Court Opinion

ID: 9707995
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:26:55.851321+00
Date Added: 2024-06-11T17:18:00.893274
License: Public Domain

Spencer, J.,
dissenting.
I respectfully dissent from the decision of the court in this case for the reason that I cannot be a party to the rape of the school land trust. I concede the legislative intent to grant rights to lessees in the improvements, but question the power of the Legislature to grant an interest of any nature in the land.
In this case, as in the Banks case, we are not concerned with rights as between lessees, but rather with the question whether a trustee may grant rights to the detriment of a cestui que trust. It is the law of trusts which should be controlling herein, and not the intent of the legislation.
It is undisputed that no request was made nor permission granted to place improvements on the land previous to 1954. Previous to that time there was no statute dealing with the rights and obligations as between a lessee of school land and the Board of Educational Lands and Funds with regard to permanent improvements placed upon the school lands by a lessee. In such situation, under the provisions of section 49-101, R. R. S. 1943, the common law applied. Under the common law, permanent improvements placed on real estate by a lessee without the consent of the landlord became the property of the landowner. It is also of interest to note that after the installation of the irrigation wells the lessee sublet the leased property to other lessees.
As set out in Propst v. Board of Educational Lands & Funds, 156 Neb. 226, 55 N. W. 2d 653: “The title to the state school lands was vested in the state upon an express trust for the support of common schools without right or power of the state to use, dispose of, or alien*734ate the lands or any part thereof except as allowed by the Enabling Act and the Constitution.”
The majority opinion holds improvements on leased property create a property right. I have no quarrel with that holding if it is restricted to property rights in the removable improvements. However, I am in complete disagreement that land leveling, irrigation wells, and like improvements create a property right in other than those portions which conceivably can be removed, and to so hold would necessarily create a property interest in the land itself. This is beyond the power of the Legislature to grant, and is a direct violation of the school lands trust to the detriment of the common schools, the cestui que trust.
Over the years, the school land trust has been manipulated by the legislative process for the advantage of school land lessees, and to the detriment of the trust, by inadequate rental returns. The legislation under consideration, as construed by the majority opinion, is an extreme manipulation for the benefit of school land lessees, and is an obvious encroachment upon the trust itself.
The law applicable herein is well stated in State ex rel. Ebke v. Board of Educational Lands & Funds, 154 Neb. 244, 47 N. W. 2d 520: “A trustee acts in a representative capacity and persons dealing with him are bound to be cognizant of his powers. A trustee is required to dispose of trust property upon the most advantageous terms which it is possible for him to secure for the benefit of the cestui que trust whom he represents. The rule is no different in the leasing of property of a trust estate.”
In that same case, we said: “The state in acting as a trustee is subject to the same standards, and when its status as a trustee is: fixed by the Constitution a violation of its duty as a trustee is a violation of the Constitution itself. * * *
' “That the Legislature has the power to provide the method of administering the public school lands of the *735state as a trust is not subject to. question. But the method provided must be one which is within the law governing the administration of trust estates. The designation of these lands as a trust in the Constitution has the effect of incorporating into the constitutional provision the rules of law regulating the administration of trusts and the conduct and duties of trustees. A breach of trust in such a situation is in effect a violation of the constitutional provision and has the effect of invalidating the legislation authorizing the breach.”
It seems elementary to me that in dealing with this trust a strict interpretation must be placed upon all statutes, agreements, and proceedings for the protection of the beneficiaries of our public school lands. This fact, it appears to me, has been wholly ignored by the Banks case and the majority opinion herein. I have no quarrel with these holdings when interpreting rights between lessees. As I interpret the improvement statutes, they refer to authorized improvements, and contemplate, and I believe can only contemplate, the relationship between the old and the new lessees. The statute is so limited. To extend them, as was done by the Banks case and is done by the majority opinion herein, is to ignore the trust nature of the property, and to read into the statute a grant which is beyond the power of the Legislature to give. In the first instance, the State merely serves as an intermediary between the old and the new lessees. I cannot accept any interpretation that grants lessees any land benefits as against the trust, for the simple reason that the Legislature is without power to create or grant such benefits. What the majority opinion does is to diminish the value of the school lands by considering the State as a new lessee rather than as a trustee. To me this is not only judicial legislation but legislation in violation of a constitutional prohibition.
White; C. J., and Newton, J., join in'this dissent.