Assessment Bond Service, Inc. v. W. R. Johnston & Co.

1956 OK 112, 296 P.2d 959, 1956 Okla. LEXIS 451
CourtSupreme Court of Oklahoma
DecidedMarch 27, 1956
Docket36592
StatusPublished
Cited by5 cases

This text of 1956 OK 112 (Assessment Bond Service, Inc. v. W. R. Johnston & Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Assessment Bond Service, Inc. v. W. R. Johnston & Co., 1956 OK 112, 296 P.2d 959, 1956 Okla. LEXIS 451 (Okla. 1956).

Opinion

HALLEY, Justice'.

On November 17, 1952, Guy A. Calame, and others, as owners of lots in Paving District No. 16, in the City of Sulphur, Murray County, Oklahoma, filed this action to quiet title against various- defendants as the holders of Street Improvement Bonds issued by the City of Sulphur, March. 16, 1926, as authorized by Chapter 173, p. 278, S.L.1923,-to be paid by special assessments levied against the various properties in the paving district. The bonds were numbered 1 to -49, inclusive, and only the first 12 had been paid, the last on -April 3, 1931. All of the bonds matured October 1, 1935.

Plaintiffs prayed that the lien of the special assessments levied against their respective properties for the years 1926 to 1935, inclusive, be cancelled and their respective titles quieted because the bondholders had failed to commence an action to foreclose delinquent assessments within 3 yea'rs after the maturity of the bonds as provided by the 1939 Act- of the Legislature, appearing as Section 242, 11 O.S.1941, and because they had not agreed to- accept street improvement refunding bonds as provided by the Act last mentioned and had failed to take any action- to collect delinquent assessments which had been extinguished by the 1939 Act. Also negligence and laches were pleaded.

.The defendant bondholders, alleged that the special assessments to pay their bonds were legally levied, due and unpaid. They further alleged that the 1939 Act on which the plaintiffs relied was void and unconstitutional and had been so decreed l?y a judgment of the United States District Court for the Eastern District of Oklahoma on May 15, 1945, in an action in which the present property owners were defend *961 ants and involving the same properties and assessments here involved.

Defendants further alleged that the judgment of the Federal court further decreed the invalidity of the 1939 Act, which left the liens of the bondholders against the various properties in District 16 valid and subsisting liens, in spite of the 1939 Act and plaintiffs’ pleas of limitations and lach-es raised by the property owners in the Federal court action were not applicable and that even if the 1939 Act had not been nullified the attempted sale of the properties by the County Treasurer was sufficient to preserve the lien securing the bonds, despite the fact that the attempted sales included only ad valorem taxes but not the amounts of the special assessments, which remained a valid lien.

It was further contended that by the Federal court action the bondholders had sought to foreclose delinquent special assessments, or in' the altérnativé had prayed for a declaratory judgment declaring the validity of their liens and that the foreclosure being denied, the declaratory judgment was granted decreeing the 1939 Act void and the bondholders’ liens valid. It appears that the Federal court denied foreclosure because of the general statutes of limitations as discussed in City of Bristow ex rel. Hedges v. Groom, 194 Okl. 384, 151 P.2d 936. We note that the Federal court judgment suggested that the remedy of the bondholders was. by an action of mandamus to compel the County Treasurer to collect the money due to satisfy the bonds.

The trial judge made complete findings of fact and conclusions of law in the case before us. He found that the bondholders had not made any effort to-secure refunding bonds, and had made no effort to force the County Treasurer to sell the properties for delinquent paving assessments and had made no effort to enforce the Federal court judgment. The court concluded:

That Sections 242 and 242p, 11 O.S.1951, were not affected by the Federal court judgment wherein Section 242, 11 O.S.1941, was held void “ * * * in so far as it purports to extinguish by lapse of time” the liens and assessments and that by Section 23, 42 O.S.1951, the liens for páv-ing assessments and bondholders’ liens were extinguished by lapse of time during which an ordinary action to enforce the principal obligation could have been filed, or within 4 years after the bonds became due on October 1, 1935, so that the action was barred when the Federal court action was filed.

The trial court further concluded that the statute of limitations and the dormancy statute of Oklahoma, Section 735, 12 O.S.1951, bar any remedy of the bondholders since the Federal court judgment is subject-to the dormancy statute of Oklahoma, and that mandamus, is the proper remedy' to enforce the Federal court judgment, but that such remedy may not now be exercised because, that judgment has become dormant and subject to laches and equitable estoppel. The Federal court judgment was never filed in Mur’ray 'County as required by the law of Oklahoma and the Federal Judiciary Code and hence is not before the Court and that more than 8 years have elapsed since its rendition and the bondholders have done nothing whatever to enforce that judgment.

The court. further concluded that the filing of the Federal court case.after the action was barred did hot toll the operation of the statutes of limitations. The trial court rendered judgment for plaintiffs on February 2, 1954, and defendants have appealed. Only two propositions are submitted. They are as follows:

“1. The . trial court erred in its Findings of Fact, Conclusion of Law and in its judgment cancelling the assessment liens and quieting title thereon in the face .of the federal court judgment hereinafter described decreeing that the¡limitations statute, to-wit: Title 11, Sec. 242 to 242-e, O.S.A.1941, was void and unconstitutional.
“2. Even if' the 1939 Act had not been nullified, the filing of a foreclosure action in the federal court and/or the unsuccessful attempts of the County Treasurer to sell the properties for the special assessments at tax resale, constitutes a sufficient action to preserve the lien under the 1939 statute.”

*962 Plaintiffs in error point out that immediately prior to enactment of the 1939 limitations Act a special assessments lien, like ad valorem tax liens was not subject to limitations or laches and since it was declared void by the Federal court judgment above referred to with respect to the property here involved, there is no law cancel-ling the special assessments lien. Under 11 O.S.A.1941, § 103, the special assessment lien was co-equal with the ad valorem tax lien and continued until the special assessments were fully paid.

They claim that Section 23, 42 O.S.A. 1941, is not applicable to tax liens but only to contractual liens. That statute is as f ollows :

“A lien is extinguished by the mere lapse of the time within which, under the provisions of civil procedure, an action can be brought upon the principal obligation.”

It is further contended that reference to the above statute in Board of Education of City of Duncan v. Johnston, 189 Okl. 172, 115 P.2d 132, is mere dictum under the ruling of the court in Bailey v. Oklahoma City, 157 Okl. 96, 11 P.2d 113. This contention appears to be sustained because Section 23 referred to “an action” which generally means a judicial proceeding, while a proceeding by the county treasurer to collect taxes is generally referred as a “proceeding.” However, in the case of Baccus v. Banks, 199 Okl. 647, 192 P.2d 683, on page 689, this Court said:

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Bluebook (online)
1956 OK 112, 296 P.2d 959, 1956 Okla. LEXIS 451, Counsel Stack Legal Research, https://law.counselstack.com/opinion/assessment-bond-service-inc-v-w-r-johnston-co-okla-1956.