Interstate Const. Co. v. Regents of the University of Idaho

• Decision Date: 20 August 1912
• Parties: INTERSTATE CONST. CO., Limited, v. REGENTS OF THE UNIVERSITY OF IDAHO.
• Court: U.S. District Court — District of Idaho

199 F. 509

INTERSTATE CONST. CO., Limited, v. REGENTS OF THE UNIVERSITY OF IDAHO.

United States District Court, D. Idaho, Central Division.

August 20, 1912

C. J Orland, for plaintiff.

Forney & Moore, for defendant.

DIETRICH District Judge.

The plaintiff prays for judgment against the defendant in the sum of $15,554.49, on account of the alleged breach of a contract entered into between the parties on the 24th day of June 1909, by which the plaintiff was to construct for the defendant an addition to the administration building of the University of Idaho. By its demurrer the defendant asserts first, that it is not subject to the jurisdiction of this court; second, that there is a defect of parties plaintiff and, third, that the complaint does not state facts sufficient to constitute a cause of action.

1. The defendant is a corporation created by the Legislature of Idaho (Laws 1888-89, p. 17), and recognized by the Constitution of the state, for the purpose of holding the property and administering the affairs of the State University. Its legal status, for jurisdictional purposes, is discussed at some length, and defined, in a written opinion filed in this court on September 8, 1908, in the case of Phoenix Lumber Company, a Corporation, v. Regents of the University of Idaho, 197 F. 425, and it is not thought necessary here to restate the law upon that head. However, while it was decided in that case that the court had jurisdiction, some new considerations are now advanced, and for that reason the point merits further discussion. There are two branches to the question as now presented. In the first place, assuming that the defendant is a corporation organized only to perform certain public functions of the state, and that it is therefore, in a sense, but an arm of the state, is it subject to the process of any court? And, in the second place, if it be held that it is subject to the process of the state courts, is it, in view of the eleventh amendment to the Constitution of the United States, amenable to the process of the federal courts?

Were it not for certain decisions of the Supreme Court of the state, rendered since the filing of the opinion in Phoenix Lumber Company v. Regents, etc., supra, it would be sufficient to say that the first phase of the question is ruled by that case. But, inasmuch as this court must follow the construction placed upon the Constitution and statutes of the state by the highest court of the state, respect must be had to the recent decisions of that tribunal. At the time the Phoenix Lumber Company decision was rendered, the Supreme Court of the state had entertained jurisdiction upon appeal of a suit similar thereto, but the decision was not thought to be conclusive, for the reason that the precise point was not raised. American Bonding Co. v. Regents of University, 11 Idaho, 163, 81 P. 604. By way of argument in the Phoenix Lumber Company Case, and as tending to support the view that it was the general policy of the state to permit corporate bodies having the management and control of public institutions to be sued in courts of law, reference was had to the charter provisions of certain of the educational institutions, including the two State Normal Schools, in the case of each of which there is an express provision of law to the effect that they may sue and be sued. Thereafter, one of these schools, namely, the one at Albion, was drawn into litigation, the final upshot of which was that the Supreme Court of the state held that the corporate body having control of the school could not be sued in a court of general jurisdiction, and that the only remedy of a contractor was to seek a recommendatory judgment in the Supreme Court of the state under the provisions of section 10 of article 5 of the Constitution, which provides that:

'The Supreme Court shall have original jurisdiction to hear claims against the state, but its decision shall be merely recommendatory; no process in the nature of execution shall issue thereon; they shall be reported to the next session of the Legislature for its action.'

And it was further held that the statutory language, providing that the 'Board of Trustees (of the Albion Normal School) may sue and be sued,' was subject to the limitations of this constitutional provision. Thomas v. State, 16 Idaho, 81, 100 P. 761. If this decision stood alone, I should have no hesitation in reaching the conclusion that the application of the principle upon which it rests requires that it be held that the defendant here is exempt from ordinary judicial process. But later the Moscow Hardware Company, a corporation, having a claim against the Regents of the University, apparently assuming that, under the Thomas decision, its only remedy was an application to the Supreme Court for a recommendatory judgment, under the constitutional provision above quoted, filed its petition in the Supreme Court, and thereafter, upon a reference, the evidence was reported, whereupon the Supreme Court, of its own motion, held that it was without original jurisdiction in the premises, and that the constitutional provision did not apply. Moscow Hardware Co., Ltd., v. Regents of the University of Idaho, 19 Idaho, 420, 113 P. 731. Unfortunately there is, in the majority opinion, no reference to the Thomas Case, and it is not distinguished or expressly overruled; but counsel have not attempted to reconcile the two cases, and I have not been able to do so. The cause of action here presented is, from a legal standpoint, identical with that involved in the Moscow Hardware Company Case, and in the majority opinion there it is said:

'Although the question of the jurisdiction of this court to hear and determine this case is not raised, it is clear that this court has no jurisdiction to render a recommendatory judgment herein. * * * Under the provisions of section 3 of an act of the territorial Legislature approved January 30, 1889, entitled 'An act to establish University of Idaho,' the Board of Regents was made a body corporate by the name of 'The Regents of the University of Idaho,' and under the provisions of section 10, art. 9, of the Constitution of the state, the regents have the general supervision of the University and control and direction of all of the funds of, and appropriations to, the University, under such 'regulations as may be prescribed by law.' The Board of Regents is a body corporate, and when it enters into a contract for the erection of buildings, if it fails to comply therewith, an action may be maintained against it to compel it to do so, which action may be prosecuted in the district court. Under the foregoing provisions of the Constitution and statutes, there can be no doubt but that the Board of Regents is a body corporate, and may sue and be sued, and that, when they enter into a contract, they are liable to the process of the district court the same as any other corporation organized under the laws of the state.'

It will thus be seen that the conclusion of the Supreme Court in its most recent decision is...