Court Opinion

ID: 7134117
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:22:07.125964+00
Date Added: 2024-06-11T16:14:34.005866
License: Public Domain

DISSENTING OPINION BY
JUDGE PAYNTER.
The court recognizes as elementary the principle that a State can be sued only when she has expressly given her consent. Notwithstanding the recognition of that principle, the court distinctly and manifestly disregards it. The fundamental error consists in assuming that, as the board *847of managers could make a contract with reference to the business which the act commissioned it to transact, therefore it was intended that the board, and not the State, should be bound thereby. Because the law authorizes the agents or officers of a State to make contracts for her, it does not follow that an action can be maintained against a State thereon. It is equally as erroneous to assume that, because the State can not be sued, therefore her agents can be on her contracts. If the test of a right to sue a State was to be determined by the fact that her agents had made a contract authorized by law, then she could be sued on her contract thus made, as an individual can be on his obligations. To show that the court proceeded upon an erroneous hypothesis, and that its reasoning is not sound, it is but necessary to quote its language, which is as follows:
“As the power to make contracts is expressly conferred, the power to sue or be sued on these contracts was necessarily vested in the board; for the contracts were the obligations of the board, and not the obligations of the State.” The exhibit which the board was required to make under the act was for the State of Kentucky. The money with which the expenses of the exhibit and commission were to be paid belonged to the State, and the commissioners appointed to carry out the wishes of the State were officers and agents, and were required to give bond to the State for the faithful discharge of their duties. They were required, to make reports to the Governor of the State for his examination and supervision. In fact, everything they were required to do under the act was for the State, and every dollar which they were authorized to expend belonged to the State.
There was nothing in the duties of the board which indi*848cated that it was incorporated, or that it was to transact the business as an incorporated company. The members of the commission were simply the agents of the State, and carried on the business in the name designated by the act which made the appropriation. The act provides that “any excess of the State appropriation and the proceeds of the sales of such building materials, or any other property that may be proper to sell, shall be covered into the treasury and be held and treated as part of the general fund of the State.”
This language shows that the commissioners were not to have a cent’s interest in the fund which was appropriated, except their salaries and expenses, or that part which might remain after the World’s Fair was over. The board was not to withdraw from the treasury any of it, except upon warrants' drawn by the Auditor of Public Accounts on the State Treasurer, but in some way it got possession of the entire fund. Then it was that the Legislature made the declaration that it would not be bound beyond the amount appropriated. If the General Assembly had declared in the act that it was to be bound for all contracts which the commissioners made, that would not have given a right to one who entered into a contract with the commission to sue the State thereon, as the consent to be sued was not given. If the resolution to which the court called attention is to be given any significance in this case, it certainly has exactly the opposite meaning to the one given it by the court, as the inference to be drawn is that she was to be bound by contracts to the extent of the amount of the appropriation, to-wit., |100,000, but not beyond that amount. This would mean, if anything, that these were the State’s, not the commissioners,’ contracts, to that extent. There is *849nothing in the language of the resolution which indicates that the Legislature did or intended to relinquish its right to the fund. The resolution does not in the slightest degree tend to support the conclusion reached by the court.
In Norman, Auditor v. The Kentucky Board of Managers, 93 Ky., 543, [20 S. W., 902], in speaking of the relation which the commissioners sustained to the State, the court said, “The commissioners selected to expend the money ar,e merely the State’s agents to do so, and provide the exhibit for the benefit of its people.”
It necessarily follows that the contracts which the commissioners were authorized to enter into obligated the State, and not the board. If they were a corporation under the name of the board of managers, etc., it was none the less an agency of the State, without right to sue or be sued. There was no such right conferred by the act. There is no language employed in the act, and nothing in the nature of its duties, which indicates that the Legislature intended to create the board a corporation.
In the case of Hancock v. Louisville & Nashville Railroad Co., 145 U. S., 409, [12 Sup. Ct., 969], does not sustain the court’s conclusion that the board is a corporation. In that case certain persons were directed to do certain things, in the way of issuing bonds of a taxing district to a railroad company. Under the act the district became a stockholder of the railroad company, and the question arose as to the right of the district to vote its stock. The court held that under the act under which the bonds of the district were authorized to be issued to the railroad company, and its stock to be issued to the district, the district was created *850a corporation, although not designated so by the terms of the act.
If such a question could and did arise in this case, as to whether the State had been created a corporation by the act under which the commission was created, then the doctrine of that case would be applicable. The county judge and others who acted for the taxing district in the Hancock case were not declared a corporation, but the district itself was adjudged to be a corporation; so there is not the slightest analogy between that and the case under consideration.
The right of Herr to sue the Kentucky Central Lunatic Asylum, 17 Ky. Law Rep., 320, [30 S. W., 971], was adjudged because the charter expressly permitted it “to sue and be sued.”
It was said in Tate, &c., v. Salmon, &c., 79 Ky., 543: “It has been repeatedly decided by this court that, in the absence of law authorizing it, the State can not be made a party defendant or garnishee, and is not suable in her own courts; that parties will not be allowed to evade this inhibition by ignoring the State in their suits, and proceeding directly against the public officer having the custody of the moneys sought to be reached.”
In the case of Williamson, by, &c., v. Louisville Industrial School of Reform, 95 Ky., 251, [44 Am. St. R., 243; 24 S. W., 1065], it appeared that it was a chartered corporation, with the usual powers to sue and be sued; and it was held to be an agency of the State, and for that reason it was held that it could not be sued.
The untenable position is assumed by the court, that, although you can not sue the State without her consent, *851you can sue her agents without her consent, and appro: priate money in their hands to the payment of the alleged claim against the State. If this were true, the doctrine that a State can not be sued would become obsolete, because parties would sue the agents, and not the principal. The board is said to be a corporation distinct from the State, bound for its obligations; yet its officers are the salaried officers of the State, make reports to the State of their acts, hold the funds of the State, and are commanded to cover the unexpended portion into the treasury of the State.
The action is, to all intents and purposes, one against the State. It is the State’s property, and not that of the commissioners, that is to be affected by the judgmenr. It is the right of the. State that is assailed. It is true, the attack is not made against the State directly, but through her officers. To proceed in this way is just as objectionable as if the action had been instituted directly against the State. Whoever deals with a sovereign State is aware that he must rely entirely upon the sense of justice and good faith of the State, and that the courts can not interfere to enforce contracts, except wherein she has given her consent.
Many authorities could be cited to sustain the conclusion reached in this dissenting opinion, but it is deemed unnecessary to do so.
JUDGE GUPPY CONCURRING.