Board of Com'rs of Oklahoma County v. Good Tp., Harper County

• Decision Date: 12 November 1940
• Docket Number: 29131.
• Citation: 107 P.2d 805,188 Okla. 151,1940 OK 450
• Parties: BOARD OF COUNTY COM'RS OF OKLAHOMA COUNTY v. GOOD TP., HARPER COUNTY.
• Court: Oklahoma Supreme Court

107 P.2d 805

188 Okla. 151, 1940 OK 450

BOARD OF COUNTY COM'RS OF OKLAHOMA COUNTY v. GOOD TP., HARPER COUNTY.

No. 29131.

Supreme Court of Oklahoma

November 12, 1940

Syllabus by the Court.

The investment of the county sinking funds in securities as provided by law is a governmental function, and the statute of limitations is not ordinarily available as a defense in an action by the county to recover on such securities.

Appeal from District Court, Harper County; F. Hiner Dale, Judge.

Action by the Board of County Commissioners of the County of Oklahoma against Good Township in Harper County, State of Oklahoma, to recover principal and interest due on certain bridge bonds issued by the defendant. The trial court sustained defendant's plea of limitation, and the plaintiff appeals.

Judgment reversed, and cause remanded, with directions to proceed with the trial.

DAVISON J., BAYLESS, C.J., WELCH, V. C.J., and CORN, J., dissenting.

Lewis R. Morris, Co. Atty., and B. C. Logsdon, Asst. Co. Atty both of Oklahoma City, and M. A. Holcomb, of Buffalo, for plaintiff in error.

B. F Willett, Co. Atty., of Buffalo, for defendant in error.

GIBSON Justice.

Oklahoma county brought this suit against Good township of Harper county to recover principal and interest due on certain bridge bonds issued by defendant, and maturing October 14 1926. The bonds were purchased with county sinking fund.

Defendant pleaded the five-year statute of limitations, 12 Okl.St.Ann. § 95, subd. 1, and the trial court sustained the plea.

Plaintiff sought by certain allegations and proof to avoid the alleged limitation, and in addition thereto asserted the county's immunity from the operation of the statute. As we view the record, our determination of the latter question will fully dispose of the appeal.

It is insisted that the investment of the county's sinking fund in the bonds in question was clearly a public right or duty as distinguished from a mere so-called private right, thus saving said county from the operation of the statute of limitations. Herndon v. Board of Com'rs, etc., 158 Okl. 14, 11 P.2d 939. Plaintiff says that by reason of certain constitutional and statutory provisions the sinking fund was impressed with a public trust, and that the investment thereof was a matter in which the state at large was interested and not merely of local interest to the county, and therefore involved a public right as distinguished from a private right.

The constitutional provisions referred to are sections 26 and 28, article 10, Okl.St.Ann., which provide for the levy and collection of taxes for a sinking fund to retire bonded indebtedness. The statutes referred to are sections 5915 and 5917, O.S. 1931, 62 Okl.St.Ann. §§ 432, 434, prescribing the manner in which sinking funds may be invested when not presently needed to retire indebtedness, and providing a penalty against county and municipal treasurers for failure to invest such fund. Plaintiff says that these laws stamp the investment with a public interest.

If this court is to continue to recognize a distinction between a public and private right of a political subdivision of the state with reference to the application of the statute of limitations thereto, the distinction when drawn should be bolstered by every reasonable presumption favorable to government immunity from the limitation. This we say for the reason that the general rule has been to exempt the state from the operation of the statute in the absence of specific permissive act of the Legislature. State ex rel. Freeling v. Smith, 77 Okl. 277, 188 P. 96; and that immunity ordinarily applies to the political subdivisions. Foot v. Town of Watonga, 37 Okl. 43, 130 P. 597. To apply the statute in cases such as this is a drastic exception to the general rule. As said above, it is applied when the right sought to be enforced is a private one as distinguished from a public right. It may readily be seen that the line of demarcation between such rights is invariably indistinct and uncertain. Therefore the presumptions should favor the sovereignty of the government and all doubts resolved to the end that all government rights are public rights.

Defendant says that the plaintiff is asserting merely a private right in this action; that the collection of invested sinking fund is a matter of interest to the county alone, and not to the general public of the state at large. This distinction, says defendant, is agreeable with that drawn in the Herndon case [158 Okl. 14, 11 P.2d 941], above, wherein the court said: "The test as to whether a matter is a public right or a private right appears to be whether the right is such as to affect the public generally or to merely affect a class of individuals within the political subdivision."

Perhaps the inhabitants of the county alone are primarily interested in the collection of their investments made out of the sinking fund, but the state has manifested a direct interest in such fund, and has adopted a definite policy of action with relation to the creation, the investment and the disbursement thereof. If there ever existed a function of government that affected the people at large throughout the state any more than the official handling of the sinking fund of the different counties and municipalities, we are not aware thereof. The state has confined the investment of that fund to the bonds of the United States, the state, and its various subdivisions, and to the warrants of the subdivisions (sec. 5915, O.S.1931, 62 Okl.St.Ann. § 432); and to the payment of bonded indebtedness of the particular municipality and any outstanding judgments against it. Sec. 5919 O.S.1931, 62 Okl.St.Ann. § 435. County and municipal treasurers are enjoined, at their peril, to invest such fund when not needed presently for the retirement of the bonds for the payment of which the fund was established. Sec. 5917, O.S.1931, 62 Okl.St.Ann. § 434. The sinking fund is established not only for the payment of public improvements such as court houses and other public structures which the whole public may enjoy (Herndon case, supra), but has been inaugurated under the general governmental policy of the state as a business trust fund, to the trustees of which any person from anywhere may resort to transact the business to which that fund is dedicated. It has all the marks of a public trust, the protection of which should be a public right, and immune from the bar of the statute of limitations. Then too, if the right to enforce conveyance of realty to be used as courthouse grounds is a public right as held in the Herndon case, then it seems logical to say that the protection of the funds to pay for such premises is also a public right. In this respect such funds are held for and dedicated to a public use, and the laxity of the public officials in...