Brams v. State

Decision Date23 July 1935
Docket Number7816.
Citation262 N.W. 89,63 S.D. 571
PartiesBRAMS v. STATE.
CourtSouth Dakota Supreme Court

Original action by Sofus Brams against the State of South Dakota. On demurrer to the complaint.

Demurrer overruled.

Sutherland & Payne, of Pierre, and W. M. Potts, of Mobridge, for plaintiff.

Walter Conway, Atty. Gen., and Herman L. Bode, Asst. Atty. Gen., for the State.

CAMPBELL Judge.

Pursuant to proposal by chapter 34, Laws Special Session 1918, the people of this state, at the November, 1918, General Election, adopted as section 14, art. 13, Constitution of South Dakota, the following: "The mining, distribution and sale of coal are hereby declared to be works of public necessity and importance in which the state may engage, and the legislature may enact suitable laws to carry this provision into effect and to empower the state to acquire, by purchase or appropriation, all lands, structures, easements tracts, rights of way, equipment, cars, motive power, and all other facilities, implements, instrumentalities, and materials necessary or incidental to the acquisition, mining manufacturing and distribution of coal for fuel purposes Provided, however, that no expenditure of money for the purposes enumerated in this section shall be made except upon a vote of two-thirds of the members elect of each branch of the legislature."

Thereafter, by chapter 136, Laws 1919, the Legislature created the state coal mining commission with authority, inter alia, to "open, establish and operate coal mines * * * and to distribute and sell coal to citizens of this state. * * *" Section 5. This statute likewise appropriated to the use of the coal mining commission the sum of $150,000 and provided that such money should be withdrawn from the state treasury from time to time in such amounts as, in the opinion of the coal commission, was reasonably necessary for the transaction of its business and should be placed in a bank "in a revolving fund to the credit of the said commission." Section 6. The statute also provided that all sums of money received from the sale of any product of the mines should likewise be placed in said fund and said revolving fund was to be disbursed "by or under the supervision of said commission pursuant to such rules and regulations as it may fix and establish in that behalf. * * *" Section 6.

The scheme contemplated that the operation of coal mines by the state should be self-supporting and producing sufficient profit ultimately to repay to the state treasury the $150,000 appropriation originally made for the establishment of the revolving fund. To this end the statute provided that in fixing the selling price of coal "provision shall be made for only such margin of profit as may be necessary, after defraying all expenses of operation, to restore and pay into the State Treasury the appropriation of one hundred fifty thousand ($150,000) dollars made in the next succeeding section, and to set aside a depreciation reserve for the replacement of plant equipment as may be necessary" (section 5), and the statute further provided that the coal mining commission should "from time to time transfer from said revolving fund to the general fund in the State Treasury any accumulation of funds which in its opinion may not be actually needed for the transaction of its business" (section 6). This statute passed as an emergency measure and by a vote of more than two-thirds of the members elect of each branch of the 1919 Legislature. The coal mining commission contemplated by this statute was duly established and organized and has since, to an extent and degree varying from time to time, engaged in the mining of coal both in South Dakota and North Dakota and in the distribution and sale thereof to citizens of this state. As an emergency measure and by the vote of more than two-thirds of the members elect of each house, the 1935 Legislature enacted chapter 36, Laws 1935, which provides: "There is hereby appropriated the sum of Nine Thousand, Four Hundred Eighty-two Dollars and Eighty-three Cents ($9,482.83) for the payment of the past due obligations of the State Coal Mine Commission, said sum to be paid out on the warrant of the State Auditor based upon the approval of the said claims and obligations by the State Coal Mine Commission."

Section 2109, R. C. 1919, is to the effect that "it shall be competent for any person deeming himself aggrieved by the refusal of the state auditor to allow any just claim against the state, to commence an action against the state by filing with the clerk of the supreme court a complaint setting forth fully and particularly the nature of the claim." Purporting to act under the section last mentioned, the plaintiff above named has instituted an original proceeding in this court by filing with the clerk hereof his complaint against the state. The gist of the complaint (as amended per stipulation of counsel) is about as follows:

Plaintiff alleges that in July, 1933, he contracted with the Sunshine Coal Company to strip certain coal land of the overburden thereon and construct drainage ditches for the coal beds thus exposed, which contract was made at the instance and request of the state coal mining commission and by its terms assignable to said commission on the part of the Sunshine Coal Company and was subsequently assigned to and taken over by the coal mining commission, the purpose of the contract being to enable the coal mining commission to mine and sell coal as authorized by statute, the coal mining commission having previously leased the land in question and having the right to go upon said land and mine and take the coal therefrom. By the terms of the contract, plaintiff was to receive 15 cents per cubic yard for over-burden removed and 15 cents per cubic yard for necessary excavation for drainage ditches "out of the first moneys received from sale of coal from said coal beds and coal fields," the coal mining commission reserving, however, the right to withhold from such revenues 25 per cent. thereof for payment of miners, truckers, purchase of tools, royalty on coal, etc. The contract contemplated the stripping and draining of a tract of land approximately 200 feet wide by 800 feet long with an average overburden of 20 to 22 feet, and provided that work should begin not later than August, 1933, and be prosecuted diligently and faithfully to completion, subject to delays from unusual or extraordinary conditions.

Plaintiff alleges that prior to January 1, 1934, he stripped and drained two certain portions of the tract pursuant to the designation and request of the coal mining commission, known and referred to as pit No. 1 and pit No. 2, removing 57,162 cubic yards of earth, whereby, according to the contract, the state of South Dakota and the state coal mining commission became indebted to plaintiff in the sum of $8,574.30. Plaintiff further alleges that during the period between the execution of the contract and March 1, 1934, he proceeded with the stripping of a third portion of the tract which was designated by the state coal mining commission and known and referred to as pit No. 3, and having excavated and removed 17,129 cubic yards of earth from pit No. 3, the state coal mining commission on or about March 1, 1934, compelled plaintiff to desist and refused to allow him to complete the work of stripping said pit No. 3. Plaintiff alleges that he was ready, able, and willing to complete the stripping of Pit No. 3 when he was wrongfully compelled to desist by the coal mining commission; that the completion would have required the removal of 12,000 additional cubic yards of earth, and that the removal thereof would have been much less expensive than the removal of the 17,129 cubic yards previously removed because of a much shorter haul being necessary, and plaintiff, being thus deprived of the benefit of the short haul on the latter portion of the work by reason of the wrongful conduct of the coal mining commission and in breach of its contract, alleges the reasonable value of his labor and services in removing the 17,129 cubic yards from pit No. 3 to be the sum of $3,409.35. Plaintiff therefore alleges that the state of South Dakota became indebted to plaintiff in the aggregate sum of $11,983.65, of which there was paid to plaintiff on January 1, 1934, the sum of $8,377.41, leaving a balance due of $3,606.24. Plaintiff further alleges that after he stripped pits 1 and 2 the coal mining commission proceeded to mine and sell coal therefrom and received as the proceeds of said coal money more than sufficient to pay plaintiff in full (even after reserving 25 per cent. of said receipts for mining operation expense), but that the coal mining commission failed and refused to pay plaintiff and expended said money for other purposes, notwithstanding its contract; that the coal mining commission has paid out and expended all moneys received by it from the sale of coal and from all other sources and has disbursed and exhausted its revolving fund created by chapter 136, Laws 1919, and at the time of the commencement of this action had no moneys or funds in its possession or under its control save only the sum of $9,482.83 in the state treasury appropriated by chapter 36, Laws 1935, for the payment of its past-due obligations, although...

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