Norbeck & Nicholson Co. v. State

SMITH, J.

This -cause was -before this court on a ¡demurrer to the original •complaint, which was sustained upon the ground that the contract was one authorized by an act of the Legislature, was made between-.the state and a person who- was a member of the Legislature at the time the act was. passed, and -was therefore void. 32 S. D. 189, 142 N. W. 847. The -demurrer being •sustained, plaintiff, exercising its -statutory' right, amended its complaint. The present -demurrer is to the complaint as- amended. The amended complaint pleads the identical contract alleged in the original complant, and the first six paragraphs thereof are the same. Certain allegations of the ¡original complaint relied upon as grounds for a recovery upon quantum meruit are omitted.

The amended complaint alleges matter to the effect that the state Legislature,- ¡at its session of 1911, appropriated the sum of $5,000 for the .purpose -of sinking a well at the university, and equipping the same with proper -and necessary apparatus and water mains; that all the moneys provided by such special appropriation were paid out in equipping said well, constructed by the plaintiff as therein, set forth, with necessary pumping apparatus and water mains, and said special appropriation has been entirely exhausted; that, at the time said contract -was entered into, the .Board of Regents had in their hands and under their control certain moneys derived' from, other sources, which ware .available and sufficient to discharge the indebtedness -created by said contract; that- demand for payment ‘has -been duhr made and refused by the state auditor; an;d prays judgment for the amount due under the contract. _ It is further alleged that, at all times mentioned in the contract, Peter Norbeck was a stockholder .and- president of the plaintiff corporation. From these allegations it is- apparent that the entire transaction — the contract and well — are the same described in the original complaint. It is also- disclosed by the amended complaint that the contract w-as -one “authorized” by chapter 38, Laws 1911, and that Peter Norbeck was then a member of the Legislature.

Section 12, art. 3, of the state Constitution, declares that no member of the Legislature shall be interested, -directly or indirectly, in -any contract with the state, authorized by any law passed during -the term for which he shall have been elected, or within one year thereafter. Under the former decision of this court upon the demurrer to- the original complaint 32 S. D. 189, 142 N. W. 847, this identical contract was held void because in violation of this provision of the Constitution. It cannot therefore be made the ground of recovery in this action, even though there may have been funds available derived from- other sources than -the appropriation o-f 1911. Th-e validity of the contract is in no manner dependent upon the sources from which state funds may be derived to 'liquidate the indebtedness created by the contract.

We do not express any opinion as to the power -or authority of tire Board of Regents to -enter into- a contract other than one authorized by a -special act of th-e Legislature, for improvements on the university grounds of the general character' of those here involved, and to pay for such improvements out of funds derived from sources other than a special appropriation (by ■ act of the legislative assembly). The contract here involved concedeclly was entered into pursuant to arid in execution of an act of 'the legislative assembfy, and its validity depended u-pon the conditions existing- at the time -of its execution, and not upon acts or -conditions done or arising- subsequently. If -the contract itself was void at the time of its execution, because of the constitutional inhibition, no circumstances or facts thereafter arising could change its status or render it valid. It would follow that the subsequent expenditure of the special appropriation provided by the act, or The fact that the board may possess other funds which might be expended for purposes similar to those contemplated by the act, could not render if valid, so that it might be made a ground of recover]' in this action. We think it clear that payment under this contract could only he made out of the special appropriation.

In. short, the alleged new matter set out in the amended complaint consists only of -facts and circumstances arising long subsequent to the execution of the contract, and could in no manner cure or affect its original invalidity. The contract upon which plaintiff seeks recovery was authorized by a legislative act, and is within the very language of the Constitution which says that no member of the legislative assembly shall 'be interested, directly or indirectly, in any contract authorized by a law passed during the term for which he shall have been elected. It therefore follows that, for the reasons announced in our former opinion herein, the contract was 'invalid when entered into, and none of the additional acts or facts alleged in the amended answer would render it valid, or in any manner change or affect the legal rights of the plaintiff thereunder.

The demurrer must be sustained.