Miller v. Corporation Commission

SIMMS, Justice,

dissenting:

I must respectfully dissent. I cannot agree with the majority’s conclusion that the sealed-bid process is not reflective of open market conditions. The comparison to sales pursuant to eminent domain is particularly fallacious. It is not, as the majority suggests, the absence of face-to-face negotiations that makes condemnation sales incompetent to show fair market value in Oklahoma. In condemnation, the owner is forced to sell. It is this element of compulsion that so alters the economic forces in an open market.

In Durell v. Public Service Co. of Oklahoma, 174 Okl. 549, 51 P.2d 517 (1935), we distinguished a sale by condemnation from one on the open market, and said:

“In order for sales of other pieces of land to serve as an indication of the market value of the land in question, it seems *1010very clear that, to have that tendency, those other sales must have been made under circumstances where the vendor was not compelled to sell at all events, but was at liberty to invite competition among those desiring to become purchasers."

Those are the exact circumstances present when the state leases property by sealed bid pursuant to 64 O.S.1971, § 281. The state invites competition through bids, from all those who desire to purchase. The state is free to reject all. As the majority notes, prices of similar voluntary sales are admissible in Oklahoma to show fair market value (see notes 5 & 6). A sale by the state is no less voluntary merely because the state has the opportunity to choose from among several sealed bids.

To say that the sealed-bid process is the antithesis of the free market system is to ignore its basic purpose. It is designed to ensure that the state is able to take full advantage of all the benefits the open market offers. See, A.A.B. Electric, Inc. v. Stephenson Pub. Sch. Dist. No. 303, 5 Wash.App. 887, 491 P.2d 694 (1971); Sulphur Springs Val. Elec. Coop. v. City of Tombstone, 1 Ariz.App. 268, 401 P.2d 753 (1965).

Finally, the majority correctly cites the rule that values paid for comparable leases are only relevant when such sales occur on an open market, but then holds that state leases through the sealed-bid process may be relevant and admissible, although they do not represent a sale in the open market. I do not see how this conclusion can be logically supported.

I would hold that values paid to the state for minerals leased through the sealed-bid process are admissible to prove fair market value, to be considered by the Corporation Commission when offered, along with other competent evidence presented.

I am authorized to state that BARNES, V. C. J., and HODGES and DOOLIN, JJ., join in this dissent.