C & C Tile Co., Inc. v. Independent School Dist. No. 7 of Tulsa County, 45066

• Decision Date: 24 October 1972
• Docket Number: No. 45066,45066
• Citation: 1972 OK 137,503 P.2d 554
• Parties: C & C TILE COMPANY, INC., a Corporation et al., Appellants, v. INDEPENDENT SCHOOL DISTRICT NUMBER 7 OF TULSA COUNTY, Oklahoma, a School District Lying within Tulsa and Osage Counties, doing business as Skiatook Public School, Appellee.
• Court: Oklahoma Supreme Court

Page 554

503 P.2d 554

C & C TILE COMPANY, INC., a Corporation et al., Appellants, v. INDEPENDENT SCHOOL DISTRICT NUMBER 7 OF TULSA COUNTY,

Oklahoma, a School District Lying within Tulsa and

Osage Counties, doing business as

Skiatook Public School, Appellee.

No. 45066.

Supreme Court of Oklahoma.

Oct. 24, 1972.

Covington, Gibbon & Poe, Tulsa, for appellant, C & C Tile Co., Inc.

Rucker, Tabor, McBride & Hopkins, Tulsa, for appellants, Kentile Floors, Inc. and Ellis F. Hall.

Grigg & Richards, Tulsa, for appellant, Atlantic Richfield Co.

Green, Feldman & Hall, by William S. Hall, Tulsa, for appellee.

HODGES, Justice.

This case involves an action for recovery of fire damage to a school building located in Osage County. There are two questions of law certified in this controversy.

The first question concerns the application of the statute of limitations to plaintiff's cause of action. Appellee filed an action in Osage County using the correct name of party plaintiff within one year of dismissal of the same cause of action which had been erroneously filed in Tulsa County under incorrect name of party plaintiff. The subsequent action is barred by the statute of limitations unless dismissal for lack of venue constitutes failure other than on the merits and as such entitles appellee as correctly named party plaintiff to the saving provisions of 12 O.S.1971 § 100.

The superintendent, acting for Skiatook Public Schools, entered into a loan trust receipt with the insurer acknowledging an interest free loan in the exact amount of the loss. The loan was to be repaid solely from the net proceeds of any recovery against any carrier, bailee, insurer, or other third party liable for the loss. The agreement also purported to establish a trust whereby any recovery would be held by the insured as trustee for the insurer. The determination to be made is whether under these circumstances the school district is a real party in interest.

On August 2, 1966, the Skiatook Jr. High School in Osage County was damaged by fire. The superintendent of Skiatook Public Schools executed two identical Loan and Trust Receipts with Insurance Company of North America on August 26, and August 30, 1966, which acknowledged receipt of $84,647.00 and $89,764.00 respectively. The receipt of August 26 was signed 'Skiatook Public Schools by Charles A. Marrs.' The trust loan receipt of August 30, 1966, is set forth below:

'THE UNDERSIGNED hereby acknowledge(s) receipt of $84,764.00 from--INSURANCE COMPANY OF NORTH AMERICA--as a loan without interest (not as a payment) repayable solely out of the net proceeds of any recovery of the property mentioned below, and out of any net recovery made against any carrier, bailee, insurer, or other third party liable for the loss mentioned below; and as trustee(s) of an express trust the undersigned agree(s) to hold in trust from said Insurance Company all such property and monies so recovered, and all rights for the recovery thereof. The undersigned guarantee(s) that they are (he or it is) the person(s) entitled to recover such property and to pursue such claims against said third parties; and the undersigned hereby irrevocably appoint(s) said Insurance Company as agent and attorney-in-fact of the undersigned with full power to collect, enforce, compromise, release and dispose of such property, claims and recoveries through attorneys and representatives of the said Insurance Company's own selection, by legal proceedings or otherwise, all in and with the full co-operation of the undersigned, but at the sole expense of the Insurance Company; and the undersigned undertakes to execute such documents as may be necessary to carry out the purpose hereof.

DATED Aug. 30, 1966

/S/ Charles A. Marrs

Skiatook Public Schools

Witness:

/S/ Sybil E. Marlow

File No. _ _

Draft No. _ _

Policy No. _ _

Description of Property and Loss: (Marks and numbers, ship or other conveyance, boyage, date, place and nature of loss.)

_ _'

An action to recover damages was filed June 13, 1967, in Tulsa County, Oklahoma, by Independent School District Number 7 of Osage County, Oklahoma. The petition alleged in Paragraph II that:

'Plaintiff is the owner of one certain Public Junior High School premises located at 600 South Osage Street, Skiatook, Oklahoma, and same is for the use and benefit of the children in the vicinity in Tulsa and Osage counties.'

Evidence was submitted showing that the Board of Education of the school district had contracted as Board of Education, Independent School District No. 7, Skiatook, Osage County, Oklahoma.

The deposition of the superintendent of schools was taken August 31, 1967. At that time, it was disclosed that although the School District was 'identified' as 'Osage 7', in fact it was a legal entity of Tulsa County. Therefore, the correct appellation should have been Independent School District Number Seven of Tulsa County.

An oral motion to amend the petition to clarify the name of party plaintiff was made at the pre-trial conference. A written Motion To Amend Petition was filed June 13, 1969, but was never acted upon by the court.

The District Judge of Tulsa County dismissed plaintiff's cause of action June 27, 1969, for lack of venue after it was determined by all parties that 600 South Osage Street was the boundary line between Tulsa and Osage Counties. The Junior High School premises were located to the west of Osage street, completely within Osage County.

An action was brought in Osage County naming 'Independent School District Number 7 of Tulsa County, Oklahoma, a school district lying within Tulsa and Osage counties, doing business as Skiatook Public Schools' as party plaintiff on July 16, 1969. Paragraph III of appellee's petition contained the identical language of Paragraph II of the petition filed in Tulsa County.

Appellants filed special demurrers raising the defense of the statute of limitations and the question of real party in interest. The trial court overruled these motions and certified its order for an immediate appeal to the Supreme Court pursuant to 12 O.S.1971 § 952(b)(3). Certiorari was granted.

Appellants contend that the initial cause of action was never properly commenced in Tulsa County because the court lacked venue. They allege that summons was not issued by a proper court as required by 12 O.S.1971 § 151, and as the result, appellants were never served. Therefore, the appellants contend, the action in Tulsa County did not toll the statute of limitations and the case should be dismissed.

The statute relied upon by appellants is not controlling in the case at bar. Chapter 3, 12 O.S.1971 is the specific section of civil procedure which pertains to limitation of actions. It is provided by 12 O.S.1971 § 97 of that chapter that an action shall be deemed commenced, within the meaning of the article, as to each defendant at the date of the summons which is served on him, or on a codefendant, who is a joint contractor or otherwise united in interest with him. (The article contains 12 O.S.1971 §§ 91--102).

The United States Supreme Court in Goldlawr, Inc., v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962) in interpreting 28 U.S.C.A. § 1406(a), a venue statute, held that filing of a lawsuit shows proper diligence on the part of the plaintiff sufficient to initiate and toll the statute of limitations. In that case, the court did not have personal jurisdiction over the defendants. They were not residents of, transacting business in, and could not be found in the state where the action was first filed.

Although this court has previously held in Griesel v. Favian, 184 Okl. 42, 84 P.2d 634 (1938) that the prosecution of an action in good faith even before a court without jurisdiction tolls the statute of limitations, it is not prepared to accept that mere filing of a lawsuit accomplishes the same. A lawsuit must be commenced in due time and defendants served with summons in accordance with 12 O.S.1971 § 97 in order for plaintiff to avail himself of the saving provisions of 12 O.S.1971, § 100; Myers v. Kansas, Okla. & Gulf Ry. Co., 200 Okl. 676, 199 P.2d 600, 602 (1948).

An action is deemed commenced under this statute when the plaintiff properly endeavors to procure service on defendant, provided that such attempt is followed by service of summons on defendant within sixty days. Kile v. Cotner, 415 P.2d 961 (Okl.1966).

It is not within the purview of the statute to penalize parties for making a bad guess as to where venue properly lies. An action filed in good faith, even in a court lacking proper venue, tolls the statute of limitations. The steps taken in the original action in Tulsa County were sufficient to commence the action. A dismissal for lack of venue constitutes a failure unrelated to the merits of the controversy, and as such falls within the ameliorative relief accorded by 12 O.S.1971 § 100.

Appellants further contend the appellee cannot avail itself of the protection provided in 12 O.S.1971 § 100, which permits a party to refile an action within one year because the party plaintiffs in the two actions do not have the same substantial or legal identity. Although the party plaintiff is designated differently, the two petitions contain the same language in identifying party plaintiff.

The statute which permits institution of new action within one year after prior action fails otherwise than on the merits is remedial, and should be liberally construed, Meshek v. Cordes, 164 Okl. 40, 22 P.2d 921 (1933).

The theory of the limitation statutes is that a defendant be given notice within a certain period that he will be called upon to defend a certain action, and that he be given sufficient notice to adequately prepare. If this is done within the statutory period, the bringing of a subsequent action in the name of correct party plaintiff which does not substantially change the claim or allege a new cause of action does not harm defendant. Saint Paul Fire and Marine...