Smith v. State

• Decision Date: 02 March 1976
• Docket Number: No. 70,70
• Citation: 289 N.C. 303,222 S.E.2d 412
• Court: North Carolina Supreme Court
• Parties: C. Capers SMITH v. STATE of North Carolina et al.

Page 412

222 S.E.2d 412

289 N.C. 303

C. Capers SMITH v. STATE of North Carolina et al.

No. 70.

Supreme Court of North Carolina.

March 2, 1976.

Hatcher, Sitton & Powell and James J. Booker, Winston Salem, for plaintiff-appellee.

Blanchard, Tucker, Denson & Cline by Charles F. Blanchard, Raleigh, for Joe K. Byrd.

James H. Carson, Jr., Atty. Gen., and Parks H. Icenhour, Asst. Atty. Gen., Raleigh, for defendants-appellants.

SHARP, Chief Justice:

Appellants' first assignment of error challenges the trial court's denial of their motion to dismiss made on the grounds (1) that the State of North Carolina is the real party in interest, and (2) that its sovereign immunity bars plaintiff's action against both the State and the individual defendants, who were State officials acting within the scope of their official authority and in the exercise of the discretion invested in them by virtue of their respective positions.

In determining whether the motion to dismiss was properly denied we first consider whether the doctrine of sovereign immunity precludes plaintiff's action against the State itself without reference to its application to the individual defendants. As to them different considerations are, or may be, involved.

Plaintiff's claim against the State for the salary he alleges he would have earned during the three years and five months of his unexpired term as superintendent of Broughton Hospital, to be tenable, must be based upon status as a State employee under a valid contract of employment. Since the decision in Mial v. Ellington, 134 N.C. 131, 149, 46 S.E. 961, 967 (1930), it has been the law of this State that "an appointment or election to public office does not establish contract relations between the person appointed or elected and the State." See 63 Am.Jur.2d Public Officers and Employees § 10 (1972).

In a sense public office is an employment but, briefly stated, the distinction is this: '(A) position is a public office when it is created by law, with duties cast on the incumbent which involve some portion of the sovereign power and in the performance of which the public is concerned. . . .' Id. at § 11. See also Bland v. City of Wilmington, 278 N.C. 657, 180 S.E.2d 813 (1971); Annot., 140 A.L.R. 1076 (1942).

Plaintiff was appointed superintendent pursuant to N.C.Sess.Laws 1963, ch. 1166, § 4 (codified as G.S. § 122--25 (1964)) (repealed by Sess.Laws 1973, ch. 476, § 133). In pertinent part this enactment provided: 'The Commissioner of Mental Health, with the approval of the State Board of Mental Health, shall appoint a medical superintendent for each hospital. The medical superintendent shall be a medical doctor duly licensed in North Carolina with approved training and experience in psychiatry. The appointment shall be for a term of six (6) years. . . .'

In specifying the powers and duties of the State Board of Mental Health 'a policy-making body within and for the State Department of Health,' N.C.Sess. Laws 1963, ch. 1166, § 3 (codified as G.S. § 122--1.1 (1964)) (repealed by Sess. Laws 1973, ch. 476, § 133) provided, Inter alia: 'The Board shall determine policies and adopt necessary rules and regulations governing the operation of the State Department of Mental Health and the employment of professional and staff personnel. The State Board of Mental Health by and with the approval of the Governor, may terminate for cause the services of any Employee appointed for a specific length of time. In the event of any such termination, severance pay shall be adjusted by the Governor and the Advisory Budget Commission.' (Emphasis added.)

The foregoing statutes clearly makes the madical superintendent of a state hospital a state employee. Thus, simply stated, plaintiff was a medical expert employed to supervise a psychiatric hospital owned and operated by the State. He had no duties which required or permitted him to exercise any portion of the sovereign power of the State. It was the State Board of Mental Health, 'a policy-making body within and for the State Department of Mental Health,' which exercised the State's sovereign power by formulating the policies and guidelines for the operation of its mental hospital. These policies determined, Inter alia, the admission of patients and the extent and duration of their treatment--matters of public concern. The State Board was also authorized to enact ordinances for the regulation and deportment of persons in the buildings and grounds of the mental hospitals. G.S. § 122--16 (1974). Plaintiff, as superintendent of Broughton Hospital, was subordinate to the Board. With the consent of the Governor, the Board could terminate his employment only for cause since he was an employee appointed for a specific length of time. Plaintiff's duties were to implement the Board's directives and policies, and to make those administrative and professional decisions which are daily required of the superintendent of a mental hospital.

The intent of the legislature to give the medical superintendents of the State's mental hospitals the status of employees, as well as the reasons for such designation, is apparent. The proper operation of a mental hospital requires a superintendent who is a medical expert with administrative ability and whose tenure will be unaffected by political changes. Thus, the superintendents themselves were given no policy-making authority. That was reposed in the State Board, the members of which were appointees of the Governor. Divorced from political considerations, the superintendents were to provide the expertise and continuity necessary to insure the continued efficient operation of the hospitals notwithstanding changes in the Executive Department of the State's government.

We hold, therefore, by reason of the statutes cited above that (1) plaintiff was an employee of the State and (2) at the time of his appointment the State employed him as superintendent of Broughton Hospital for a period of six years, provided only his employment not be earlier terminated for cause.

Here it is pertinent to note that N.C.Sess. Laws 1963, ch. 1166, § 13 (codified as G.S. § 122--31 (1964)) provided that the State Board of Mental Health shall fix the salaries and compensation of the superintendents of the State hospitals, and that '(t)he salaries shall not be diminished during the term of the incumbents.' The provision quoted above was carried forward when G.S. § 122--31 was rewritten by N.C.Sess. Laws 1973, ch. 673, § 12 (now codified as G.S. § 122--31 (1974)).

Having determined that a contract existed between plaintiff and the State, the question remains whether the State is immune from an action for damages for the alleged breach of that contract.

The doctrine of sovereign immunity--that the State cannot be sued without its consent--has long been the law in North Carolina. The doctrine has proscribed both contract and tort actions against the state and its administrative agencies, as well as suits to prevent a State officer or Commission from performing official duties or to control the exercise of judgment on the part of State officers or agencies. See Lewis v. White, 287 N.C. 625, 216 S.E.2d 134 (1975); Orange County v. Heath, 282 N.C. 292, 192 S.E.2d 308 (1972); Steelman v. City of New Bern, 279 N.C. 589, 184 S.E.2d 239 (1971); General Elec. Co. v. Turner, 275 N.C. 493, 168 S.E.2d 385 (1969); Nello L. Teer Co. v. Highway Comm., 265 N.C. 1, 143 S.E.2d 247 (1965); Shingleton v. State, 260 N.C. 451, 133 S.E.2d 183 (1963); Great Am. Ins. Co. v. Gold, 254 N.C. 168, 118 S.E.2d 792 (1961); Pharr v. Garibaldi, 252 N.C. 803, 115 S.E.2d 18 (1960); Floyd v. Highway Comm., 241 N.C. 461, 85 S.E.2d 703 (1955); Teer Co. v. Jordan, 232 N.C. 48, 59 S.E.2d 359 (1950); Schloss v. Highway Comm., 230 N.C. 489, 53 S.E.2d 517 (1949); Kirby v. Stokes County Board of Education, 230 N.C. 619, 55 S.E.2d 322 (1949); Prudential Insurance Co. of America v. Unemployment Compensation Comm., 217 N.C. 495, 8 S.E.2d 619 (1940); Vinson v. O'Berry, 209 N.C. 287, 183 S.E. 423 (1936); Carpenter v. Atlanta & C.A.L. Ry., 184 N.C. 400, 114 S.E. 693 (1922); Moody v. State Prison, 128 N.C. 12, 38 S.E. 131 (1901); Clodfelter v. State, 86 N.C. 51 (1882); 7 Strong's N.C.Index 2d, § 4 (1968).

The traditional rules governing the State's liability on its contract and its immunity to suit are stated as follows in 72 Am.Jur.2d, States, Etc. (1974):

'The rights and responsibilities of a state under an ordinary business contract are, with few exceptions, the same as those of individuals. Although it cannot be sued without its consent, the state, when making a contract with an individual, is liable for a breach of its agreement in like manner as an individual contractor. And while it may refuse to respond in damages, and leave a claimant without any remedy, as it may refuse to pay its bonds, the obligation remains. No legislative fiat can destroy or impair that. In order to impose a contractual liability on the state, there must be a contract obligation on its part. It is not bound by a contract entered into by its officers without authority.' Id. § 88.

'As to its contract, the State should be held to the same rules and principles of construction and application of contract provisions as govern private persons and corporations in contracting with each other. But aside from the fact that a contract of the State must ordinarily rest upon some legislative enactment and in this respect is distinguished from contracts with individuals, there is another essential and far-reaching difference between the contracts of citizens and those of sovereigns, not, indeed, as to the meaning and effect of the contract itself, but as to the capacity of the sovereign to defeat the enforcement of its contract. The one may defeat enforcement, but the other cannot. This result flows from the established principle that a state cannot be sued. The legislature has the ability to avoid payment of the obligations of the...