Citation. 642 P.2d 230 (Okla. 1982) · Read the full opinion →
Facts. Five Oklahoma statutes set the terms on which the Commissioners of the Land Office could lease and lend the assets of the school land trust — granted at statehood under the Oklahoma Enabling Act of 1906. Two capped the annual rent on preference-right agricultural leases at a fixed percentage of appraised value. Two capped the interest the Commissioners could charge on farm loans and on the unpaid purchase price of trust land. The fifth required that a sitting lessee in good standing be awarded a new lease without having to match or exceed competing bids. The Oklahoma Education Association, Inc., brought an original action in the Oklahoma Supreme Court challenging all five as unconstitutional; the Attorney General of Oklahoma intervened on the petitioner’s side, and school districts and groups of private citizens intervened as well. The respondents were Governor George Nigh and four other state officers sued in their capacity as Commissioners of the Land Office, the body that under Article VI, Section 32 of the Oklahoma Constitution manages the school lands ex officio.
Holding. The Oklahoma Supreme Court held all five statutes unconstitutional under Article XI, Sections 1, 2, and 5 of the Oklahoma Constitution and under the Oklahoma Enabling Act of 1906. The statutes required the trust to be managed for less than full value in order to subsidize a favored class: “Just as a State may not use school land trust funds assets to subsidize its highway construction program, a State may not use school land trust assets to subsidize farming and ranching.” OEA v. Nigh, 642 P.2d at 236. The state’s acceptance of the grant, the Court explained, made the acceptance provisions of the Oklahoma Constitution and the Enabling Act “an irrevocable compact between the United States and Oklahoma, for the benefit of the common schools, which cannot be altered or abrogated.” Id. at 235. And “[n]o Act of the Legislature can validly alter, modify or diminish the State’s duty as Trustee of the school land trust to administer it in a manner most beneficial to the trust estate and in a manner which obtains the maximum benefit in return from the use of trust property or loan of trust funds.” Id. at 236. The Court issued no injunction and ordered no money restored. It directed the Commissioners to exercise their powers so as to maintain the maximum return to the trust, id. at 238–39, but because the Commissioners and the citizens who had dealt with them had relied in good faith on statutes then presumed valid, the decision was made to “operate prospectively from the date this opinion becomes final.” Id. at 239. Justice Simms dissented, joined by Justices Doolin and Hargrave; Justice Opala concurred in part and dissented in part.
Why it matters. OEA v. Nigh is a leading state-supreme-court holding that a legislature may not require the trustee of a school land trust to take less than full value in order to benefit a favored class of private parties, and its “irrevocable compact” language has become a standard reference. The South Dakota Supreme Court in Kanaly v. State, 368 N.W.2d 819, 823 (S.D. 1985), cited OEA v. Nigh in cataloguing the formulations courts have used to describe the school land grant — “irrevocable compact” (Nigh), “solemn agreement” (Andrus v. Utah), and “contract” (State v. Platte Valley Public Power & Irrigation District). The case is doctrinally useful wherever a statute directs the trustee to lease, sell, or lend below market on a public-policy rationale, however sympathetic the beneficiary of that policy. Its remedial half is equally instructive, and cuts the other way: the Court declined to apply its ruling retroactively, so a trust that had been undercharging for years recovered nothing for those years.
Cited in. Courts outside Oklahoma have relied on Nigh in Kanaly v. State, 368 N.W.2d 819, 823 (S.D. 1985); Department of State Lands v. Pettibone, 702 P.2d 948 (Mont. 1985); Plateau Mining Co. v. Utah Division of State Lands, 802 P.2d 720 (Utah 1990); National Parks and Conservation Association v. Board of State Lands, 869 P.2d 909 (Utah 1993); and County of Skamania v. State, 102 Wn.2d 127 (1984) — most often for the proposition that a state administering school trust lands is held to the duties of a private trustee. This list reflects the opinions the Library holds and has read against their full text; it is not a comprehensive citator search.
Limits of this annotation. This entry is a scholarly summary, not a Shepardized citation analysis, and is not a substitute for current legal research. Readers should verify the case’s continuing validity in their jurisdiction before relying on it in litigation. Last updated: 2026-05-18.
