State v. Evans
| Decision Date | 07 September 1906 |
| Docket Number | 14,728 - (27) |
| Parties | STATE v. MABEL EVANS and Others |
| Court | Minnesota Supreme Court |
Appeal by plaintiff from a judgment of the district court for St Louis county, entered pursuant to the findings and order of Dibell, J. Affirmed.
Mineral Lease Act.
Chapter 22, p. 68, of the Laws of 1889 and the amendments thereto providing for the issuance of mineral leases and contracts, are constitutional.
Edward T. Young, Attorney General, Royal A. Stone, Assistant Attorney General, and W. B. Douglas, for the State.
Washburn, Bailey & Mitchell, Davis, Kellogg & Sevenance, and Joseph B. Cotton, for respondents.
This action was brought in the district court of the county of St. Louis to set aside a certain mineral lease and contract, dated December 30, 1902 and November 20, 1903, issued on behalf of the state by its land commissioner to the defendant Mabel Evans, on the alleged ground that they were obtained by fraud and conspiracy, and further, that the statute purporting to authorize the execution of mineral leases on behalf of the state is unconstitutional. The trial court found that the allegations of fraud and conspiracy were not sustained by the evidence; that the mineral lease and contract in this case were made on behalf of the state pursuant to the statute, and in accordance with the ordinary course of business of its land department, but there was no public sale thereof or prior appraisement; that the lease and contract related to 36.65 acres of land, acquired by the state under the swamp land act, known as "lot 1 in section 6, township 58 1/2, range 17" in the county of St. Louis, which was then entirely unexplored, and undeveloped; that the lessee by the lease was authorized to enter upon the land for the purpose of prospecting for iron ore thereon, and the contract was in the form, and contained the provisions required by the statute.
The trial court further found that the term "merchantable shipping iron ore" means iron ore, which, at the time it is mined, can be mined, shipped, and sold at a profit; its merchantability varies from time to time, and that all the mines in Minnesota contain both merchantable and nonmerchantable ore; that under the mineral contract here in question the land has been partially explored, showing that merchantable and nonmerchantable ore exists therein, the extent whereof is not known, and that aside from the minerals and mineral rights therein, the value of the land does not exceed $10 per acre; that since the adoption of the mining lease law of 1889, the state, through its land commissioner, has issued four thousand three hundred thirteen mineral leases upon its swamp and school lands for which it has been paid the sum of $109,628.50; that it has executed six hundred forty-three mineral contracts on such lands for which it has been paid the sum of $178,300 in annual rentals where ore was not mined; and that it has been paid $542,281.96 in royalties on ore mined and removed under such mineral contracts; that since the enactment of the law private parties have expended not less than $1,300,000 in exploratory and preliminary work preparatory to taking out and removing iron ore from state lands so leased, in some cases preparatory to mining operations which may extend over a period of years, and more than $1,100,000 has been paid by individuals and corporations upon the purchase and transfer of such mineral contracts after the lands covered by such contracts had been explored at large expense, and ore discovered therein; and that all of such things have been done in reliance upon the validity of the mineral lease law and the construction placed upon the provisions of the constitution respecting the management and disposition of the state school and swamp lands, since the enactment of the law, by the departments of the government of the state and people thereof, during which time, and until the commencement of this action, the constitutionality of the law has not been questioned.
As a conclusion of law, the trial court found the statute authorizing the execution of the mineral lease and contract constitutional, and denied the state any relief in the premises. Judgment was so entered from which the state appealed. The facts found are not here challenged, and the sole question for our decision is whether the mineral lease statute violates the constitution of the state, which provides that no portion of the school or swamp lands of the state shall be sold otherwise than at public sale. The statute (Laws 1889, p. 68, c. 22, Laws 1895, p. 227, c. 105; Laws 1897, p. 578, c. 312, and Laws 1903, pp. 330, 562, chapters 225 and 317), was substantially re-enacted by R.L. 1905, §§ 2483-2495.
The salient provisions of this statute are these: The state reserves for its own use all the iron and other minerals in all lands owned by it. To encourage the development of mineral deposits on land of the state, the land commissioner is authorized to issue, on application and payment of $25 therefor, a permit or license which authorizes the holder thereof to enter upon the land therein described, for the purpose of prospecting, examining, and sinking test pits for iron ore. The permit expires by express limitation in one year from its date. The holder of this first lease or prospecting permit has the right at any time prior to its expiration to receive from the land commissioner a mining contract or lease, whereby the state leases the land to such holder for the term of fifty years for the purpose of exploring, mining, taking out, and removing therefrom the merchantable iron ore there found, with the right to erect and maintain all necessary structures and appliances necessary for mining and removing the iron ore. The lessee is required to pay an annual rental of $100 until the expiration of the time within which the first thousand tons of ore is to be mined, which must be done within five years after the completion of a railroad within one mile of the land, and annually thereafter he must pay a royalty of twenty five cents per ton on all iron mined and removed from the land, such royalty to be paid annually on at least five thousand tons whether that amount is mined or not. The lessee is also required to open, use, and work the mines in such manner as is usual in skilful mining operations by the proprietors thereof, and to pay the taxes assessed against the land, the improvements thereon, and the iron ore, the same as if he were the owner in fee of the leased land. The state reserves the timber on the land with the right to sell and dispose of it. In case copper or any valuable mineral other than iron should be discovered on the land, the conditions on which it may be mined may be agreed upon by the parties or by a reference to arbitrators. The right of re-entry for condition broken is reserved by the state. No provision is made by the statute for any public sale of leases; but in cases where there are two or more applicants for a prospecting permit for the same land, provision is made for its sale to the applicant who is the highest bidder therefor.
Is this method of developing and disposing of the iron ore on state lands prohibited by the constitution? It is the contention of counsel for the state that the question must be answered in the affirmative, because the statute in legal effect provides for a sale of a portion of the state lands at private sale at a price fixed by the legislature.
The mineral lease here in question is for a tract of swamp land, but by the amendment of 1881 to section 2 of article 8 of our state constitution, the sale of all swamp lands of the state was placed under the same and no greater limitations than the sale of school lands. If the provision as to the sale of swamp lands had been in the form of an independent amendment to the constitution, there might have been some question as to its true meaning. It is, however, an amendment to the particular section of the of the particular section of the constitution prohibiting the sale of school lands, except at public sale, and providing for the investment and preservation of the fund arising from any sale or other disposition thereof. It is quite obvious from a reading of the whole section, as amended, that the purpose of the amendment was to place swamp lands as to a sale thereof on the same basis as school lands, and not to incorporate in the constitution, by the use of general language, statutory provisions as to the details for the sale of school lands. This mineral lease statute does not purport to deal with agricultural lands, hence section 15, article 1, of the constitution, declaring void all leases of agricultural land for a longer period than twenty one years, has no application to the question under consideration. Minneapolis Mill Co. v. Tiffany, 22 Minn. 463.
It follows, then, that the statute is constitutional, unless it provides for a sale of the school and swamp lands of the state within the meaning of section 2, article 8, of the constitution, which provides in effect that the proceeds of school lands shall remain a perpetual school fund; that no portion of such lands shall be sold otherwise than at public sale, that is to the highest bidder at auction; that the principal of all funds arising from sales or other disposition of such lands shall forever be preserved inviolate and undiminished; and that the income arising from the lease or sale of lands shall be distributed to the different townships of the state in proportion to the number of scholars in each.
It is to be noted that the only limitation upon the unquestioned power of the legislature, in the absence of constitutional restrictions, to dispose of the public domain as...
To continue reading
Request your trial