Farnsworth v. Louisiana Highway Commission, 2513.

• Decision Date: 27 April 1934
• Docket Number: No. 2513.,2513.
• Parties: FARNSWORTH v. LOUISIANA HIGHWAY COMMISSION et al. (JONES & LAUGHLIN, Intervener).
• Court: U.S. District Court — Western District of Louisiana

8 F. Supp. 11

FARNSWORTH v. LOUISIANA HIGHWAY COMMISSION et al. (JONES & LAUGHLIN, Intervener).^*

No. 2513.

District Court, W. D. Louisiana, Opelousas Division.

April 27, 1934.

Deutsch & Kerrigan & Burke, of New Orleans, La., for plaintiff.

J. C. Henriques and Rosen, Kammer, Wolff & Farrar, all of New Orleans, La., for exceptors.

Lewis L. Morgan, of Covington, La., and E. R. Stoker, of Baton Rouge, La., for defendant.

DAWKINS, District Judge.

In this case the plaintiff sued the highway commission of Louisiana as the principal in a contract for the construction of certain roadwork in this state, at the same time making the surety upon the plaintiff's bond, Union Indemnity Company of New Orleans, through its receivers, and the Jones & Laughlin Steel Corporation, a furnisher of certain materials, parties, in order that they might assert their rights, all in accordance with a concursus proceeding authorized by the state law.

The defendant highway commission excepted to the jurisdiction on the ground that the plaintiff was not a resident of the state of Mississippi, as he alleged, but a citizen of Louisiana, and hence there was no diversity of citizenship. At the hearing on this plea, evidence was taken as to the citizenship of the plaintiff, and, on the argument, counsel for the commission urged the further point that the highway commission was not a citizen of the state of Louisiana within the meaning of the federal law vesting jurisdiction in this court between citizens of different states. At the same time, this defendant filed an exception of no right or cause of action.

The matter was argued orally and briefs were subsequently filed. The only point discussed in the briefs is as to whether the defendant highway commission is a citizen of Louisiana within the meaning of the federal statute, or a state agency of such character that the suit is in reality one against the state of Louisiana. Hence this is the only question the court will pass upon at this time.

In support of its contention, the commission cited, among others, the case of State Highway Commission of Wyoming v. Utah Construction Company, 278 U. S. 194, 49 S. Ct. 104, 73 L. Ed. 262, wherein it was held that a similar suit against the highway commission of Wyoming was in reality one against that state. On the other hand, the plaintiff relied upon the fact that the Supreme Court of Louisiana has construed the provisions of the Constitution and statute creating the highway commission of this state, and decided that it is a corporate body, separate and distinct from the state, to such extent that it may sue and be sued apart from the state, and can be represented by counsel other than the Attorney General, notwithstanding a provision of the state Constitution which makes that officer the sole counsel for the state in all legal matters, including lawsuits, where its interests are involved.

The provisions of the statute creating the highway commission in the Wyoming Case were substantially the same as those in the present case, but the Supreme Court of that state had never construed its law to the extent of defining the character or status of its highway commission; hence the Supreme Court of the United States had to make its own construction, and found, in view of all the circumstances, that the commission had no existence or interest in the subject-matter of the litigation apart from the state, and therefore the action was one against it, which prevented a federal court from taking jurisdiction on the ground of diverse citizenship. However, it cited decisions of the Supreme Court of Wyoming in similar matters, to wit: Hjorth Royalty Co. v. Trustees of University of Wyoming, 30 Wyo. 309, 222 P. 9, and Franzen v. Southern Surety Company, 35 Wyo. 15, 246 P. 30, 46 A. L. R. 496, holding that trustees of a state university, etc., were mere state agencies.

In the case of Saint, Attorney General, et al., v. Allen et al., 172 La. 350, 134 So. 246, 247, the Attorney General of Louisiana, in his own behalf and in the name of the state, brought suit against the highway commission of Louisiana, and its members in their official capacity, as well as five attorneys employed by the commission, alleging that the employment of the latter was illegal and seeking an injunction against the commission and its members prohibiting the payment of the salaries of the said attorneys, amounting to $14,000 a year. The Attorney General alleged that under the Constitution of the state (Const. 1921, art. 7, § 56) it was his mandatory duty to "attend to, and have charge of all legal matters in which the State has an interest, or to which the State is a party," and, if any act of the Legislature purported to provide otherwise, it was unconstitutional. In passing upon the matter, the court, among other things, said:

"The case involves a consideration of Act No. 95 of 1921 (Ex. Sess.) creating the Louisiana highway commission, a consideration of sections 55 and 56 of article 7 of the Constitution of 1921, creating the office of Attorney General, and stating the duties and powers of that official, and Act No. 125 of 1912, as amended by Act No. 221 of 1920.

"The commission was created by Act No. 95 of 1921 (Ex. Sess.) in carrying out the provisions of section 19 of article 6 of the Constitution of 1921, relative to establishing and maintaining a system of hard surface state highways. * * * The first section creates the commission. The third section establishes the domicile of the commission at the state capital, which is Baton Rouge, and also provides that `the Commission shall be a body corporate and as such may sue and be sued, plead and be impleaded, in any Court of Justice.' The sixteenth section provides that every contract for highway improvement, under the act, must be made in the name of the State of Louisiana, be signed by the state engineer and the other contracting party, and approved by the commission, and that no such contract shall be entered into, nor shall any such work be authorized, which will create a liability on the part of the state in excess of the funds available for expenditure under the terms of the act. Section 18 provides that the cost of all highway and bridge construction, under the act, shall be paid out of the general highway fund, although local aid may be received. This fund, as appears from the thirty-fourth section of the act, consists of all moneys, dedicated to the construction and maintenance of highways and bridges of the state by the Constitution or the Legislature, and any moneys received from the federal government. In the twentieth section the act provides that the...