Court Opinion

ID: 3544389
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:55:49.856367+00
Date Added: 2024-06-11T14:22:20.131851
License: Public Domain

I dissent. It is my opinion that the real and ultimate question presented in this, and similar cases, is whether the holder of an oil and gas lease on state-owned lands is entitled, after *Page 472 
the expiration thereof, to a preferential right to a new lease thereon, upon matching or meeting the highest responsible bid made at public auction advertised as required by statute.
Section 1882.15, Revised Codes, provides that upon the expiration or termination of any state oil and gas lease embracing lands where oil and gas has been produced, the land board shall advertise such land for releasing and lease the same to the highest responsible bidder therefor at public auction. The following porviso is found in this section: "provided, however, that when the lands are advertised for re-leasing, any person, association, firm or corporation who held such lease at the expiration thereof, whether oil or gas had been produced thereunder or not, shall have the privilege of re-leasing the same at such highest responsible bid offered therefor, upon such terms and conditions as may be prescribed by the said board or by the legislative assembly; and the board shall have the privilege of rejecting any and all bids."
It is my view that such proviso gives the owner of a terminated lease on state lands an absolute preference right of re-leasing such lands at the highest responsible bid offered for a lease thereon at public auction. Such right was doubtless granted by the legislature as a reward to the prior lessee for the required development of such land, at his risk and to the enrichment of the state.
The majority opinion, I think effectively destroys such preference right and nullifies the legislative edict, by, in effect, requiring the prior lessee to become a bidder at the public auction, in competition with all others who may see fit to bid thereat. It is my view that such is not the effect of the law. The section quoted provides that the board shall have the privilege of rejecting all bids. The auctioneer, here, announced at the sale that all bids must be submitted to the board for approval, or otherwise. The only purpose of such announcement was the preservation of the right of the board to determine which of the offers was the "highest responsible bid," and which of those bidding was the "highest responsible *Page 473 
bidder," or to reject any or all of the bids. Both of the quoted terms are included in the wording of the statute. I cannot agree that what is "the highest responsible bid" is to be determined solely by whether or not the amount bid is tendered at the time of the sale as evidence of the good faith of the bidder. The board, and the board alone, has the power of such determination, which obviously can be exercised only at a meeting subsequent to the auction.
In this instance the board did not act upon the bids until after relator had submitted its offer to match the highest bid made at the auction. Under such circumstances I think the board had no discretion but to award the lease to the relator and respondent.
Much is said in the record and briefs concerning certain alleged violation by the relator of terms of the original lease, and my impression is that refusal of the board to award a lease to relator was principally based upon such violations. This the board had no right to do. If the lease had been breached, as claimed, such breaches had long since been waived, as appears in the record.
I shall not futilely encumber the record with arguments which I believe sustain my conclusion. Suffice it to state my belief that the majority of my brethren have nullified the intent of the law and of the legislature. The only remaining method of insuring the administration of the law in accordance with that intent is by legislative enactment, in such unmistakable language as to remove any doubt, to prevent the board from substituting its discretion for the legislative mandate.
Rehearing denied April 23, 1946.