State Ex Rel. Com'rs of Land Office v. Weems ( 1946 )

The defendants procured a loan from the School Land Department of the state and $10,000 was paid to them out of the public school fund. After default in the payment of the principal and interest provided by the note made therefor, suit was filed for judgment on the obligation and foreclosure and judgment was entered. After sale of the real estate mortgaged and foreclosed there remained a deficiency judgment of $2,067.40.

The School Land Commission bought the land at the foreclosure sale and by certificate sale sold same to one Kenny who made default after making certain payments and the sale to him was canceled. Before this happened, however, and about a year after the entry of the judgment, the Commissioners of the Land Office, based upon its knowledge of the facts and the representations and insistence of the defendants, resolved to release the deficiency judgment and executed and filed of record a satisfaction and release which, omitting formal parts, is as follows:

"In consideration of the sum of one dollar and the further consideration that the lands held as security for said loan was foreclosed and 'the lands purchased by the State at such foreclosure sale and have since been advertised and sold at public sale for a price sufficient to cover the full amount of the plaintiff's indebtedness in this case,' the plaintiff hereby acknowledges full satisfaction of the deficiency judgment herein and releases the same of record.

"Upon authority and direction of the Commissioners of the Land Office this satisfaction and release of judgment is executed by the undersigned as attorney of record for plaintiff in this case."

After an unsuccessful attempt to get the clerk of the court of Sequoyah county, wherein the judgment was entered, to expunge the release from the record, the Commissioners of the Land Office filed a motion in the foreclosure action to require the clerk to expunge the release on the ground that same was invalid. Eventually the defendants responded to the motion, alleging the validity of the release and payment of the judgment by compromise and settlement and that the judgment was dormant and unrevived.

A motion was leveled at the response to strike therefrom the allegation relating to dormancy of the judgment and the allegation of satisfaction by profit made from the subsequent sale of the property for the reason that same stated no defense to the motion to expunge from the record the satisfaction and release of judgment. This motion to strike was by the court overruled.

Upon a hearing on the application to expunge, the Commissioners of the Land Office offered their testimony. Demurrer thereto was sustained on the sole ground, so said the trial court, that the judgment was dormant and the application was dismissed.

If the dormancy statute is one of limitation, it does not apply to the state acting in its sovereign capacity in the enforcement of a public right. That the state was so acting in this instance there can be no doubt. This is conceded.

On January 31, 1931, the "Satisfaction and Release of Judgment" was filed in the office of the court clerk of Sequoyah county and duly entered on the judgment docket in cause No. 5660. This instrument was executed by George E. Merritt, attorney of record for the Commissioners of the Land Office, pursuant to authority and direction contained in a resolution adopted by said Commissioners at a meeting held December 29, 1930.

By the pleadings of the defendants, the records submitted to us and relied upon by the parties and the assertions of the defendants here, it is conclusively shown that the release relied upon by the defendants as valid was executed and filed about one year after the entry of the final judgment in question; that the release was executed upon the consideration therein stated and no other; that the judgment has not been paid in full in money; that no execution ever issued and no attempt was ever made to revive same; that more than six years have expired since the entry of the judgment.

There is no contention made by the state that the voluntary act of the parties in entering the satisfaction and release of judgment rendered the judgment dormant until the release should be expunged from the record nor did the state plead, nor does it assert here, estoppel against the defendants to assert and rely upon the dormancy of the judgment. It should also be noted that the state does not contend here, though it no doubt did in the trial court, that the plea of dormancy is not germane to the issue tendered and is so inconsistent with the asserted plea of validity of the release that inclusion of the latter contention necessarily excludes the other. The state now concedes the relevancy and materiality of the plea of dormancy and asks us to sustain its contention that the dormancy statute is a true statute of limitation.

Officers can only exercise the authority vested in them. (Const. art. 5, sec. 53; Shaw v. Grumbine, 137 Okla. 95,278 P. 311.) The Commissioners of the Land Office are authorized to make loans from the school fund and to collect the obligation made to the state in consideration thereof only in the manner prescribed by law. Such judgments of the state may not be released otherwise than upon payment. The release is wholly invalid and so shows on its face. Motion to expunge being proper procedure to rid the record of an unauthorized release (Sneary v. Nichols, 70 Okla. 133, 173 P. 366), it follows that the application to expunge the release from the record should have been sustained.

The dormancy statute is procedural and binding on all judgment creditors. Custer v. McCutchen, 283 U.S. 514, 75 L. Ed. 1239.

The statutory revivor of dormant judgments is not the only remedy open to the state where its judgments are dormant. (Jones v. Nye, 56 Okla. 578, 156 P. 332.) A suit may be prosecuted for a new judgment based upon a dormant judgment. (Jones v. Nye, supra; Custer v. McCutchen, supra; 31 Am. Jur. 842.)

Reversed with directions to expunge the satisfaction and release.

RILEY, OSBORN, BAYLESS, and WELCH, JJ., concur. HURST, V.C.J., concurs in result but dissents to paragraph 4 of the syllabus, on authority of State v. Dixon, 90 Kan. 594, 135 P. 538, 47 L.R.A. (N.S.) 905. CORN, J., concurs in result. GIBSON, C. J., dissents.