Moon v. State Board of Land Commissioners
724 P.2d 125
Idaho
1986
Check Treatment

*1 724 P.2d MOON, Marjorie Ruth State

Treasurer, Petitioner, LAND COM BOARD OF

The STATE MISSIONERS, of the State

Idaho, Respondent.

No. 16199.

Supreme Court of Idaho. 2, 1986.

June Boise, petitioner. Chapman,

John S. Jones, Atty. (argued), and Jim Gen. Hon. Gen., Atty. Addington, Deputy L. Steven Boise, respondent.

SHEPARD, Justice. original proceeding the na- This is an petition for writ of mandamus of a ture brought the State Treasurer prohibition Land Commis- Board of against unconstitutionality of asserting the sioners provides that revenues I.C. § on and timber sales leases obtained from used for ex- may be certain state administering those incurred penses is consti- that 58-140 We hold I.C. lands. petition. tutional, deny the and hence I.C. outset We note in 1969 having duly enacted been 58-140 with it carries and last amended constitutionality. School presumption *2 Commission, keep Dist. No. 25 v. State Tax a record thereof which shall show Idaho separately Board moneys received from each of County Commissioners v. Idaho Health category of endowment lands. All mon- Authority, Facilities 96 Idaho eys deposited in the hereby account are P.2d 588 appropriated continually to the state pur- board of land commissioners for the Code, provides: Section Idaho poses hereinabove enumerated. Special 58-140. account for maintenance, Additionally, management protec- the state board land of and timber, grazing hereby commissioners is tion of state owned and authorized to department recreational site lands.—A reasonable contract with the state of per agriculture, amount any not to exceed ten centum county, pro- with (10%) moneys programs received from the vide of noxious weed control or timber, standing grazing sale of from lands, eradication on may state and uti- leases and from recreation site leases lize such resources as are available to the account, special shall constitute a purposes. board for such hereby created for to be used mainte- At the time of its enactment nance, management protection and of purpose legislation stated was: lands, grazing state owned timber hereby It is declared to be the best lands; provided, and recreation site that interests of the state of Idaho and for any moneys constituting part of such designated beneficiaries of the sever- standing account received from a sale grants al land held in trust endowment timber or from leases of lands which are by the state of Idaho from the United part grant a endowment land shall government, States for the maintenance, only be used protection maintenance and of the mar- management protection and of lands of lands, ket state timber value of owned grant. the same endowment Provided grazing site lands and recreation lands. further, that all such funds collected expended from timber sales shall be sole- Organic Section 14 of the Act of the ly purpose management, pro- for the grants Territory of made of land to and of state lands. tection reforestation territory for the mainte- to be used All such funds collected from recreation 4, 5, nance of schools. Sections and expended for the site leases shall be 7 of Idaho Admission Bill elaborate on maintenance, protection improve- and lands, providing school endowment such sites, exist- ment of both new lease and every township for certain sections ing situate on state recreation areas support of the the state to be set aside for lands. All such funds collected from proceeds of the common schools with the grazing expended leases shall for the be perma- a sale of such sections to constitute maintenance, management protec- and provided fund. It was also nent school grazing tion of state owned lands. Con- only funds will the interest from said trol and eradication of noxious weeds is a support of the common expended be for the maintenance, part schools. improvement programs. pro- 3 of our Constitution Article The state of land commissioners board vides: hereby rules authorized to establish Fund to Remain Intact— Public School regulations fixing percentage shall Fund of the state The Public School the amount received from each sale intact; the remain inviolate forever standing grazing and from each timber expended only shall be interest thereon lease, to exceed and recreation site schools of the maintenance of the total, (10%) per ten centum among state, shall be distributed here- shall constitute the account and school districts counties deposit- several created. The account shall be manner as be treasurer, in such who shall the state ed with the state v. Investment fund, Moon upon principally of this lies by law. No prescribed interest, supra, inop- ever trans- shall be but we find that case principal or fund, or used or There, sought ferred Treasurer posite. the State provided. except as herein appropriated prohibit State In- original writ custodian of shall be The State Treasurer from, authority Board under the vestment fund, securely this same shall statute, using acquired from monies law properly invested *3 public funds to of the school investments supply all loss- The state shall directed. by Invest- defray expenses incurred the any in manner occur. thereof that es the Public Board in the investment of ment There, clearly monies the strictly ID. School Fund. has construed This Court CONST, 9, part corpus end that the a art. 3 to the constituted § way in be di- Fund will not which Public School Public School Fund could depletion principal of interest. subject to of this previous the decisions verted under Board, 200, Idaho Moon v. Investment 98 at In the instant case the monies Court. (1977); Engelking Invest v. P.2d 871 560 corpus of the are not issue 217, 458 P.2d 213 ment 93 Idaho Fund but rather constitute Public School 499, Fitzpatrick, v. 5 Idaho management of from the revenues derived v. See also United States P. 112 51 the a different trust res which constitutes (D.C.Idaho 1939). Fenton, F.Supp. 27 816 9, pursuant to art. endowment lands school CONST, Constitution, supra. 9, perti- of our provides in ID. art. § § part: nent manages sepa- of two The State duty the of the state board It shall be public for benefit of schools. rate trusts the provide the of land commissioners res of the The Public School Fund the location, protection, sale or rental all of trust, by the Invest- first which is invested heretofore, or which the lands seq. The Board. I.C. 57-715 et ment § granted by acquired to or hereafter responsibilities re- State’s constitutional general govern- the by the or from state protection the garding this trust and the ment, regulations may be under such CONST, ID. art. money corpus are found in manner law, in such prescribed 9, of school second trust consists 3. The § long term as will secure the maximum Land managed by the endowment institution return the financial The endowment lands themselves Board. spe- granted the if not or to state and the State’s form the res of this trust shall, grant; cifically legislature The ... regarding this trust constitutional duties practicable period, provide at earliest the corpus of the land found general grants of land law that CONST, in ID. art. § by congress to the state shall be made noted, legislation at issue carefully pre- judiciously As above located trust, subject presumption to dis- a consti- and held in carries with it served here Williams, Rich posal public auction for use 81 Idaho tutionality. respective object (1959), for which had benefit this Court made, grants of land were question said funds before sale of legislature shall constitutionally dedicated to revenues for the from time to time and said lands and the claim that particular purpose and for on all state lands sale of timber attempt- unconstitutionally legislature was application proceeds argu- funds. There ing to divert those faithful the terms in accordance with funds were of ment was made that certain thereof added.) ... grants; said (Emphasis constitutionally required to be used exclu- construction, repair and mainte- sively for authority from parties hereto cite no highways. The action public nance of the jurisdiction squarely on this or funds the use of such sought prohibit analogous circum- point, nor even building as office Moon re- for the construction stances of this case. Petitioner lands, necessary proper function to the granted school and those in lieu highway program. such; administration of Arguably, ...” art. could be § require read to that monies received from projected The Court Rich held that the leases or timber sales of school en- usage money was not unconstitution- “proceeds dowment lands are of such al, pointing out: However, lands.” 4 must be read § limitation, State Constitution is a “Our act, enabling the context of the 5 of grant power, Legislature not a and the Bill, the Idaho provides Admission matters, plenary powers except has all clearly “proceeds” only refers to mo- prohibited by the those Constitution. ... nies received from sales of endowment legislative presumed “A act is to be lands. constitutional and all reasonable doubt as constitutionality to its must be resolved pro- Said 5 of the Bill Idaho Admission validity. of its favor ... pertinent part: vides in *4 opened statute is “Where a to two (a) (b) Except provided as in subsection constructions one of which will render it granted all lands herein education- for unconstitutional, and the other constitu- purposes disposed al only shall be at of tional, the rule of construction must be sale, public proceeds the to constitute a adopted uphold which will it. ... permanent fund, school the interest of showing “The burden of the unconsti- only expended shall be in the tutionality upon party of a statute is support said schools. Such lands of it, asserting invalidity and must be clear- may, regulations leg- under such as the ly shown. ... prescribe, islature shall be leased a for proper application “In the of the fore- period years, and not more than ten of going duty rules it becomes the of the oil, gas, hydro- in the case or other uphold constitutionality courts to geothermal carbon lease or a resource legislative if such can be ac- enactments lease, by-products and associated for as complished by reasonable construction. long produce pro- as such is thereafter paying quantities in or the lessee duced “ judicial ‘It is fundamental that the drilling good conducting in faith is well power legislative to declare action invalid operations, or and such construction upon grounds is to be exer- constitutional subject preemption, lands shall not be only in constitu- cised clear cases. The entry, entry un- homestead or manifest, invalidity and if tional must be States, der the land laws of the United fact, upon disputed questions it rests unsurveyed, but surveyed whether ” invalidating proved.’ facts must be purposes shall be reserved for school added.) only. (Emphasis In the instant case we hold that alleged invalidity is not mani constitutional language phrase that the That indicates a reason clearly fest nor shown and that permanent proceeds to constitute a “the our able construction of the interaction of fund, only of which shall the interest school provisions, taken to various constitutional support in of said schools” expended be Organic gether with the Act and the herein only phrase “all lands modifies Bill, validity for the Admission militate purposes shall be educational granted for constitutionality legislation ques in of the sale____” The public disposed only tion here. authorizing the lease of language of 5§ CONST, requirement by any is not followed lands provides in ID. rents constitute funds derived of that the part: public fund of pertinent “The school schools, support permanent fund for proceeds the state shall consist of the may be that such rather indicates grant but heretofore been such lands as have legis- regulations as under “such ed, leased may granted, be hereafter prescribe.” lature shall general government, known as state Organic provisions suiting involving Act of the from transactions sale of the land are Territory required deposit- Admission of Idaho and the Idaho to be grants ed as a trust res in the Public En- Bill established of land to be used School financing public dowment Fund. Since the land continues schools of to be congressional owned state and held trust Idaho. Those enactments public by provisions the use and benefit of the implemented were of the Ida- schools, it continues to remain a adopted in 1890. We deem ho Constitution provisions trust res and the State Land as that all of the above-mentioned trustee, constitutionally statutorily demonstrate a rationale to strike a balance required protection for the long-term the current and the between regulations may said land “under such of the state of Idaho. All monies needs law, prescribed by be ...” of such derived from the sale lands must deposited be the Public School Fund and Hence, we hold that I.C. Only in- thereafter remain inviolate. permits percent a sum not to exceed ten received from the investment of that terest the revenue received from the sale of withdrawn, may Public School Fund standing grazing timber and from only used for the main- the interest leases, recreational to be used for the main tenance of the schools. tenance, management lands, principles those in accord with day age this some would consider law, i.e., of basic trust trustee de such a scheme to be an anachronism since duct many from the res of the trust effect holds millions of dollars in protect *5 preserve order to the trust any pur- limbo which cannot be used for property. See v. The Gisborn Charter pose except production of revenue. Co., 326, Oak Insurance 12 be, U.S. clearly However that the result is Life 277, (1892); Bogert, S.Ct. 35 L.Ed. 1029 by mandated our Constitution. On the oth- (1973). Law Trusts The few hand, §§ er such a constitutional can scheme courts which have addressed the issue have resulting be viewed as from the concern of express prohibition if held that no can be public the framers that school education is enabling pertinent act found or con Idaho, extremely important to the state of provisions, stitutional then the in long-term public future of school maintaining protecting curred education needs of the state will be assured trust res are reasonable deductions. Unit part by produced at least in the revenues (10th Swope, ed v. States 16 F.2d 215 Cir. from the investment of such Public School 1926); State ex rel. Greenbaum v. Fund. Rhoades, 4 Nev. 312 Betts Com The framers of our Constitution Office, missioners the Land Okl. public well have theorized that once school (1910). 110 P. 766 they longer endowment lands are sold no that the statute at issue Hence we hold constitute an asset of the state nor a trust constructions, open to two one of here is res, sale of lands the upon and therefore constitutional, and the which will render it proceeds deposited of the sale must be Treasurer has not petition of the State the Public School Endowment Fund to clearly showing the the burden of carried thereafter constitute a trust res that would unconstitutionality of the statute. I.C. continue to income for the benefit hereby held to be constitution- 58-140 is § hand, schools. On the other al. we see no clear intent on the 57-803(n)1 1, 1985, July be framers of our Constitution or the federal I.C. On § Thereafter, pursuant Congress, require proceeds re- effective. that the came existence, recognized or are recognized and confirmed in 57-803. Funds established.— (1) budget, accounting, appropriation, purposes, the use of For all For all such established. allotment, audit, report pur- and other financial authorized. Accounts accounts within funds is funds, other, poses, following are and none statute, grant the State Auditor created three terms of the school endowment Agency in the Asset separate accounts our Constitution. percent which to hold ten Funds within sum, we hold that to- I.C. § by the Board the monies received Land 57-803(n) gether with I.C. do not contra- § leasing grazing or recreational from restraints, vene constitutional but rather Currently, sale timber. lands and the properly carry out the man- constitutional percent proceeds ten of these leases CONST, “Imple- dates ID. 8.§ being or timber sales is transferred into principles mentation constitutional Agency Asset Fund accounts. those legislation, appropriate function and un- Since that time the State Treasurer has implementing legislation is less such clear- agency refused to credit the three asset ly principle, in violation of a constitutional generated by accounts with interest legislative pow- valid exercise of the is. accounts, but rather has been credit- those Board, 96 Idaho er.” Moon v. Investment generated by ing those ac- the interest general fund. In addition to counts to petition The of the State Treasurer for resisting sought by the Trea- the writ State prohibition is denied. writ of mandate herein, Board has surer the State Land hereby Treasurer is ordered to cease State

petitioned this Court to order Treasurer generated in- crediting the income crediting generated cease that interest agency to the terest on the asset accounts general to the agency asset funds appeal general account. Costs on fund. Land Board. State correctly points Treasurer out requirement specific no I.C. there is DONALDSON, C.J., BAKES and 57-803(n) interest 58-140 or I.C. that HUNTLEY, JJ., concur. paid agency accounts or on paid if that it be credited to that interest BISTLINE, Justice, dissenting. there- agency those asset accounts. She to I.C. 58-140 and 57-803 Pursuant §§ argues authority that she is without fore diverting its into own the Land Board is interest to those accounts credit percent of ten the funds bank account general be credited to the the interest must *6 sale and lease are received from the which 67-1210 which pursuant account to I.C. § assets, The Board of school endowment requires that interest on the investment money for says: worry, “Not we use the to general to the ac- idle monies be credited per- expenses.” One hundred Land Board specifically otherwise re- count “unless going funds should be cent of those quired by law.” by the Fund. This action Public School posi We hold accordance with is an unconstitutional invasion Land Board the interest of the Land Board that tion majori- Fund and the the Public School an agency on the asset accounts is earned extremely impor- this ty’s determination of integral part total monies received of the invasion. judicially sanctions that tant issue be used for the from school lands and must requires Pub- The Idaho Constitution constituting the of the lands inviolate and Fund to remain lic School purposes in accord or for school trust res Const, 9, art. 3 states: Idaho intact. the trust established with terms of ance In- to Remain School Fund Crediting Public inter by our Constitution. such Public School Fund tact.—The by agency accounts generated asset est remain inviolate State shall forever is a violation of the general fund purpose, in use or only by by are restricted may law or the order be established be, be, may ac- invested and or which must state auditor. entities, are not separate for as counted (Emphasis any hereby other fund. (n) for in agency is created and accounted asset fund The treasury. agency added.) The in the state established moneys is be used to account asset fund intact; only proceeds by the interest thereon shall be between the investment of expended management in the maintenance of Investment Board and the state, by schools of the and shall be distrib- endowment lands the State Land Board. Hence, here, the rule Moon should among the several counties apply uted Constitution, pursuant school districts the state such man- which is that may prescribed by ner as law. No the Endowment Fund is to remain invio- fund, interest, late; intact; principal portion of this or it is also to remain no principal may any any shall ever be transferred to be diverted for fund, purpose, appropriated except principal or used or whether that be in the liquid form of assets or land. provided. herein The State Treasurer fund, shall be custodian of this and the majority’s attempt distinguishing at securely properly same shall be in- Moon, supra, unpersuasive. argues It vested as law directed. The money receiving that the the Land Board is supply state shall all losses thereof comes from a different source than the (Emphasis manner occur. money the Investment Board received. added.) This is a distinction without a difference. majority acknowledges, As the The fact of the matter is this Court that both Boards seeking recognized money has in a number of cases that were or are to use for their Const, 4, 5, expenses, originates own 3 and and 7 from the §§ Fund, Bill Public School Endowment and such prohibit any the Idaho Admission attempt expressly attempt by Legislature forbidden our State Constitution. principal Board officers to divert either the away or interest from the Public School ruling op- Common sense also dictates a Board, Fund. Moon v. Investment 98 Ida- posite majority. As to that a result (1977); Engelking v. ho today’s holding, the Land Board will be

Investment 93 Idaho 458 P.2d pay expenses able to all of its without Fitzpatrick, 5 Idaho being go required through appropria- See also United 51 P. 112 process. Accordingly, expenses tion Fenton, (D.C.Ida- States v. F.Supp. anticipates year longer each henceforth no 1939). today’s ho Yet that is the result of justified legislature; need be before the case. thus, accountability will become non- know, majority As the will exist over the should also existent. No controls account, strong words “inviolate” and “intact” are Land Board’s and noth- Webster’s ing requires words. defines the Land Board to return “inviolate” as change.” unspent money year. “free from It the end of a fiscal defines “intact” as *7 short, especially not by anything “untouched In the Land Board now need Allowing expense budget, harms anyone or diminishes.” the si- answer to for its phoning percent unhealthy ten state of affairs. off of of the funds most unwise and from the sale and lease of the School En- concern, A second also unaddressed definitely changing dowment assets is 58-140’s majority, is the fact that I.C. § fund; way in no can the fund be viewed as provision percent for a ten with- present remaining Accordingly, “untouched.” in concrete. While that drawal is not cast language being clear of our Constitution is likely it requirement, equally may be a fair ignored. membership may not be. The of this Court supra,

Moon v. Investment We are does not include C.P.A.’s. Moon, year compla- controlling. issued an a board of auditors. Next Court may up to 20 prohibition legislature writ of cent the take alternative to the Invest- con- prohibit using percent percent. All of which ment Board to it from mo- or 50 slightest. acquired today’s majority not in the nies from the investment of cerns reasoning approving defray expenses. its majority’s now school funds to As a matter, equally applicable practical 58-140 will be there is little difference amendment to 58- percentage which an

140 sets. is the fact that there

A third concern what

no discussion about Board claims. Each of the members

Land politically Board are elected officers budgeted for ex- presumably have

who support to staff

pense accounts and assist pertinent to com- in the duties

them membership. It Land

prising Board would pool the five offices

seem far better that budgets of their own

appropriate share stringent fly into the face of a

than to

unyielding prohibition constitutional proper- invading school endowment

against

ties or funds. today’s opinion nullifies

The result of our sense,

Constitution, gives defies common power, Land Board unchecked open possibility for the further

leaves constitutionally be-

taking of monies that I

long in School Fund. there- the Public

fore dissent. Meredith Byron William J. Brauner P.2d 132 Idaho, Caldwell, and Dennis J. (argued), HAMILTON, Schowalter

Connie Sallaz, Boise, plaintiff-appellant. Plaintiff-Appellant, McDaniel, McDaniel, Brady & Terry R. Boise, defendant-respondent. RYBAR, Defendant-Respondent. David No. 16279. SHEPARD, Justice. Idaho.

Supreme Court of de- in favor Judgment was entered July 1985. On Rybar on fendant June 6, 1986. June a new motion for filed a 1985 Hamilton 59(a), which mo- pursuant to I.R.C.P. trial Sep- court on the trial denied tion was September tember On *8 for reconsidera- filed motion Hamilton on October tion, denied motion was Hamilton On December seeking appeal appeal filed a notice denying order judgment, from trial, a new motion for Hamilton’s recon- motion for denying Hamilton’s order sideration.