Morton County v. Tavis

66 N.W.2d 201, 1954 N.D. LEXIS 102
CourtNorth Dakota Supreme Court
DecidedSeptember 30, 1954
Docket7465, 7464
StatusPublished
Cited by4 cases

This text of 66 N.W.2d 201 (Morton County v. Tavis) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morton County v. Tavis, 66 N.W.2d 201, 1954 N.D. LEXIS 102 (N.D. 1954).

Opinion

MORRIS, Chief Justice.

On March 8, 1954, Morton County recovered a judgment against Lawrence M. Tavis and A. J. Jensen, State Commissioner of Insurance and administrator of the State Bonding Fund of the State of North Dakota, upon two causes of action for principal, interest, and costs amounting to $25,500.61, and upon the same date recovered another judgment in a separate suit against the same defendants upon six causes of action for $120,243.55. In the second suit one Bernard M. Porter was named as a defendant but was never served. Tavis defaulted in both actions. From the judgments so entered separate appeals have been taken. The *203 cases were by stipulation consolidated for trial and tried together in the district court. They were briefed and argued together in this court. Since the facts in these cases are similar and the controlling principles of law are identical, we consider both appeals in one opinion.

In May 1931, Lawrence M. Tavis became treasurer of Morton County and Bernard M. Porter became his deputy. They alternated in holding these respective offices during various subsequent periods, one being treasurer and the other his deputy. During that time the county treasurer of Morton County was bonded by the State Bonding Fund under the provisions of the State Bonding Fund Law which was originally Chapter 158 SLND 1919 and is now Chapter 26-23 NDRC 1943. During the period from May 1931 to July 1952 Tavis and Porter conspired with each other to embezzle and did embezzle from Morton County the sum of $209,691.58 during their respective terms as county treasurer as follows: May 1931 to May 1933, Tavis treasurer, Porter deputy, $13,807.42; May 1933 to May 1935, Porter treasurer, Tavis deputy, $18,166.08; May 1935 to May 1937, Porter treasurer, Tavis deputy, $1,969.88; May 1937 to May 1939, Tavis treasurer, Porter deputy, $4,-181.61; May 1939 to May 1941, Tavis treasurer, Porter deputy, $6,057.41; May 1941 to May 1943, Porter treasurer, Tavis deputy, $68,984.98; May 1943 to May 1945, Tavis treasurer alone, $16,155; May 1945 to May 1947, Tavis treasurer alone, $11,062.35; May 1947 to May 1949, Tavis treasurer alone, $56,709.62; May 1949 to May 1951, Tavis treasurer alone, $12,597.23. The above embezzlements are established by stipulation of the parties.

The embezzlements of Tavis and Porter were not discovered by the board of county commissioners of Morton County until on or about July 8, 1952. Claims representing the above amounts were filed with the defendant state commissioner of insurance within sixty days after the discovery of the embezzlements. The commissioner admitted liability upon all claims that were less than six years old and paid to Morton County the amount thereof in the sum of $72,526.-93 but refused to pay the balance of $137,-164.65. To recover this amount these actions were brought on June 11, 1953. The insurance commissioner answered, alleging that the causes of action set forth in the complaint did not accrue within six years before the commencement of the actions. The plaintiff replied, setting up an estoppel challenging the right of the defendant to plead and rely upon the six-year statute of limitations as a defense, the challenge being based upon the ground that Tavis and Porter, as public employees, fraudulently concealed, secreted, and suppressed the evidence of their defalcations to avoid detection. Thus there were presented to the trial court two issues. The first is: Does the six-year statute of limitations, Section 28-0116 NDRC 1943, -bar recovery from the State Bonding Fund for an embezzlement that occurred more than six years prior to the commencement of an action against the state commissioner of insurance? The second issue is: If the statute does apply, is the defendant insurance commissioner es-topped by the facts in this case from asserting the statute of limitations as a defense?

It is suggested that this suit may be considered an action for relief on the ground of fraud and is not deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud. All of these matters come within the purview of Section 28-0116 NDRC 1943, the applicable subdivisions of which provide:

“The following actions must be commenced within six years after the cause of action has accrued:
"1. An action upon a contract, obligation, or liability, express or implied, subject to the provisions of section 28-0115;
“2. An action upon a liability created by statute, other than a penalty or forfeiture, when not otherwise expressly provided; * * *
“6. An action for relief on , the ground of fraud in all cases both at law and in equity, the cause of action in such case not to be deemed to have ac *204 crued until the discovery by the aggrieved party of the facts constituting the fraud; * *

The first position of the appellant is that the obligation of the State Bonding Fund involved in this case, although based upon a statute, is nevertheless contractual, a view that is supported by Clark County v. Bergstresser, 63 S.D. 121, 257 N.W. 44. The appellant further argues that if the obligation of the State Bonding Fund is not contractual, then it is an action upon a liability created by statute which comes within subdivision 2 of Section 28-0116 NDRC 1943 and is, in any event, subject to the general statutory limitation of six years. We need not concern ourselves with whether the obligation of the State Bonding Fund is contractual or statutory, for the same period of limitation applies to either. A collection of cases dealing with these two theories of liability may be found in the annotation 32 A.L.R.2d 1240. The real question here is whether any of the provisions of the general six-year statute of limitations, Section 28-0116, apply.

The respondent contends that Section 28-0116 'NDRC 1943 is a general statute of limitations ; that the bonding fund law contains its own special statute of limitations which applies to all actions coming within its provisions to the exclusion of the general statute, Section 28-0116. To that contention we now devote our attention.

The State Bonding Fund was established by Chapter 62 SLND 1915. Chapter 158 SLND 1919, while purporting to amend and reenact the 1915 law, is in fact a comprehensive and complete statute establishing a State Bonding Fund under the management of the commissioner of insurance. The latter act is now Chapter 26-23 NDRC 1943, the pertinent sections of which provide:

26-2308. “The public employees of the state and each political subdivision thereof, as the case may be, shall be insured in the fund according to the provisions of this chapter automatically and without the issuance of any bond and without further action by the commissioner. The provisions of this chapter and of any statute requiring a bond shall constitute the bond of each and every public employee for the purpose of any law of this state requiring such bond and shall constitute the entire contract between the fund and the state or its political subdivisions, respectively, as the obligee in any such bond.”
26-2309.

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Cite This Page — Counsel Stack

Bluebook (online)
66 N.W.2d 201, 1954 N.D. LEXIS 102, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morton-county-v-tavis-nd-1954.