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Director of the Office of State Lands & Investments v. Merbanco6/6/2003
, 35 So. 2d 125, the concurrence concluded the sale/exchange debate was mere semantics and the reason the proposed exchange must fail was because exchanges were not explicitly authorized by the terms of the Arizona Constitution. Id. at 598 (Corcoran, J., concurring in part). We believe that this conclusion is inconsistent with Wyoming law which provides the constitution is a limitation-not a grant-of authority. The omission of specific reference to exchanges in our constitution does not prohibit the state from entering into such transactions in the course of exercising its general police power. The concurring opinion in Fain also rejected the conclusion that an exchange is a sale because it would lead to the "absurd result" that a public auction is required, an outcome which would be impossible to implement. Moreover, the concurrence concluded, "An exchange by public auction is an oxymoron, certainly not within the intentions of the framers of either the 1910 Enabling Act or our constitution." Id. at 600 (Corcoran, J., concurring in part).
The dissenting opinion in Fain disagreed with the majority's logic that, simply because a value is assigned to one or all the properties, a sale occurs. The dissent carefully examined the authorities cited by the majority in support of that proposition and concluded they involved different facts and none addressed the exchange of public land for private land. It found, "A sale and an exchange are two different concepts with different legal significance attached to each; otherwise, the words would be synonyms for each other with no legal difference." Id. at 606 (Cameron, J., dissenting). We find the rationale of the Fain dissent more persuasive than the majority when considering what Wyoming's framers intended when they required a public auction for a sale of school lands.
The challengers' contention that "disposal" must be read so broadly as to include any means of conveying the state's interest in school lands does not square with other authorities which have approved of grants of rights of way in school lands, condemnation of school lands, and use of school lands by other public and nonschool entities, all without public auction so long as the respective school lands fund receives full value for the interest granted. For example, the United States Supreme Court held public sale provisions of the ArizonaNew Mexico Enabling Act did not apply to the state highway department's acquisition of rights of way and material sites on school lands. However, the court further held the state could not presume the value of the school lands was enhanced by the highway department's activities and was required to fully compensate the trust fund for the value of the interests acquired. Lassen v. Arizona ex rel. Arizona Highway Department, 385 U.S. 458 (1967). After considering the historical context of the enabling act and concluding the purpose of the public sale requirement was to prevent school lands from being "exploited for private advantage," the court saw "no need to read the Act to impose these restrictions on transfers in which the abuses they were intended to prevent are not likely to occur, and in which the trust may in another and more effective fashion be assured full compensation." Id. at 464. The holding in Lassen, which can be applied with equal force to exchanges, stated:
We conclude that it is consonant with the Act's essential purposes to exclude from the restrictions in question the transactions at issue here. The trust will be protected, and its purposes entirely satisfied, if the State is required to provide full compensation for the land it uses. We hold, therefore, that Arizona need not offer public notice or conduct a public sale when it s
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