Court Opinion

ID: 9550063
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:28:44.977159+00
Date Added: 2024-06-11T15:21:17.263684
License: Public Domain

DOOLIN, Justice
(dissenting).
The majority opinion notes that Principal Funding Corporation’s (hereinafter referred to as “Plaintiff”) claim against Petitioners (hereinafter referred to as “State”) is a claim for back rentals arising out of a contractual rental arrangement between the parties authorized by legislative enactment. There are several pertinent distinctions between an action to enforce such a contractual arrangement and an action against a state which might be barred by the Doctrine of Sovereign Immunity.
As stated by Chief Justice Gibson of the Supreme Court of the State of California in the case of Souza & McCue Const. Co. v. Superior Court of San Benito, 57 Cal.2d 508, 20 Cal.Rptr. 634, 370 P.2d 338 (1962):
“When the State makes a contract with an individual, it is liable for a breach of its agreement in like manner as an individual, and the doctrine of governmental immunity does not apply. * * * ”
This is in accord with the general rule in many jurisdictions in regard to the inapplicability of sovereign immunity to situations where the state has contractually obligated itself to a certain performance. 81 C.J.S. States § 124, states :
“The State is bound to observe the same rule of conduct in the performance of its contracts with its citizens as it requires them to observe.”
The many decisions in which authority is found in support of this conclusion include the following:
Regents of University, System of Georgia v. Blanton, 49 Ga.App. 602, 176 S.E. 673; Carr v. State, 127 Ind. 204, 26 N.E. 778, 11 L.R.A. 370, 22 A.S.R. 624; Todd v. Board of Educational Lands and Funds of Neb., 154 Neb. 606, 48 N.W.2d 706; In re Block No. 1, Donly Heights Addition, Oklahoma City, Oklahoma, 194 Okl. 221, 149 P.2d 265; Cosgrove v. State, 278 App.Div. 596, 102 N.Y.S.2d 353; Rorick v. Board of Comm’rs of Everglades Drainage District, D.C.Fla., 57 F.2d 1048; State for the use of Lane v. Dashiell, 195 Md. 677, 75 A.2d 348; Newcomb v. Ogden City Public School Teachers’ Retirement Commission, 121 Utah 503, 243 P.2d 941; State v. Clau-sen, 94 Wash. 166, 162 P. 1; Regents of University, System of Georgia v. Woodward, 49 Ga.App. 608, 176 S.E. 677; Commonwealth ex rel Smith v. Clark, 331 Pa. 405, 200 A. 41; Grady v. City of Livingston, 115 Mont. 47, 141 P.2d 346; Eagles v. General Electric Co., 5 Wash.2d 20, 104 P.2d 912; State of Connecticut v. F. H. McGraw & Co., D.C.Conn., 41 F.Supp. 369; Frio County v. Security State Bank of Pharr, Tex.Civ.App., 207 S.W.2d 231; Souza & McCue Const. Co. v. San Benito County, supra, and State Highway Dept. v. W. L. Cobb Const. Co., 111 Ga.App. 822, 143 S.E.2d 500. The Oklahoma case of In re Block 1, etc., supra, said:
“The state is bound by its valid contracts and svalid acts of its officers. * * * ”
Also, at 48 Am.Jur. States, Territories and Dependencies § 62, the treatise concludes that:
(the state) “. . . may lay aside its sovereignty and like a private individual or corporation contract either with other public bodies or private persons, and be bound under a like contract.”
This text goes on to state that such a contractual obligation may be defeated by a legislative failure to appropriate funds for its satisfaction, although it may not impair the obligation of existing contracts. These rules are compatible both with generally accepted authority, and the holding of the Nashert case, post.
By statute, in the State of Oklahoma:
“All contracts, whether public or private, are to be interpreted by the same rules, except as otherwise provided by law.”
*50915 O.S. 1971 § 151. In the case of State of Oklahoma, ex rel Capitol Improvement Authority v. Walter Nashert & Sons, Inc., 518 P.2d 1267 (1974), this Court cited this statute in support of its conclusion that the State has no greater authority in relation to a contractual arrangement than a private agency. Since a contract must be enforceable by both parties thereto before it is a contract, it follows that State should not be able to avoid its contractual obligation by hiding behind the Doctrine of Sovereign Immunity. As stated by Justice McInerney in his dissenting opinion in the case of State ex rel Department of Highways v. McKnight, 496 P.2d 775, 785 (Okl.1972):
“Where a special fund is created from sources not coming from, or out of, the general revenue fund of the State, authority may be granted to an officer, board or commission to expend said fund for a special purpose, where the authority to disburse said fund or obligate the State is limited to the amount of money that may go into said fund, and such officer, board or commission is not permitted to incur an indebtedness against the State which may be payable out of, or charged against, the general revenue fund of the State.”
See also Fortinberry Co. v. Blundell, 206 Okl. 261, 242 P.2d 427, second syllabus:
“Where one enters into a lawful and valid contract with the State, through a duly authorized State official, under an existing law which provides for and appropriates certain moneys to be used for the payment of a claim against the State, arising under such contract, the inhibitions of the State and Federal Constitutions against any law which impairs the obligation of contracts will not permit the repeal of such law insofar as it provides a fund from which the valid claims arising while said law is in force may be paid, unless other adequate provisions are made for the satisfaction of such claims.”
In the present case, there is a valid legislative enactment, House Bill No. 1575 of the Second regular session of the 1970 Legislature (1970 Oklahoma Session Laws, Ch. 330, pgs. 637-640), Section 7, which made an appropriation for the purposes set forth in the lease. Plaintiff should not, therefore, be barred by the Doctrine of Sovereign Immunity from enforcing its contractual rights thereunder where an appropriation has been made and authority to bind the State is present.
Although the majority opinion does not allow Plaintiff to maintain an ordinary action to recover back rentals against State, it clearly would allow Plaintiff to bring an action to mandamus the appropriate public official to honor the obligation of State under the contractual arrangement. This Court has recently acknowledged the availability of such a remedy under Oklahoma Statutes, see State of Oklahoma, ex rel Oklahoma Capitol Improvement Authority v. E. A. Cowen Construction Co., 518 P.2d 1264. But I do believe resort to this extraordinary remedy either expedient or necessary when an adequate remedy at law exists. I believe Plaintiff’s action to recover rentals allegedly due it under its legislatively authorized contractual arrangement and appropriation is not barred by the Doctrine of Sovereign Immunity, and insofar as the majority opinion bars such recovery in an ordinary action at law and restricts Plaintiff’s remedy to extraordinary writ, it is incorrect.
I am authorized to state that Justice SIMMS concurs in the views herein expressed.