Board of Trustees of State Institutions of Higher Learning v. Wood
| Citation | 779 F.2d 1106 |
| Decision Date | 08 January 1986 |
| Docket Number | No. 85-4115,85-4115 |
| Parties | BOARD OF TRUSTEES OF STATE INSTITUTIONS OF HIGHER LEARNING, Plaintiff-Appellee, v. Elbert Homer WOOD, Jr., Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Beth C. Clay, Alex A. Alston, Jr., Jackson, Miss., for defendant-appellant.
Charles G. Copeland, James R. Moore, Jr., Jackson, Miss., for plaintiff-appellee.
Appeal from the United States District Court for the Southern District of Mississippi.
Before CLARK, Chief Judge, and TATE, and DAVIS, Circuit Judges.
The Board of Trustees of State Institutions of Higher Learning adopted Rules and Regulations to govern loans to medical students designed to encourage needed medical practice in Mississippi communities of 10,000 and under. Dr. Elbert Homer Wood, Jr. applied for and was granted a loan at a time when the Rules and Regulations provided (1) for residency training only in the specialties of Family Practice, Internal Medicine and Pediatrics; (2) that the Board's Rules and Regulations were a part of every loan contract; and (3) that any breach of contract matured the loan and, upon demand, made liquidated damages of $5,000 for each unfulfilled year of the required five years of practice then due and payable.
Disregarding the Board's express refusal of his request to waive the residency training restrictions for him, Dr. Wood chose to pursue a residency in Obstetrics and Gynecology. The Board brought the present action to recover the loan with interest and liquidated damages. The district court found the Board's rule restricting specialization to be reasonably related to the purposes of the medical loan program and validly promulgated. The court further found that Dr. Wood had committed an anticipatory breach of contract that gave rise to an immediate right of action in the Board and entered judgment for the loan amount of $12,000 plus $25,000 in liquidated damages with interest.
In the present appeal, Dr. Wood argues that the Board's rule exceeds and contravenes the Mississippi statutory scheme governing medical loans and converts the liquidated damage provision incorporated in the statutes into an impermissible penalty. The Board contends that they have power to promulgate the Rules and Regulations enumerated above under their statutory authority to prescribe rules and regulations deemed necessary to carry out the purposes of the loan program.
The statutory provision authorizing the promulgation of rules and regulations by the Board was broad enough to encompass the limitation on residency training. The choice to permit only certain specialization by those returning to community practice serves a central aim of the loan program, i.e. to secure the most needed types of practice. That the choice was committed by the legislature to the agency, not the loan recipient, is obvious.
The rules and regulations were incorporated into the contract prior to its execution by Wood....
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