ORTH, J., delivered the opinion of the Court.
This appeal, before us by grant of writ of certiorari to the Court of Special Appeals, wherein it was pending argument and decision, is in an unusual posture. The final judgment from which the appeal was taken was an order of the Circuit Court for Howard County entered in an action under the Uniform Declaratory Judgments Act brought by John K. Ruff, Inc. (Ruff) against the Board of Trustees of Howard
It is of no moment that the matter of sovereign immunity was not raised below by the pleadings or otherwise. We made clear in Bd. of Education v. Alcrymat Corp., 258 Md. 508, 516, 266 A.2d 349, 353 (1970) that "... the law is well established that counsel for the State or one of its agencies may not either by affirmative action or by failure to plead the defense, waive the defense of governmental immunity in the absence of express statutory authorization, or by necessary implication from a statute...."
Once venerated, recently vilified, and presently substantially limited, the doctrine of sovereign immunity has been long recognized by this Court. We have applied the doctrine for over a century, and a compendium of our discussions regarding it, from State v. B. & O.R.R. Co., 34 Md. 344 (1871), aff'd, 21 Wall. 456 (1875) to Calvert Associates v. Department, 277 Md. 372, 357 A.2d 839 (1976), was set out in American Structures v. City of Balto., 278 Md. 356, 359, 364 A.2d 55, 56 (1976):
The frequent and increasingly vigorous attacks upon the doctrine have been no more persistent than our refusal to abrogate or modify it by judicial fiat. We have consistently adhered to the view that "... it is desirable and in the public interest that any change in the doctrine of sovereign immunity should come from the legislative branch of the State Government rather than from the judicial branch inasmuch as there are fiscal considerations, administrative difficulties and other problems in balancing the rights of the State and its agencies with new possible rights of the individual citizens, which can far better be considered and resolved by the legislative branch than by the judiciary of the State." Jekofsky v. State Roads Comm'n, 264 Md. 471, 474, 287 A.2d 40, 42 (1972).
As far as community colleges are concerned, the doctrine of sovereign immunity has also been partially waived by ch. 549, Acts 1971, which as amended by ch. 528, Acts 1972, and now codified as Code (1957, 1975 Repl. Vol.) Art. 77A, § 10A, provides that the board of trustees of such colleges:
That law has no application to this case either. As we observed in Charles E. Brohawn & Bros. v. Board, 269 Md. 164, 171-172, 304 A.2d 819, 823 (1973), "[i]t affects only those claims which would be covered by such a `comprehensive liability insurance' policy and, to the extent of the policy, provides a fund from which these can be paid."
Over half a century ago this Court observed in Williams v. Fitzhugh, 147 Md. 384, 386, 128 A. 137, 137-8 (1925):
In quoting this with approval in Charles E. Brohawn & Bros. v. Board, supra, 269 Md. at 169, 304 A.2d at 822, the Court substituted "Board of Trustees" for "State Board of Education". It was clear that in the frame of reference of the opinion, the Court considered the Board of Trustees of a community college to be an agency of the State for the purpose of sovereign immunity just as the Court had so considered the State Board of Education years ago. In Brohawn we made an examination of the relationship which exists between this State and the community colleges located within its borders in order to determine whether the
As the Board here is an agency of the State of Maryland, a litigant is precluded from asserting an otherwise meritorious cause of action against it unless the sovereign immunity which the Board enjoys has been expressly waived by statute or by a necessary inference from such legislative enactment. Dunne v. State, 162 Md. 274, 288-9, 159 A. 751, 757 (1932). We find that sovereign immunity with respect to boards of trustees of community colleges has been expressly waived by statute. Chapter 873, Acts 1973, was enacted, according to its title, "... to resolve doubts as to whether the trustees of community colleges and trustees of regional community colleges have the power and authority to sue and be sued." It simply added a new subsection (1-1) to § 1 of Art. 77A, effective 1 July 1973, and by it vested such trustees with the power "To sue and be sued." Previous decisions of this Court indicate that the "power" to be sued, bestowed upon an agency of the State by the General Assembly is, with limitations, an express waiver by statute of sovereign immunity as to that agency. In Weddle v. School Commissioners, 94 Md. 334, 51 A. 289 (1902), the Board of School Commissioners of Frederick County, entitled to the benefit of sovereign immunity, was made "capable to sue and be sued" by statute and was the defendant in a tort action to recover damages for a pupil's death which was alleged to have been caused by the Board's negligence. The plaintiff urged that the declaration that the Board was capable to sue or be sued should be construed as imposing unqualified liability in that respect. The Court did not agree: "Now it is obvious, we think, that the Legislature intended by the use of the language `shall be capable to sue and be sued' to restrict the liability of the Boards of County School Commissioners to such suits, in respect to matters within the scope of their duties and to such things as the boards are empowered to do." Id., at 344, 51 A. at 291. As the tort action was not with respect to a matter within the scope of the Board's duties and did not involve such a thing as it
Code (1957, 1975 Repl. Vol.) Art. 77, § 38 provides that a county board of education "... shall be capable to sue and be sued...." In light of this law, we said in Bolick v. Bd. of Education of Charles Co., 256 Md. 180, 183, 260 A.2d 31, 32 (1969): "Boards of education in this State [although State agencies], do not per se enjoy governmental immunity from suit...." See, Thomas L. Higdon, Inc. v. Board, 256 Md. 595, 261 A.2d 783 (1970); Bd. of Education v. Alcrymat Corp., supra, 258 Md. at 512, 266 A.2d at 351.
In Charles E. Brohawn & Bros. v. Board, supra, decided five days after the approval of ch. 873, Acts 1973, giving boards of trustees of community colleges the power to sue and be sued, but before that law became effective, we discussed the similar provision in Art. 77, § 38, which provided that a county board of education can both sue and be sued. It was argued, relying principally on Keifer & Keifer v. R.F.C., 306 U.S. 381 (1939), that the Board of Trustees of Chesapeake College, as an offspring of the boards of education of the counties concerned, inherited their waiver of immunity conferred by Art. 77, § 38. We found that the reasoning faltered when applied to a regional type college as distinguished from a single county community college. We noted that a regional community college is not brought into being by any action of a county board of education. We also thought that there may be some significance to the fact that although the board of education constitutes the board of trustees of a single county community college, members of the board, but not necessarily all, constitute the regional community college board of trustees. Thus, we did not, expressly or by implication, reject the notion that the grant of statutory
We conclude that when the General Assembly expressly authorizes suits to be brought against one of the State's agencies, it is the giving of a positive consent and has the effect of waiving sovereign immunity as to that agency within its scope of duties and obligations. It does not necessarily follow, however, that a money judgment may therefore be obtained, even with respect to matters within the scope of the duties of the agency. As we next discuss, an action for a money judgment may not be maintained unless funds had been appropriated for that purpose or the agency can provide funds by taxation.
Legislative authority for a governmental agency to be sued is not free from restrictions, even though limitations are not expressly made by the Legislature. Such authority does not impose unqualified liability even as to matters within the scope of the agency's duties and obligations. This Court has consistently held that suits may not be maintained unless money has been appropriated for the payment of such damages as may be awarded, or the agency itself is authorized to raise money for that purpose. We said in University of Maryland v. Maas, supra, 173 Md.at 558-559, 197 A. at 125:
See Bolick v. Bd. of Education of Charles Co., supra, 256 Md. at 183, 260 A.2d at 32, and Thomas L. Higdon, Inc. v. Board, supra, applying it; Weisner v. Bd. of Education, supra; Williams v. Fitzhugh, supra; Fisher & Corozza Co. v. Mackall, 138 Md. 586, 114 A. 580 (1921); Weddle v. School Commissioners, supra. It follows, and we so hold, that sovereign immunity is a valid defense against a suit brought for a money judgment in assumpsit under the contract here against the Board unless funds have been appropriated for the payment of such damages as may be awarded, or the Board is authorized to raise funds for that purpose.
We have declared that the Board was an agency of the State. Therefore, the doctrine of sovereign immunity applicable to the State was also applicable to the Board. We have found that the General Assembly directly waived the sovereign immunity of the Board. We have determined that, despite the waiver, sovereign immunity would still be a defense to a suit brought for a money judgment in contract against the Board unless funds have been appropriated for the purpose or the Board can provide funds by taxation. We must next ascertain whether funds are in fact available for the satisfaction of such a judgment or whether there is power reposed in the Board to provide such funds by taxation. The latter is simply answered. Although the Board has the power "To receive local, State, and federal funds to
Of course, all that we have said concerning sovereign immunity would be material only if the Board were liable for the sales tax due and payable in furtherance of the contract. We have indicated that we thought that the trial court was correct in holding that the Board was liable. We now give our reasons.
Early in April 1974 the Board invited general contractors to bid on the construction of a Nurse Education Facility for the College under designated terms, conditions and specifications. Ruff was among those who responded to the invitation, and its fixed-sum bid of $2,088,100 was accepted. Thereupon, the Board and Ruff entered into a written contract on 28 June 1974, using the American Institute of Architects standard form of agreement between Owner and Contractor where the basis of payment is a stipulated sum. Article 1 of the contract pertained to the contract documents. It read:
In establishing the fixed-price amount of its bid, Ruff did not include any sums representing Maryland sales tax on the purchase of materials for the construction of the facility, and the subcontractors who agreed with Ruff to perform part of the work covered by Ruff's contract with the Board, did not include any such sums in their bids. Pursuant to Specification 1.24.02 the Board gave Ruff Exemption Certificate No. 08798. It had been issued by the Comptroller of the Treasury on 13 April 1970 and authorized exemption from payment of sales tax on those purchases of taxable personal property or services purchased for use in carrying on the work of the Board. The construction of the facility began.
It appeared thereafter that the facility construction project was not exempt from Maryland sales tax. The Comptroller of the Treasury so informed Ruff and its subcontractors. On 23 September 1975 the State filed a tax lien against Ruff for sales taxes due from 23 September through 27 December 1974, plus penalties and interest, and the subcontractors, complaining that they had bid on the basis of sales tax exemption, demanded that Ruff adjust their contracts to include additional sums for sales taxes
On 2 October 1975 Ruff instituted the declaratory judgment action against the Board. After Answer by the Board, Ruff moved for summary judgment. The court below granted the motion and on 19 April 1976 made its declaration of the rights of the parties. The doctrine of sovereign immunity was not considered.
Still with no consideration given to the doctrine of sovereign immunity, the Board urges that Ruff was not entitled to summary judgment because there was a dispute as to a material fact. Implicit in the grant of the motion for summary judgment is that the trial court summarily determined, as it may, that there was no bona fide issue between the parties. In the frame of reference of the court's consideration, we are in accord with this determination. The facts material to the controversy as presented were that the contract between the parties contained a provision that materials purchased to perform the work called for were to be exempt from sales tax. Ruff and its subcontractors, however, were obliged to pay sales tax on those materials. The pleadings and depositions on file and the affidavits submitted by Ruff as the moving party, set forth competent evidence to show these facts. The Board did not present evidence which was sufficient to dispute them. Lynx, Inc. v. Ordnance Products, 273 Md. 1, 327 A.2d 502 (1974); Melbourne v. Griffith, 263 Md. 486, 283 A.2d 363 (1971).
On the undisputed facts Ruff was entitled to summary judgment as a matter of law. Maryland Rule 610 d 1. As we see it, the controversy is simply determined. The clear import of Specification 1.24 was that in bidding on the job no Maryland sales tax need be considered and Ruff presented his bid accordingly. When his bid was accepted, Specification 1.24 was made a provision of the ensuing contract. In other words, the agreement called for Ruff to perform certain work for the Board at a stipulated sum, arrived at by Ruff and accepted by the Board, on the Board's assurance, written into the contract, that no sales tax would
The entire controversy here has been narrowed to the one issue whether funds are in fact available to the Board in an amount sufficient to satisfy a money judgment for the sales tax, interest and penalties, paid and payable in the construction of the facility under the contract. If funds are available, the waiver of sovereign immunity is complete, and an action for a money judgment for breach of the contract would lie. On the other hand, if funds are not available, such action would be precluded by the application of the doctrine of sovereign immunity.
As we are not able to resolve the issue on the record before
Case remanded for further proceedings in accordance with this opinion; costs to abide the result below.