Court Opinion

ID: 9703845
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:10:10.585144+00
Date Added: 2024-06-11T18:21:52.192208
License: Public Domain

HENDERSON, Justice
(dissenting).
I respectfully dissent.
This Court, a mere 134 days ago, in Kanaly v. State, 368 N.W.2d 819, 824-25 (S.D.1985), while recognizing that the Enabling Act and the constitution of this state did not require an institution of higher education to exist at the City of Springfield, stated, plainly, unequivocally, and unanimously:
Thus, the legislature may decide to close this institution at the City of Springfield and convert the property into other trust assets provided the trust fund is not thereby impaired. The trust and all proceeds delivered thereto must hereafter be perpetually held and used in a separate fund for the support and maintenance of a curriculum and/or educational programs associated with a normal school and the educational programs historically held at USD/S and now conducted at other South Dakota institutions of higher education. (Emphasis supplied; footnote omitted.)
As authority for the above statement, this Court cited S.D. Const, art. VIII, § 8. Kanaly, 368 N.W.2d at 824 n. 2. S.D. Const. art. VIII, § 7, provides:
All lands, money or other property donated, granted or received from the United States or any other source for a university, agricultural college, normal schools or other educational or charitable institution or purpose, and the proceeds of all such lands and other property so received from any source, shall be and remain perpetual funds, the interest and income of which, together with the rents *630of all such lands as may remain unsold, shall be inviolably appropriated and applied to the specific objects of the original grants or gifts. The principal of every such fund may be increased, but shall never be diminished, and the interest and income only shall be used. Every such fund shall be deemed a trust fund held by the state, and the state shall make good all losses therefrom that shall in any manner occur. (Emphasis supplied.)
S.D. Const, art. VIII, § 8, in turn, provides:
Appraisal and sale of donated lands— Separate accounts.
All lands mentioned in the preceding section shall be appraised and sold in the same manner and by the same officers and boards under the same limitations, and subject to all the conditions as to price, sale and approval, provided above for the appraisal and sale of lands for the benefit of public schools, but a distinct and separate account shall be kept by the proper officers of each of such funds. (Emphasis supplied.)
A simple reading of these constitutional provisions reveals that all lands, money or property donated by the United States or any source for normal schools, must be held in trust by the state, see Schelle v. Foss, 76 S.D. 620, 626, 83 N.W.2d 847, 851 (1957), and kept in a separate account. S.D. Const, art. VIII, § 8. This Court unanimously recognized these constitutional dictates and safeguards in Kanaly as the above quotation therefrom clearly evidences. We have recognized, since early statehood, the permanent trust relationship, In re State Bonds, 7 S.D. 42, 63 N.W. 223 (1895), and that the constitution controls trust management, Heston v. Mayhem, 9 S.D. 501, 70 N.W. 635 (1897). The beneficiaries of this trust are the educational institutions of this state, Schelle.
The majority, however, now seeks to avoid our unanimous Kanaly ruling and our long-established constitutional protections and to do this, the majority advances two avenues of constitutional regress.
First, the majority resorts to a dictionary interpretation of the wording “the specific objects of the original grant.” The majority then holds that the 1985 Legislature could “amend or supersede its previous action in 1895 by enactment of SB 310/1985, and thereby divert the trust assets from a nonexistent institution to the other existing state normal schools,” and that an opposite conclusion is “too narrow a reading of the plain language of the Enabling Act and the Constitution_” (Emphasis supplied.) The word “divert” is defined in Webster’s New Collegiate Dictionary 331 (1980) as meaning “to turn in opposite directions, to turn aside, deviate, to turn from one course or use to another, deflect, distract.” This is precisely what the majority holding herein does. It turns the Springfield trust assets from one course or use to another. It turns aside from the constitutional safeguards provided in Article VIII, §§ 7 and 8, and it deviates from our unanimous ruling in Kanaly. A constitutional interpretation of the relevant provisions and Kanaly, however, does not support the majority. Separate accounts is the constitutional requirement, S.D. Const, art. VIII, § 8, and although logic may escape the majority, the majority cannot escape the constitution.
Second, the majority, so as to avoid our clear and unanimous ruling in Kanaly, resorts to concluding that the above Kanaly quotation is obiter dicta because the “issue of merger of school trust funds was not before us or even suggested.” In Kanaly, the issue was whether the permanent trust fund provisions of the Enabling Act and the South Dakota Constitution would be violated by a transfer of trust assets without consideration. In concluding that a constitutional violation had occurred, this Court unanimously stated that the trust and all proceeds must be perpetually held and used in a separate fund for the support and maintenance of programs associated with a normal school and historically held at USD/S. Kanaly, 368 N.W.2d at 824-25. In the present case, the issue is whether the permanent trust fund provisions will be violated by a merger of the USD/S trust and the trust or trusts held for the other *631normal schools. The issue now as then is the same: Do certain legislative enactments concerning the USD/S trust violate our permanent trust fund provisions? In Kanaly, we held the enactments there in question to be constitutionally infirm as an impairment of the trust fund and that the trust must thereafter be held and used in a separate USD/S fund. The issues are similar, Kanaly is binding, and the Kanaly ruling does not constitute obiter dicta.
In Kanaly, 368 N.W.2d at 823, this Court held these trusts to be “special, permanent and perpetual” and it is the USD/S trust, not a collection of trusts, that our decision in Kanaly protects. The only means by which USD/S trust assets may be placed in another trust fund is by virtue of a constitutional amendment. The constitutional permanent trust fund provisions protect the private givers to higher education and provide that any gift given to higher education will be used in a way consistent with the donor’s intent. If not, the concept of a “permanent trust fund” and the constitutional phrase “shall be inviolably appropriated and applied to the specific objects of the original grants or gifts” would be utterly without meaning to higher education in South Dakota. Inevitably, this would result in the conclusion by potential donors that the system of higher education in South Dakota was not a proper steward for donations. To require the state to maintain the separate account necessary to keep the USD/S trust as it has been historically held is a small price to pay for the protection of the integrity of a sacred educational trust and the preservation of a vital constitutional principle. See Schomer v. Scott, 65 S.D. 353, 359, 274 N.W. 556, 559 (1937). Indeed, such a requirement is mandated by the constitution itself. See S.D. Const, art. VIII, § 8.
Under the majority decision, the constitutional requirements of “separate accounts” and “inviolability” become defiled; all permanent trust funds are commingled together — undefinable—lost in futuristic chame-leonic whim by the politicos.
Because I believe the majority ruling does violence to our constitution, our decision in Kanaly, higher education in South Dakota, and private donors — past— present — and future, I dissent.