Here, the State asserts none, except its understandable interest in not paying any more than it has to. The State argues that it should be exempt from paying prejudgment interest to the United States because, under its own law, it may not be held liable for interest unless it has consented to be. See Guaranty Trust Co. of New York v. West Virginia Turnpike Comm'n, 144 W. Va. 266, 271, 107 S.E.2d 792, 796 (1959). But the source of this exemption is the State's sovereign immunity, see id., at 274-275, 107 S.E.2d, at 797-798; since the State must consent to be sued by private parties, it may consent in a limited fashion and refuse to be liable for prejudgment interest.
The sovereign immunity of the Parkways Authority's predecessor, the Turnpike Commission, was addressed in Hope Natural Gas Co. v. West Virginia Tpk. Comm'n, 143 W. Va. 913 (1958) and Guaranty Trust Co. of N.Y. v. West Virginia Tpk. Comm'n, 144 W. Va. 266 (1959). Both cases determined that the Turnpike Commission—as it existed then—was not entitled to sovereign immunity under the West Virginia Constitution.
The government revenue bond scheme is simply a straight-up business deal involving government in its proprietary capacity: Lenders conclude that the income from the project will be sufficient to cover repayment of interest and principle; when lenders are wrong, lenders, not taxpayers, take a bath. See State ex rel. State Road Commission v. O'Brien, 140 W. Va. 114, 116, 82 S.E.2d 903, 904 (1954) (principal and interest to be paid "out of the revenues to be derived from the operation of the bridge"); Guaranty Trust Co. of N.Y. v. West Virginia Turnpike Commission, 144 W. Va. 266, 269, 107 S.E.2d 792, 795 (1959) ("the tolls and other revenues received from time to time by the Commission" are pledged or assigned "to secure the payment of such bonds"); State ex rel. Board of Governors of West Virginia University v. O'Brien, 142 W. Va. 88, 90, 94 S.E.2d 446, 447 (1956) ("principal of and interest on such bonds shall be payable solely from the special non-revolving fund" in which are deposited "all fees collect . . . from students at the university other than students in" specified schools).
Most states have held that in the absence of a statute authorizing it, or a lawful contract requiring it, a state is not liable to pay interest on its debts. Maurice L. Bein, Inc., v. Housing Authority (1958), 157 Cal.App.2d 670, 321 P.2d 753; Brown v. State Highway Comm. (1970), 206 Kan. 49, 476 P.2d 233; East Orange v. Palmer (1968), 52 N.J. 329, 245 A.2d 327; Purdy Estate (1972), 447 Pa. 439, 291 A.2d 93; Bond v. State (1967), 70 Wn.2d 746, 425 P.2d 10; Guaranty Trust Co. v. West Virginia Turnpike Comm. (1959), 144 W. Va. 266, 107 S.E.2d 792. We conclude that the trial court erred in allowing interest on the award of back pay to appellee Lewis.
The 1971 Act, as we have previously stated in this opinion, provides that the bonds shall have and are declared to have all the qualities of negotiable instruments. Guaranty Trust Company of New York v. West Virginia Turnpike Commission, 144 W. Va. 266, 107 S.E.2d 792, involved the question whether interest coupons attached to bonds issued and sold by the turnpike commission bore interest from their respective due dates. The turnpike commission contended that it is such an agency of the state as to be entitled to the immunity from payment of interest which, with certain exceptions, applies to the state.
As to interest being allowable either as interestor as damages: 47 C.J.S. Interest, p. 8; 132 S.C. 427, 128 S.E. 865; 57 S.C. 358, 35 S.E. 577; 83 S.C. 16, 64 S.E. 859; 24 A.L.R.2d 928; 69 N.E. 320, 184 Mass. 502. As to the doctrine of sovereign immunitynot being applicable: 30 S.E.2d 726, 126 W. Va. 828; 25 F.2d 480; 267 U.S. 76, 45 S.Ct. 211, 69 L.Ed. 519; 81 C.J.S., States p. 1114; 49 S.C. 449, 27 S.E. 654; Cheves 61; Sec. 1-442, Code of Laws of South Carolina, 1962; Vol. XXX Statutes at Large 881, Sec. 1-431 through 1-452 Code of Laws, 1962; 107 S.E.2d 792, 144 W. Va. 266; 11 So.2d 437, 194 Miss. 119; 24 A.L.R.2d 977; 253 S.C. 639, 172 S.E.2d 827; 194 S.C. 15, 8 S.E.2d 871. Messrs.
A statute similar to that involved in the Bates case is Article 16A of Chapter 17, Code, 1931, as amended, which created The West Virginia Turnpike Commission and authorized it to issue revenue bonds for the construction and maintenance of turnpikes and to pay for such construction and maintenance by the issuance and sale of revenue bonds payable solely from tolls derived from the public use of such turnpikes. In Guaranty Trust Company v. West Virginia Turnpike Commission, 144 W. Va. 266, 274, 107 S.E.2d 792, 797, the Court stated: "The Turnpike Commission was created and authorized to incur a bond indebtedness for the very reason that the State itself is prohibited by Article X, Section 4 of the State Constitution from incurring such indebtedness." State ex rel. The Board of Governors of West Virginia University v. O'Brien, 142 W. Va. 88, 94 S.E.2d 446, involved the constitutionality of a statute formerly designated as Article 11A of Chapter 18, and now, in essentially the same language, appearing in Article 24 of Chapter 18, Code, 1931, as amended.
While the demurrer and answer assert that the issuance of bonds or notes by the Fund would constitute a grant of the credit of the state in violation of Article X, Section 6 of the Constitution of West Virginia, this point of the demurrer has been abandoned and counsel for the respondent conceded in oral argument, and the Court holds, that the Act is not unconstitutional in this respect. See Guaranty Trust Company of New York v. West Virginia Turnpike Commission, 144 W. Va. 266, 274, 107 S.E.2d 792, 797. At a meeting of the board of directors of the Fund duly and regularly called and held on September 25, 1969, there was adopted a resolution, the chairman of the board abstaining from voting thereon, by which resolution the board evidenced its consideration of certain loans proposed to be made by the Fund; made certain findings with respect thereto; and authorized, empowered and directed the respondent, John T. Copenhaver, Jr., as chairman of the board and chief executive officer of the Fund, to execute, as the corporate acts of the Fund, certain contracts respecting the proposed loans, which contracts were specifically described in the resolution.