117 Neb. 66 | Neb. | 1928
This is an equity suit in which the district court decreed that a 99-year lease of certain real property made by the county to two of the individual defendants was invalid. The county and the lessees appealed.
The suit to enjoin the performance of the lease was brought by a taxpayer, who alleged, in substance, that the county of Lancaster has long owned in fee lots four (4), five (5) and six (6), block ninety (90), Original Plat to the city of Lincoln, and that said property is commonly
A brief history of the case, condensed from the extended evidence, will help us to diagnose the case and will aid -the reader to understand it. On March 24, 1896, a shortage of $36,000 was discovered in the official accounts of one who was then and for some time had been treasurer of Lancaster county. Soon thereafter he died. The claim of the county against his estate was allowed in full. Suit was brought in the district court against the bondsmen of the treasurer, naming also the representative of his estate as a defendant, to recover the shortage, and a settlement was made, with the approval of the county court, by which notes held by the treasurer and secured by mortgage on the lots in question were turned over to the county. Thereupon, and as a part of the settlement, the holder of the title conveyed the lots to the county, to satisfy his debt evidenced by the notes and secured by this mortgage. In the settlement the liability of the estate on the short
“It is further agreed that the party of the first part (the county) shall have the right to sell the premises herein described, provided, however, that notice of such contemplated sale shall be given in writing to the party of the second part (the Legion) at least one year prior to the time fixed for the vacation of said premises by the party of the second part, and provided, further, that during such period the party of the second part shall have option to itself take over and buy the premises at the price and on the terms of such contemplated sale.”
An examination of all the leases of this property ever made by the county prior to the one in suit shows that they all contained reservations of permission to use the premises by political conventions and that none of them required >the payment by the lessees of any general taxes. The evidence shows that the gross rentals received from the property from the time it was acquired in 1896 up. to July 7, 1925, amounted to $5,954.60, and during that period the amount paid out on account of the property a total of $928.50. It may be remarked that the spirit of the leases, and the uses for which they required the property to be reserved in part, did not look toward revenue as a main end. On July 7, 1925, the county, by its commissioners, leased said premises to the defendants, E. M. O’Shea and R. H. Rogers, for a full term of 99 years, beginning on the 7th day of July, 1925 (subject to the Legion lease, which will expire August 13, 1929), for a yearly rental of $4,000 from and after the expiration of the Legion lease. The written lease was duly executed and acknowledged by all parties thereto and was filed, all on
At the conclusion of the trial before the court, the court found that the county commissioners were without power to enter into the 99-year lease; that the contract is ultra vires and void; that the premises are public grounds belonging to Lancaster county within the meaning of the statutes; that the question of entering into said contract has never been submitted to a vote of the electors; that there was no fraud or concealment on the part of the county commissioners and that the consideration for the lease was not so inadequate as to amount to fraud; that there was no fraud in the conduct of the defendants O’Shea and Rogers and Shurtleff and Olson, and that there was no fraud or conspiracy against the Legion to deprive it of its rights under the option contained in its lease. The decree of the court canceled the lease, denied the prayer of the intervener, the Legion, for specific performance, and gave
The appellants assign that the court erred (1) in holding that the property constituted public grounds and buildings, as distinguished from real estate of the county, within the meaning of the statutes; and therefore erred (2) in holding that the county commissioners had no authority to enter into a lease without a vote of the electors; (3) in holding that the county could not lease this property for 99 years; and (4) in holding that the 99-year lease was a sale or equivalent to a sale under the statute.
At the outset of the discussion, it may be set down that, like the trial court, we find nothing in the evidence to support any charge of active fraud, collusion or conspiracy on the part either of the county commissioners or of the lessees and their associates, or of their attorneys, all of whose conduct, either directly or by implication, is sought to be impugned in some connection or another in briefs and arguments by some of the parties. There appears no unlawful combination or confederation to deprive the county of title to its property or to interfere with the rights of the Legion in the premises. The lessees were seeking a desirable investment and the improvement of this property as an enhancement to their valuable improved property adjoining this on the east, as they had a right to do. The county, through its commissioners, was seeking some use of this property, so long held with meager returns, that would produce a net income commensurate with its value, as it had the right to do. If its commissioners acted within their powers and without fraud, conspiracy or collusion, then the courts cannot and will not interfere and substitute the judgment of the court for the thus exercised discretion of the commissioners. The inquiry here is as to whether they acted within their powers in making the 99-year lease.
So much of the general sections of the statutes as are involved are quoted in this paragraph:
“Each county which has heretofore been, or may here
The appellants argue, from these statutes, in substance, that a county has two qualities or characteristics: First, governmental or politic; and, second, private or proprietary ; that such lands and buildings as are necessary to use for the purpose of carrying on the business of the county
The appellants cite a previous case in this court, involving a 50-year lease of this identical property, as binding authority that this is not public grounds and buildings and that there is no limitation on the powers of the county board to make the lease. Lancaster County v. Lincoln Auditorium Ass’n, 87 Neb. 87. We find ourselves unable to accord with the expressed views of appellants as to the present eifect of that case for two reasons: First, the opinion by Judge Letton shows (page 92) that the parties there agreed that the lots “were not ‘public grounds* of the county, and that the board of county commissioners had the power, without first submitting the question to a vote of the electors of the county, to enter into the first lease, and afterwards, with the consent of the lessee, to can.cel’and set aside the same and release the property for the term of 50 years,” so that case was considered and decided on other grounds than those under consideration here; and second, when that- case was up in 1910, the legislature had not amended section 853, as heretofore shown
Appellants assert that the phrase “body politic and corporate” as found in sections 848 and 850 is indicative of two distinct powers or qualities found in counties; that when the members of the county board deal with governmental matters they are acting as agents of the county in exercising its functions as a “body politic,” but where they deal with other matters they act as agents of the county in exercising its functions as a “body corporate.” Specifically they apply their theory and definitions here by saying that such lands as the county holds for the actual use of the county, like the courthouse and grounds and the poor-farm and buildings, it holds in its governmental capacity as a “body politic” and such are therefore “public grounds and buildings;” but such “lands” as the county otherwise holds, it holds as a proprietor in its corporate capacity as a “body corporate.” From historical sources of the derivation of the term “body politic and corporate,” as applied to a county, and from the term itself, we do not find support for splitting up the phrase. It is. conjunctive rather than disjunctive.
In 2 Coke, Littleton, sec. 413, the learned author, in discussing bodies politic and corporate, says; “This is a body to take in succession, framed (as to that capacity) by policie, and thereupon it is called here by Littleton a body politike; and it is also called a corporation, or a body incorporate, because the persons are made into a body, and are of capacity to take and grant,' etc. And this body politike, or incorporate, may commence, and be established three manner of ways, viz.,'by prescription, by letters patented, or by act of parliament.”
“Bodies politic and corporate had been known to exist as far back at least as the time of Cicero; and Gaius traces them back even to the laws of Solon of Athens, who lived
The definition of “body politic” found in the preamble of the Massachusetts Constitution is widely quoted. “The body politic is formed by a voluntary association of individuals ; it is a social compact, by which the whole people covenants with each citizen and each citizen with the whole people, that all shall be governed by certain laws for the common good.” While the definition was prescribed for a commonwealth, the principle is quite applicable to the body of the people set apart in a county or a city to be a state agency or a unit for the purpose of certain local governmental functions.
That a county, even though a body politic and corporate, is a creature of statute and has only such powers as the legislature has conferred upon it is. almost axiomatic. These powers are executed by the county board. The board of county commissioners has such powers as are specifically conferred on it by statute and such other incidental powers as are necessary to carry into eifect the powers expressly granted. Lancaster County v. Green, 54 Neb. 98; Berryman v. Schalander, 85 Neb. 281. So it is more of an academic question here as to whether the county holds any certain real estate as a proprietor in a corporate capacity. or as to whether it holds it in its governmental capacity. The question arises rather when it seeks to make disposition or use of property, whether the legislature has clothed the county board with the power, in the particular instance, to execute what they conceive to be within their functions. It is true that, where county real estate is devoted to actual public use, it has attached to it a governmental character or quality such as to cause it to be distinguished as public grounds; and where it is not used for such public purposes the county might well be said to hold it as a proprietor. In other words, we are of the opinion that, when a county holds or undertakes to dispose of any of its lands, the measure of its powers is not found solely in the inherent character of the lands, but
The second subdivision of section 851 gave the county power “to sell * * * any real or personal estate owned by the county;” not only did section 850 say that the powers of the county should be exercised by the county board, but the third subdivision of section 852 gave the county board the power “to sell the public grounds or buildings * * * and purchase other properties in lieu thereof;” and; section 853, while originally prohibiting the sale of “the public grounds as provided in the third subdivision of” section 852 without a vote of the electors, yet, as the legislature amended section 853 in 1925, and as that amended section was worded when.the lease under consideration was made,
The next question to consider is the power of a county board to lease real estate acquired and owned by the county. The distinction between selling and leasing real estate is so well known that it needs little or no discussion. “A lease transfers to the lessee an interest in the realty less than the estate of the lessor, and as a result of such transfer the lessor has a reversion in such realty, while a con
This leads us to the inquiry as to the effect of a 99-year lease. Is it the equivalent of a sale? The appellees assert that it is and therefore is prohibited by amended section 853. They cite Fawn Lake Ranch Co. v. Cumbow, 102 Neb. 288, which arose in the potash'era of the World War. The company had school land leases of a section of school land. It sought to enjoin the defendants from trespassing and removing the mineral waters from a lake on the land. The defendants answered, setting up a lease from the
The various appellees, in numerous briefs, cite too many cases to make it possible, to take up and discuss them separately. But this is the substance of their argument to convince that the lease in question results in a sale and conveyance of the property: Under section 5586, Comp. St. 1922, defining “real estate,” the lease, being for more than one year, is a chattel real and therefore real estate; under section 5587, defining “purchaser,” the appellants are purchasers because an interest in real estate is conveyed to them for a valuable consideration ;• under section 5588 the lease in question is a deed assigning an Interest in real estate; therefore, by the lease,, the real estate is sought to be sold to the appellants. The main Nebraska case, construing these sections, cited by appellees and discussed at length in several of the briefs, is Fawn Lake Ranch Co. v. Cumbow, 102 Neb. 288, 297. After discussing the above sections and deciding that the lease in
The appellees cite two cases from the supreme' court of the state of Washington. There they have a provision in the state Constitution which (1) prohibits the ownership of lands by aliens (with exceptions and provisions not involved here) and which (2) provides that “all conveyances of lands hereafter made to any alien directly, or in trust for such alien, shall be void.” In the first case, State v. Morrison, 18 Wash. 664, the court, considering a 99-year lease, after stating that it could not find any authority bearing directly upon the question, said: “We have concluded that a lease of lands in this state to an alien for a reasonable term might be upheld, but that the lease in question is for an unreasonable term, and consequently void.” In the second case, State v. Hudson Land Co., 19 Wash. 85, it was held that a lease of land to an alien for 49 years was void since it permitted that to be accomplished indirectly which could not be done directly. The decisions in these two cases were forced by the policy plainly expressed in the Constitution against any ownership of lands with the constitutional prohibition of “all conveyances of lands” to any alien. By reason of the constitutional provisions there, we do not regard these cases as applicable here, where our Constitution contains no such prohibition
Other cases cited by the appellees, too numerous to analyze in this already extended opinion, find their answer-in our statute law applicable to leases of county real estate.
A case very much like the instant case in its facts, and akin to it in the principles involved, arose in Chicago, and ultimately was reviewed in the supreme court. The Tribune Company had occupied under a lease three lots which were school property, the title to which was in the city of Chicago in trust. The company had improved the property with a building which it occupied for its business. The management of the property was vested in a board of education, subject to control by the legislature, and with powers defined by statute. The board had power to lease school lands. In May, 1880, the property was leased to the Tribune Company for 50 years. On June 15, 1888, the company and the school board entered into an agreement extending the lease to May 8, 1985. In 1907 the city of Chicago and the school board brought suit to cancel all the leases and agreements. On evidence and report of a master, the trial court dismissed the bill. Complainants appealed. The Illinois supreme court, in a well-reasoned opinion, affirmed the decree, holding that “A lease for a fixed and definite period, conditioned upon the payment of a fixed annual rental, even though for a long term of years, is a lease and not a sale, notwithstanding the language of the conveyance act and the act relating to judgments, which specifies that long-term leases shall be included within the term ‘real estate.’ ” In the opinion, the court said:
“It is next argued that the leases, as extended until 1985, amounted to a sale of the property, which was beyond the power of the board of education, and the basis of the argument is that the terms were long. Reliance is placed upon the act in regard to judgments, which declares that leasehold estates, when the unexpired term exceeds five years, shall be included in the term ‘real estate,’ as used
The parties to that case, the statutes affecting it, and the principles of the common law applicable to it are such as to give it elements unusually common to the case at bar. The reasoning is cogent and is applicable here. On principle and on authority, without prolonging this discussion, we see no logical escape from the conclusion that the 99-year lease made by the county board was not a sale, but was in fact a lease.
The lease is conditioned upon the payment of an adequate annual rental with an agreement for valuable and permanent improvements to be made by the lessees who covenant to pay taxes and assessments of every kind. Upon failure of the lessees to perform its covenants the term ends. It contains no revaluation clause, but the evidence shows that this is not unusual in modern leases of this type. At the end of the term the improvements will belong to the lessor. There was no fraud in its procurement. It. was a lease and not a sale and was made on behalf of the lessor within the authority of the law. When so made we cannot interfere with the powers of the board. To substitute our discretion for theirs would usurp functions not committed by the Constitution to the judicial department of our state government.
Having determined that the lease was made with authority and that it is not in effect a sale, it follows that the option of the Legion is .ineffectual. It is an option to purchase if a sale be made. No sale being made, the option has nothing to operate on.
For the reasons stated, the judgment of the district court is reversed, with directions to enter a decree validating the lease as binding on all parties to the litigation.
Reversed.