Every grazing lessee who desires a new lease on the same lands for a term not exceeding five years shall make and file with the commissioner his application for such new lease on or before August 1st next preceding the expiration of his existing lease; and any and all other applicants for a like lease on such land shall make and file with the commissioner their applications on or before September 1st next preceding the expiration date of such existing lease. If more than one such application to lease be filed as herein provided, one of which shall be that of the holder of the existing lease, the commissioner shall lease such land to the bona fide applicant offering the highest annual rental therefor, if to anyone; except that the commissioner, before so doing, if another bona fide applicant shall offer a higher rental than that offered by the holder of the existing lease, shall give written notice to the holder of the existing lease, immediately after September 1st next preceding the expiration of such lease, of the name and address of the applicant offering the highest annual rental and the amount of such offer, and if the holder of the existing lease, on or before September 30th next ensuing, shall meet such offer and has, in good faith, complied with all the requirements of his existing lease, the lease shall be awarded to him, if to anyone.

History: Laws 1937, ch. 42, § 2; 1941 Comp., § 8-846; 1953 Comp., § 7-8-51.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Cross references. — For preference in leasing to departments of state for purpose of erecting state buildings, see 19-7-27 NMSA 1978.

For preference to occupants of lands acquired by state, and to persons domiciled or paying taxes therein, see 19-7-53 NMSA 1978.

For lease preference rights of municipality, county or school district, see 19-7-56 NMSA 1978.

Condemnation of leased lands. — Defendant lessees, in a condemnation suit by the federal government, holding grazing leases of state-owned tracts, have compensable interests therein, for which they should receive, upon distribution of the proceedings, the condemnation award for the lands they have leased from the state; furthermore, the leases of the state-owned tracts executed or renewed by the state after July 1, 1970, created in the lessee a property compensable in these proceedings. United States v. 41,098.98 Acres of Land, 548 F.2d 911 (10th Cir. 1977).

In a condemnation suit brought by the United States against state grazing lease held by appellees for a five-year term as provided in the New Mexico Enabling Act, and issued under statutory authority, with a preference right for renewal under this section, which for all practical purposes was an absolute right as against other applicants, the court approved a compensation formula including both the state-owned lands leased by the defendants as well as the fee lands of the defendants as one ownership unit. United States v. 41,098.98 Acres of Land, 548 F.2d 911 (10th Cir. 1977).

Effect of renewal on mortgage. — As between mortgagor and mortgagee, a renewal of a grazing lease was to be regarded as merely a continuation of the original lease, and the operation of this principle was not defeated by the fact that the lease assigned contained no covenant of renewal. Scharbauer v. Graham, 1933-NMSC-043, 37 N.M. 449, 24 P.2d 288 (case decided under former law).

Effect of expiration during cancellation suit. — Mere fact that lease expired prior to decision in the district court did not render moot the question presented by a contest seeking cancellation of the lease by reason of a sublease in violation of its terms, because of the preference right of the holder of the old lease to a new lease. Lusk v. First Nat'l Bank, 1942-NMSC-056, 46 N.M. 445, 130 P.2d 1032.

Right of renewal. — Preference right of renewal under former law referred to all leases issued by the public lands commissioner, including leases of five years and less which the commissioner could make without advertisement and sale at public auction; in case of conflicting rights, the preference was to the one holding the superior right in the judgment of the commissioner. State ex rel. McElroy v. Vesely, 1935-NMSC-096, 40 N.M. 19, 52 P.2d 1090 (decided under prior law).

Part of lease. — Former C.S. 1929, § 132-120, giving preference right of renewal, was a part of a state land lease. State ex rel. McElroy v. Vesely, 1935-NMSC-096, 40 N.M. 19, 52 P.2d 1090 (decided under prior law).

But not absolute. — Although former C.S. 1929, § 132-120 gave to good-faith lessee of state lands preferred right to renew lease, it was not the intent of the legislature to give an absolute right of renewal, which would run counter to the Enabling Act. State ex rel. McElroy v. Vesely, 1935-NMSC-096, 40 N.M. 19, 52 P.2d 1090, explained in Ellison v. Ellison, 1944-NMSC-012, 48 N.M. 80, 146 P.2d 173 (decided under prior law).

Waiver of preference. — Decedent's right to renewal of lease of state lands passed to administrator, who waived such right when he refused to accept renewal, knowing that lease assignment had been fraudulently obtained from decedent's heir; also, such refusal cut off the right of decedent's heirs to claim lease, either through preference or as beneficiaries under lease. Hart v. Walker, 1935-NMSC-089, 40 N.M. 1, 52 P.2d 123.

Mandamus not available. — Under former law, the lessee's right of renewal did not justify mandamus against the public lands commissioner, which right had to originate in the constitution or statutes; the Enabling Act, § 10, did not give the lessee absolute right. State ex rel. McElroy v. Vesely, 1935-NMSC-096, 40 N.M. 19, 52 P.2d 1090.

Notice. — Those who may wish to apply and bid for a lease on lands covered by an expiring lease are deprived of "notice" in the case of a consolidation of leases by relinquishment and reissuance. 1969 Op. Att'y Gen. No. 69-67.

The "notice" which is given is simply contained in the records of the land office showing that a five-year lease has been granted and, in the normal course, will expire under its terms at the end of that time. 1969 Op. Att'y Gen. No. 69-67.

Law reviews. — For note, "Administration of Grazing Lands in New Mexico: A Breach of Trust," see 15 Nat. Resources J. 581 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 73A C.J.S. Public Lands § 197.