*1 him. While against judgment be rendered as to what would him made to it was be that no direct commitment made talked, yet statements were to whom he of the officers appel- with the contact these officers to others who relied, and we he lant, undoubtedly upon whose advice by per- justice best served the ends of would be believe mitting appellant change plea. his is reversed. judgment

For of conviction these reasons directions the district court with The cause remanded to appellant to withdraw judgment to vacate the and allow the guilty, and for plea plea guilty his and to enter a herewith. in that not inconsistent proceedings further court CASTLES, BOTTOMLY, MR. ANGSTMAN JUSTICES ADAIR, concur. STRANDBERG, MONTANA, rel. HARDIE N.

STATE OF ex LAND v. STATE OF BOARD Respondent, Relator Appellants. COMMISSIONERS, al., et Defendants No. 9577. January February 14, 1957. Submitted 1957. Decided Rehearing As Amended on Denial for March 1957. (2d) 307 Pac. *2 F. Atty. Gen., Mr. William Anderson, H.

Mr. Forrest Atty. Gen., appellant. Crowley, Asst. for McKeon, Anaconda, L. Helena, Mr. John Erickson, Mr. Leif Helena, respondent. Richards, Mr. Jerrold R. Erickson, Mr. Mr. McKeon and Anderson, Crowley, Mr. Mr. orally. argued Mr. Henry Loble and Olsen Mr. Picotte, Helena, Mr. Loble & Loble and A. Mr. Gene

Messrs. Olsen, Helena, arnica curiae. H. Arnold MR. ANGSTMAN: JUSTICE from confirm- enjoin brought defendants

This action was separate tracts four gas oil and leases on ing approving royalty. per of a 16 cent state lands on the basis 2/3 made were bids that there complaint alleges substance royalty and also bids per calling lands for 16 cent on the 2/3 separate bids on royalty. calling per There cent 12% aggregate were bids in the each of the four tracts of land. The $39,040 and 16 as follows: One bid was a bonus of 2/3 $68,000 and a bonus of royalty, cent and the other for allegations of the royalty. Thus it will be seen from as the complaint for a bonus increased the amount bid conversely as a bonus royalty decreased, and the amount bid decreased as the increased. complaint. general

The court overruled a demurrer demurrer, judg- suffered Defendants elected to stand them, appealed from against ment to be entered and have judgment. *3 improper, relies contending that the leases are

Relator, in 61, by chapter 81-1704, as amended 1947, on section R.C.M. gas in all and leases provides that oil 1951, of which Laws in addition to the by shall be reserved the state there granted produced, and that such gas and royalty in the oil rental a and one-half centum “royalty be twelve reservation'shall (12% ) per centum (12% %) gas, twelve and one-half % casing-head oil average production of or portion of the on that exceeding 3,000 producing not barrels for each well gasoline month.” for the calendar that the amendment board contend to for defendant

Counsel per cent, at is un- 81-1704, fixes the which section rely article XVII They on section of the constitutional. providing disposal after for the of state which, Constitution “® * * and none of lands, limitation: such contains this therein, land, any disposed estate or interest shall ever be nor general providing except pursuance in laws such dis- estate or inter- market value of the position, nor unless the full may as be disposed in such manner of, est to be ascertained provided by safely to the state.” law, paid be secured chapter that the vice of

And counsel for the board contended 1953, chapter 122, by passage was accentuated pro- gas long as which authorized leases for as oil prior pas- to paying quantities. duced Leases executed (10) sage chapter exceeding not ten period were “for a (20) years twenty long during the term of as thereafter leases, as years oil commencing with the date of such lease or quantity shall gas quality of commercial in commercial thereby.” produced be R.C.M. from the land covered 81-1702, (2), in 1953. And section subd. before amendment one-half royalty reservation, less than twelve and “shall be percent (12%%) 81-1704. And whole thereof.” Section authority given expiration at the leases board was of such highest responsible re-leasing advertise to the land for to bidder. Section 81-1715: much of counsel as

There is discussion the briefs deter legislature whetherit is Land Board that must or the of the state ascertaining mine the method of the market value The lands, therein, disposed of. interest that is be question to this is found in the Constitution. answer that' the market value XVII, provides article disposal upon therein” its interest any “estate or lands and may provided be manner as in such shall be “ascertained ’’ leasing of the Board has the control Land And while the law. “under state, it must do so of the school lands sale of the ’’ by law. may prescribed be as and restrictions regulations such Const, Act contains 4. XI, art. Mont. ‘‘ may prescribed words as language. same practically Legislature. State provided by law” means (2d) *4 106 Mont. 79 Pac. Weir, Wilson v. ex rel. Legisla- it is the Constitution that under our seen Thus it is governing must fix the rules Land Board and not ture arriving method of land, and the leasing of state the sale and thereof. at the market value existing laws that under in is no merit the contention

There being not obtained. lands is market of the the full value then, since until 61, and ever passage chapter Before the royalty with a arose, leases been executed the instant case had receiving the cent, at the time of per reservation 12% sale offered for here other lands were bids on the lands involved leases were royalty cent, and per or lease on a sales 12% market was obtained that basis. If the full value made on maxi- royalty running for a carrying per a cent leases 12% why understand at twenty years, mum then it is difficult automati- twenty-year period the market value end of the does cally words, In other the duration of the lease increases. question of appear any relationship to have what royalty the full market should obtained in to receive order value of the land. royalty carrying the noted, As the bid before 2/3 carry- $39,040, the one whereas a bonus of

cent submitted $68,000. a ing bonus submitted say for sure one can highest Which and best bid? No is the drilling in to ascertain highest is the bid advance which oil-bearing should be noted that sands. It whether the land has average throughout nine, on an eight wells out of drilled oil Bulletin, American Association of country, dry holes. are III, 1193. In page Yol. No. Table Geologists, Petroleum dry paid is fact in excess holes, whatever bonus is ease of of the develops to have been the actual value of what market per- leasing purposes. If estate interest in the land oil legislative under method for or leased chance some are sold value, legislature turns to be the market less than what out concluding plan that the as a whole would was warranted average, bonus as an procure the market value any, shortages, producing if dry from holes would offset arbitrarily, capri- acts acreages. Of course if reason, fraudulently might then the ciously, or without courts *5 70 Chapter 61, royalty per

intercede. which fixed the at'12% cent, passed single dissenting was without in either house a vote (H. 1951, page 163; 347), chapter 122, page J. S. J. 1953, passed (H. by 57 to 30 J. the House a vote of 1953, page 152), passed by by and was the Senate a vote of (S. 340). 1953, page J. fraud, charging Legislature

There is no basis the with it arbitrarily capriciously had acted or without in passing act, particularly chapter reason either 61 which is the one under attack here. It difficult situa- was faced with a duty disposing tion. It discharging had the two trusts in state lands. Constitution, stated, imposes upon as above the Legislatureobligation the to obtain the full market value ‘ ’ ‘ ’ every of the land but of estate or interest therein. When disposal

lands are leased on a rental there is a of an estate basis XVII, meaning or interest therein within article the of section Cooney, of our Rider 94 Mont. 23 Pac. Constitution. v. (2d) 261. When oil a and a lands are leased on basis for an estate bonus, here, the bonus constitutes rental cash as Sheridan, Dickgraber v. or interest in land. State ex rel. the leas (2d) Hence, the 447, 254 Mont. Pac. full market value ing obligation is under to obtain the oil lands basis, a as well disposed interest rental of the estate or under itself, gas in and as the sale of the land the oil rental for can no sacrifice of the additional the land. There be time, 1, of article royalty without, violating at same renting. disposed XVII, to the interest per cent dilemma, Legislature fixed Paced with this 12% sold, interest when the royalty as estate or the value month, 3,000 and al- production barrels does not exceed on a rental or bonus basis estate or interest leased lowed the bidding. subject competitive When to be made the royalty, was, which Legislature fixed throughout rate Mon- many been, prevailing years had by the Federal also the rate used Govern- tana, and which was there can generally, corporations ment and individuals fraudulently, arbitrarily, it no contention that acted be valid judgment. reason or capriciously or without legislative enactment liberty to strike down We are not at one. a better might draft simply we think we because plan alternative faulty, Likewise, legislative plan be if though evil, even not correct proposed as a substitute would a plan authority substitute the Board has we assume objection might be less own, has not. At most it of its which it legisla degree if faulty it too be in some able, but would held to so. plan tive *6 maximum is royalty as a words,

In other if cent, but, except for illegal unlawful, then so is 2/3 If degree. lesser percentages royalty to a the difference in only sound, then the of counsel for defendants be contention competitive bid- way to “market value” would be to have assure But that any bonus. ding percentage on the without plan plan under such a the state would have its faults because $5,790,423.32 had to distribute to never would have Dickgraber public in ex rel. schools involved the case of State market Sheridan, supra, requiring and the full v. Constitution disposed value of the or interest of on a rental or bonus estate not provide basis would be violated. Of course if the law does obtaining good the full market lands then the value of the concern, it Legislature faith of the is a matter of no but here legislative plan has not been shown that the fails to obtain full market value of the state lands sold or leased oil and gas purposes. that be devised to obtain and fast rule can

There is no hard gas purposes and value of lands oil the full market all others. exclusion of necessarily lodged in must discretion

Some determining full market fixing in method of if, when, by experience that it determines one value, its it in discretion make a than another method is better words, by holding present that the method ob change. In other it be under lands, is not to tains the fnll market value of necessarily This it is the exclusive method. result stood any given tract of land speculative follows from the value no one knows gas purposes where being disposed of for oil and bearing the land has oil drilling in whether for sure advance of expected. or, so, production can be sands if what amount of in overruling demurrer and en- right in The court was judgment tering for relator. judgment affirmed. HARRISON, MR. JUSTICE

MR. CHIEF JUSTICE CASTLES, concur.

MR. JUSTICE BOTTOMLY: I dissent: 122, chapter interpret chapter 61,

As I Laws of with the Constitution both are conflict Montana, the fundamental law of the Ordinances of which is this state. specifically February 22, 1889, Act, approved by this granted lands part, “That all

provides, advertising public sale after at disposed of shall-be act # ’> * * supplied. Emphasis Constitution, requires XVII, Montana article by Con- granted to the state that have been the state all lands of in trust state, and shall be held lands of the public shall gress *7 purposes for respective for the disposed of people, to be land, nor such granted, and none of they have been which disposed except therein, shall ever or interest estate nor disposition, for such general providing laws pursuance disposed interest the estate or market value unless full provision is man- state. This paid safely secured Const, Ill, section art. datory. Mont. acts of legislative the above-mentioned neither of Under estate or interest value of the full market 1953 is the 1951 or Mon- of, secured to the State disposed lands the school

73 tana. public The record shows that at sale some bidders were willing statutory-restricted to bid than royalty more reserva- tion for arbitrary the lease. Where the statute sets an reserva- per tion of public cent royalty, and at auction sale the 12% fact able, willing bidders are and bid cent 2/3 lease, for the conclusively demonstrates that the royalty provided by only statute of is not full market value of the being disposed state’s interest of, nor can the full correctly market value be determined under said enacted laws. It by free, open, unrestricted, competitive bidding at a public auction sale that the true value or full market value of the state’s interest be determined and realized. Com- pare State ex rel. Galen v. Court, District 105, 117, Mont. 112 Pac. power 706. While the is left with the enact regulation laws for the and restriction leasing state yet lands, must, such laws in adopting regula- restrictions tions for purpose leasing, clearly unequivocally pro- system vide a that will, without or uncertainty, doubt secure to people of the state the full market value of these lands or any interest 1, therein. Section XVII, supra. art. This the Legislature has failed to do enacting chapter 61, Laws of chapter 122, Laws of 1953.

It urged has been that the case of State of Montana ex rel. Johnson v. State Board of Land Commissioners, 348 U. S. S. Ct. 99 L. Ed. 750, question, settled this but there Supreme only found, Court petition for writ of'

certiorari, B..G.M. (2d), 81-1702 was not incon- sistent Supreme with “federal law.” The Court did not of pass course upon question whether the statute was or was not in conflict with our I provisions' Ordinance or the of the Constitution of Montana. of the Act has been amended

Congress, giving the consent of the United States to the chang- ing letter, word, spirit of the and intent section, of that Legislature purportedly our erroneously attempted to ac- cept by proceeding such amendments to enact legislation such

74 chapter 84, chap- chapter 8,

as Laws of Laws of 1939, 1933, proposed ter submitting without the 18, first 1949, changes required people Montana, to the of State of the by the the En- Constitution, I, Montana supra, Ordinance abling right the people Act. Thus were the of this state denied reject to either accept proposed. the amendments In this out our pointed connection it should that State I, supra, peo- Constitution and to Ordinance was submitted ple rejection approval of the same was Montana approved general people of Montana in ratified purpose election for that on October 1889. I, supra, the restriction

Section sixth Ordinance contains judicial departments legislative, on the the executive and the government “That the ordinances of our state as follows: United without consent this article shall he irrevocable Emphasis people State Montana.” States and the said supplied. the low- government, highest

All our from the to officers of legally morally bound est, are creatures of the law and are obey only supreme power republican it. It is the in our to justice not system government. Courts of are established citizens, to decide only to between but also decide controversies government. Compare and their controversies between citizens Ed. Lee, S. Ct. L. United States v. U.S. 1 27 yield the land. must fundamental law of Any statute yield to statute. The Constitution does provisions of provision and the foregoing constitutional disposal by the power of upon the limitations I are Ordinance upon the executive and binding equally and are Pac. Estate, Mont. re 561, 576, In Beck’s judiciary. See 784, 1057. agreement I the trust contains Ordinance seven granted our the lands so to state of Montana people upon accepted the terms and were Enabling Act are

under specifically provided. It is Enabling Act in the conditions amd Enabling Act have amendments be noted .while States, so-called been tbe United none of the consented to submitted to amendments of the Act have ever been rejection man- people approval of Montana for as made datory by provisions I. section sixth of Ordinance *9 any I in harmony Ordinance are and do not conflict with with provision Constitution, binding of our therefore State and are upon executive, all legislative judiciary, the and as are other mandatory provisions It of our Constitution. will be noted I Ordinance is unrestricted is permanent, and while Ordinance by II is restricted section 12 thereof. majority

The I, rule that an is ordinance such as Ordinance permitted required by where enabling ours, an act such when people attached to and submitted to the of a state to- gether with the constitution approval rejection, when approved part becomes a basic, fundamental, of the and su- preme this law of state. Thompson Kenney, State ex rel. v. 9 Mont. 733; Pac. Crosby, Stewart v. Tex. 548. supreme beyond law of the state the legis- control of the C.J.S., lature. 16 Law, Constitutional 11, pages 63, It should be opinion noted that the in Thompson Kenney, v.

supra, year was written the next after the Ordinances and Con- stitution by were people ratified the and opin- Montana the ion in Crosby, Stewart v. supra, promulgated years was a few after Texas was admitted to the Union. The authors of those opinions well were aware of meaning the intent and pro- the visions of the Ordinances and Constitution there involved. question no

There can be a convention, constitutional acting by assembled and as directed an enabling act, for the purpose framing a constitution and ordinances for a new state, has unquestioned power the inherent and right and adopt frame and ordinances to be submitted with the constitu- people rejection. tion to the for either ratification or peo- ple possessors of the state are the of and the foundation of supreme authority power flowing and with a sovereign people, by approved and such when may ordinances so by and did place beyond I Ordinance control of the power authority modify, change and amend the question people Act without of the state. submitting the “All of article III declares: of our Constitution political power all people; is vested from the derived government right originates people; with the is founded only, upon solely good their for the will and is instituted the whole.” discussed, being

Such an I ordinance as Ordinance herein part dignity law, may ignored our nor fundamental by any abrogated legislative act more than of the other mandatory provisions ignored of our Constitution Legislature, Judiciary. Executive The Ordi- lawyers by outstanding Constitu- nances were written Assembly, approved and then were submitted to tional They carefully purpose people. prepared caring most protecting people’s valuable and sacred was, permanent and irrevocable is, interests. Ordinance I *10 is changed by language the The people until of Montana. it had simple, certain; interpretation. it needs If direct no surrendering power that this to people been the intended Legis- chang Enabling their the terms of the Act to will of the lature, easy so, it said but the very have so to have would been people provide, but, contrary, people did did not so on the the the con- that this Ordinance shall be irrevocable without declare the the Montana. This was people sent of said State of the by people themselves sovereign people, framed act of highest legis- acting constitute people so themselves. conclusion can otherwise body. think no reasonable We lative that or hold may rightfully declare court This be reached. sur- merely implication people by or by merely nonuse they expressed their to them right a so valuable rendered one and terms as to the vigorous plain in intention any change or proposed consent to giving their method I, part a which is be noted that Ordinance It should changes. it Montana, unique and is differ- is law of fundamental or any ordinances from other in its terms and restrictions ent by other states. adopted schedules and slow method urged is a cumbersome

It has been that it people. be submitted to the requiring question in operate under arguments all such we short answer to haste, or government decree form of where constitutional fiat interpre- place in the expediency has no are not tolerated statutory provisions ordinances or of tation of constitutional may I A of Ordinance provision acts. of the Constitution or ignored. sleep but it not be my legislative no act foregoing reasons, opinion,

For the in approve operate or under purports accept is valid which ap- proposed change or amendment of Act proved February contemplated change until such duly regularly amendment first has been submitted to rejection, people approval State of Montana for their being as approved Congress well of the United States mandatory by chapter 61, as is I. made Ordinance Therefore chapter 122, Laws of being conflict with I, supra, the Constitution of Montana and are Ordinance void. my

It opinion judgment is therefore that the of the district reversed; injunction court should be that the heretofore issued and that dissolved the action the district court should be ordered dismissed. ADAIR:

MR. JUSTICE Bottomly. Mr. foregoing opinion Justice I in the concur