Altman v. Kilburn

• Citation: 45 N.M. 453,116 P.2d 812
• Decision Date: 17 May 1941
• Docket Number: No. 4569.,4569.
• Parties: ALTMANv.KILBURN et al.
• Court: Supreme Court of New Mexico

45 N.M. 453

116 P.2d 812

ALTMAN

v.KILBURN et al.

No. 4569.

Supreme Court of New Mexico.

May 17, 1941.Rehearing Denied Sept. 22, 1941.

Appeal from District Court, Union County; David Chavez, Jr., Judge.

Action by Edward F. Altman against F. P. Kilburn and another to foreclose paving liens. From an adverse judgment, the defendants appeal.

Reversed with instructions.

Statute providing that suits for collection of taxes or for foreclosure of tax liens shall be barred if not brought within ten years from and after date of delinquency of such taxes does not apply to special improvement assessments, but the statute applies to general taxes. Comp.St.1929, § 141-715.

Bate Bond, of Clayton, and Seth & Montgomery, of Santa Fe, for appellants.

W. A. Keleher and A. H. McLeod, both of Albuquerque (Maurice Sanchez, K. Gill Shaffer, R. F. Deacon Arledge, Sam Dazzo, H. Leslie Williams, M. Ralph Brown, Marron & Wood, D. A. Macpherson, Jr., Robert Hoath LaFollette, and Benjamin Osuna, all of Albuquerque, Frazier & Quantius, of Roswell, and Simms, Modrall & Seymour and John F. Simms, Jr., all of Albuquerque, on rehearing only), amici curiae, for appellants.Adolf J. Krehbiel, of Clayton, for appellee.C. R. McIntosh, Arthur Livingston, H. A. Kiker, Manuel A. Sanchez, and Anthony J. Albert, all of Santa Fe, Joseph L. Dailey and Waldo H. Rogers, both of Albuquerque (George E. McDevitt, of Gallup, Ross L. Malone, Jr., of Roswell, E. G. Shannon, of Las Cruces, C. R. Anderson, of Carlsbad, L. L. Skarda, of Clovis, Allan D. Walker, of Alamogordo, Neil B. Watson, of Artesia, and David S. Bonem, of Tucumcari, on rehearing only), amici curiae, for appellee.

MABRY, Justice.

There is involved here the question whether the New Mexico statute of limitations has run against street paving certificate or bond obligations issued by the town of Clayton.

Appellee, plaintiff below, filed his complaint seeking foreclosure of certain paving liens represented by paving certificates or bonds, issued by the said town, of which certificates or bonds he was the owner and holder. Appellants, defendants below, as owners of some of the abutting lots sought to be foreclosed, answered setting up, among other defenses, the controlling one that the causes of action sued upon were barred by the statute of limitations. The parties will hereafter be designated as plaintiff and defendants.

Plaintiff demurred to the answer, the demurrer was sustained, and judgment of foreclosure was entered against defendants. The appeal is from this judgment upon the demurrer.

The complaint contains two causes of action, both based upon paving certificates or bonds issued upon assessments against certain property of defendants. The two causes of action affect property against which like special assessments were made, though at different times and under different ordinances. For the purpose of this case the distinction between the two causes of action is of no moment, the question being one of appraising the paving lien, the ordinance, and the statute authorizing it, in relation to our general statutes of limitation.

The complaint shows that under the ordinances the assessments levied against the property might, at the option of the property owner, be paid, as is usual, in ten equal annual installments, with interest; that for nearly six years there had been default in the payment of any such annual installments.

This lien upon the property so improved by the paving was established by the conventional provisional order method, whereby assessments of benefits were laid upon the property by ordinance, the statutory lien thus created and certificates or bonds issued for the purpose of securing the funds to pay for the improvement. Such certificates or bonds are discharged only by money realized from the assessments collected.

The ordinance in question contained the following provision: “Failure to pay any installment whether of principal or interest, when due, shall cause the whole of the unpaid principal to become due and payable immediately and the whole amount of the unpaid principal and accrued interest shall thereafter draw interest at the rate of one per centum per month or fraction of a month, until the day of sale, but at any time prior to the day of the sale, the owner may pay the amount of all unpaid installments, with interest at one per centum per month, or fraction of a month, on the unpaid installments, and all penalties accrued, and shall thereupon be restored to the right thereafter to pay in installments in the same manner as if default had not been suffered.”

Defendants make and rely upon the following points in their challenge to the court's ruling upon their demurrer and its holding the liens good as against their plea of the statute of limitations: (a) that on default in the payment of any installment of the paving liens the entire unpaid balance thereof became due and the cause of action of plaintiff thereupon accrued; and (b) that plaintiff's cause of action is barred either by the six or four year general statute of limitations.

Upon the question of the acceleration of the indebtedness, defendants point to the language of the ordinance authorizing the assessments for the improvements and the bonds issued thereupon as hereinbefore set out, urging that, since the acceleration of the indebtedness upon default of any payment to become due and payable does not rest upon the option of the City or any holder of any paving certificate, the entire unpaid balance upon such default automatically becomes immediately due and payable. Defendants cite and rely upon Buss v. Kemp Lumber Co., 23 N.M. 567, 170 P. 54, L.R.A.1918C, 1015 and Beebe v. Fouse, 27 N.M. 194, 199 P. 364, as authority for their position. The court, in these two cases, defendants urge, expressly repudiated the idea for which plaintiff contends, that this language of the acceleration clause was for the benefit of the creditor, the City or its assignee, who had an option or election in the matter.

Plaintiff would distinguish the situations presented in both the Buss v. Kemp Lumber Co. and the Beebe v. Fouse cases, supra, from that found here. He points to what he terms extraordinary provisions found in the ordinance here under consideration, viz., (a) the penalty provision, and (b) the restoration provision, and relies upon this distinction in urging that the acceleration provision is solely for the benefit of the municipality, and contends that Roswell v. Levers, 38 N.M. 419, 34 P.2d 865, holding the penalty imposed invalid, does not weaken the strength of his argument. We are not dealing with the tax levying power of the town in its governmental capacity, plaintiff contends. Amici curiae upon one brief also argue strenuously for a distinction between the facts involved in the two cases above cited and the situation presented here.

[1] We see nothing in the case before us to distinguish it to the extent that the rule applied by us in Buss v. Kemp Lumber Co., supra, would not likewise apply here. We hold, therefore, that, under this acceleration clause, the entire indebtedness becomes due and payable upon default in the payment of any installment, without the necessity of an exercise of any option to so declare.

If any statute of limitation applies-and this is the principal point in the case- is it the four or six year statute? Sections 83-103 and 83-104 of the N.M.Comp. Laws 1929, our general limitation statute, read:

“83-103. Notes-Written instruments- Judgments of courts not of record. Those founded upon any bond, promissory note, bill of exchange or other contract in writing, or upon any judgment of any court not of record, within six years.”

“83-104. Accounts-Unwritten contracts-Torts-Frauds-General provision. Those founded upon accounts and unwritten contracts; those brought for injuries to property or for the conversion of personal property or for relief upon the ground of fraud, and all other actions not herein otherwise provided for and specified within four years.”

It is clear that suit was not brought upon the bonds in question within time to avoid the defense of either the four or six year term provided by such statute, if in fact the indebtedness here involved under the circumstances of the case can be defeated by such statute.

[2] Plaintiff contends that the six year statute of limitation does not control for the principal reason that this is not a contract in writing and the indebtedness does not come within the terms of the statute under any designation. This, he urges, is an action based upon an improvement assessment lien, imposed under the taxing power of the state, which plaintiff seeks to foreclose, and is not an action upon contract; that the certificate or bond is merely evidence of the indebtedness or lien, and is not the foundation of it. Weggs v. Kreugel, 28 N.M. 24, 205 P. 730. In this plaintiff is correct. And, he argues against the applicability of the four year statute for the reason that such improvement tax liens are not there in specified; and further, that if it could be said the act might have applied at the time of its enactment and until 1929, that since then the enactment of Section 90-1217, N.M.Comp.Laws 1929 (Chap. 118, Laws of 1929), which had to do with assessments for such improvement and fixing the lien thereof, gave the status of perpetuity to the validity of such liens; and that since the latter act is a specific statute dealing with the subject of improvement assessment liens, such statute must prevail over a general statute on the subject of limitation of actions.

[3] We would find no difficulty in holding that the four year statute of limitation, which includes “all other actions not herein otherwise provided for”, would cover an action of this character, provided other considerations to be hereinafter discussed are not controlling. As was said in the case of Knoxville v. Gervin, 169 Tenn. 532, 89 S.W.2d 348, 351, 103 A.L.R. 877: “‘...