State Ex Rel. State Board of Public Affairs v. Principal Funding Corp.

1974 OK 16, 519 P.2d 503, 1974 Okla. LEXIS 259
CourtSupreme Court of Oklahoma
DecidedFebruary 12, 1974
Docket46198
StatusPublished
Cited by12 cases

This text of 1974 OK 16 (State Ex Rel. State Board of Public Affairs v. Principal Funding Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. State Board of Public Affairs v. Principal Funding Corp., 1974 OK 16, 519 P.2d 503, 1974 Okla. LEXIS 259 (Okla. 1974).

Opinions

IRWIN, Justice:

Presented for review is a Certified Interlocutory Order of the trial court concerning the rights of a corporate entity to sue the State in an action at law based upon breach of contract where the State has not consented to being sued. The parties will be referred to as they appeared in the trial court, i. e., Respondent, Principal Funding Corporation, will be referred to as plaintiff, and Petitioners, defendants in the trial court, will be referred to as State.

The facts giving rise to this litigation are briefly summarized.

[504]*504Plaintiff owned certain real property and entered into a written lease agreement for its rental with the proper State officials. The lease was for a basic period of one year and the rental was to be paid in twelve (12) monthly installments of $5,075.00 each.

State refused to pay the last four monthly installments, totalling $20,300.00, on the grounds that it had legally terminated the lease pursuant to its terms; and that it had surrendered possession of the property and plaintiff had accepted its surrender.

Plaintiff first commenced a mandamus action to collect the rentals allegedly due. Apparently the trial court sustained State’s demurrer to plaintiff’s petition based on the grounds that it could not rule on the issues therein submitted, as a matter of law, because several questions of fact existed which would have to be determined before plaintiff was entitled to a writ of mandamus. The pleadings in that case have not been submitted for our consideration. State says in its brief that the mandamus action was dismissed and plaintiff says it was not.

Thereafter, plaintiff commenced an ordinary action at law to recover the $20,300.-00 allegedly due under the lease rental contract. This action forms the basis for this proceeding.

State filed demurrers alleging, inter alia, that the State of Oklahoma was immune from suit in the absence of an express consent thereto and the trial court had no jurisdiction over it without its express consent to being sued having first being obtained.

The trial court overruled State’s demurrers and based on a finding that an immediate appeal would materially advance the ultimate termination of the litigation certified the following question.

“Whether plaintiff may bring and maintain an ordinary action at law against officers of the State of Oklahoma, in their official capacities, for money damages by reason of an alleged breach of a written lease agreement, there being a disputed fact situation in regard to defendant’s (State’s) liability and the amount of damages, if any, alleged to be owing to plaintiff, without the plaintiff first being required to obtain the express consent of the State of Oklahoma to being sued ?”

House Bill No. 1575 of the Second Regular Session of the 1970 Legislature, was approved on April 28, 1970. See 1970 Oklahoma Session Laws, Ch. 330, pgs. 637-640. Section 7 of that enactment made an appropriation for the purposes set forth in the lease rental agreement.

Plaintiff contends that by virtue of the above enactment, the Legislature appropriated funds for an express purpose; that it and State entered into a valid contract (the lease rental agreement) to carry out that purpose; that it committed no acts constituting a breach of that contract but had fully performed under its terms; and that State wrongfully refused to pay the rentals due under the contract.

Plaintiff cites Lingo-Leeper Lbr. Co. v. Carter, 161 Okl. 5, 17 P.2d 365, to support its contention that State is liable in the case at bar because there was a specific legislative appropriation for the purposes for which the lease rental agreement was made. In Lingo, plaintiff furnished materials and supplies for the construction of a state building pursuant to a contract with the proper State officials. The State officials approved plaintiff’s claims but the State Auditor refused to act on the claims and refused to issue a warrant. Plaintiff filed a mandamus action against the State Auditor to require him to act upon the claims and to issue a warrant therefor. The State Auditor’s defense was that there had not been a valid appropriation for the building for which plaintiff furnished materials and supplies.

We denied the writ on the grounds that liability depended entirely upon whether there had been a valid appropriation for the construction of the building and there had not been a valid appropriation.

[505]*505Although State, in the case at bar, makes no contention there was not a valid appropriation for the purposes contracted for in the lease rental agreement, there is a vital distinction between Lingo and the case at bar. Lingo was a mandamus action to require the State Auditor to perform his official duties. In the proceeding giving use to the certified interlocutory order now presented for our review, plaintiff did not seek a writ of mandamus against State officials requiring them to perform their official duties, imposed by law, but seeks a judgment establishing that State is indebted to it for the rentals due under the lease rental contract.

In Oklahoma Agricultural and Mechanical College v. Willis (1898), 6 Okl. 593, 52 P. 921, an action at law was brought against College for a balance allegedly due from College upon a written contract for the furnishing of certain materials and the performance of certain labor in repairing some rooms at the college. Judgment was rendered against College and it appealed. In reversing the judgment on appeal the Court held that College, as a part of the sovereign government, could not be sued without the consent of the state.

In State ex rel. Department of Highways v. McKnight (1972), Okl., 496 P.2d 775, we discussed in detail numerous cases supporting the proposition that a sovereign state cannot be sued except by express legislative enactment; that the right of the sovereign state to immunity from suit is a public right and must not be treated as relinquished or conveyed away by inference or construction; and that the statutes must clearly permit the State to be sued or the right to do so will not exist.

We hold that plaintiff in the instant proceeding may not maintain an ordinary action at law to collect the rentals allegedly due under the lease rental agreement without first obtaining State’s consent to being sued.

The trial court erred in overruling State’s demurrers to plaintiff’s petition and we answer the question certified in favor of State.

Our holding herein does not mean that where an individual or entity enters into a valid contract with the proper State officials and a valid appropriation has been made therefor, and the individual or entity performs all the obligations under the terms of the contract, and the State officials wrongfully refuse to pay the legal contractual obligations, that such individual or entity has no recourse.

12 O.S.1971 § 1451, provides that “The writ of mandamus may be issued by * * * the district court * * * to compel the performance of any act which the law specially enjoins as a duty, resulting from an office, trust or station, ⅝ ⅝

12 O.S.1971 § 1452, provides that the writ of mandamus may not be issued in any case where there is a plain and adequate remedy in the ordinary course of law. We have already held that plaintiff does not have “a plain and adequate remedy in the ordinary course of law.”

Donaldson v.

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Bluebook (online)
1974 OK 16, 519 P.2d 503, 1974 Okla. LEXIS 259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-state-board-of-public-affairs-v-principal-funding-corp-okla-1974.