Court Opinion

ID: 9698919
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:04:12.104196+00
Date Added: 2024-06-11T18:20:44.655154
License: Public Domain

McCown, J.,
dissenting.
The majority opinion here represents an obvious desire to decide the Belker case once more. See State ex rel. Belker v. State Board of Educational Lands & Funds, 184 Neb. 621, 171 N. W. 2d 156, and on rehearing, ante p. 270, 175 N. W. 2d 63. The issues in the Belker case, however, were not and are not the real issues here.
The only real issues in this case are whether the State Board of Educational Lands and Funds has authority under any circumstances to accept a higher upset bid subsequent to a completed statutory sale of school lands, or set the prior sale aside; and second, whether any court having jurisdiction over the school lands trust has any authority to set aside a completed statutory sale of school lands under the factual circumstances partially disclosed by the majority opinion and additionally reflected in the dissent of Judge Smith.
Even if the Belker constitutional issue were critical, which it is not, the conclusion of the present majority on that issue rests upon a misinterpretation of the legislative action relied upon as justification. In both of the previous Belker opinions, the majority grounded the decisions on the assertion that because of legislative rejection of a proposed amendment to the bill, the resulting statutory silence on the issue must be interpreted as showing a clear legislative intent that neither the board nor even a court, should have any authority “to reject or confirm bids,” and demonstrated that the Legislature intended to “obstruct the trustee in the performance of its duty.”
One of those opinions referred to the critical amendment as one “that would give the Board of Educational *807Lands and Funds the right to reject bids.” The other opinion said that “in support of amendments,” two Senators argued that the board “should have the right to reject bids.”
The proposed amendment was to section 2 of L. B. 234, now section 72-257, R. S. Supp., 1967. The first sentence of that section read: “All lands, now owned or hereafter acquired by the state for educational purposes, shall be sold at the expiration of the present leases.” The crucial amendment was to insert the words “when the best interest of the state will be served” after the word “sold” in that sentence. The actual amendment was a far-cry from what it was said to be by the Belker majority. The interpretation of the legislative rejection of that amendment as “plainly indicating that the Legislature did not intend that such board as trustee could see to it that the land did sell for its highest market price,” is a truly remarkable interpretation of that legislative action.
A far more reasonable interpretation of that action, and the only one finding support in the legislative record, is that if the amendment had been adopted, it would have left the choice of whether to sell school lands or not entirely up to the board, and the board members had advised some members of the Legislature that they did not agree with the legislative mandate to sell all of the lands. See 1965 Legislative floor debate, p. 2902. It is fár-fetched indeed to ascribe to the rejection of the proposed amendment by the Legislature an intention to disregard the trust character of school lands, and to wipe out the obligation of the trustee of those lands to exercise the utmost good faith in the handling of the trust property. It is even more far-fetched to assume that it was intended to wipe out the right and duty of courts to supervise the trust for the benefit of the common schools.
The statutory silence and lack of specific authority for resale or setting a sale aside, in the opinion of the *808majority in the Belker cases, made the statute requiring the sale of school lands unconstitutional. The interpretation of that same statutory silence by the minority as leaving the existing trust law in operation, was referred to as judicial legislation. While a majority here were formerly quite willing to regard that legislative silence as speaking loudly for a particular and specific interpretation of legislative intention, any different interpretation of it is now referred to as being nothing less than “outright usurpation” of the legislative function. This is simply not true.
Turning now to the real issues in this case, we can find no logical nor legal reason why the decisions and rules governing contracts, trusts, and judicial sales should not be applied here to a statutory sale of school lands. This court long ago decided that the school lands of this state are held in trust for the benefit of the common schools; that the relationship of trustee and beneficiary is a fiduciary one imposing the utmost good faith in the handling of the trust property; and that the courts are charged with supervision of that trust regardless of who may be the trustee. We have also held that anyone dealing with the school lands must do so with knowledge of, and subject to, the trust obligation of the state. Propst v. Board of Educational Lands & Funds, 156 Neb. 226, 55 N. W. 2d 653, 346 U. S. 823, 74 S. Ct. 39, 98 L. Ed. 348. This law pertaining to the trust of lands for the benefit of the common schools grew out of the initial grant of the lands by the United States and its acceptance by the state. The law is judicial in origin, not statutory. It fills the void left by statutory silence and, in fact, is impervious to legislative overruling. Yet, it is from this area of judicial law, applicable specifically to the school lands involved here, that the majority wishes to abdicate in favor of an imagined interpretation of a silently expressed legislative intent.
As to judicial sales, the courts must act in the interest of fairness and prudence and with a due regard to the *809rights of all concerned and the stability of judicial sales. See, Siekert v. Soester, 144 Neb. 321, 13 N. W. 2d 139, 152 A. L. R. 527; Michelson v. Wagner, 170 Neb. 28, 101 N. W. 2d 498; Hull v. Hull, 183 Neb. 773, 164 N. W. 2d 455. These holdings also do not derive from any specific statute, but from judicial interpretation and decision. Certainly the obligation of courts as to a sale of trust assets by a trustee of a trust supervised by the court, is equally demanding, even though it also is not specifically required by any statute. As stated by the current majority in the dissenting opinion on rehearing in State ex rel. Belker v. State Board of Educational Lands & Funds, ante p. 270, 175 N. W. 2d 63: “Among the duties of a trustee is to require in the case of the sale of trust property that he shall obtain the highest price possible and refuse to make a sale if the sale was fraudulent, or the result of chilled bidding, or any other conduct or circumstance that resulted in an inadequate sale price.”
In Rupe v. Oldenburg, 184 Neb. 229, 166 N. W. 2d 417, this court unanimously approved the setting aside of a partition sale even after the sale had been initially confirmed by the court after a higher upset bid. The amount of the upset bid, made after confirmation, exceeded the initially confirmed bid by slightly more than 10 percent. There is no statute which spells out any authority of a court to set aside a judicial sale already completed and confirmed. Neither does any statute authorize an immediate resale to a higher subsequent bidder.
The subsequent bid to the Board of Educational Lands and Funds in this case exceeds the highest bid at the sale by a percentage virtually identical to the Rupe case. We can see no valid reason to reach a different result in this case. The only response to that conclusion in the majority opinion is the flat and unsupported statement that: “this is not a judicial sale and the rules applicable thereto are not relevant.” Such authority *810is not enough to discard the law of judicial sales, much less the law of contracts and of trusts.
The action of the Board of Educational Lands and Funds in setting aside its prior sale and ordering a resale, upon receipt of a binding bid exceeding the sale price by more than 10 percent and accompanied by certified check and payment of costs of resale, should have been affirmed. The judgment of the trial court should be reversed.