Opinion
June 13, 1949.
1. Sixteenth section lien lands — board of supervisors as trustees — duty of trustees.
The board of supervisors as trustees of sixteenth section lien lands are under duty to exercise a higher degree of care in the administration of that trust than in the management of their own personal business or even in attending to the general run of the county's business.
2. Sixteenth section lien lands — lease to begin after expiration of term of board of supervisors.
Neither the board of supervisors nor the county superintendent of education may lawfully make a contract binding their successors when the contract is to begin after the term of office of the board will have expired; wherefore an oil and gas lease of sixteenth section lien lands to begin on April 7, 1948, when the terms of the board and of the superintendent of education will have expired on December 31, 1947, is void, although all but one of the officers concerned were reelected.
Headnotes as approved by Smith, J.
APPEAL from the chancery court of Adams County, R.W. CUTRER, Chancellor.
Laub, Adams Forman, Heidelberg Roberts, and Tom P. Caldwell, for appellant.
Appellees take the position that a board of supervisors cannot transact any business which would carry over after an election wherein there might be changes in the personnel of the board, for the reason that the newly elected members of the board would not have an opportunity to vote thereon.
To begin with, the evidence showed that the old board was returned on January 1, 1948, except for one member, to-wit, J.M. Anders, who was succeeded by Elmer Longmire. The lease as granted in October and November was unanimously granted. The one change in membership could not in any way have effected the granting of the lease. Were the contention of appellees of any merit, then no public board could enter into any contract which would run beyond its term of office, and all business would have to stop on the 31st day of December every four years, and new contracts be entered into. Such is not the law, as we see it, could not be the law, and has never been acted upon as being the law. Our position in this matter is that the Oil, Gas Mineral lease in question was granted in October, 1947, and in November, 1947, and became effective as of the day that it was executed; although it might not be operative until April 7, 1948, yet, nevertheless, it was effective and was a good and valid lease as of the date of its execution and approval by the superintendent of education. If the contention of appellees were followed, then the board of supervisors could not grant an oil and gas lease for a period of six years, as the statute gives them power to do, because such a lease would carry over the four year elective term of the members of the board. No bond issue which ran beyond the present term of the members of said board would be valid or binding. Our numerous statutes have given boards authority to issue bonds for various periods, usually not exceeding twenty-five years.
No surface lease on school lands for the 15 year term or the 99 year term would be valid and binding under the reasoning of appellees, and this same reasoning would apply to the point made by appellees that the superintendent of education could not approve a lease which would run past her term of office.
By the same token, all contracts in reference to the conducting of schools which the superintendent of education might make and let would have to stop on the first day of January, at the expiration of her term, and the school children's studies and the school business in many particulars would come to a standstill at mid term.
There is nothing in the statute which provides that the board of supervisors shall wait until the expiration of the first lease before negotiating for a new lease. In the construction of other statutes where boards in possession of trusts have been involved, this court has upheld the leasing of lands to the same party while a prior lease was operative. See State v. Hamilton, 116 Miss. 697, 77 So. 650, and Smith v. Young, et al, 199 Miss. 658, 24 So.2d 746.
L.A. Whittington, W.A. Geisenberger, Walter D. Coleman, Robert L. Netterville, and J.T. Patterson, Assistant Attorney General, for appellees.
The action of the board of supervisors of Adams County in entering into a lease for a period of two years with the Humble Oil and Refining Company on October 20th, 1947, to become effective on April 7th, 1948, when there was at that time a valid outstanding lease to said Humble Oil and Refining Company for a primary term of six years which did not expire until April 7, 1948, resulted in the extending of the primary term of the original lease for a period of two years, thus granting to said Humble Oil and Refining Company a lease for a primary term of eight years. The result of such action on the part of the board was to extend the original lease, regardless of the name able counsel for the appellant may insist on calling the two-year lease. We submit that it is the effect and result of the two-year lease in controversy that controls in this matter and not the name that may be given to such lease, and the effect and result is an extension of the primary term beyond the six-year term specifically authorized by statute.
If the appellants are to be sustained in their contention that the board of supervisors had the authority to execute the two-year lease at the time and under the conditions that the lease in question was executed then that part of said Section 6600 which specifically provides: "That said lands shall not be leased for oil, gas and other minerals for a primary term of more than six years" is meaningless and stands completely nullified. If the board of supervisors of Adams County had the authority to enter into a two-year lease on school lands five and one-half months prior to the expiration term of an existing lease on the same lands, then would it not logically follow that the board of supervisors could enter into a lease on school lands five and one-half years before the expiration date of an outstanding lease on the same lands, providing that the new lease took effect on the expiration date of the existing lease? Or would it not logically follow that the board of supervisors could enter into successive leases for primary terms of six years or less, each lease to become effective upon the expiration date of the preceding lease, and thereby lease said lands for any priod of time, thus defeating and nullifying the specific provisions of Section 6600 which limits the primary term of leasing of such lands to a period of six years.
We therefore submit that the learned chancellor was in error in his finding of fact and conclusion of law in holding that the board of supervisors of Adams County had the authority to enter into the lease in question on October 20th, 1947, to become effective on April 7, 1948, when there was at that time a valid outstanding lease for a primary term of six years which did not expire until April 7, 1948.
We call the court's attention to the fact that in this case the board of supervisors were not making a lease that would become effective during their term of office, but they were making a lease that would be effective only after the expiration of their term of office. This was not an effective contract or lease during their term of office, but it became effective only on April 7th, 1948, three months after the expiration of their term of office.
We say, therefore, that this is in reality not a contract that extended beyond the term of office, but was a contract made that would not become effective or in force until after their term of office, thereby depriving their successors in office, in the matter of leasing sixteenth section lands for oil, gas and mineral purposes, of the exercise of their own personal judgment and discretion as the board in authority at the time of the effective date of the contract.
We further submit, in all earnestness, to this court that there could not be a more illuminating instance of one board making a contract that would become effective after the expiration of their term of office that would be wholly detrimental to the public interest and against public policy, than that presented in this case.
And it is idle for counsel to argue that all except one member of the board was reelected. That doesn't effect the principle of law involved. They could have made, as we have pointed out before, if they had the power so to do, a lease in June, 1947 to take effect in April, 1948, if such was in their power. They certainly could not have known that they were going to be reelected,
Moreover the statute provides that in making the lease, the board of supervisors should exercise judgment and discretion. The judgment and discretion referred to is that of the board of supervisors in office at the time of the effective date of a lease. In this connection we point out that even the board of supervisors who granted the lease could not exercise any reasonable discretion or judgment whatsoever in undertaking to fix a value on the lease in October, 1947, for the simple reason that Humble Oil Refining Company, having a lease that would run to April 7th, 1948, absolutly prohibited any other person who might have desired to pay $200,000.00 or $50,000.00 for the lease, from offering to do so or binding himself to do so, since he had done so, the Humble Oil Refining Company could have immediately started drilling operations and his money would have been wasted.
It will be kept in mind that the appellant is claiming a new lease but they are claiming a new lease where the lessee had the hands, discretion and judgment of the board tied. They could not inquire of others, for no others would have listened to the inquiry or offer to grant a new lease to become effective on April 7th, 1948. This was another evidence of the bad faith of Humble Oil Refining Company in claiming that this lease was was a new lease, instead of an extension of an existing lease.
The court will keep in mind that the board of supervisors were exercising not their individual right, but only a special right and power conferred upon them by statute, and while the statute provided that they could grant such lease in their discretion and judgment, yet if the circumstances show — as they do in this case — we respectfully submit that they could not exercise any judgment or discretion in fixing the value of the lease or granting the lease to become effective at a future date. We admit that an individual with his own property could have done as he pleased in granting such a lease, but the board of supervisors were trustees and had only limited authority. They could not gamble or conjecture or speculate or take the risk that an individual might take, in the discharge of their trust.
The State of Mississippi and the Board of Supervisors of Adams County filed their original bill in the Chancery Court against Humble Oil and Refining Company, seeking the cancellation of an oil and gas lease to said corporation, dated October 20, 1947. The County Superintendent of Adams County was also made a defendant, but was by the chancellor afterwards permitted to become a complainant, which she did.
The validity of the lease was attacked on several grounds. Two of which only we will mention.
The chancellor sustained appellees in their contention that the lease was void because the minutes of the Board of Supervisors, October 1947 meeting, were not signed before the final adjournment; and overruled a contrary contention of appellants, as well as their additional argument that the lease could be and was ratified at the Board's subsequent meeting on November 3rd, 1947. Appellees, over objection of appellants, were permitted to introduce evidence by the president and others that he was on a trip to the state of New Jersey at the time. We do not refer to this matter for the purpose of adjudicating this difficult issue, but merely and solely as a part of the history of the trial.
We have unanimously concluded that the lease is void because on October 20, 1947, the Board of Supervisors had no legal power to execute it and the County Superintendent of Education had no lawfull right to approve it, under their sole authority, Section 6600, Code of 1942.
The Board of Supervisors of Adams County were Trustees of the lands involved for the benefit of the educable children of the township in which it lay, since Section 3, Township 6 North, Range 4, West, was lieu land, in place of Section 16 of the Choctaw Purchase. (Hn 1) As such Trustees they were required, like all other fiduciaries, to exercise a higher degree of care with reference to the administration of their trust than in the management of their own individual personal business, and furthermore, even than in attending to the general run of the county's business. After authorizing and executing this lease, they determined that it was improvidently done, without legal authority, and filed this suit to cancel it, offering to return the payment of $5,031.00, appellant had paid for it. This tender, during the trial, and in the original bill, was refused by appellants.
On April 7, 1942, an oil and gas lease was legally executed to Humble Oil and Refining Company as to this same land. Its term was for six years, the maximum allowed by the statute. This, of course, fixed the expiration date of that lease on April 7, 1948, approximately five and a half months after the execution of the new lease on October 20, 1947, and a few days more than three months after the term of office of the members of the board of supervisors and of the county superintendent of education expired, which was December 31, 1947.
Section 6600, supra, requires that the county superintendent of education approve the lease before execution by the of supervisors.
Argument is made by appellees that on October 20, 1947, the board by executing a new lease to go into effect on April 7, 1948, for two years thereafter, thereby declared their right to renew a lease before it expired, cutting off all benefits from the possible enhancement of its value, in this growing and expanding field, by the time its effective date was reached, and by successive repetitions of the process, continue such leases for long years, without drilling by the lessee, contrary to the statutory limitations of six years. Here, Humble already had a valid outstanding lease to the oil and gas under the same land, and it is argued that under those circumstances at the date of October 20, 1947, even conceding the right of the board to make said lease on said date, they, as Trustees for the educable children, cut themselves off from competive bids by other oil companies, who would be unwilling to make such a contract then, for the reason Humble, under its existing lease, could defeat any other lease to another, by the simple expedient of drilling under their lease dated April 7, 1942. Indeed, on October 20, 1947, the board had nothing to lease, because they were then already lessors of all they had a right to lease, under proper conditions and as authorized by law.
The October 20, 1947, anticipatory lease coupled with the right of Humble also under its existing lease, to drill on said lands, made it extremely unlikely that any other oil companies would be willing to risk the expense of geophysical exploration, due to uncertainty as to the availability of the oil and gas for a new lease April 7, 1948. By awaiting the end of the term, the matter would then be open to general competition.
All of the foregoing is but preliminary to our final conclusion that the law is wise in limiting such leases to six-year terms, and that (Hn 2) neither the board of supervisors nor the county superintendent may lawfully make a contract binding their successors, which begins after the terms of office of the board making it has expired. Our view here is not to be confused with contracts effective during term of one board, and performance starting during the term of office of said board, but extending over into the term of office of a successor board. Here the terms of office of the members of the board and of the county superintendent of education expired December 31, 1947, yet they attempted to make a contract to go into effect during the term of their successors, preempting the latter from the right and duty to attend to the matter themselves.
We have no cases, decided by this Court, exactly in point on the question. The nearest approach to it is American Oil Co. v. Marion County, 187 Miss. 148, 192 So. 296. That was a case dealing with the power to sell or lease county property. The third syllabus reads: "3. A county board of supervisors may not by contract preclude itself or its successors in office from the right and duty to exercise the power given it by a statute, whenever, in its judgment or discretion, it is deemed necessary to exercise a clearly granted power." We quote from the opinion: "In this connection, we might say that the power to sell is here so clearly distinguished from the power to lease as not to call for debate; but there is a manifest reason therefor, for if a predecessor board could lease county land, it would prevent its successors from exercising the power to sell and convey, the very thing which the Legislature has granted — the power to sell lands of the county which have ceased to be used or useful for public purposes. As illustrative of this position, see the case of State ex rel. Scott v. Hart et al., 144 Ind. 107, 43 N.E. 7, 33 L.R.A. 118. A board of supervisors may not, by contract, preclude itself or its successors in office from the right and the duty to exercise the power given it by a statute, whenever, in its judgment or discretion, it is deemed necessary to exercise a clearly granted power."
The Supreme Court of Indiana has held that a county auditor has no authority, after his successor is elected, and shortly before the close of his term, to contract for a suitable number of blank forms of poll books and election returns, and other proper blanks necessary to be used in an election to be held more than 18 months after the contract is made. Morrison et al. v. Board of Commissioners of Decatur County, 16 Ind. App. 317, 44 N.E. 65, 1012. Eliminating, "after his successor is elected," we agree with this announcement by the Indiana Court. The point is, the board of supervisors and county superintendent of education could not bind their successors after their term of office had expired, by a contract to take effect only and be operative during the term of office of their successors.
But, say appellants, four supervisors and the county superintendent were reelected, — which, in our judgment, is no answer. We are dealing with officers, not identity of individuals.
As stated, supra, there is no Mississippi case dealing with counties directly in point, but the question has been decided by this Court in a municipal case where we held that the outgoing Board of Mayor and Aldermen could not elect inferior municipal officers to begin service after the term of office of the Board of Mayor and Aldermen, because that power belonged exclusively to the new or incoming Mayor and Board of Aldermen. That is directly in point here. Ott v. State, 78 Miss. 487, 29 So. 520.
American Jurisprudence says this: "Thus, a contract by which a board of county commissioners attempts to employ a legal adviser for a period of three years, to commence three months in the future and after the time for the election of a person to fill the vacancy caused by the expiration of the term of office of one member of the board, the term of employment extending over a period during which all the members of the board as constituted at the time of the contract will retire therefrom unless reelected, is against public policy and void. Moreover, an insurance contract by a county board has been held binding on a successor board only if the term of the contract was to commence before the expiration of the term of the board which made it."
We affirm the chancellor's decree in favor of appellees on the ground discussed by us, supra, which, however, overrules his views contrary thereto. We make no adjudication on the signing of the minutes, deeming it to be unncessary, in view of the conclusion we have reached on the other point. Several other matters are argued, which we likewise do not review, for the same reason.
The decree will accordingly be affirmed.
Affirmed.