B-89331, OCTOBER 13, 1949, 29 COMP. GEN. 180

B-89331: Oct 13, 1949

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THE PAYMENT OF INCREASED RENTALS OCCASIONED BY THE REAPPRAISAL UPWARDS OF SCHOOL LANDS LEASED TO THE GOVERNMENT AT FIXED RENTALS IS AUTHORIZED. 1949: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16. THE LEASES WERE ENTERED INTO ON BEHALF OF THE STATE OF NEBRASKA BY THE PAYEE NAMED ON THE VOUCHERS HEREINAFTER REFERRED TO AS THE BOARD. WHICH IS RENEWABLE AT THE OPTION OF THE GOVERNMENT FOR A TOTAL TERM OF 25 YEARS. THAT THE LANDS MAY BE REAPPRAISED WHEN SUCH IS DEEMED TO BE IN THE BEST INTERESTS OF THE STATE. THE OTHER THREE LEASES PROVIDE FOR FIXED RENTALS FOR THE TERM STIPULATED AND ARE RENEWABLE AT THE OPTION OF THE GOVERNMENT AS THEREIN PROVIDED. THE ANNUAL RENTALS STIPULATED IN THE LEASES ARE AS FOLLOWS: CHART I6FW-911 .

B-89331, OCTOBER 13, 1949, 29 COMP. GEN. 180

LEASES - RENT - INCREASES - STATE SCHOOL LANDS IN VIEW OF THE PROVISIONS OF THE NEBRASKA STATE LAW AUTHORIZING THE REAPPRAISAL OF SCHOOL LANDS AND PROVIDING THAT LEASES OF SCHOOL LANDS REQUIRE THE LESSEE TO PAY AN ANNUAL RENTAL OF 6 PERCENT OF THE APPRAISED VALUE, THE PAYMENT OF INCREASED RENTALS OCCASIONED BY THE REAPPRAISAL UPWARDS OF SCHOOL LANDS LEASED TO THE GOVERNMENT AT FIXED RENTALS IS AUTHORIZED, EVEN THOUGH THE LEASES DID NOT AUTHORIZE THE REAPPRAISAL OF THE LANDS BY EITHER RAISING OR LOWERING THEIR VALUATION, OR REQUIRE THE LESSEE TO PAY ANNUAL RENTALS OF 6 PERCENT OF THE APPRAISED VALUE THEREOF.

COMPTROLLER GENERAL WARREN TO W. R. DILLON, DEPARTMENT OF THE INTERIOR, OCTOBER 13, 1949:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16, 1949, TRANSMITTING FOUR VOUCHERS EACH STATED IN FAVOR OF THE BOARD OF EDUCATIONAL LANDS AND FUNDS OF THE STATE OF NEBRASKA IN THE AMOUNTS OF $180, $180, $359.70, AND $343.50 AS RENTAL FOR SCHOOL LANDS IN THAT STATE FOR THE FISCAL YEAR ENDING JUNE 30, 1949, UNDER LEASES I6FW-911, DATED JUNE 1, 1940, I6FW-923, DATED MAY 21, 1941, I6FW-4167, DATED JUNE 25, 1942, AND I6FW-4349, DATED APRIL 4, 1944, RESPECTIVELY, AS RENEWED, AND REQUESTING A DECISION AS TO WHETHER YOU PROPERLY MAY CERTIFY THE VOUCHERS FOR PAYMENT.

THE LEASES WERE ENTERED INTO ON BEHALF OF THE STATE OF NEBRASKA BY THE PAYEE NAMED ON THE VOUCHERS HEREINAFTER REFERRED TO AS THE BOARD. INDICATED IN YOUR LETTER, LEASE NO. I6FW-911, WHICH IS RENEWABLE AT THE OPTION OF THE GOVERNMENT FOR A TOTAL TERM OF 25 YEARS, PROVIDES IN EFFECT THAT THE RENTAL SHALL BE AT THE ANNUAL RATE OF 6 PERCENT OF THE APPRAISED VALUE OF THE LANDS; THAT THE LANDS MAY BE REAPPRAISED WHEN SUCH IS DEEMED TO BE IN THE BEST INTERESTS OF THE STATE; AND THAT THE RENTAL THEREAFTER SHALL BE BASED UPON SUCH REAPPRAISAL. THE OTHER THREE LEASES PROVIDE FOR FIXED RENTALS FOR THE TERM STIPULATED AND ARE RENEWABLE AT THE OPTION OF THE GOVERNMENT AS THEREIN PROVIDED.

THE ANNUAL RENTALS STIPULATED IN THE LEASES ARE AS FOLLOWS:

CHART

I6FW-911 -------------------------------------------- $102.00

I6FW-923 -------------------------------------------- 157.41

I6FW-4167 ------------------------------------------- 171.00

I6FW-4349 ------------------------------------------- 168.30

THE RECORD SHOWS THAT BY LETTER OF MAY 25, 1948, THE BOARD NOTIFIED THE DEPARTMENT THAT PURSUANT TO THE AUTHORITY GRANTED BY THE PROVISIONS OF SECTIONS 72-204 AND 72-205, REVISED STATUTES OF NEBRASKA, 1943, THE LAND OCCUPIED BY THE GOVERNMENT UNDER LEASE NO. I6FW-911 HAD BEEN REAPPRAISED AT $3,000 EFFECTIVE AS OF JANUARY 1, 1948, AND THAT EFFECTIVE AS OF JULY 1, 1948, THE ANNUAL RENTAL AT THE STATUTORY RATE OF 6 PERCENT WOULD BE INCREASED TO $180. THE RECORD FURTHER SHOWS THAT BY LETTER OF MAY 18, 1948, THE BOARD NOTIFIED THE DEPARTMENT THAT THE LAND OCCUPIED BY THE GOVERNMENT UNDER THE OTHER THREE LEASES HAD BEEN REAPPRAISED UNDER THE ABOVE-CITED STATUTORY PROVISIONS AND THAT EFFECTIVE AS OF JULY 1, 1948, RENTAL RATES UNDER SAID LEASES WOULD BE INCREASED, AS FOLLOWS:

CHART

NEW RATE LEASE NO:

REAPPRAISAL AT 6 PERCENT

I6FW-4167 ------------------------ $5,995 $359.70

I6FW-4349 ------------------------ 5,725 343.50

I6FW-923 ------------------------- 4,270 256.20

SINCE, AS INDICATED ABOVE, LEASE NO. I6FW-911 EXPRESSLY PROVIDES FOR A REAPPRAISAL OF THE LAND BY THE BOARD AND FOR THE PAYMENT OF RENT BASED UPON SUCH REAPPRAISAL, AND SINCE IT APPEARS THAT THE MIGRATORY BIRD CONSERVATION COMMISSION HAS APPROVED PAYMENT OF THE INCREASED RENTAL DEMANDED BY THE BOARD AS REQUIRED BY LAW (16 U.S.C. 715A), THE VOUCHER IN THE AMOUNT OF $180 FOR THE RENT FOR THAT LAND FOR THE YEAR BEGINNING JULY 1, 1948, MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE FREE FROM OBJECTION.

WITH RESPECT TO THE OTHER THREE LEASES, IN THE CASE OF STATE V. PLATTE VALLEY PUBLIC POWER AND IRRIGATION DISTRICT, 23 N.W.2D 300, 306, THE SUPREME COURT OF THE STATE OF NEBRASKA, IN REFERRING TO THE AUTHORITY OF THE BOARD TO LEASE SCHOOL LANDS, STATED IN PERTINENT PART AS FOLLOWS:

THE SCHOOL LANDS OF THIS STATE ARE HELD IN TRUST BY THE STATE UNDER A CONTRACTUAL AND CONSTITUTIONAL OBLIGATION TO REFRAIN FROM DISPOSITION OR ALIENATION OF THE USE OF THIS PROPERTY, EXCEPT AS ALLOWED BY THE ENABLING ACT AND THE CONSTITUTION. BY THE PROVISIONS OF SECTION 1, ARTICLE VII, OF THE CONSTITUTION, THE BOARD OF COMMISSIONERS THERE NAMED, UNDER THE DIRECTION OF THE LEGISLATURE, HAS THE POWER TO LEASE SAID LANDS. THEY WILL BE HEREIN REFERRED TO AS THE BOARD. LEGISLATIVE DIRECTION, AS TO THE TERMS UNDER WHICH THE SCHOOL LANDS SHALL BE LEASED, IS SUBJECT TO AND LIMITED BY THE OBLIGATION TO PRESERVE THE TRUST PROPERTY INVIOLATE. LIKEWISE, THE ACTION OF THE BOARD IN LEASING THE SCHOOL LANDS IS SUBJECT TO AND LIMITED BY THE TERMS IMPOSED BY THE LEGISLATURE. THEIR POWER TO LEASE EXISTS ONLY INSOFAR AS IT IS DIRECTED OR PERMITTED BY THE LEGISLATURE. STATE V. CENTRAL NEBRASKA PUBLIC POWER AND IRRIGATION DISTRICT, 143 NEB. 153, 8 N.W.2D 841. ANYONE DEALING WITH THE SCHOOL LANDS MUST BE HELD TO DO SO WITH KNOWLEDGE OF AND SUBJECT TO THE TRUST OBLIGATIONS OF THE STATE AND THE LEGISLATIVE GRANT OF POWER TO THE BOARD AS TO THE TERMS AND CONDITIONS OF THE LEASE. THE LAW ENTERS INTO AND BECOMES A PART OF THE CONTRACT. STANSER V. CATHER, 85 NEB. 305, 313 * *

BY THE PROVISIONS OF SECTIONS 72-204, AND 72-205, R.S. 1943, THE BOARD IS AUTHORIZED TO APPRAISE AND REAPPRAISE SCHOOL LANDS WHEN IT DEEMS IT TO THE BEST INTEREST OF THE STATE, AND TO RAISE OR LOWER THE VALUATION OF SUCH LANDS AS IT MAY DEEM ADVISABLE IN THE PUBLIC INTEREST, THE LESSEES OF SUCH LANDS, OR OTHER PARTIES AFFECTED THEREBY. ALL UNSOLD LANDS ARE SUBJECT TO LEASE AT AN ANNUAL RENTAL OF SIX PERCENT OF THE APPRAISED VALUE. SEC. 72- 232, R.S. 1943. EACH LEASE SHALL CONTAIN A COVENANT THAT WHENEVER THE BOARD DEEMS IT FOR THE BEST INTERESTS OF THE STATE, IT MAY REAPPRAISE SAID LANDS, AND THAT THE LESSEE WILL PAY AN ANNUAL RENTAL OF SIX PERCENT UPON THE APPRAISED VALUE THEREOF. SEC. 72-234, R.S. 1943. * * *

IT HAS BEEN HELD THAT WHOEVER DEALS WITH A MUNICIPALITY AND STATE OR ANY OF THE VARIOUS POLITICAL SUBDIVISIONS IS CHARGED WITH NOTICE OF THE LIMITATIONS ON THE POWERS OR AUTHORITY OF THE PRINCIPALS, AGENTS, OR REPRESENTATIVES. TOXEN V. CITY OF SANTA BARBARA, 134 P. 1142; ELLIS LANDING AND DOCK COMPANY V. CITY OF RICHMOND, 234 P. 336; CONTRACT COSTA CONSTRUCTION COMPANY V. DALY CITY, 192 P. 178; LOS ANGELES WAREHOUSE COMPANY V. LOS ANGELES COUNTY, 33 P.2D 1059, 44 C.J. 87, 110 A.L.R. 153, 157. ALSO, IT HAS BEEN HELD THAT A STATE IS NOT LIABLE AS AN INDIVIDUAL OR A PRIVATE CORPORATION MAY BE ON THE GROUND ITS AGENT ACTED UPON APPARENT AUTHORITY WHICH WAS NOT REAL. 49 AM. JUR. STATES, TERRITORIES AND DEPENDENCIES, SECTION 73.

WHILE LEASES NOS. I6FW-923, 4167, AND 4349 DO NOT CONTAIN ANY PROVISIONS AUTHORIZING THE BOARD TO REAPPRAISE THE LAND; TO RAISE OR LOWER THE VALUATION OF SUCH LAND; OR ANY PROVISION REQUIRING THE LESSEE TO PAY AN ANNUAL RENTAL OF 6 PERCENT OF THE APPRAISED VALUE THEREOF, THE LAWS REQUIRING SUCH REAPPRAISAL AND THE COVENANT REQUIRING THE LESSEE TO PAY AN ANNUAL RENTAL OF 6 PERCENT OF THE APPRAISED VALUE WERE AS MUCH A PART OF THE LEASES AS IF THEY HAD BEEN WRITTEN THEREIN AND FORMED A PART OF THE CONTRACTUAL RELATION OF THE PARTIES. EASTERN BUILDING CORPORATION V. UNITED STATES, 96 C.1CLS. 399, 405; APPLICATION OF COHEN, 55 N.Y.S.2D 337, 341.

ACCORDINGLY, SINCE YOU STATE THAT THE MIGRATORY BIRD CONSERVATION COMMISSION APPROVED PAYMENT OF THE INCREASED RENTALS ON JUNE 21, 1948, AS REQUIRED BY LAW, THE VOUCHERS SUBMITTED FOR THE RENTAL ACCRUING ON JULY 1, 1948, UNDER LEASES I6FW-923, 4167, AND 4349, ALSO MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE FREE FROM OBJECTION.