STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

August 20, 1975

Mr. George D. Kane
Commissioner of School and
Public Lands
State Capitol
Pierre, S. D. 57501

OFFICIAL OPINION NO. 75-142

Pasturing agreements on leased school or endowment lands

Dear Mr. Kane:

You have requested an official opinion based on the following factual situation:

Certain lessees of school or endowment lands are negotiating "pasturing agreements" whereby they pasture livestock during the summer for another party. The agreements call for payment to the lessee of a given dollar amount per animal unit month, which total payment exceeds the rental paid the state pursuant to the lease.

Your specific questions are:

1. Are “pasturing agreements” considered subleasing?

2. Are "pasturing agreements" that return a profit in violation of SDCL 5-5-20 and, therefore, subject to the penalties of said statute?

3. Do "pasturing agreements" have to be approved by the Commissioner of School and Public Lands?

4. Does the Board of School and Public Lands have the authority to adopt a regulation requiring a lessee to own the livestock pastured on state leased land?

SDCL 5-5-20 provides as follows:

5-5-20. Assignment of lease to be approved by commissioner -Subletting prohibited - Double damages for subletting. - The lessee of any school or endowment lands may assign his lease to any third person provided that before any such assignment of a lease shall be effective, the assignment shall be approved by the commissioner and a copy thereof filed by the commissioner. The subletting of any school and endowment lands by the lessee thereof for profit is hereby specifically prohibited and the commission of such an act shall be cause for the forfeiture of the lease and shall render the lessee liable to the state for damages in double the amount of the difference between the lease rental and the amount paid or agreed to be paid from the sublessee.

The above cited statute contains the only reference in SDCL 5-5 to subbleases or subletting. Therefore, additonal authority must be consulted to determine what constitutes a sublease within the meaning of the statute.

Words not defined or otherwise explained are to be understood as used in their ordinary sense or meaning. (SDCL 2-14-1.) A "sublease" has generally been held to mean an underletting by a lessee of part or all of the leased premises to a third person for a period less than the lessee's term. The persuasive elements of a sublease are exclusive possession, a fixed term, a fixed rental, and a right of re-entry in event the conditions are breached. 51 C.J.S. Landlord & Tenant § 376.

The Wyoming Supreme Court has ruled on the application and meaning of sublease pursuant to statute similar to SDCL 5-5-20. The Wyoming statute reads, in part, as follows:

(§ 24-109) If a lessee of state lands shall assign or sub-lease all or any part of the lease area, said lease shall be subject to cancellation unless such assignment or sub-lease is approved by the board Of land commissioners; ...

The Court held on several occasions that the mere act of a lessee in granting grazing privileges on leased public land to a third person for a consideration was not the execution of a sublease. Stauffer v. Johnson, 259 P. 2d 753; Rayburne v. Queen, 326 P. 2d 110.

However, it was also clearly stated by the Court that their decision was based on the lower court's findings of fact and that each particular situation must be considered to determine if the agreement does constitute a sublease.

Therefore, based on your factual situation, I am of the opinion that the answer to your Question No.1 is "NO." I do, however, want to emphasize the fact that each "pasturing agreement" must be scrutinized for terms and conditions which could in substance constitute a sublease.

Since the pasturing agreement in question cannot be considered as a subletting or assignment, the provisions of SDCL 5-5 are not applicable thereto. Thus, the answers to your Questions No.2 and 3 are "NO."

With regard to your Question No. 4, SDCL 5-5-3 reads as follows:

5-5-3. Designation of lands to be leased - Establishment of regulations. - The board of school and public lands shall designate from time to time such lands as may be leased for meadow and pasturage purposes only, also such lands as may be leased for either meadow and pasturage, or for agricultural purposes.

It shall establish such regulations as in its judgment shall be necessary in order that such lands may be leased most profitably for the state, and upon designation of the lands as herein provided, the commissioner shall proceed to offer the same for lease.

The statutory standard or guideline to be followed by the Board in adopting rules is that of providing a system of leasing most profitable to the State. If the Board in its discretion determines that prohibiting a lessee from grazing livestock other than his own will result in greater profit to the State, it would be authorized to adopt a rule so stating. Such a rule, if adopted, would have the probable effect of increasing the number of bidders at public auctions for leasing of school and endowment lands since the acquisition of grazing lands at a later date by means of subleasing or pasturing agreement would not exist. Presumably, the increased competition would result in higher bids and more profit to the State.

The answer to your Question No. 4 is “YES.”

Respectfully submitted,

William Janklow
Attorney General

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