Bucknum v. Johnson

S cotí, Justice. This case was originally instituted as a contest before the State Board of School Land Commissioners ■ by Johnson, the defendant in error, on June 5, 1907, seeking the cancellation of a lease made and executed by the State to Clark Beck on April 26, 1907, and by him assigned with the approval of the board to the plaintiff in error on June 27, 1907, of the south half of the northwest quarter, the southwest quarter of the northeast quarter, the west half of the southeast quarter, the northeast quarter of the southeast quarter, and the northeast quarter of the southwest quarter of section 8, township 35 north, of range 82 west of the 6th principal meridian, and situated in Natrona County, Wyoming. The board upon hearing sustained the lease in favor of Bucknum, the assignee and plaintiff in error here, and dismissed defendant in error’s contest, whereupon a motion for a rehearing was submitted by Johnson to and denied by the board and the case was appealed by him to the District Court of Matrona County. The case was tried in that court and the decision and judgment was for Johnson, the lease cancelled, and Bucknum brings the case here on error. It was sought by Johnson to appropriate a part of the land in controversy for and as a part of a reservoir site. A part of the land included in the proposed site belonged to the United States and, as shown by the findings of the board, was selected by the state in lieu- of other lands after a part of the work on the proposed reservoir was done. The exact date .of the selection does not appear in the record. It must, however, be assumed to have been made prior to the date of the lease, to-wit: April 26, 1907. It appears that an application for a permit to construct the reservoir and the Johnson supply ditch therefor by Johnson was filed in the office of and approved by the State Engineer on April 5, 1901. On January 20, 1904, Johnson filed notice in such office of the completion of the reservoir, and on December 2, 1903, he filed notice in that office of the — 35 — completion of the Johnson Supply Ditch to .such reservoir. On November 29, 1904, application was made by Johnson for permit to divert and appropriate waters for supply of said reservoir,- which application was approved by the State Engineer and notice of the completion of this ditch was received at the State Engineer’s office on December 2, 1904, and within the time limited by the permit.. On November 29, 1904, application for permit to use water for another proposed supply ditch for such reservoir was made to and granted by the State Engineer, and proof of the completion of this ditch was likewise filed in the Engineer’s ofjfice within the time limited by the permit. In addition to the foregoing ditches, Johnson alleges and the evidence tends to show that up to the time of instituting this contest he had under permit, duly issued to conserve and use waters for domestic, mining, milling and irrigation purposes in that locality, constructed five additional reservoirs as a part of his irrigation plan and to be used in connection with the proposed reservoir site, the right to which is here in dispute. It further appears that no water impounded in the -proposed reservoir has been drawn therefrom for the reason that up to the time of completing Supply Ditch No. 2 in the latter part of December, 1906, the reservoir did not contain sufficient, water for that purpose, but-since the, completion of that ditch the reservoir does contain sufficient water for irrigation purposes, and by ■ constructing a tunnel he will be enabled to irrigate his own land and supply water to others in that vicinity. It thus appears that the application of the water impounded in the reservoir for irrigation purposes has not been made. There is some contention upon the briefs as to whether the District Court to which the case was appealed was vested with jurisdiction other than of review. There was no equitable jurisdiction involved nor did the trial involve the application of common law rules. The proceeding is one purely of statutory origin. The appeal brought into the District Court those questions only which were or36 might have been raised before the' board. The issues could hot be enlarged nor could the action be transformed into an equitable nor a common law action. The District Court sat in the appeal as a substitute for the board and was limited on such appeal to questions that had or may be presumed to have been passed upon by the board. Speaking of such appeal, Section 656, Comp. Stat., says: “Said appeal shall stand to be heard and for'trial de novo by said court," and Section 658, áfter providing and regulating the duties of the Commissioner, says: “The párties may conduct the appeal upon, the original papers and affidavits in the case or upon new and amended pleadings, and such case shall stand for trial upon the evidence adduced before said board; Provided, That in the discretion of the court, additional evidence may be adduced on the trial; but the party desiring to introduce such evidence shall give notice to the adverse party or parties immediately after the perfection of the bill, of the offering of said evidence and stating the purport and nature thereof.” The record shows that the statute regulating such appeal was not departed from in the matter of the trial. It was tried' by the District Court upon the same pleadings and transcript of evidence sent up by the commissioner and upon additional evidence introduced upon notice duly served. It' is provided by Section 660, Comp. Stat., as follows: “At the expiration of the time for the appearance of the appellees, "the case is to be deemed ready for hearing; and’it shall be heard and tried the' same in all respects as civil cases are tried in said District Court; and an appeal from the judgment, finding and decree of said court shall lie to the Supreme Court the same in all respects as prescribed by law for appeals and proceedings in error from the District Courts to the Supreme' Court of this state.” This section must be .construed in connection with Section 658, supra, and construing these, together the conclusion seems irresistible that the trial upon the appeal includes the trial and determination of the issues of fa’ct made by the pleadings independent of the findings — 37 — and determination of those issues by the board. Whether such trial be had upon the evidence submitted to the board or upon that and new evidence in addition fhereto as permitted under the provision of Section 658, supra/ makes .no difference. The jurisdiction of the District Court, on the appeal is to try the case de novo on the facts and its judgment is not one of affirmance, reversal or modification, as upon review upon error, but is based upon its finding upon the evidence, and is not governed by the findings of the board; and the court is in a sense substituted for the board to determine the matter in-issue upon the facts. The question to be determined by the court is the same as that which was presented to the board, .viz: whether the state which had granted the lease should cancel it. The land here in controversy wás occupied as a reservoir site and permit for the use of the water therefor, under the statute and the regulation of the State Engineer thereunder, which had been duly issued prior to the date of the lease in controversy. The entire plant was in course of construction, though not completed, at the time the land was selected and granted to the state. Section 2339 and Section 2340 supplementary thereto (U. S. Comp. Stat. 1901, p. 1437) are as follows: “Sec. 2339. Whenever, by priority of possession, rights to the use of water for mining,- agricultural, manufacturing, or other purposes, have vested and accrued, and the same are recognized and acknowledged by the local customs, laws, and the decisions of courts, the possessors and owners of such vested rights shall be maintained and protected in the same way; and the right of way for the construction of ditches and canals for the purposes herein specified is acknowledged and confirmed; but whenever any person, in the construction of any ditch or canal, injures or damages the possession of any settler on the.public domain, the party committing ■ such injury or damage shall be liable to the party injured for such injury or damage.” — 38 — “Sec. 2340. : All patents granted, or pre-emption or homesteads allowed, shall be subject to any vested and accrued water rights, or rights to ditches and reservoirs used in connection with such water rights, as may have been acquired under or recognized by the preceding section.” In addition to the foregoing sections the Act of Congress, March 3, 1891 (U. S. Comp. Stat. 1901, p. 1570, Sec. 2477), provided for the grant of a right of way for reservoirs, canals and ditches over public lands upon filing articles of incorporation, maps and statements in the land office. This act was by its terms, Sec. 20, made applicable to individuals as well'as to corporations. The later Acts of Congress are cumulative to and an enlargement of Sec. 2339, supra. (Sec. 440, Weil on Water Rights.) In the case here it is unnecessary to enter into a lengthy discussion of these sections of the federal statute or to determine whether Johnson had any right of way or easement in the land or not, for if there were a prior vested right to the ditch and reservoir site at the time of patent to the state that of itself would be no ground for setting aside the lease, for the latter would not be involved, but subject to any such prior vested right. In that sense the ditch and reservoir site do not conflict with the lease, for the latter would be limited to the title conveyed to the state and that title would ■be subject to Johnson’s accrued water, ditch and reservoir fights, if any such had accrued. Whether such rights existed- as here contended or not, the question could' be litigated in a proper forum and proceeding. The jurisdiction of the land board is limited to the leasing and disposal of the state lands. Ih the performance of its duties it is vested with neither equitable nor common law j urisdiction. A contest for the right to lease land duly instituted before it, is a statutory proceeding. In the performance of its duties it is vested with certain discretionary powers which are limited and circumscribed in the matter of obtaining the greatest revenue for the lease or sale of such lands. This court said in State v. Commissioners, 7 Wyo. 478 489, 490, 53 Pac. — 39 — 292, 295, which was a mandamus case, as follows: “The Constitution invests the board under such regulations as may be provided by. law with the direction, control; disposition, and care of all state lands. (Art. 18, Sec. 3; Art. 7, Sec. 13.) A large discretion has be en conferred by statute upon the board in the matter of leasing and sale of’state lands. (Chaper 79, L,aws of 1890, 1891.) Section 16 authorizes the board to lease any legal subdivision at an annual rental of not less than five per centum per annum on the val-, uatión thereof fixed by the board; and Section 22 provides that ‘The board shall lease all state lands in such manner and to such parties as shall inure the greatest benefit and secure the greatest revenue to the state.’ Section 44 is as follpws: ‘The board may herein determine the claims of each person who may claim to be entitled, in whole or in part, to any land owned by this state. The decisions of the board shall be final until set aside by a court of competent jurisdiction. The board may establish such rules and regulations as in its opinion may be proper to prevent fraudulent applications being granted.’ * * .* * The exercise of the power conferred upon the board to lease the lands of the state in the manner and to parties which shall inure to the greatest benefit and secure the largest revenue to the state, requires judgment and discretion. No inflexible rule is laid down for the guidance of the board in those matters. The judgment and discretion to be exercised is judicial in character, and in an application for the writ of mandamus it is not proper for the court to interpose its opinion and judgment in the place of that of the board, even if the conclusion which the latter has reached upon the facts should appear to have been erroneous.” The sections of the statute mentioned in that opinion are still in force though slightly modified and are embodied in Se'ctions 609 and 615, Compiled Statutes, and are applicable by their terms to the leasing and disposal of school as well' as state lands. At the time the lease here in controversy was granted there was but one applicant therefor. The board was not called upon to pass — 40 — upon "any- questions other than the form and information contained .in the application and .evidence in support thereof as bearing upon the applicant’s right to lease. ■ Jn the application and the evidence in support thereof by witnesses the. following question appears and answer, made thereto,-viz: '“State'who, if any one, occupies land within one mile - of the tract applied for, giving section number, township and range?” Ans. “No one.” The evidence is undisputed that Johnson’s homestead, houses and buildings are-and were-on the NE% of the SE)4 of Section 6, Tp.-35, R; 82, and 1,400 or 1,500 feet from the reservoir at the time of the application for this lease, and within one mile of each quarter section of the land covered by the lease. Mr. Johnson’s >evidence is uncontradicted that years before the application for. the lease was made his dwelling houses had been constructed on his homestead and occupied part of the time as a home for himself and family, and that it has always been occupied either by his family or by men in his employ, and that the corrals thereon were used in.working and caring for his stock. It thus appeal's that the land covered by Johnson’s homestead was occupied by him, i. e., in his possession (Webster’s New International Dictionary) for many years-and was so occupied at the time of/the application for the lease, yet it is stated in the application therefor that no land was occupied within one mile of the land sought to be leased. Basing Beck’s and his assignee’s right to the lease upon the application presented to the board, it is evident that.the lease was granted upon incorrect information as to the occupancy of the Johnson homestead. It was the duty of the applicant to place the board in -possession of the facts called for showing the true situation with reference to the homestead. (Sec. 609, Comp. Stat.) Such information might have an important bearing on the amount of obtainable revenue for the lease. It is provided by Sec. 618, Comp. Stat. 1910,- that “Any lease for state lands' procured by fraud,- deceit or misrepresentation may be cancelled by the board upon proper proof thereof.” It will be observed that — 41 — this statute is permissive, but not compulsory, though doubtless in a proper case it would be the board’s duty to cancel the lease. The proof of course must be submitted to the board, and it acts thereon in a judicial capacity. We think it not obligatory on the board to cancel the' lease in controversy unless damage to the state is shown in the way of rental or otherwise to have been sustained: Johnson had no application before the board to purchase or lease the land at the time it was leased to Beck. In his petition filed with the board to contest the lease he bases a preference right in part on the ground of his water right and reservoir site. As to whether he had such water right and reservoir site was a question without the jurisdiction of the board and it appears that the object of the contest was to sécure from the board a recognition of such ditch right a'nd- reservoir site and upon such recognition a cancellation of; the lease. It was not necessary to cancel the lease to protect any vested water right and reservoir site existing at the time the patent issued to the state for the patent would be subject thereto and the lease from the state as already stated would be limited to the state’s title. The sections of the U. S. statute, supra, were intended to and would protect such vested rights, if any, independent of any recognition 01-want of recognition by the board, for the latter could only deal with the title conveyed to it by the patent as construed and affected by the acts of Congress in effect at the time of the issuance of such patent. (Weil on Water Rights (3rd Ed.), Sec. 257; Chicago, B. & Q. R. Co. v. McPhillamey (Wyo.), 118 Pac. 682, 684.) Conceding that the information furnished in the application for the lease with reference to the occupancy of the Johnson homestead was untrue, then there is still an absence of showing that the state has been damaged thereby, nor has any unconditional offer or willingness on the part of Johnson been shown to pay the same or more rental than that paid by Beck or his assignee. It is true that in his petition filed with the board setting forth his grounds of contest Johnson made an .offer — 42 — to lease the land or any portion thereof provided such board had the right to require him to do so as a condition of recognizing his rights in the premises. As already stated, his ditch right and reservoir site vested, if at all, prior to the patent by the United States to the state and independent of any. action by the board. His offer to lease was conditional upon the' board having a right under the circumstances to require him to rent the land as a condition precedent to its recognition of the ditch right and reservoir site. This was not an offer to pay the rental value fixed or to be fixed by the board, but tendered an issue for trial, and not only so, but one without the jurisdiction of the board except in so far as it might enter into consideration in fixing the rental value of the land. It does not appear that any interest of the state or the contestant was injuriously affected by the apparent misrepresentation in Beck’s application as to .the occupancy of land within one mile of the leased tract. Johnson’s contest and such application as he made to lease the land were instituted and made prior to the amendment of the statute in 1909, which statute as then amended declares a preference in case of a lease of state or school, lands in favor of resident citizens of the state who reside nearest to the land applied for (Comp. Stat., Sec. 615), and the contest was decided by the board prior to the enactment of that statute., Johnson therefore could have claimed nothing in the contest under such statute, for it would not apply to him. Our conclusion is‘that the state had the right to lease the land subject to Johnson’s right, if any, to proceed and complete his reservoir, and whether he had such right or not is a question that could not be conclusively determined by the land board. It follows that the judgment of the District Court declaring the lease invalid and setting it aside was error, for which the judgment should be reversed. Reversed. Beard, C J., and Potter, J., concur.