James & Yost, Inc. v. State Bd. of Higher Educ.

• Citation: 216 Or. 598,340 P.2d 577
• Parties: JAMES & YOST, INC., Appellant, v. STATE BOARD OF HIGHER EDUCATION of the State of Oregon, in its own name and in behalf of the State of Oregon, Respondent.
• Decision Date: 10 June 1959
• Court: Supreme Court of Oregon

Page 577

340 P.2d 577

216 Or. 598

JAMES & YOST, INC., Appellant, v. STATE BOARD OF HIGHER EDUCATION of the State of Oregon, in its own name and in behalf of the State of Oregon Respondent.

Supreme Court of Oregon.

Argued and Submitted Dec. 3, 1958.

Decided June 10, 1959.

Stuart W. Hill, Portland, argued the cause for appellant. On the briefs were Tooze, Kerr, Hill, Dougherty & Tooze, and Keller & Keller, Portland.

John D. Nichols and Lloyd G. Hammel, Asst. Attys. Gen., argued the cause for respondent. With John D. Nichols, Salem, on the brief were Robert Y. Thornton, Atty. Gen., and E. G. Foxley, Dep. Atty. Gen.

Before PERRY ^*, C. J., and ROSSMAN, LUSK, McALLISTER ^**, and SLOAN, JJ.

PERRY, Justice.

Plaintiff, James & Yost, Inc., an Oregon corporation, brought this action to recover for work and labor performed under a construction contract entered into with the defendant State Board of Higher Education of the State of Oregon. The contract relates to the remodeling of Villard Hall and the construction of a new theater building on the University of Oregon campus.

Plaintiff, being dissatisfied with the amount recovered for extra work done at the request of defendant, and because of the refusal of the trial court to accept plaintiff's theory of the measure of recovery under the contract, has appealed.

At the outset, we are met with the contention of the defendant that the State of Oregon is the real party in interest and that the state has not consented to be sued, therefore, plaintiff cannot maintain this appeal. Schrader v. Veatch, Or., 337 P.2d 814; Lucas v. Banfield, 180 Or. 437, 177 P.2d 244; United Contracting Co. v. Duby, 134 Or. 1, 292 P. 309; Mohler v. Fish Commission, 129 Or. 302, 276 P. 691.

There can be little question but that the action is one against the state. The State Board of Higher Education is not a separate and distinct entity, granted attributes of sovereignty, but is an instrument or arm of the state, charged with carrying out one of the functions of government, to-wit, the education of the peoples of the state. ORS 351.010. It has such powers and duties only as the state entrusts to the Board and these powers and duties are set forth by statutory enactment. McClain v. Regents of the University, 124 Or. 629, 265 P. 412.

Article IV, Section 24, of our Constitution provides:

'Provision may be made by general law, for bringing suit against the State, as to all liabilities originating after, or existing at the time of the adopttion of this Constitution; * * *.'

Except in a few instances, not pertinent here, it is clear from this constitutional provision that only the legislature may permit judicial action to be maintained against the state.

The plaintiff points out that in this case defendant appeared generally, and from this argues that defendant, by thus appearing, waived its immunity; citing Clark v. Barnard, 108 U.S. 436, 2 S.Ct. 878, 27 L.Ed. 780; Maguire v. Monaghan, 206 Misc. 550, 134 N.Y.S.2d 320, affirmed 285 App.Div. 926, 139 N.Y.S.2d 883, appeal denied 285 App.Div. 1049, 1129, 141 N.Y.S.2d 501; Parker v. Moore, 222 Ark. 811, 262 S.W.2d 891; Jackson County v. McGlasson, 167 Tenn. 311, 69 S.W.2d 887; Regan v. Babcock, 196 Minn. 243, 264 N.W. 803; Salem Mills Co. v. Lord, 42 Or. 82, 69 P. 1033, 70 P. 832.

While it is true sovereign immunity from suit is a 'personal privilege which it may waive at pleasure,' Clark v. Barnard, supra [108 U.S. 436, 2 S.Ct. 883], a study of these cases immediately shows the fallacy of plaintiff's contention. In each of these cases the sovereign was either plaintiff or intervened seeking affirmative relief. These cases hold, and we think properly, that in such a situation, as to the relief sought, the sovereign has consented to a determination of the issue in its own courts and cannot then claim it is not to be bound by the adjudication.

While it may be contended by the plaintiff that under general rules of procedure the defendant appeared generally by filing a demurrer instead of a motion to quash, it must be quite obvious that the general rule, relied upon by the plaintiff, cannot apply, since under the Oregon Constitution only the people by legislative act may waive the state's immunity from suit. This they have not done either by granting that authority to its agents, the attorney general or the defendant.

Plaintiff also contends that the legislature by general law has authorized it to maintain this suit by reason of the provisions of ORS 351.060, which, so far as applicable, reads as follows:

'The State Board of Higher Education may:

* * *

* * *

'(3) Acquire, receive, hold, control, convey, sell, manage, operate, lease, lend, invest, improve and develop any and all property, real or personal, given to any of the institutions under the control of the State Board of Higher Education by private donors, whether such gifts are made to the State Board of Higher Education or the State of Oregon.

* * *

* * *

'(5) Institute, maintain and participate in suits and actions and other judicial proceedings, in the name of the State of Oregon, for the foreclosure of such mortgages [referring to mortgages authorized by subsection (4) of the same section] or for the purpose of carrying into effect any and all of the powers, duties and authority given to the State Board of Higher Education by this section, ORS 351.070 and 351.150.'

Plaintiff's argument, that this statute permits the maintenance of this action, is grounded (1) on the fact...