Coosaw Mining Company v. South Carolina

This suit was brought by the appellees March 23, 1891, in one of the courts of South Carolina, and subsequently, on the petition of the appellant, the defendant below, was removed into the circuit court of the United States. 45 Fed. Rep. 804. Its object was to obtain a decree enjoining the Coosaw Mining Company, its servants, agents, and employes, from claiming any right, title, interest, or grant in or to the phosphate rock and phosphatic deposits in Coosaw river, in that state; from digging, mining, or removing such rock and deposits in the bed of that river; and from obstructing, by suit or otherwise, any agent or other person acting by authority of the state board of phosphate commissioners from digging, mining, and removing the same.

The appellant claimed, in its answer, to have a contract with the state, by which it acquired an exclusive right, for an indefinite period, to occupy, dig, mine, and remove such rocks and deposits in Coosaw river, and that in violation of the constitution of the United States the obligation of its contract had been impaired by a subsequent act of the legislature.

The decree below, rendered September 16, 1891,-the CHIEF JUSTICE and Judge SIMONTON concurring,-proceeded upon the ground that the appellant did have at one time, and for a limited period, a contract with the state, of the kind mentioned, but that such period had expired before the institution of this suit. State v. Mining Co., 47 Fed. Rep. 225. The relief asked was therefore granted.

The principal question to be considered depends upon certain legislative enactments relating to phosphate rocks and phosphatic deposits in the navigable waters of South Carolina. It is necessary to ascertain the scope of those enactments.

By an act which took effect March 1, 1870, the state granted to certain named persons, and their associates, the right, for the full term of 21 years, to dig, mine, and remove phosphate rocks and phosphatice deposits from the beds of the navigable streams and waters within the jurisdiction of the state of South Carolina. This grant was made upon the express condition that the grantees pay the state $1 per ton for every ton of phosphate rock and phosphatic deposits so dug, mined, and removed, and $500 as a license fee before commencing business under the grant.

The act further provided that before commencing operations under authority of the act the grantees and thier associates should file, or cause to be filed, in the office of the state auditor, a bond in the sum of $50,000, conditioned that they would make true and faithful returns to that officer annually, on or before the 1st day of October, and oftener, if required, of the number of tons of phosphate rocks and phosphatic deposits dug, mined, and removed by them, and punctually pay to the state treasurer annually, on the 1st day of October, $1 per ton for every ton of rocks and deposits by them so dug, mined and removed during the year preceding; such bond to be renewed annually, and approved by the attorney general. 14 Gen. St. S.C.. p. 381.

The Coosaw Mining Company, it is admitted, succeeded to all the rights given by this act.

On March 28, 1876, another act was passed, entitled 'An act to settle definitely the period at which returns shall be made of phosphate rocks and phosphatic deposits dug and mined in the beds of the navigable streams and waters of the state of South Carolina, and the royalty shall be paid thereon, and also to fix the terms on which this act may be accepted by the parties named therein.' This act is the foundation of the appellant's claim of an exclusive right, for an indefinite period, to dig, mine, and remove phosphate rocks and phosphatic deposits in that part of Coosaw river which it occupies. Its provisions are therefore given in full as follows:

'Whereas differences have arisen between the Coosaw Mining Company and the comptroller general as to the times and manner in which the said company shall make their returns of the number of tons of phosphate rocks and phosphatic deposits dug, mined, and removed by them from the beds of the navigable streams and waters of the state, and also as to the times when the royalty thereon shall be paid, therefore, for remedy thereof.

'Section 1. Be it enacted, etc., that the said Coosaw Mining Company, and all other companies and persons engaged in digging, mining, and removing phosphate rocks and phosphatic deposits from the bed of the navigable streams and waters of the state, shall be, and they are hereby, required, from and after the passage of this act, to make to the comptroller general true and faithful returns of the number of tons of phosphate rocks and phosphatic deposits they have so dug, mined, and removed, and shipped, or otherwise sent to market, at the end of every month; and shall punctually pay to the state treasurer the royalty already provided by law to be paid thereon at the end of every quarter or three months; the first quarter to commence to run on the first day of March in the present year.

Sec. 2. That the said Coosaw Mining Company, and all other companies and persons mentioned in the preceding section, shall, within ten days from the passage of this act, enter into new bonds, in the penal sums and in the manner and form already provided by law, but conforming in their conditions to the terms set forth in the said preceding section, and also pay to the state treasurer the royalty accrued up to the said 1st day of March of the present year. And whereas it is desirable that the said Coosaw Mining Company, and all other companies and persons engaged in digging, mining, and remoying phosphate rock and phosphatic deposits as aforesaid, shall accept the terms of this act, in order to make it binding on them respectively; and whereas the said Coosaw Mining Company have already occupied so much of the Coosaw river as lies opposite to and south of Chisolm's island, whereon their works are located, and to the marshes thereof, and have expended large sums of money in establishing themselves thereon, with sufficient mining plant for mining and preparing for market the phosphate rocks and phosphatic deposits of that part of the said Coosaw river; therefore, in consideration thereof,

'Sec. 3. That the said Coosaw Mining Company, on accepting the terms of this act within ten days from the passage thereof, shall thenceforth have the exclusive right to occupy and dig, mine, and remove phosphate rock and phosphatic deposits from all that part of the said Coosaw river above mentioned so long as, and no longer than, they shall make true and faithful returns of the number of tons thereof they shall so dig, mine, and remove, and ship or otherwise send to market, and punctually pay the royalty thereon, as provided in the first section of this act.

'Sec. 4. That all other companies and persons engaged in digging, mining, and removing phosphate rocks and phosphatic deposits as aforesaid under gift and grant of the state of South Carolina, or by authority thereof, who shall accept the terms of this act within ten days from the passage thereof, shall thenceforth have the same exclusive right where they have respectively occupied and established themselves for mining purposes, and on the same limitations as are prescribed in the preceding section of this act.

'Sec. 5. That all acts and parts of acts inconsistent with this act be, and they are hereby, for the purpose of this act, repealed.' Acts S.C.. 1875-76, p. 198.

The appellant accepted the terms of that act, and thereby, it is contended, acquired the exclusive right in question. The act which is supposed to have impaired the obligation of its contract with the state was that of December 23, 1890, creating a board of phosphate commissioners, consisting of the governor, attorney general, comptroller general, and two individual citizens, charged with the exclusive control and protection of the rights and interest of the state in the phosphate rocks and phosphatic deposits in its navigable streams and marshes. The latter act empowered the board-if, upon full investingation and examination, they deemed it advisable-to require all persons or corporations digging or mining phosphate rock or phosphatic deposits in the navigable streams and marshes of the state to pay a royalty not to exceed two dollars per ton for all or any phosphate rock so dug or mined; six months' notice being given before raising the royalty above one dollar.

It also authorized and directed the board, after the 1st day of March, 1891, 'to take possession and control of the Coosaw River phosphate territory heretofore occupied by the Coosaw Mining Company,' and to issue licenses to mine and remove therefrom phosphate rock and phosphatic deposits, in like manner as was then provided by law for the other navigable streams and waters of the state; each ton of phosphate rock or phosphatic deposits, the product of such mining operations, to be deemed the property of the state until the said parties paid thereon a royalty, to be fixed by the board, at not exceeding two dollars per ton on each ton of phosphate rock or phosphatic deposits dug, mined, and removed, and six months notice to be given before raising the royalty above one dollar.

It was further provided that if any person interfered with, obstructed, molested, or attempted to interfere with, obstruct, or molest, the board, or any one by them authorized or licensed, in the peaceable possession and occupation for mining purposes of any of the marshes and navigable streams and waters of the state, it was authorized, in the name and on behalf of the state of South Carolina, 'to take such measures or proceedings as they may be advised are proper to enjoin and terminate any such molestation, interference, or obstruction, and place the state, through its agents, the said board of phosphate commissioners, or any one under them authorized, in absolute and practicable possession and occupation of the same.'

Other sections of the act made it an offense punishable by fine or imprisonment, or both, at the discretion of the court, for any person or persons to willfully interfere with, molest, or obstruct, or attempt to interfere with, molest, or obstruct, the state or the board of phosphate commissioners, or any one by them authorized or licensed, in the peaceable possession and occupation of any of the said marshes and navigable streams and waters of the state, 'including the said Coosaw-River phosphate territory,' or who shall dig or mine, or attempt to dig or mine, any of the phosphate rock or phosphatic deposits of this state without a license so to do by the board. The board were authorized and empowered to inquire into and protect the interests of the state in and to any phosphate deposits or mines, whether in the navigable waters of the state or in land, marshes, or other territory owned or claimed by other parties, and in the proceeds of any such mines, and to take such action for or in behalf of the state in regard thereto as they might find necessary or deem proper. All acts or parts of acts inconsistent with the provisions of the act of 1890 were repealed. Acts S.C.. 1890, p. 691.

Edward McCrady, Jr., Augustine T. Smythe, and T. W. Bacot, for appellant.

[Argument of Counsel from pages 556-560 intentionally omitted]

''John L. McLaurin, Geo. S. Mower, and Henry A. M. Smith'', for appellees.

Mr. Justice HARLAN delivered the opinion of the court.