Hauck v. Bull

• Citation: 110 N.W.2d 506,79 S.D. 242
• Decision Date: 06 September 1961
• Docket Number: No. 9903,9903
• Court: Supreme Court of South Dakota
• Parties: Donald F. HAUCK and Reinhold Kempf, Plaintiffs and Appellants, v. Charles W. BULL, Ruben Bertsch, Alden Flakoll, Dean Melland and Erwin Martin, Defendants and Respondents.

Page 506

110 N.W.2d 506

79 S.D. 242

Donald F. HAUCK and Reinhold Kempf, Plaintiffs and Appellants, v. Charles W. BULL, Ruben Bertsch, Alden Flakoll, Dean Melland and Erwin Martin, Defendants and Respondents.

No. 9903.

Supreme Court of South Dakota.

Sept. 6, 1961.

Chas. E. Gorsuch, Aberdeen, for plaintiffs-appellants.

Campbell, Voas & Richardson, Aberdeen, for defendants-respondents.

HANSON, Judge.

This is a taxpayers' action to recover public funds alleged to have been unlawfully paid out under a void road construction contract.

The complaint alleges, in effect, that plaintiffs are residents and taxpayers of Wachter Township, McPherson County, South Dakota, and bring this action on behalf of themselves and others similarly situated; that defendants, Charles W. Bull, Ruben Bertsch, Alden Flakoll, and Dean Melland are officers of Wachter Township and defendant, Erwin Martin, is a road contractor; that on or about June 17, 1959 the township officers entered into a contract with Martin whereby the township agreed to pay Martin the sum of $1,400 to $1,500 per mile for constructing certain roads in Wachter Township; that said contract was illegal and void as it was entered into without first advertising for bids as required by law; and the sum of $11,874.25 was paid to defendant Martin from funds of Wachter Township in violation of South Dakota law.

Defendants' answer contained a general denial and, in substance, the following affirmative defenses: (1) That plaintiffs were aware the contracts between the township and Martin were being negotiated without bids and were consummated with full performance on both sides. That plaintiffs were aware that for weeks defendant Martin had been working on the township roads, had watched his progress, and would be paid from township funds for his material and services. That plaintiffs by their conduct and inaction permitted and condoned said action and because of their failure to object or complain are estopped from objecting and are guilty of laches in not having raised the issue or objecting to the contracts or to the payments made thereunder; (2) That at a regular annual meeting of the township of the electors adopted Resolution No. 1, marked Exhibit 1, by a vote of 36 to 3 thereby waiving and ratifying all actions of its officials involving the road contracts with defendant Martin; (3) That the electorate by adopting Resolution No. 1 for $1 and other valuable considerations compromised, adjusted, settled and satisfied all claims thereby releasing defendants from all liability; (4) Full accord and satisfaction of all claims by adoption of Resolution No. 1; and (5) That the township and taxpayers therein have received benefits from the road contracts in excess of the money paid to defendant Martin and plaintiffs are estopped to deny such contracts to the extent of benefits received.

In granting defendants' motion for judgment on the pleadings the trial court considered and determined the issues raised by the pleadings on their merits. The propriety of such action is the primary question presented on this appeal.

Motions for judgment on the pleadings are provided for by SDC 1960 Supp. 33.1002 as follows: 'After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.' Demurrers have been abolished in this jurisdiction and a motion for judgment on the pleadings, like a motion to dismiss, now provides an expeditious remedy to test the legal sufficiency, substance, and form of pleadings. It is a proper remedy only when no issue of fact is raised. It deals only with questions of law arising from the pleadings. Friedman v. Washburn Co., 7 Cir., 145 F.2d 715. 'When a party moves for judgment on the pleadings, he not only for the purposes of his motion admits the truth of all the allegations of his adversary, but must also be deemed to have admitted the untruth of all his own allegations which have been denied by his adversary.' Phenix v. Bijelich, 30 Nev. 257, 95 P. 351, 353; United States v. Hole, D.C., 38 F.Supp. 600.

The only pleadings filed in the present action are the complaint and answer. No reply was made and none was required, under our practice, as the answer did not contain a counterclaim denominated as such nor did the court order a reply to be made. SDC 1960 Supp. 33.0901. For the purposes of defendants' motion all of the affirmative allegations in the answer should have been treated as denied by virtue of SDC 1960 Supp. 33.0906 which provides, in part, that 'Averments in a pleading to which no responsive pleading is required or permitted shall be taken as denied or avoided.' Therefore, the only question presented by defendants' motion was whether or not the complaint stated a cause of action. Friedman v. Washburn Co., 7 Cir., 145 F.2d 715; Koolvent Metal Awning Corp. v. Kool-Vent Metal A. Corp., D.C., 138 F.Supp. 95; 1A Fed. Practice & Procedure, Sec. 358 p. 393. Upon the implied admission of facts defendants' motion should have been denied. A taxpayer under proper circumstances may maintain a representative action for the recovery of public funds illegally expended under an invalid contract.

At the time the alleged road construction contract was entered into between the township and Martin the provisions of Chapter 300, Laws of 1939, as amended, were in effect. Chapter 300, Laws of 1939, has now been codified into Chapter 65.07 of SDC 1960 Supp. It is a comprehensive act designed to unify and regulate the awarding of contracts by all public corporations. SDC 1960 Supp. 65.0701-1 provides that "Public Corporation' shall embrace the state and all counties, cities, towns, public school corporations and all officers, boards or commissions empowered by law to enter into contracts for the construction of public improvements.' This comprehensive language covers and includes townships which are corporate bodies. SDC 58.0201. According to SDC 1960 Supp. 65.0701-2 'All contracts of any public corporation, whether for the construction of public improvements or contracts for the purchase of materials, supplies or equipment, when such contracts, involve an expenditure equal to or in excess of one thousand...