 1111, 79 A.L.R.2d 821 (1960).

. 82 C.J.S. Statutes § 382, p. 892.

. 82 C.J.S. Statutes § 382, p. 893; Broadbent v. Gibson, 105 Utah 53, 140 P.2d 939.

. 65-1-91, U.C.A.1953.

. Laws of Utah 1963, Ch. 167, § 1. Effective date May 14, 1963.

. 43 U.S.C.A. §§ 870 and 871a.

. Conclusion of Law #3 of the Board.