Court Opinion

ID: 9851107
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:07:27.482425+00
Date Added: 2024-06-11T09:20:48.819659
License: Public Domain

Berry, Judge:
This is an original proceeding in mandamus initially filed in this Court on December 9, 1969, in which the petitioner, C & D Equipment Company, a corporation, for the use and benefit of the First National Bank of South Charleston, West Virginia, to which money had been assigned, seeks a writ to compel the respondent, Denzil L. Gainer, Auditor of the State of West Virginia, to draw a warrant for the payment of an agreed amount between the petitioner and the State Building Commission of West Virginia on the funds of the said Commission in the hands of the State Treasurer of West Virginia, the said agreed amount to be paid to the petitioner as the result of a compromised claim for damages *85in connection with a contract between the parties to demolish various houses and other structures in the vicinity of the State Capitol of West Virginia. The first application was refused, but a rule was issued January 19, 1970, on a second application by the petitioner, directing the respondent to show cause why a writ of mandamus should not be granted as prayed for to compel the payment of $29,907.68, the agreed amount of the settlement of the claim against the State Building Commission by the parties. The matter was submitted for decision on arguments and briefs of the respective parties at the January Regular Term, 1970, of this Court.
The controversy involved herein arose out of a contract executed December 29, 1967, between the C & D Equipment Company and the State Building Commission which provided for the demolition by the petitioner of approximately fifty structures in the vicinity of the State Capitol which occupied the site of two new office buildings which have since been erected with some adjacent parking areas. The contract was entitled “Demolition Contract, Project: Capitol Complex,” and was awarded to the petitioner as a result of the petitioner being the low bidder for the work to be done after notices had been given to prospective contractors for such work and sealed bids of the various bidders had been submitted to the Commission. The petitioner’s bid was in the amount of $41,717 for the work to be done and was accepted by the Commission. Attached to the contract was a list of structures to be demolished and the location thereof by street numbers around the area to be cleared.
According to the allegations of the petition, when the company started to work soon after the contract was executed, it developed that the Commission had not cleared all of the structures for demolition and some tenants were still occupying the structures. As the result of this situation, the company had to move its equipment around the structures which were occupied and not ready for demolition. This resulted in the unnecessary moving of the equipment and in numerous delays in waiting for various structures to be vacated in order that they could be demolished. The company had rented extra *86equipment to be used on this project which was necessary to perform the work to be done, and rent therefor had to be paid by the company during this delay. It is claimed by the company, as indicated by an affidavit made on June 10, 1968, that it had been subjected to added costs in the amount of $29,907^68 in.addition to the contract price represented by its low bid contained in the contract of $41,717. It was further claimed by another affidavit made on June 12, 1968, that the completion of the work would take two more weeks after June 10,1968, in which the company would incur an additional loss of $6,702.88 for which it agreed not to press a claim if the Commission would reimburse it for the first amount claim of $29,907.68.
After the complaint with regard to the extra cost was presented to the Building Commission a subcommittee was appointed by the Commission to investigate the matter, and after an examination of the claim was made, it recommended the payment of $29,907.68. The Building Commission, by its secretary, then submitted a requisition for this amount to the State Auditor with the request that he issue a warrant to the State Treasurer to pay such amount.
The Auditor refused to issue a warrant authorizing the payment of the claim and gave as a reason by an endorsement on the requisition that the amount was in excess of the contract, was not supported by an authorized change order, and could possibly be presented as a claim for consideration. by the Court of Claims.
After the refusal of the Auditor to issue a warrant on the first requisition a purported change order was drawn up by the Commission and forwarded with another requisition to the Auditor for the payment of the claim of $29,907.68. The Auditor again refused to authorize the payment as requested and stated that the requisition was for an increase of approximately seventy per cent over the amount contained in the original contract and that he did not mean to convey the idea that a change order was all that was needed for the authorization for the payment in such case. He further stated that he *87could not authorize the payment unless the matter was submitted to the Court of Claims to determine if there was a moral obligation and that he was accordingly submitting it to the Court of Claims.
The Court of Claims apparently considered the request for an advisory opinion without a hearing and indicated that it was not proper to bring the claim to its attention in this fashion but that there should be a hearing with evidence presented to it on the matter by the petitioner if petitioner desired to file a claim. The petitioner apparently did not ask the Court of Claims to consider its claim but instead instituted the instant proceeding in this Court.
It is contended by the petitioner that the Court of Claims did not have jurisdiction to hear this claim because the money for the operation of the Building Commission comes from the sale of bonds issued by the Commission which do not encumber the general funds of the State and that the Building Commission can be sued in the courts of this State and, therefore, under the statute creating the Court of Claims it has no jurisdiction in such cases.
The respondent filed a demurrer and an answer. In the demurrer he takes the position that the Commission is a State agency and therefore immune from a suit based on negligence or breach of contract, that this matter represents an effort to obtain additional compensation for a contractor, which is prohibited by the Constitution of this State, that it is his duty to refuse the authorization of such payment unless and until the claim has been declared to be a moral obligation by the Legislature and that mandamus, if granted, would compel him to do an illegal or unauthorized act.
The respondent’s answer denies there was any particular plan of operation in connection with the work required by the contract between the petitioner and the Commission and states that there was no duty on the part of the Commission to have each building lined up in order to conform to any plan the company might have had for the demolition work. The answer further states that the respondent did not ask *88for an advisory opinion of the Court of Claims but merely suggested that it consider the matter as provided by law.
It is also contended by the respondent that regardless of the money source and any power to renegotiate the contracts by the Commission, such payment would be improper because renegotiation does not contemplate an increase in price without some corresponding increase in service rendered and must be for the benefit of the Building Commission in that its interest must be best served; that the Commission is a State agency with public funds and payment of such claim is forbidden by the Constitution; and that the income of the Commission will be derived from rentals paid to it by other State agencies and departments from which the money comes out of appropriations by the Legislature.
The controlling question in this case is whether the State Building Commission is a State agency and can not be sued.
It is the contention of the petitioner that an action may be maintained against the Building Commission in the courts of this State, and therefore the Court of Claims is without jurisdiction, and specifically excluded from hearing such claims by the provisions of Code, 14-2-14 (5), as amended. The authority for such contention cited by the petitioner is that it has been held that the West Virginia Turnpike Commission, which is quite similar to the Building Commission, both of which were created by acts of the Legislature of West Virginia using the same language in many places and stating that each can sue and be sued, was not immune from suit.
It is true that both the Federal District Court and this Court have held that the West Virginia Turnpike Commission is not such an agency of the State of West Virginia as is immune from being sued in the courts of law under the provisions of Article VI, Section 35, of the Constitution of West Virginia. Guaranty Trust Co. of New York v. West Virginia Turnpike Commission, 109 F. Supp. 286; Hope Natural Gas Co. v. West Virginia Turnpike Commission, 143 W.Va. 913, *89105 S.E.2d 630; Christo v. Dotson, 151 W.Va. 696, 155 S.E.2d 571.
However, there are marked differences in the two statutes setting up respectively the Turnpike Commission and the Building Commission. Both provide for bonds to finance the building of each, but the money obtained for the use of the Turnpike and to pay off its obligation is obtained from the public users of the Turnpike, while the money obtained to pay off the obligation of the Building Commission is from the State agencies for rent which money is obtained from State funds. This clearly distinguishes the Turnpike Commission from the Building Commission. Then, too, the Turnpike Commission, under the statute creating it, handles its own funds and no requisition is required to be presented to the State Auditor for a warrant directed to the Treasurer to pay any claim against it. This is not true with regard to the statute pertaining to the Building Commission. All moneys of the Building Commission, from whatever source derived, are turned over to the State Treasurer and kept in a separate fund and can not be paid out without a requisition being made to the Auditor and a warrant issued by him to the State Treasurer. The Building Commission statute also requires the State Auditor to audit the funds of the Commission which is not required of the Turnpike Commission. Code, 5-6-4, as amended. On the other hand, it has been specifically held that the State Office Building Commission is a State agency and is immune from suit under the provisions of Article VI, Section 35, of the Constitution of West Virginia which provides that: “The State of West Virginia shall never be made defendant in any court of law or equity, except * * * in any garnishment or attachment proceeding, * * City of Charleston v. Southeastern Construction Company, 134 W.Va. 666, 64 S.E.2d 676. This principle is clearly stated in the first syllabus point of that case wherein it is stated: “The State Office Building Commission [now called “State Building Commission”] is a State agency, and, as such, is an arm of the State and under Section 35, Article VI of the Constitution of this State is immune from suit.”
*90The original statute, Chapter 43, Acts of the Legislature, Regular Session, 1939, creating this Commission was amended in 1966 and its existence was continued but the name was changed to the State Building Commission of West Virginia. In 1967 several provisions relating to the legislative members were deleted and the Legislature in 1966 deleted the power by implication of the Commission to rent office spaces to private persons or corporations. Section 1 of the 1966 amended Act continued the same language creating the Commission and declaring it to be an agency of the State. See State ex rel. State Building Comm. v. Bailey, 151 W.Va. 79, 81, 150 S.E.2d 449 at page 451.
It is the contention of the petitioner that the settlement of the claim between the petitioner and the Commission is merely a renegotiation of the original contract which is authorized by the provisions of Code, 5-6-3, as amended. However, in the first place the settlement of the claim in the amount of $29,907.68 agreed upon by the petitioner and the Commission is not a renegotiation of the contract. It is a compromise of a claim arising out of the contract and presented by the petitioner and to serve petitioner’s best interest, and even if it were an actual renegotiation of the original contract the power or authority given to the Commission to renegotiate such contract is only when “its interest will be best served.” The Commission represents the State and the additional payment of $29,907.68 certainly does not best serve the State’s interest, because it is not decreasing the amount of the bid submitted by the petitioner in order to obtain the contract, but is increasing it perhaps to more than that for which other contractors had submitted their bids to perform the work.
It is quite true that after the completion of the work the petitioner was entitled to the amount called for in the contract of $41,717 and the State Auditor would be required to issue a warrant to the Treasurer for such amount; but he is not authorized or required to issue a warrant for any additional amount for claims settled between the parties in connection with the contract. In fact, the allowance of extra compensation in such cases is prohibited by Article VI, S'éction 38, of the *91West Virginia Constitution, and only the Legislature can authorize such payments if and when they are found and declared by it to be moral obligations of the State, and specific appropriations made for payment thereof. Article X, § 3 of the Constitution of West Virginia; Slack v. Jacob, 8 W.Va. 612; Glover v. Sims, 121 W.Va. 407, 3 S.E.2d 612; State ex rel. Vincent v. Gainer, 151 W.Va. 1002, 158 S.E.2d 145. In the final analysis, the existence of a “moral obligation” is a judicial question.
In the case of George A. Fuller Co. v. Commonwealth, (Mass.) 21 N.E.2d 529, the contractor contended that it had to do extra work in connection with a road contract and consequently made a claim for over $300,000 more than the original amount of the contract. A settlement was agreed upon with the contractor for $135,000 and the state treasurer refused to pay the claim. It was held that only the legislature could authorize such payment and the authority to negotiate the contract did not give the authority to the state officers to determine the damage as the result of the Commonwealth’s error, and any such agreement with regard to damages would be ancillary and create a new and independent obligation which the state officers had no authority to do. In the case of California Highway Commission v. Riley, (Calif.) 218 P. 579, a contract was entered into by the state with a contractor to build a road in California. It was decided later by the state commission that it did not want to build 'the road in question, and it attempted to compromise the claim of the contractor for expenses incurred' by paying him several thousand dollars to give up the contract, which the state comptroller refused to pay. It was held in that case that mandamus did not lie to compel the comptroller to pay the claim.
In the case of Cramp & Sons Ship & Engine Building Co. v. United States, 216 U.S. 494, 30 S. Ct. Rep. 392, 54 L. Ed. 587, which involved a claim for over $49,000 for extra work in the building of a battleship which the United States Government caused the ship building company to lose, the Supreme Court of the United States held that the executive *92officers are not authorized to settle claims for unliquidated damages.
Any monetary claims against an agency of the State which is immune from suit is within the jurisdiction of the Court of Claims. City of Morgantown v. Ducker, 153 W.Va. 121, 168 S.E.2d 298. It was held in that case that by reason of the immunity from suit of a State agency as an arm of the State, the State Court of Claims has jurisdiction of a monetary claim against such State agency and that mandamus is the proper remedy to require the State Court of Claims to assume jurisdiction of a monetary claim against such State agency. This holding is under Code, 14-2-13, as amended, which provides that such court’s jurisdiction extends to claims and demands, liquidated and unliquidated, ex contractu and ex delicto, against the State or any of its agencies, which the State should in equity and good conscience discharge and pay.
The State Court of Claims has never refused to entertain the claim involved in this proceeding. The petitioner has never presented its petition to the Court of Claims for consideration of the claim and has insisted that the Auditor be forced to issue a warrant for the payment thereof. The authorities dealing with the matter involved in this proceeding clearly indicate that the Auditor can not be required by mandamus to issue a warrant for the payment of the claim involved upon requisition of the State Building Commission as it is purely a compromise of a claim based upon improper performance of a contract. If it could be compromised for $29,000 any like claim could be compromised in the future regardless of the amount.
Although the claim in question may be a just claim and should be paid, there is no authority for the Auditor to issue a warrant for such claim without the authorization for payment by the Legislature. The proper procedure, therefore, to have the claim considered for payment is for the petitioner to file a petition with the Court of Claims as held in the case of City of Morgantown v. Ducker, supra.
*93For the reasons stated herein, the respondent’s demurrer is sustained and the writ prayed for is denied.

Writ denied.