State ex rel. Point Towing Co. v. McDonough

• Citation: 150 W.Va. 724,149 S.E.2d 302
• Decision Date: 12 July 1966
• Docket Number: No. 12576,12576
• Parties: STATE ex rel. POINT TOWING COMPANY, a corporation, v. Robert P. McDONOUGH, Director of the West Virginia Department of NaturalResources, Truman E. Gore, etc., et al.
• Court: Supreme Court of West Virginia

Page 302

149 S.E.2d 302

150 W.Va. 724

STATE ex rel. POINT TOWING COMPANY, a corporation, v. Robert P. McDONOUGH, Director of the West Virginia

Department of NaturalResources, Truman E. Gore, etc., et al.

No. 12576.

Supreme Court of Appeals of West Virginia.

Submitted June 21, 1966.

Decided July 12, 1966.

Syllabus by the Court

1. Except as otherwise provided in Code, 1931, 12--3--17, a spending unit of the state government is precluded from the creation of an obligation purporting to bind the state to make a purchase during the next fiscal year, and any contract creating such obligation is invalid.

2. A contract of purchase entered into on behalf of the state providing for the expenditure of state funds during the next fiscal year is invalid.

3. Funds appropriated by the 1965 Legislature did not become existing funds, out of which purchases could be made, until July 1, 1965, and any attempt prior to that date to obligate such funds for expenditure, except as provided in Code, 1931, 12--3--17, was unlawful.

4. Mandamus will not lie to compel the performance of an illegal or unlawful act.

5. Inasmuch as the Court will not compel the performance of a useless act, mandamus will never be issued in any case where, if used it would prove unavailing, fruitless or nugatory.

Donald C. Carman, Henry C. Bias, Jr., Charleston, for relator.

C. Donald Robertson, Atty. Gen., Thomas P. O'Brien, Jr., Asst. Atty. Gen., Charleston, for respondent.

CAPLAN, President.

In this original proceeding in mandamus the petitioner, Point Towing Company, a corporation, seeks a writ to compel the respondents, Robert P. McDonough, Director of the Department of Natural Resources for the State of West Virginia, Truman E. Gore, Commissioner of the Department of Finance and Administration, and William L. Coffman, Director of the Budget Division of the Department of Finance and Administration, to prepare, issue, process and submit a proper requisition to the Auditor of the State of West Virginia whereby the petitioner may be paid the sum of $20,500.00 which the said petitioner alleges is due and owing to it. In the alternative the petitioner prays that a writ be awarded commanding the respondents to institute an action in eminent domain wherein the value of the towboat taken by the State can be properly determined and payment therefor made to the petitioner.

A rule was granted on June 6, 1966, returnable on June 14, 1966, at which time, upon the motion of the petitioner, the hearing thereon was continued until June 21, 1966. On the latter date the case was submitted for decision upon the petition; the answer and demurrer of the respondents; the petitioner's replication to said answer; upon the exhibits of each of the parties; and upon the briefs and oral arguments of counsel.

The petitioner, a Pennsylvania corporation, is engaged in the business of river transportation and in the operation thereof maintains offices in Kanauga, Ohio. Sometime during the month of February or March of 1965 representatives of the State of West Virginia approached the petitioner at its Kanauga offices and inquired about the possibility of purchasing a towboat. Upon being informed that two such boats were available for sale, a report thereof was made to the West Virginia Board of Public Works. Thereafter, at the request of that Board and the Governor of the State of West Virginia, the Honorable Gus R. Douglass, Commissioner of Agriculture and member of the Board, made an inspection of the two boats and by letter of March 9, 1965 recommended that, if one is to be purchased, the State purchase the one named and designated the 'Thelma-Ann'.

By an agreement dated May 31, 1965, designated BARGE CHARTER PARTY, the petitioner agreed to 'let' and the charterer, State of West Virginia, Department of Natural Resources, agreed to 'hire' the 'M/V Thelma-Ann' for a period of one month at a rental rate of $500.00 per month. On the face of this agreement was the notation, 'SEE ATTACHMENT ONE'. Attached thereto and contained in the record of this proceeding as Petitioner's Exhibit No. 2 is the following:

'ATTACHMENT ONE TO BE ATTACHED TO AND MADE PART OF BARGE CHARTER PARTY DATED MAY 31, 1965 BETWEEN POINT TOWING COMPANY AND THE STATE OF WEST VIRGINIA, DEPARTMENT OF NATURAL RESOURCES,

'The State of West Virginia, Department of Natural Resources agrees to purchase the M/V Thelma-Ann on July 1, 1965 for the sum of TWENTY THOUSAND DOLLARS ($20,000.00) and further agrees to pay the above sum to Point Towing Company on or before July 15, 1965.'

The above agreement was executed for Point Towing Company by Robert H. Bosworth, its president, and for the State of West Virginia by Warden M. Lane, who at that time was the Director of the Department of Natural Resources. Pursuant to this agreement, the petitioner, on or about May 31, 1965, delivered the Thelma-Ann to the State of West Virginia, Department of Natural Resources, and the latter accepted delivery thereof. Thereafter, the boat was used by the State to two the showboat Rhododendron through the waters of various streams throughout this and other states. The name of this towboat was subsequently changed to 'Mary Alice'.

During the month of January, 1966, while being operated to two the Rhododendron, the motor vessel Mary Alice sank in the waters of the Monongahela River at or near a point known as Mile 91 of said river. So far as this record is concerned, the Mary Alice was never recovered from her watery resting place by the parties to this proceeding.

The petitioner here complains that although the Legislature, at its Regular Session, 1965, made an appropriation of funds from which payment for this boat can be made, the present Director of the Department of Natural Resources, Robert P. McDonough, who succeeded Warden M. Lane in that office, has, upon request by the petitioner, refused and continues to refuse to issue the proper requisition so as to effect the payment of this obligation. It is the position of the petitioner that the aforesaid agreement has been fully executed and that the relief sought here will merely compel the performance of a purely ministerial duty.

In support of its assertion that funds are available from which this obligation can be paid, the petitioner alleges, and it appears from its exhibits, that on March 15, 1965, the Board of Public Works amended the budget of the Department of Natural Resources for the fiscal year 1965--66 by adding $30,000.00 thereto. Furthermore, petitioner's Exhibit No. 3 shows that on June 17, 1965, the Board of Public Works approved an expenditure by the Department of Natural Resources in the sum of $30,000.00 for a boat. This approval, however, authorized such expenditure to be made from the budget for the fiscal year 1965--66, not from the one in effect on the date of the agreement or when such approval was given.

In these circumstances, the petitioner contends, a clear legal right to the relief sought and a corresponding duty on the part of the respondents to perform having been shown to exist, mandamus is the proper remedy and will lie as the only manner in which justice can be accomplished.

The respondents, on the other hand, take the position that the writ sought can not be awarded and assert as their principal reason therefor that the contract, upon which the petitioner solely relies, is invalid. Although the respondents state saveral reasons in support of their contention that the contract is invalid, and all have been considered, we are of the opinion that only one has merit. Succinctly stated, the respondents assert that the contract dated May 31, 1965, whereby the petitioner agrees to sell and the State agrees to purchase the subject boat, is in direct violation of the provisions of Code, 1931, 12--3--17, and is therefore invalid. They say that this was an attempt to incur a liability in a fiscal year which would be paid in the next fiscal year.

Where pertinent, Code, 1931, 12--3--17, reads as follows:

'It shall be unlawful for any state board, commission, officer or employee to incur any liability during any fiscal year which cannot be paid out of the then current appropriation for such year * * *. It shall be unlawful for any * * * officer * * * to pay any account or bill incurred during any fiscal year out of the appropriation for the following year * * *.

'Any * * * officer or employee violating any provision of this section shall be personally liable for any debt unlawfully incurred or for any payment unlawfully made.'

We are in agreement with the respondents' contention. The obvious purpose of the above statute is to prevent a spending unit of the state government from creating a liability which can not be paid from Then existing funds. It expressly precludes the creation of an obligation during a fiscal year which is to be satisfied in the next fiscal year. This Court, in Shonk Land Co., et al. v. Joachim, et al., 96 W.Va. 708, 123 S.E. 444, considering a like statute, said: 'The legislative policy is clear, and the statute must not be warped by construction to defeat it. The Phrases 'funds legally at the disposal of the fiscal body,' and 'which cannot be paid out of the levy for the current fiscal year,' refer to the time when the contract is made,...