City of Bisbee v. Cochise County

• Decision Date: 25 April 1938
• Docket Number: Civil 3831
• Citation: 52 Ariz. 1,78 P.2d 982
• Parties: CITY OF BISBEE, a Municipal Corporation, Appellant, v. COCHISE COUNTY, DANIEL S. KITCHEL, as Treasurer and ex-Officio Tax Collector of Cochise County, and JOHN HILD, HARLIE COX and JOHN MURPHY, as the Board of Supervisors of Cochise County, Appellees
• Court: Arizona Supreme Court

78 P.2d 982

52 Ariz. 1

CITY OF BISBEE, a Municipal Corporation, Appellant, v. COCHISE COUNTY, DANIEL S. KITCHEL, as Treasurer and ex-Officio Tax Collector of Cochise County, and JOHN HILD, HARLIE COX and JOHN MURPHY, as the Board of Supervisors of Cochise County, Appellees

Civil No. 3831

Supreme Court of Arizona

April 25, 1938

APPEAL from a judgment of the Superior Court of the County of Cochise. John Wilson Ross, Judge. (See former opinion rendered October 18, 1937, 50 Ariz. 360, 72 P.2d 439.) On motion for rehearing. Motion denied.

Mr James T. Gentry, City Attorney of Bisbee, and Mr. W. G Gilmore, for Appellant.

Mr Frank E. Thomas, County Attorney, for Appellees.

Messrs. Silverthorne & Van Spanckeren, Messrs. Moore & Romley, Messrs. Strouss & Salmon, Mr. Frank L. Snell, Mr. Blaine B. Shimmel, Messrs. Baker & Whitney, Mr. Lawrence L. Howe, Mr. Floyd M. Stahl, Mr. Herman Lewkowitz, Messrs. Gust, Rosenfeld, Divelbess, Robinette & Coolidge, Messrs. Armstrong, Kramer, Morrison & Roche, Messrs. Moeur & Moeur, Messrs. Darnell, Pattee & Robertson, Mr. Chester H. Smith, Messrs. Wilson, Wood & Compton, Mr. Dodd L. Greer, and Mr. Gilbert E. Greer, Amici Curiae.

OPINION

LOCKWOOD, J.

In this case the City of Bisbee, a municipal corporation, hereinafter called plaintiff, brought suit against the County of Cochise and others, hereinafter called defendants, to recover certain tax moneys belonging to the plaintiff, which it was alleged the defendants had collected and refused to pay to the owner. The facts were not denied, but a number of legal objections to the recovery were raised by the defendants, and we held that none of the matters so raised constituted a defense to the action. Among these issues was the statute of limitations, and in our original opinion we held that under the rule of nullum tempus occurrit regi the statute did not apply. A rehearing was asked for, and a very large number of the leading lawyers of the state petitioned for leave to file briefs and argue the case as amici curiae. This petition was granted and, contrary to our usual custom, the motion for rehearing was heard on oral argument. Many eminent counsel appeared and presented their views upon the question, both for and against the motion. Each and all, with one exception, stated, as preliminary to their arguments, that they were personally and vitally interested in the decision for the reason that they had clients whose rights in pending litigation would be materially affected by the conclusion finally reached by this court in regard to how far the doctrine of nullum tempus occurrit regi applies to suits by and against governmental agencies. The one exception claimed that he did not have a client with actual litigation pending which would be affected by our decision, but frankly admitted he had one who expected to engage in such litigation within a short period.

We desire to commend all of counsel for their frank and ingenuous statement of their interest in the result of the case, but if occurs to us that interest appears to have been not so much that the court should reach a decision which was correct as a matter of public policy, but that it should come to a conclusion which would not adversely affect the clients represented by them. For this reason, we have given to the various arguments presented not only the careful consideration which the ability of counsel deserves, but that critical examination which their interest in the result also makes necessary.

In reaching our conclusion, we have studied carefully all of the cases cited by counsel, but we have based that conclusion not upon the number of cases upholding a certain rule, nor the standing of the courts from which they come, but expressly and entirely upon the soundness of their reasoning as applied to the question of what rule is most in harmony with modern social and economic principles and the general public policy, and welfare of the state.

Before, however, we proceed to a discussion of the general principles which control our decision, we think it best to refer to the contention that this court is already committed to a rule contrary to that laid down in our original opinion by the case of Griffith v. State, 41 Ariz. 517, 20 P.2d 289. That was an action by the state of Arizona, on behalf of itself and Pima county, against a former county assessor and his bondsmen to recover public money which it was alleged the assessor had fraudulently converted to his own use. Th claim was set up in that action that the complaint showed it was barred by the statute of limitations under subdivision 3, paragraph 709, Civil Code, Revised Statutes of Arizona 1913, which reads as follows:

"There shall be commenced and prosecuted within one year after the cause of action shall have accrued, and not afterward, all actions or suits, in court, of the following description: ...

"(3.) An action upon a liability created by statute, other than a penalty or forfeiture."

And a general demurrer was interposed on that ground. The demurrer was overruled and judgment was rendered against Griffith.

The sole issue in reference to the statute of limitations which was discussed and decided by us was whether the action was based upon a liability created by statute and, if so, when the right of action accrued. We held that the liability was created by statute, and, since the money was converted fraudulently and in breach of a trust, that the statute did not begin to run until the party defrauded discovered or was put upon reasonable notice of the breach of trust. As the complaint did not show when the fraud was discovered and the one year had already run, we held the court should have sustained the general demurrer, and remanded the case for a new trial. The question of the application of the rule of nullum tempus occurrit regi to a suit by either the state or the county was not discussed, nor even mentioned, in our opinion in the Griffith case, and was not considered by us in arriving at our conclusion. An assumption that the rule did not apply could only be drawn from an inference that, if it did, we would have decided the case otherwise. The doctrine of stare decisis cannot be extended to implications from what was actually decided in a previous case. Broadwater v. Wabash R. Co., 212 Mo. 437, 110 S.W. 1084. We think that principle applies to the Griffith case. We held that the statute of limitations would not apply as against Griffith under certain conditions, but we said nothing whatever as to whether it also would apply for another reason. It is extending the rule of stare decisis far beyond any reasonable limit to hold that our opinion in the Griffith case established the rule contended for by defendants in the present case. If we had thought it did, we would not, in the previous appeal of this case (44 Ariz. 233, 243, 36 P.2d 559, 563), have said:

"There is a serious conflict in the authorities as to whether statutes of limitations apply to municipal corporations unless the legislature expressly states that they do. We think, however, we need not decide the question as to whether in an action of this kind the city can claim that it represents the state in its sovereign capacity, and is thus exempt from the statute of limitations,"

but would have applied the rule as urged by defendants. We, therefore, consider the question as one of first impression in this state.

This involves an examination of some of the fundamental principles back of statutes of limitations. Considered only from the standpoint of abstract equity, 99 of every 100 men would unhesitatingly and correctly say that the mere lapse of time should never relieve one from the performance of a just obligation.

And were that the only excuse which could be given for the existence of statutes of limitations, it is safe to say they would never have been adopted. Unfortunately, however, as in most cases where it is necessary to establish a definite rule to be enforced by the court, the issue was not so simple.

In the case of Masury & Son v. Bisbee Lumber Co., 49 Ariz. 443, 68 P.2d 679, we discussed these statutes somewhat at length, and pointed out that many bitter experiences taught that, if a claim was not made until many years after the right of action had accrued, it was frequently fraudulent in its nature, but that due to the lapse of time the evidence by which the defendant could otherwise have proved its character had disappeared. The choice of the legislative body was, therefore, between two rules, each one having some merits and some demerits. On the one hand, in the absence of any statute, no honest claim could be defeated by the mere lapse of time, but many fraudulent ones might prevail for the reason just given. On the other hand, if a limitation were placed on the time in which an action might be brought, some debtors might escape the performance of a just obligation, but fewer unjust claims could be successfully maintained. The question of which rule to follow became one of public policy, and, as is almost invariably the case when public policy is involved, the choice was only of the lesser of two evils. It was finally determined that the probability of many unjust claims after the lapse of time was so great that it outweighed the certainty of the loss of a few just debts, and it was therefore thought, as a pragmatic working principle of public policy, that it was better a few honest creditors lose their rights through a failure to present them within a certain time than that many alleged debtors should be mulcted through the presentation of dishonest claims because the lapse of time had prevented them from making a proper defense. The statutes, therefore, while recognizing that the right would not be affected by the lapse...