Court Opinion

ID: 6597518
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:04:27.188702+00
Date Added: 2024-06-11T15:57:52.033748
License: Public Domain

Smith, J.,
dissenting. There are one or two questions involved in this case which, in magnitude and importance, rise far above the other matters submitted for our consideration, affecting not only the parties to this suit, but extending to most of the transactions of the school-land department. It has, therefore, been long and frequently under consideration, and has received all the study and care which we have been able to bestow upon the subject. Having arrived at a conclusion which, in my mind, admits of no doubt, I deem it my imperative duty to state that conclusion as briefly as possible.
. To understand fully the questions involved, it becomes necessary to examine the constitution of the state, and the various statutory provisions in relation to the disposition and saie of the school lands. And it is worthy of remark, in the outset, that these lands, set apart for the purpose of raising a fund for the support of education, were deemed of such primary importance that the people were unwilling to leave the disposition, of them altogether to the discretion of the legislature, but restricted the power of that body certain constitutional enactments.
Section 7 of article 10 of the Constitution provides as follows: “ The secretary of state, treasurer and attorney-general shall constitute a board of commissioners for the sale of the school and university lands, and for the investment of the funds arising therefrom.”
*586“ Section 8. Provision shall be made by law for tbe sale of all school and university lands after they shall have been appraised, and when any portion of such lands shall be sold, and the purchase money shall not be paid at the time of sale, the commissioners shall take security by mortgage upon the land sold for the sum remaining unpaid, with seven per cent, interest thereon, payable annually at the office of the treasurer. The commissioners shall be authorized to execute good and sufficient conveyances to all purchasers of such lands, and to discharge any mortgages taken as security, when the sum due thereon shall have been paid.”
Immediately after the organization of the state government, the legislature, in view of, and, as they doubtless supposed, in obedience to the requirements of the constitution, devised and adopted a system designed to fulfill all the requirements of that instrument, and to dispose of the school lands and their proceeds in conformity with its injunctions. Accordingly an act was passed, developing and defining the system so adopted, which is found substantially in the Eevised Statutes, in chapter twenty-four, entitled “ Of the school and university lands, the sale and superintendence thereof, of the investment of the funds arising therefrom, and the powers and duties of the commissioners of said lands.”
The declared object of this act is to provide for the sale of the school lands. No other disposition of them is contemplated or intimated. Every section and phrase of the chapter having reference to such disposition conveys the idea of a sale. The language used throughout is that of “ sale and purchase,” “ vendor and vendee.” It seems to be impossible to conceive that the legislature had any other object in view than that of a sale of the lands. And it is equally certain, that the main, leading idea of the act is, that these lands shall be sold upon credit. How, then, can it be possible otherwise than that the constitutional inhibition, or rather regulation, must apply that the security for the unpaid purchase money shall be by way of mortgage, and that all the rights and relations between the state and such purchaser must be those of mortgagor and mortgagee ?
*587It would be a laborious task to refer to, or to quote, all the provisions of the act in question going to show that the disposition of the lands thereby authorized is essentially that of a sale; so intended by the legislature — so considered by the purchaser, and so in law and in fact. Without going over and reciting the whole of these provisions of chapter twenty-four, it will answer the present purpose to refer to a very few, out of the very many, and to the one, and it is believed the only one, which can in any degree tend to reduce the disposition of the lands authorized by the act below the character of a sale.
And first, the title of the act expressly declares the object and intent of the legislature. It was not to lease the lands, not to contract them for sale, not to pledge their usufruct, not to create an equitable lien upon them, but for the “ sale and superintendence thereof, and for the investment of the funds arising from the proceeds therefrom.” Investment of what funds ? Not from those arising from the superintendence of them, for none such could arise to any considerable amount, but from the sale thereof. This is clear and certain from the fact that no other superintendence of the lands, except that of sale, which could produce any revenue, is authorized by the act. It is true the commissioners may protect the lands from spoliation, but the “ proceeds ” spoken of are those arising from the sale, and nothing more nor less.
Their every step in the programme of procedure is prescribed in order for the appraisal, price, sale, purchase, payment for, and on payment of conveyance in fee of the lands.
The first section of chapter 24 follows very nearly the language of section 7 of article 10 of the Constitution, thus showing that the act was passed in reference to, and, no doubt, as was intended to be in conformity with the mandates of that instrument, declaratory of the persons who should be commissioners for the superintendence and sale of the school and university lands, and for the investment of the funds arising therefrom. The second section provides that the said commissioners shall, before the 15th day of December, 1850, “ offer for sale, at public auction, all the lands, &c.,” and that they may have the power to withhold from such “sale,” &c.
*588Provision is made also in the the act for preemption rights that had accrued or that might accrue. Td what has the term preemption reference but to a sale, prospective indeed, but nevertheless the right of purchase and the obligation to sell, and the terms .fixed upon the like credit as of other sales ?
Section 4 fixes the minimum-price at which the lands may be bought. The next section provides that all lands shall be sold at public auction in the county in which they are situated, upon public notice being given; the auction sale is to be continued from day to day, precisely after the manner of the public lands of the United States. Each tract is to be offered for sale separately at the minimum price, and is to be struck off to the highest bidder; but if the minimum price is not bid, the tract is to be set down as “ unsold.”
Section 10 prescribes the terms of payment on which the lands are offered for sale: “ The terms of payment on the sale of all school and university lands shall be not less than ten per cent, nor nrore than seventy-five per cent, of the purchase money to be paid at the time of sale, as shall be determined by the commissioners, and interest on the balance to be paid the first day of January next following,- and the balance of the principal in one or more installments at any time within ten years from the time of sale, at the option of the purchaser, with like interest payable annually in advance.” Upon the close of the sales, each day, the purchaser is required to pay the amount of purchase money required by the terms of sale, and in case of failure the lands are to be again offered; and moreover, in case he refuses or neglects to make such payment before the lands are again offered, he is liable to a penalty of twenty-five dollars for every tract on which he makes such default; After the lands have been thus offered at public sale, they are subject to private sale, at-the office of the commissioners, and are there sold at the appraised value, and a certificate given as in other Gases. ■
Now, in view of this language and of these provisions, did or did not the legislature intend a sale of these lands'? If they did not intend a sale, what did- they intend? What does this language mean ? In case a “ purchaser ” bids off a tract of land at *589one of these “ auction sales,” and pays down at tbe time of 11 sale ” seventy-five per cent, of tbe “ purchase money,” does be thereby become a purchaser or not? If not, what relation does he bear to the transaction ? If he is a purchaser, how, under the constitution, shall the remaining twenty-five per cent, of the purchase money be secured? The constitution says by mortgage on the land sold. Is there any possibility of construing this transaction into anything else than a sale ? — a sale, too, executed so far that a court of equity may enforce a conveyance in conformity with the constitutional requirement ? Here is no contract or agreement to sell at a future day, but it is a present operative contract of sale. The purchaser takes possession and assumes dominion. The minds of the parties have met, the amount required to be paid down is paid and received; it is complete except only the written evidence of its execution, which, as before said, equity would enforce.
But this act provides, that-upon the sale of the lands as before described, the commissioners shall issue to .the purchaser a certificate of such sale, specifying the purchase price, the amount paid down, the amount remaining due, when payable, &c., and it is further provided, that “ the title or fee of all the school and university lands shall remain in the state, until patents shall issue for the same, and no such patent shall issue except upon full payment of the purchase money and interest.” The constitution, however, is mandatory to the commissioners, to take security by mortgage upon the land sold, for the amount, remaining unpaid at the time of sale.
This statute also provides, that in case of the non-payment of either principal or interest when due, according to the terms of the certificate of sale, such certificate shall become void from tbe time of such failure, and the purchaser shall forfeit all right and interest in the land described in such certificate, and the commissioners may take immediate possession thereof and resell the same in the manner provided.
In view of the constitution before quoted, was it competent for the legislature to forfeit in such manner the right and interest which the purchaser acquires by his purchase at such sale ? *590He has paid part of tbe purchase money but not all, and that which remains unpaid must be secured in a constitutional manner. That manner is by mortgage on the land sold. The effect of the constitution is, to create the relation of mortgagor and mortgagee between the state and purchaser, whenever part of the purchase money remains unpaid at the time of sale, and it is not in the power of the legislature to alter that relation.
In view of these provisions of the statute, together with many others which I cannot quote at length, it is impossible for me to bring my mind to any other conclusion — nay, every other conclusion is repelled by my reason and judgment — than that the act of the legislature provided for, and contemplated a sale of the school and university lands upon a credit, and for nothing else-If the disposition of the lands prescribed by the act is not a sale, then it is a cheat, a fraud, utterly unworthy of the state or its officers. But as we have before seen it is a sale, it was intended to be a sale, the language of the act induced all persons to believe that it was to be understood and treated as a sale, and to treat the transaction differently now would be, as I am compelled to say, a deception and a fraud upon purchasers. Indeed, there can be no purchaser but upon a sale. They are correlative terms, and it is impossible for me by any device of reasoning to impair their force. The conclusion is irresistible, that if these lands were sold, and the whole purchase money was not paid at the time of sale, security for the balance was required by the constitution to be taken by mortgage on the land sold. If not so taken in fact, it would attach in equity and be enforced, like other equitable mortgages. The relation of the purchaser to the state would be that of a mortgagor, to whom all the rights and incidents of such relation would necessarily apply, and among them the equity of redemption.
If these views be correct, it follows, either that the disposition of the school lands in accordance with the provisions of chapter 24 of the Revised Statutes, is unconstitutional and void, or that such disposition can be held to be a good sale in equity, evidenced by the written memorandum, or certificate, part of the purchase money having been paid, and the state an equitable *591mortgagee for tbe remainder. That this latter is the correct position I have no manner of doubt. Transactions of a similar kind between individuals are frequently so construed and enforced. Such a construction'would carry out the plain intention of the constitution, which necessarily overrides the statute, whenever the latter is repugnant, and establishes the equity of redemption, resulting from the transaction, and which the constitution contemplates and creates.
It is apparent therefore, if these views be correct, that the provisions for the absolute forfeiture of the right and interest of the purchaser in the lands, on the failure to pay the balance and interest on the day mentioned in the certificate, are repugnant to the constitution, because they are incompatible with the constitutional rights of such person as a mortgagor, and that the forfeiture and re-sale of the lands mentioned in the complainant’s bill were illegal and void.
I do not deny the legislature the power of providing a mode of foreclosing the equity of redemption which attaches to these transactions, other and different from the ordinary mode. But they have not done so, nor made any attempt to do so. Until some other mode is adopted for that purpose, the ordinary proceeding for foreclosure must be followed. The taking possession of the lands and offering them for re-sale is not a foreclosure. The forfeiture does not become absolute so that the lands may be retaken and sold, until the equity of redemption is extinguished in some way. To call the proceedings prescribed by the statute for taking possession of forfeited lands and reselling them, a form of foreclosure would be a gross perversion of terms. They are advertised as other lands, sold as other lands ; the original purchaser having, it is true, a right of preemption until the day of sale, if he shall be so fortunate as to ascertain it. The idea of foreclosing an equity of redemption cannot be gathered from all these provisions. Indeed, to admit that this is a form of foreclosure would be fatal to the whole act, as it would admit the constitutional right of a mortgagor in a credit purchaser, which the statute seeks to evade. To deny to the purchaser the rights of a mortgagor, on the ground that there was no sale *592under the statute, and tben to maintain that such, rights have been foreclosed under the same statute, is equally uncandid and unjust, not to say irrational and absurd. It is blowing hot and cold in the same breath.
Much reliance is placed upon the ,19th section of chapter 24, which is as follows:
“ The title or fee of all school and university lands,: shall remain in the state until patents shall issue for the same, and no such patent shall issue, except upon full payment of : the purchase money and interest.”
To give this section the full effect contended for, would be to nullify the provisions of the constitution, that the lands may be sold on credit. No title shall pass until patent given, and no patent shall be given until full payment, and, therefore, no payment, short of the full amount shall constitute a sale; in other words that the patent is the sale, and not the agreement of the parties.
The term sale is evidently the same in the constitution as in the statute.
It is contended, that inasmuch as this section provides that the title or fee shall not pass until the patent issues,- and the patent shall not issue until full payment; therefore, there is no sale of the lands, until full payment is made, and patent issued. In other words, that the disposition of the lands prescribed by the statute, is a contract for sale, and not a sale.
Such a construction however, does violence, not only.to the language, but to the obvious intention and idea of the whole act. From the commencement to the close, from the title to the last word, a sale of the lands, nothing less than a sale, is contemplated and provided for. Even if the absolute passing of the title were essential to constitute a legal sale, that is to say, a sale, full, absolute and perfect in law, every one knows that it is not so held in equity. But it is not so in law. The delivery of the deed is not the sale of the land. It is, indeed, the .evidence of its consummation, but not the fact of sale. Whether the legal title passes or not at the time, of the sale, it is none the less *593a sale, and if all other conditions of the sale are fulfilled, thé conveyance will be enforced by the proper court.
It is the primary rule in the construction of contracts, to ascertain and carry out the intention of the parties. The certificate issued, and the constitution and statute form the contract. The certificate and the statute, leave no doubt that the parties regarded the transaction as one of sale. They never could have used such language, had not the idea of sale been the all engrossing one. The legislature thought they were making provision for the sale of the lands as the constitution commanded them, and there is no doubt, that they supposed, by withholding the title until full payment, by the 19th section, they were accomplishing precisely the same thing as though they had conveyed the title, and taken back a mortgage. In the one case, the title is withheld by the vendor as security for the balance of the purchase money; in the other, the title is conveyed, and retaken by way of mortgage for the same object. It is not difficult, but it is every day practice for a court of equity to carry into effect such contracts according to the intention of the parties. Why not do so in this case? I can perceive no valid objection.
It is one of the most common functions of a court of equity to decree and compel the execution of proper conveyances, when the stipulations of a sale have been complied with.
In this case, the complainant or his assignor thought himself a purchaser, the vendor (the state) called him a purchaser, gave him possession, he paid down the part of the purchase money required. Without any constitutional provision, specific performance of the contract of sale could be enforced. Without any constitutional provision, the state would have an equitable lien upon the land, for the balance of the purchase money, but the effect of such provision is to create this relation, indepénd-ent, and in defiance of statutory enactments, and to secure the rights of the respective parties in this relation.
It is asked whether the constitution prohibits the legislature from disposing of, or using the school lands in any other manner than that therein prescribed. I answer, certainly not. The *594legislature may lease tbem, or use tbem in other modes. But tbe constitution does require of tbe legislature to mate provision for tbe sale of these lands, and it commands, that if sold on credit, tbe balance of tbe purchase money not paid down, shall be secured by mortgage on tbe land sold. And this plain, positive injunction of that instrument ought not to be evaded by a mere change of forms or names. It seems to me to be too clear to admit of further argument or illustration.
And there was wisdom in such constitutional provision. Had the legislature adhered to it, there could not possibly have been any fictitious issue or abstraction of certificates, there could have been no withholding of lands from sale, but in the manner prescribed by valid law. The record would necessarily show, from time to time, and day to day, the precise quantity and tracts sold, and the rights of all parties would be secured. Mistakes might occur under this as under any possible system, but they would be necessarily unfrequent, easily and early corrected, with little inconvenience, and no loss either to the state or the purchasers. But allow this wise provision of the constitution to be frittered away, or evaded by mere subterfuges, forms, or technical terms, such as contracts for sale, agreements to sell at a future day, certificates that such and such persons had agreed to purchase, or would agree to purchase hereafter, and the door is opened to every scheme of fraud and mal-administration that can be conceived. Adhere to the constitution, and the lands and the fund are safe, but depart from it, evade it, or disobey it, and all may be lost. Much more might be said concerning the imperative necessity of adhering most strenuously to the constitution in this respect, and of exacting implicit obedience to its mandate, but enough has already been said to justify me in insisting upon its strict application.
I have not the slightest doubt but that the transaction under the statute is in legal effect a sale, and that the certificate is evidence thereof, and that the state becomes thereby an equitable (perhaps in view of the constitution a legal) mortgagee of the lands sold for the balance of the purchase money, and that the purchaser becomes thereby a mortgagor, and entitled to all the *595rights of such, and among them the right of redemption until legally foreclosed.
It has been said that to convey the lands on sale, and take a mortgage for the unpaid purchase money, is impracticable. How so ? The conveyance or patent may be in few words, as well as the mortgage, furnished in blank, and the labor of issuing them can be but little more than that of the certificates used. But even if the labor were more, the constitution is imperative, and must be obeyed, although it may require a little more work. All attempts to evade or escape from the injunctions of the constitution, in this as well as all other departments, must inevitably result in confusion, if not disaster.