State ex rel. Schones v. Town of Canute

• Decision Date: 29 June 1993
• Docket Number: No. 74939,74939
• Citation: 858 P.2d 436,1993 OK 90
• Parties: STATE of Oklahoma, ex rel. Lewis SCHONES, Jewel Schones, and Marie I. Kupka, Appellants, v. TOWN OF CANUTE, Norma Warnke, Ronald Warnke, Neil J. Barton, June Walters, Jerome Warnke, Melvin Hutson, Ron Hutson, Darrell Wilson, Christine Smith, Cecil Burks, Craig Mahl, J. Robert Fraser, Lorena Cooper, David Skaggs, J.B. Vantrees, Paul Little, Terry Jordan, and Wayne Walters, Appellees.
• Court: Oklahoma Supreme Court

Page 436

858 P.2d 436

1993 OK 90

STATE of Oklahoma, ex rel. Lewis SCHONES, Jewel Schones, and Marie I. Kupka, Appellants, v. TOWN OF CANUTE, Norma Warnke, Ronald Warnke, Neil J. Barton, June Walters, Jerome Warnke, Melvin Hutson, Ron Hutson, Darrell Wilson, Christine Smith, Cecil Burks, Craig Mahl, J.

Robert Fraser, Lorena Cooper, David Skaggs, J.B. Vantrees,

Paul Little, Terry Jordan, and Wayne Walters, Appellees.

No. 74939.

Supreme Court of Oklahoma.

June 29, 1993.

Rehearing Denied Sept. 22, 1993.

On Certiorari to the Court of Appeals, Division IV.

Certiorari was granted to review opinion of Court of Appeals, Division IV, that reversed trial court's dismissal of plaintiffs' petition apparently because the statute of limitations had run on the claim. Action was brought under statute bestowing a right of action upon resident taxpayers to sue in name of the State, 62 O.S.1981 § 373. We hold that the resident-taxpayers' suit was timely filed.

Certiorari Having Been Granted Previously the Opinion of the Court of Appeals is Vacated and the Trial Court's Order of Dismissal is Reversed.

Thomas Neil Lynn III, Steven W. Gingras, Oklahoma City, for appellants.

Ted N. Pool, Sherry Blankenship, Pool, Thompson, Coldiron, Blankenship & Vincent, Oklahoma City, for appellees.

HARGRAVE, Justice.

We granted certiorari to determine whether resident taxpayers' suit to recover the penalty provided in 62 O.S. § 372 is barred by the one-year statute of limitations of 12 O.S.1981 § 95(4). ¹ The trial court dismissed the action, presumably finding that the statute of limitations barred suit. The Court of Appeals reversed, relying on State ex rel. Board of County Commissioners v. Shelton, 727 P.2d 103 (Okla.App.1986), holding that where suit is brought on behalf of the state to enforce a "public right," the statute of limitations will not bar the suit by the sovereign. Because we find that a suit This case involves suit brought by plaintiffs, resident taxpayers of the Town of Canute, pursuant to 62 O.S. § 373, against numerous individual defendants, including the former mayor and clerk/treasurer, alleged to be members of the Board of Trustees of Canute during a period from 1979 to 1985. The Town of Canute was named a defendant, as required by the statute. Plaintiffs pled twelve "causes of action": (a) four violations of competitive bidding provisions of city ordinances, (b) seven instances of wrongful approval of purchase orders under void contracts in violation of 62 O.S. § 371, and (c) one claim for damages to the Town of Canute and its residents for a contract for removal of a water tank, contrary to Canute city ordinances, which allegedly damaged Canute in amount of two thousand dollars ($2,000.00) for the value of the tank, and three thousand dollars ($3,000.00) as damages caused by depriving the city of a backup water supply system. For the first eleven causes of action plaintiffs sought recovery of the amounts paid. Plaintiffs then prayed for recovery of triple the amount wrongfully paid on each of the causes pursuant to § 372. Only three of the claims stated the date of the transaction and those dates were in 1979 and 1982.

brought by the proper officers of the Town of Canute in this case would not be barred by the statute of limitations, we find that the taxpayers' suit was timely filed. The applicable statutes are 62 O.S.Supp.1982 § 372 ² and 62 O.S.1981 § 373. ³

The taxpayers, on February 10, 1989, made written demand upon the city officials to file suit. The city officials did not file suit and plaintiffs' suit was filed July 28, 1989. Defendants moved to dismiss on grounds the action was barred by the statute of limitations, and the trial court entered an order of dismissal. Suit was brought by the taxpayers within six months of written demand being made; the question is whether the cause already was time-barred when demand was made.

Two lines of authority create confusion. A line of early cases held (or assumed) that Another line of cases, which did not involve suit for recovery of a penalty, held that the statute of limitations would not bar a suit by the sovereign or political subdivision suing in their sovereign capacity for vindication of public rights. See, Foote v. Town of Watonga, 37 Okla. 43, 130 P. 597 (1913), State ex rel. Land Commissioners v. Hall, 191 Okla. 257, 128 P.2d 838 (1942), Wooten v. State ex rel. Commissioners of the Land Office, 191 Okla. 306, 129 P.2d 584 (1942), Herndon v. Board of County Commissioners of Pontotoc County, 158 Okla. 14, 11 P.2d 939 (1932), Board of County Commissioners v. Good Township, 188 Okla. 151, 107 P.2d 805 (1940), State ex rel. Cartwright v. Tidmore, 674 P.2d 14 (Okla.1983). The rationale behind these cases is that the public interest shall not be prejudiced by the negligence of the public officers to whose care those rights may be consigned.

the statute of limitations would run against the state or political subdivision in § 372 and § 373 cases where suit was for recovery of the penalty. See, State ex rel. Lockhart v. Board of Commissioners of Lincoln County, 197 Okla. 605, 173 P.2d 725 (1946), Cummings v. Board of Education, 190 Okla. 533, 125 P.2d 989 (1942), Battles v. Conner, 182 Okla. 613, 79 P.2d 232 (1938), State ex rel. Estill v. Board of Commissioners of Pontotoc County, 119 Okla. 215, 249 P. 394 (1926), State ex rel. Gooch v. Drumright, 88 Okla. 244, 212 P. 991 (1923), State ex rel. Schilling v. Oklahoma City, 67 Okla. 18, 168 P. 227 (1917), Territory ex rel. Johnston v. Woolsey, 35 Okla. 545, 130 P. 934 (1913). In those cases, apparently no argument was raised that the statute of limitations would not run against the sovereign or that the suit was for vindication of a "public right."

Even those cases holding that the statute of limitations would run against the cause of action for recovery of a penalty by the state or political subdivision were not consistent as to when the statute would run against the resident taxpayers. The difficulty was in determining when the taxpayers' cause of action accrued. Some cases held that demand must be made within the limitations time and others held that the taxpayers' cause of action did not accrue until demand was made so that the statute did not begin to run against the taxpayers until demand was made. See, for example, State ex rel. Lockhart v. Board of Co. Com'rs of Lincoln Co., 197 Okla. 605, 173 P.2d 725 (1946), State ex rel. Estill v. Board of Commissioners of Pontotoc Co., 119 Okla. 215, 249 P. 394 (1926), State ex rel. Gooch v. Drumright, 212 P.2d 991 (Okla.1923), State ex rel. Schilling v. Oklahoma City, 67 Okla. 18, 168 P. 227 (1917). It appears that the question whether the statute of limitations would run against the sovereign or its subdivisions for recovery of the penalty under § 372 in vindication of public rights had not been specifically addressed.

Both issues were raised in State ex rel. Board of County Commissioners v. Shelton, 727 P.2d 103 (Okla.App.1986). The Court of Appeals held that the statute of limitations would not run against a political subdivision where the Board of County Commissioners sued to recover the § 372 penalty against former county commissioners. Some of the defendants there argued that § 372 is a penal statute and that cause of action was thus barred by 12 O.S. § 95(4), or in any event by the two-year statute of limitations of § 95(3) for fraud. The trial court granted a motion to dismiss and the Board appealed, alleging that it was suing in its sovereign capacity to enforce a public right and was "... immune to bar of statute of limitations or, alternately that no statute of limitations began to run until plaintiff knew or should have known and had evidence to prove elements of its cause of action." The Court of Appeals held that the county was immune from operation of the statute of limitations. We denied certiorari.

Recently, in City of Oklahoma City v. HTB, Inc., 769 P.2d 131 (Okla.1988), we reaffirmed the rule that, where the State or political subdivision is acting in its sovereign capacity vindicating a "public right", the statute of limitations will not run against it. In HTB, Inc., which was not a "From these cases we distill the general rule that statutes of limitation shall not bar suit by any governmental entity acting in its sovereign capacity to vindicate public rights and that public policy requires that every reasonable presumption favors governmental immunity from such limitation. In applying this rule to [the case being considered] we must determine whether plaintiffs acted in a sovereign capacity and whether the rights at issue rise to the level of public rights."

suit for recovery of a penalty, we recognized that the maxim nullum tempus occurrit regi (time does not run against the King) applies to municipal corporations as trustees of the rights of the public. ⁴ We said, 769 P.2d at p. 134:

Section 372 gives a right of recovery to the proper municipal officers of triple the value of property wrongfully conveyed or amounts wrongfully paid out as a penalty. Section 373 gives resident taxpayers, after demand, the right to bring any proper action that the proper officers might maintain, and the right is phrased in the alternative: to recover the money or property, or for the penalty provided in § 372. In the case at bar, the resident taxpayers, although seeking recovery of amounts wrongfully paid, seek triple the amounts so paid, and as such, their suit is for recovery of the penalty. Whichever route the taxpayer takes, taxpayer will receive one-half of his recovery as "reward" and other half will go to the state or subdivision. 62 O.S. § 373. The only time the subdivision will be made "whole" in a resident taxpayer suit, is when taxpayer recovers the penalty. See, Territory ex rel. Johnston v. Woolsey, 130 P. 934, 938 (Okla.1913).

The resident taxpayer statute, § 373, offers three choices for recovery: recovery of the property wrongfully...