Burguete v. Del Curto

Juan Burguete, plaintiff-appellee (hereinafter to be called plaintiff) brings suit against Arthur Del Curto, defendant-appellant (hereinafter to be called defendant) seeking to establish an interest in a lease to a certain section of state school land situated in Guadalupe County, and to enjoin defendant from depriving plaintiff of access to such section and the water and improvements thereupon. Judgment was in favor of plaintiff and defendant appeals.

It appears that in 1928 one Eugenio Perez and plaintiff Burguete together purchased an area of land in Guadalupe County adjoining other and separate holdings of the parties, known as the Rooney ranch, and included in this ranch was a section of common school land which they took under lease. This section of school land was leased by Perez and Burguete jointly from the State of New Mexico through the State Commissioner of Public Lands, hereinafter to be referred to as the "Commissioner." In 1937 Burguete being indebted to Perez relinquished his interest in said lease permitting the Commissioner to issue a new lease in the sole name of Perez. This was not an assignment to secure an indebtedness, under 1941 Comp. Sec. 8-835, which could have been done (Lusk v. First National Bank of Carrizozo, 46 N.M. 445,130 P.2d 1032), but was an outright relinquishment to the state. Perez and Burguete continued nevertheless to share in the use and enjoyment of the school section and the improvements thereon until November, 1939, when defendant Del Curto purchased the ranch from Perez and secured a new lease on the school section in question. Burguete continued for a time to pay Del Curto for one-half of the upkeep, taxes and lease rental as he had done after Perez became the sole owner of the lease and before the sale to defendant; but in the year 1942, defendant Del Curto, who had purchased the ranch from Perez, including Perez's interest in the school section, and had taken a new lease thereupon in his name, and who had, with the consent of the Commissioner, fenced off the school section, then advised Burguete that he had no right therein and would no longer be permitted the use of the water or improvements.

The jurisdiction of the Commissioner not ever having been invoked by any of the transaction, as between any of the parties, touching upon the use of the lands by one not a party to the lease, and himself a stranger to the Commissioner, and this proceeding not arising out of a contest action before the Commissioner, and the Commissioner not being made a party hereto, can this suit be maintained?

Much is said by appellee about how Perez, defendant's predecessor in title, or the former lessor, and plaintiff managed the lease as between them during the time these two were operating their respective ranches, using jointly the school section (which since 1937, was leased only to Perez) and before defendant Del Curto purchased the Perez ranch and took a new lease from the Commissioner in his own name. Also, something is made of the fact that Del Curto had actual notice of the arrangements by which Burguete was using the facilities of the school section at the time he, Del Curto, purchased the Perez ranch and secured the new lease from the Commissioner. It even appears that the defendant himself for some two or three years after 1939 permitted plaintiff to use these school section facilities of water, corrals and buildings through plaintiff's sharing with him, the lessee, the expense of taxes, lease rental and upkeep. But this ended in 1942 when some dispute arose between the parties as to whether plaintiff was fairly bearing his part of the cost of maintenances, etc. Defendant then secured permission from the Commissioner to fence off the school section from access to other cattle and thereafter stood upon his alleged rights as the sole lessee. The Commissioner had never given consent to the use of the school section to any other than the lessee himself, defendant Del Curto, although it does not appear that he had objected to such use, or that he knew of it.

An agreement was made between Perez and Burguete of the date of June 11, 1937, and after the two had dissolved partnership, with reference to the common use of the water and improvements on the section in question for livestock from each of their adjoining ranches. The Commissioner was not a party to this or any other agreement relative to such joint use of the school section or the facilities thereupon.

The court found that plaintiff was not a sub-lessee under defendant's lease from the State and that the Commissioner had never given his consent to the grazing of any of plaintiff's livestock upon said school section or any consent to occupancy or enjoyment of use by anyone excepting the lessee, Del Curto.

It is obvious that any attempted adjudication of rights as between plaintiff and defendant would of necessity affect the rights of the owner of the land, the State of New Mexico. We have said: "and the Commissioner not being a party and not having had his jurisdiction invoked in the first instance, we are unable to see where the district court had jurisdiction to determine any rights as between the parties touching upon the question of a renewal or a new lease of the state land in question." Ellison v. Ellison, 48 N.M. 80, 146 P.2d 173, 174.

Even if it may be said that the question here presented, because of the peculiar facts, or equitable nature of the suit, is not one as to which the Commissioner's jurisdiction should have been first invoked under 1941 Comp., Sec. 8-863, a question we need not, and do not, now decide, certainly, in any event, the jurisdiction of a court of equity may not be invoked absent this necessary and indispensable party, the Commissioner.

The Commissioner is not a party to this litigation; and, he was never consulted about any of the arrangements whereby even the temporary use of the lands so leased could be parceled out and used by another than the lessee; nor had he any knowledge of the practice which plaintiff would now say constitutes a joint lease with himself occupying the status of a co-tenant.

It's well settled in New Mexico that under the Enabling Act, our Constitution and the statutes based thereupon, the Commissioner of Public Lands has complete dominion, which is to say complete control, over state lands. State ex rel. Otto v. Field, 31 N.M. 120, 154, 241 P. 1027, 1041; Dasburg v. Atchison, T. S.F. Ry. Co., 45 N.M. 184, 191, 113 P.2d 569, 573. This "dominion" is, of course, subject to the restrictions imposed by the Enabling Act, the Constitution, and the statutes, and the manner of its exercise is subject to review by the courts. We said in the last above mentioned case in speaking of the trust feature involved in the Commissioner's control of public lands in New Mexico under the Enabling Act and the Constitution, that "the act sets up the trust, provides for the disposition of these lands only in the manner provided by the act, confines the disposition thereof by ``sale, lease, conveyance, or contract' as therein provided, and makes null and void any other manner of disposition. * * * For a discussion of and decisions upon various phases of the problems that have arisen under this trust, see State ex rel. Otto v. Field, supra; State v. Llewellyn, 23 N.M. 43, 167 P. 414; Elliott v. Rich, 24 N.M. 52, 172 P. 194; Dallas v. Swigart, 24 N.M. 1, 172 P. 416; American Mortg. Co. v. White,34 N.M. 602, 287 P. 702; Hart v. Walker, 40 N.M. 1, 52 P.2d 123; Lea County Water Co. v. Reeves, 43 N.M. 221, 89 P.2d 607; Terry v. Midwest Refining Co., 10 Cir. 64 F.2d 428." See also American Trust Savings Bank v. Scobee, 29 N.M. 436, 454, 224 P. 788, and Davidson et al. v. Enfield, 35 N.M. 580, 3 P.2d 979, 980.

The case of Davidson v. Enfield, supra, would afford considerable support for the contention that very broad latitude is given the Commissioner in the statutory contest proceeding in determining rights between parties claiming "any right, title, interest * * * in or to any state lands, covered by any lease, contract, grant or any other instrument executed by the commissioner * * *." There, a like, though not identical, question was involved and we said, in upholding the Commissioner's jurisdiction to entertain the contest and determine issues as between parties other than the Commissioner, which issues involved no ruling of the Commissioner, nor any of the records of the land office, and no instrument of assignment within his possession or control, that "the statute should be viewed in the light of the very broad powers conferred on the commissioner in the administration of the public lands of this state." Whether the facts in this case are appropriate to invoke such powers, or jurisdiction, we need not, and do not decide.

And, whether the Commissioner could be made a party to such suit without his consent, we, likewise, need not, and do not decide. We know that in State ex rel. McElroy v. Vesely, 40 N.M. 19, 52 P.2d 1090, mandamus was employed without question of its appropriateness if it could be said that a clear legal duty rested upon the Commissioner to respect a clear legal right. See also American Trust Savings Bank of Albuquerque v. Scobee, supra, in this connection.

It has been suggested that some courts have announced a rule to the effect that where the State should be a party, but cannot under the law be sued and does not voluntarily come in, it need not be joined as a necessary party. Whether or not some courts have applied such a rule, we have foreclosed its application in New Mexico under our decision in American Trust Savings Bank of Albuquerque v. Scobee, supra. See this case, 29 N.M. at page 453, 224 P. 790, where we said that:

"* * * all persons, whose interest will necessarily be affected by any decree is (in) a given case, are necessary and indispensable parties, and the court will not proceed to a decree without them. Where such necessary parties cannot for any reason be brought before the court, there is nothing to be done except to dismiss the bill, for the suit is inherently defective."

This is not a case where the rights of the state are merely indirectly involved — if that would make a difference under the present circumstances — a distinction likewise noticed in the Scobee case, supra. We there said: "The state, before its contract can be cancelled or reformed, must be before the court and in these circumstances the state has not given its consent to such action."

The Commissioner, having complete control, dominion, over these lands, strangers to the lease, "mere trespassers" they were designated in the Dasburg case, supra, cannot, by dealing with state lands and wholly ignoring the Commissioner, invoke the jurisdiction of courts to determine alleged rights in property which the indispensable, sole controlling, agency, the Commissioner, has had no part in establishing, where he is not made a party to the suit, or where the claim relied upon was not first asserted in the statutory contest proceeding before the Commissioner, Ellison v. Ellison, supra. It is much like "A" and "B" going upon the lands of "C" without his knowledge or consent and themselves parceling out the acreage as between the two, and then asking the courts to adjudicate their rights while wholly ignoring the right of "C," the landlord, to be heard.

Defendant appropriately called to the attention of the trial court the error into which it was being led both by his request for a conclusion of law and by his motion to dismiss because of the absence of the Commissioner, an indispensable party. The motion should have been granted. That an indispensable party defendant has been omitted may be raised at any time. Miller v. Klasner, 19 N.M. 21, 140 P. 1107.

It cannot be said that the Commissioner would be bound by an adjudication of rights as between the parties to this suit, and, if he could not be bound, any aid attempted to be afforded by the judgment giving plaintiff an equal right with defendant to use the water and improvements on the section in question would be wholly ineffectual. It would be adjudicating rights of a third party in a lease contract made between the State and defendant with an essential party, the lessor, a total stranger to the suit. This cannot be done. American Trust Savings Bank v. Scobee et al., supra; State v. Fields, supra; Sanders v. Saxton,182 N.Y. 477, 75 N.E. 529, 1 L.R.A., N.S., 727, 108 Am. St. Rep. 826.

Plaintiff claims that defendant holds the lease from the Commissioner of Public Lands under some kind of a trust relationship with plaintiff as to an equal undivided interest therein which would give an equal right on the part of both parties to enjoy substantial grazing and water rights upon the land. The Commissioner made a contract and lease with Defendant Del Curto. It is not claimed that the Commissioner himself had any knowledge or information as to any agreements between the parties to this suit or others as to the rights of others than the lessee himself to use and enjoy the privileges of grazing and water use under the lease. Certainly the rights of the State of New Mexico are involved in the suit since it owns the section in question. It is not to be doubted that the Commissioner could have cancelled for sub-leasing (Lusk v. First National Bank, supra) or permitting trespass without authority. And this would be a matter between the State and the lessee. Hart v. Walker, supra. The trial court found, however, that there was no sub-leasing in the instant case, but that plaintiff under the circumstances, became a joint owner of the lease, although the Commissioner had no knowledge of the circumstances which would obligate him to modify the lease in this respect and accept such plaintiff as a new party thereto.

It could not be said that the Commissioner would not be concerned as to who used the state land. We know that the lessee is obligated under the law to "protect the land leased by him from waste and trespass by unauthorized persons, and failure so to do shall subject his lease to forfeiture and cancelation," 1941 Comp. Sec. 8-705; so it must be admitted that the state has an interest and must not be denied the right to protect that interest to the extent that overgrazing and trespasses by others than the lessees, or others unauthorized to use the land, may not be suffered.

Simply because the state might consent to the grazing of the cattle of the lessee, under his contract, it does not necessarily follow that the lessee may, without the Commissioner's consent, sublet or, under all circumstances, permit any and all others to make use of the land. It is well known that overstocking for watering purposes may be just as harmful to grass lands as over-stocking and indiscriminate trespass for simple grazing purposes. In any event, the Commissioner, representing the state, as landlord, would be entitled to resist any effort at either dividing up or alienating any rights conferred under the lease, as he would be entitled to cancel out for an unauthorized subletting.

The Land Commissioner cannot thus have forced upon him a tenant whom he might not want. Certainly this court, in the absence of the Commissioner, assuming he could at this point, or at all, be made a party to the suit, will not approve a decree "modifying" the terms of the lease so as to show another, a total stranger to the Commissioner, now to have a half interest therein.

It was said in Cook v. Basom, 164 Mo. 594, 65 S.W. 227, 228:

"It is a fundamental principle in equity practice that all persons materially interested, either legally or beneficially, in the subject-matter of the suit, shall be made parties to it, either as plaintiffs or as defendants, so that there may be a complete decree, which shall bind them all. The subject-matter of this suit is the ownership of a lease from Caffee et al. to defendant, Basom. Caffee and his co-owners, the lessors, are not made parties. Defendant has insisted at every stage of the proceeding that they are necessary parties, because of their interest as owners of the leased lands, and because of their right to have the stipulations of their lease performed by their lessee, and their right to select their lessee. This the circuit court denied, and its refusal to require Caffee et al. to be brought in is assigned as error. We think defendant is right. By the decree the plaintiffs are substituted as lessees to Caffee and his co-owners without their consent, and without an opportunity to be heard in a matter of vital interest to them. In this particular case they have forced upon them tenants who had only a short time prior to this suit forfeited a lease to this same land for failure to observe the obligations of their lease, and are compelled to accept the same defaulting lessees in the place of the defendant, to whom they had leased the land. We think it would be hard to find a case in which the real party in interest in the subject-matter of the action had a stronger claim to the protection of the court than the lessors, Caffee et al., have in this case; and we consider it reversible error, in not requiring them to be made parties, and entering a decree affecting their rights without an opportunity to assert and vindicate them."

Defendant strongly urges that in any event, considered upon the merits, and aside from the particular jurisdictional question involved, plaintiff's claim to an interest in the lease, or in the well and improvements thereon, must fail. In view of the disposition here made of the case upon the ground that it is not properly before us, we refrain from considering or deciding any other question.

The judgment is reversed with direction that the cause be reinstated upon the docket and that the judgment appealed from be set aside and the cause dismissed; and it is so ordered.

SADLER and LUJAN, JJ., concur.