St. Regis Paper Co. v. New Hampshire Water Res. Bd.

• Citation: 26 A.2d 832
• Parties: ST. REGIS PAPER CO. v. NEW HAMPSHIRE WATER RESOURCES BOARD et al.
• Decision Date: 02 June 1942
• Court: Supreme Court of New Hampshire

26 A.2d 832

ST. REGIS PAPER CO.

v. NEW HAMPSHIRE WATER RESOURCES BOARD et al.

Supreme Court of New Hampshire. Coos.

June 2, 1942.

Rehearing Denied June 24, 1942.

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Suit by the St. Regis Paper Company against New Hampshire Water Resources Board and others to require the board to provide a suitable sluiceway or other convenient means at a dam for passage of logs and pulpwood. The cause was transferred to the Supreme Court without ruling on questions of law and on exceptions.

Bill dismissed.

Bill in equity. The plaintiff owns large holdings of forest lands in the drainage area of the Connecticut River above the Pittsburg dam. The dam has been so constructed as to make the river unavailable for the passage at the dam of logs and pulpwood cut on the area. The plaintiff claims the right as a member of the public that the Board be required to provide a suitable sluiceway or other convenient means at the dam for the passage of its logs and pulpwood.

The trial court (Lorimer, J.) has transferred without ruling the questions whether the plaintiff may maintain the bill and be entitled to relief, whether the bill should be dismissed as to any or all of the defendants sought to be made parties, and whether certain requests for rulings should be granted. Many exceptions are also transferred. The opinion states additional facts deemed material.

Bernard Jacobs, of Lancaster, and Horace R. Lamb, of New York City, for plaintiff.

Richard I. Upton and Robert W. Upton, both of Concord, for Water Resources Board and its directors.

Frank R. Kenison, Atty. Gen. (Ernest R. DAmours, Asst. Atty. Gen., of counsel), pro se.

ALLEN, Chief Justice.

The legislation creating the State Water Resources Board provides for a state enterprise to be undertaken with some application of the law of private relations. But the state's interest is dominant and controlling, and rules of private law govern only in certain respects the manner of financing, establishing, constructing and maintaining a project. It was evidently thought that as a means to an end projects within the Board's authority might be better undertaken, developed and operated, not by private parties, but on a basis of private relationships to the extent prescribed by the legislation. The legislation draws no specific boundary line marking the application of private or public law in the conduct of the Board's undertakings, and no application of private law is to be declared beyond the clear intendment of the legislation. The undertakings being public, public law governs except as the legislation provides otherwise.

While the Board is liable to suit "in the same manner as a private corporation", the extent of liability is far short of that of general private liability, and is limited to such as is thought to be in furtherance of the execution of a project. So far as liability may tend to defeat the objectives of the legislation, it is not imposed by the provision for suits against the Board. As a general governing rule of demarcation, private liability inheres for the Board's contracts duly entered into and for wrongful conduct in the performance of its functions and projects, but not for the plans and undertaking of a project within its authority and approved and directed by the Governor and Council.

The Board is a branch of the executive department of the State Government. Although nominally created by the legislation as a corporation, its status as a separate entity is only an illusory one of words. As a state agency it stands on the same footing as any unincorporated administrative bureau. Its five directors manage it, but the Act (Laws 1935, c. 121) does not constitute them members. The State is the sole member, and in the realm of facts it has but imaginary existence apart from that of the State itself. The concept that one may be one's own agent disregards actuality, and its expression is merely convenient phraseology in serving to define relations of authority, duties and liabilities. Differing from the ordinary corporation, the Board is not a body or group of members associated with internal and external relations, and as a corporation sole, it is the sole beneficiary of its own legal existence. The Board without its fictitious garb of appearance as an offspring of the State would be shorn of none of its authority and functions and would be under no different relations with those with whom it enters into relationship in the conduct and performance of its undertakings. Within circumscribed limits the State, by the legislature, has prescribed the terms and conditions upon and under which it may act in engagement of its functions. In short, the relation between the State and the Board is not one of principal and agent, but the Board is an agency which is a part of the State Government.

The Board has been constituted to perform a governmental function. The creation of its fictitious independent existence apart from that of the State Government is merely a denotive statement in aid of powers delegated, functions assigned, duties prescribed, and liabilities assumed by the State in respect to its activities. In its aspect as a private corporation, its aspect as a public agency at all times prevails and controls. Fundamentally and in essential principle the controversy here is between the plaintiff and the State, which has consented to be sued in a round-about manner. Any decree granting the plaintiff relief would be in every practical and effective sense against the State, with such remedy of enforcement as the legislation permits.

The only purpose and effect of the legislation in establishing the Board as a corporate entity is to provide special rules for the conduct and relations of the Board as exceptional to those otherwise applicable to a state agency, and this feature of the legislation must receive consideration for its bearing on other features.

As preliminary matters of attention, it was error to deny the Attorney-General's motion that the bill, in seeking to make him a party without his consent, be dismissed. The finding that he took part in the trial of the suit on its merits is set aside. His presence during the trial was not participation, and the record is bare of evidence to sustain the finding.

Any requirement that he be joined as a party would be based on one or both of two theories. One is that it was his duty in behalf of the State to assert, or at least to authorize the assertion of, the plaintiff's claim of public interest. Short of this theory is one that by his appearance in the suit as the representative of the State it would be bound by any decree based upon a determination of the public interest.

Neither theory is valid. It is said in Blanchard v. Boston & M. Railroad, 86 N.H. 263, 265, 167 A. 158, 159: "When the state, by those having its authority, takes either a positive or neutral position in respect to the public interest, it determines what the claim of public interest is". In the case here the Attorney-General has taken a position of neutrality in behalf of the State, and this determination of his duty, exercised in good faith, is not subject to judicial appeal or review at the demand of individuals. Since the State cannot be sued directly or indirectly without its consent (Western Union Tel. Co. v. State, 64 N.H. 265, 271, 9 A. 547; Bow v. Plummer, 79 N.H. 23, 24, 104 A. 35; Conway v. New Hampshire Water Resources Board, 89 N. H. 346, 348, 199 A. 83), and since it has here given no consent, except to permit suit against the Water Resources Board as its agency, the plaintiff's right to have the Attorney-General joined as a party must be denied.

Moreover, in the permission of suit against the Board the State has in effect and reality consented to suit against itself. Decision of the public interest is as binding upon it in its standing as a party privy as though it were a party in its own name. But the Board may act without required reference to the Attorney-General. In its necessarily implied authority to deny, in behalf of the State, the plaintiff's claim of a public interest, it is seriously doubtful whether the Attorney-General might rightfully join with the plaintiff in assertion of its claim. In this respect the Attorney-General's authority has very arguably been transferred to the Board, as the effect of the legislation creating it.

Nor in the aspect of the Board as a private corporation is the Attorney-General's intervention as a party a requirement. While he was joined as a party in Connecticut, etc., Co. v. Olcott Falls Co., 65 N.H. 290, 21 A. 1090, 13 L.R.A. 826, it was to avoid doubts, "without considering the question whether the bill" could be maintained by the plaintiff. 65 N.H. 377, 21 A. 1090. Later cases show that in private litigation the Attorney-General may not be made an involuntary party. Whitcher v. State, 87 N.H. 405, 406, 181 A. 549; Hoban v. Bucklin, 88 N.H. 73, 76, 184 A. 362, 186 A. 8. In such litigation the principle of res adjudicata by which only the parties to the litigation are bound by the judgment rendered therein serves to protect the State in respect to any decision of the public interest upon which the judgment is founded.

The bill should also have been dismissed as to the personal defendants both as directors and individually. Their alleged wrong is not in acting ultra vires nor in usurping powers, but in the improper exercise of the powers delegated them. As state officials they are under no personal liability for performance of their judicial functions in ascertaining facts and deciding thereon. Sweeney v. Young, 82 N.H. 159, 131 A. 155, 42 A.L.R. 757; La Bonte v. Berlin, 85 N.H. 89, 91, 154 A. 89. As directors they are under no present liability to the plaintiff. Any order against the Board would require its performance by the directors in office at the time of the order, who may or may not be those now joined as defendant...