Court Opinion

ID: 9572525
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:42:28.869912+00
Date Added: 2024-06-11T12:33:24.870109
License: Public Domain

OAKS, Justice
(concurring and dissenting):
Many of the school sections the state received under the Utah Enabling Act of 1894, 28 Stat. 107, contained minerals. Some of these sections were known to contain minerals at the time they were surveyed; others were not known to contain minerals at that time. This difference became critical when the United States Supreme Court held that the state of Utah received no title to school sections “known to be mineral in character,” United States v. Sweet, 245 U.S. 563, 572-73, 38 S.Ct. 193, 195, 62 L.Ed. 473 (1918), “at the time of the approval of the survey .... ” Utah v. Bradley Estates Inc., 223 F.2d 129,131 (10th Cir. 1955), cert. denied 350 U.S. 841, 76 S.Ct. 80, 100 L.Ed. 749 (1955); Andrus v. Utah, 446 U.S. 500, 508, 100 S.Ct. 1803, 1807, 64 L.Ed.2d 458 (1980). The school sections withheld from the state by the Sweet decision were granted to the state by “an additional grant” in the Jones Act of 1927, 44 Stat. 1026, ch. 57(b).
Because of this history, school sections currently owned by the state of Utah that contain minerals were necessarily acquired in one of two ways.
*36If school sections were known to contain minerals at the time of the approval of their survey, the Sweet decision establishes that they did not pass to the state under the Enabling Act. Title to those sections must have been acquired under the “additional grant” of the Jones Act in 1927. Exercising the significant latitude granted to the state by the Jones Act, the Utah Constitution, Art. X, § 3, validly prescribes that the proceeds of mineral development on these sections shall be deposited in the Uniform School Fund for current expenditure. As to these lands, I concur with the judgment of the majority.
If school sections were not known to contain minerals at the time of the approval of their survey (even though they actually did), their ownership must have been acquired under the Enabling Act of 1894.1 There were doubtless many such sections, including sections containing substances like oil shale not then known to be valuable for development as minerals.
Lands acquired under the Enabling Act are subject to the restriction in section 10 of that Act (quoted by the majority) that their “proceeds” must be deposited in a perpetual fund (i.e., the State School Fund), with only the interest available for current expenditure.2 These school sections are held in trust by the state of Utah for the purposes and upon the restrictions stated in the Enabling Act. Duchesne County v. State Tax Commission, 104 Utah 365, 366-67, 140 P.2d 335 (1943); Lassen v. Arizona, 385 U.S. 458, 460-61, 469, 87 S.Ct. 584, 585, 590, 17 L.Ed.2d 515 (1967). Consequently, under the governing federal law, the state could not validly appropriate the proceeds of these lands to current expenditure, as it attempted to do in Article X, § 3 of our Constitution, effective in 1939. Thus, a 1955 amendment to the Oklahoma Constitution was held in conflict with the Oklahoma Enabling Act and therefore invalid when it purported to authorize mineral royalties to be deposited in an operating fund rather than a permanent fund. Oklahoma ex rel. Williamson v. Commissioners of Land Office, Okla., 301 P.2d 655 (1956).
By its general references to “mineral lands” and “mineral sections,” the majority glosses over the essential distinction between mineral lands received under the Enabling Act of 1894, which are subject to the perpetual fund restriction, and mineral lands received under the Jones Act of 1927, which are not. As to the lands received under the Enabling Act, I dissent from the majority’s decision that their proceeds are free from the perpetual fund restriction.
Under familiar trust principles, the creator of the trust on school lands received under the Enabling Act (Congress) and the representatives of the beneficiaries of the trust (responsible officials of the state of Utah) might unite to free those lands from their trust restriction. But neither the language nor the legislative history of the Jones Act shows any intent to achieve that result. Its terms were expressly denoted *37an “additional grant,” and its evident purpose was to grant states the additional school sections that had not passed under the Enabling Act because of the Sweet decision. H.R.Rep.No.1761, 69th Cong., 2d Sess. 1 (1927). There are no words in the Jones Act or its legislative history that exhibit any intent to remove or modify the trust restriction Congress had imposed on sections granted under the Enabling Act.
For the reasons set out above, I am in agreement with the reasoning of the persuasive memorandum opinion Judge Christine Durham filed in the Third District in this case, insofar as it pertains to the school sections received under the Enabling Act of 1894.3
The difficulties of classifying which school sections were received under the Enabling Act and which were received under the Jones Act (i.e., which were not known to contain minerals at the time of their survey and which were known to contain minerals) should be minimized by the fact that this controversy does not involve the rights of any private parties. This is a controversy between two different arms of state government. These contestants should be able to compose most issues of fact amicably and in the public interest by a consent decree for consideration, modification (if needed), and entry by the court. I would remand for that determination.

. This is the rule that has been applied under other federal land grants expressly reserving “lands valuable for minerals.” Deffeback v. Hawke, 115 U.S. 392, 404-5, 6 S.Ct. 95, 100-01, 29 L.Ed. 423 (1885). Utah’s receipt of ownership under the Enabling Act of school sections not known to contain minerals at the time of their survey but actually containing coal was the basis of the United States Supreme Court’s decision in Work v. Braffet, 276 U.S. 560, 562, 48 S.Ct. 363, 364, 72 L.Ed. 700 (1928).

. The reference to “proceeds” in section 10 required the permanent school fund to receive all proceeds from the sales of school sections and all royalties and other payments (such as bonuses or delay rentals) from or related to the severance of mineral or other natural resources from school sections. Income issuing from the land on an annual basis, such as annual rentals on a grazing lease, would not be deposited in the permanent fund, since this type of income would be similar to the interest from the fund, which could be expended annually for the support of the schools. This allocation of receipts, familiar in the division of mineral revenues between annual income and permanent fund, 3A W. Summers, Oil & Gas § 613, p. 502 (1958), has been applied in precisely this sort of controversy to require the deposit of all proceeds received from mineral development on a school section (bonus payments and delay rentals as well as royalties) to the state’s permanent school fund. School District No. 23 v. Commissioners of Land Office, 166 Okl. 226, 27 P.2d 149 (1933).

. Judge Durham’s opinion reads in pertinent part as follows:
This action concerns the proper disposition of proceeds of mineral lands which passed to the State of Utah under the Enabling Act of July 16, 1894, by virtue of the fact that the lands were not known to be valuable for minerals at the time. The Enabling Act provided that the proceeds of land granted for public school purposes should constitute a “permanent school fund.” This Court is persuaded that Congress did not modify or alter that grant by subsequent acts or statutes, or by implication therein and that the Utah Legislature violated the terms of the Enabling Act by amending its Constitution in 1939 to provide that mineral proceeds from state public school lands should go to the uniform school fund for operational use. Pursuant to the binding terms of the Enabling Act, the proceeds of public school lands which come from revenue from minerals in the lands should be maintained in a permanent school fund....