Commercial Waterway Dist. v. King County

The various periods within which actions must be commenced after the cause of action arose are stated in Rem. Rev. Stat., § 155 [P.C. § 8160] et seq., no statutory period of limitation being longer than ten years. Section 167 [P.C. § 8174] reads in part as follows:

"The limitations prescribed in this act (chapter) shall apply to actions brought in the name or for the benefit of any county or other municipality or quasi municipality of the state, in the same manner as to actions brought by private parties: . . ."

This section was enacted as chapter 24, Laws of 1903, p. 26.

Prior to the enactment of the statute just referred to, the law in force concerning the question here at issue was found in § 35 of the Code of 1881, which reads as follows:

"The limitations prescribed in this act shall apply to actions brought in the name of the territory, or any county or other public corporation therein, or for its benefit, in the same manner as to actions by private parties. An action shall be deemed commenced when the complaint is filed."

By the act of 1903, it was provided that no limitation should run against the state, a change in law which is immaterial, so far as the question here presented is concerned.

Appellants contend that the statute of limitations does not operate to defeat an action brought by appellant district in a governmental capacity to enforce the sovereign power of taxation, also arguing that the statute cannot here be urged as a defense, because respondent, since the tax foreclosure, has held title to the property in question in trust in connection with the collection of taxes, as provided by statute, for the benefit of appellant district and other taxing units. In this connection, appellant argues that the statute of limitations would not commence to run until the open repudiation of the trust by respondent, or the commission by respondent of acts hostile to, or in fraud of, the rights of beneficiaries of the trust, and of which appellants had actual knowledge, or of which knowledge must be imputed to them. Appellants argue that they had no actual knowledge of the facts, and that such knowledge should not be imputed to them. They admit, of course, that respondent had established the airport, but contend, in effect, that they did not know that the property above referred to constituted a part of the airport.

Appellants cite the case of Commercial Waterway District No. 1v. King County, 197 Wash. 441, 85 P.2d 1067, in which it was stated that a county takes title to property through tax foreclosure, not in its proprietary capacity, but in trust for the state, for itself, and for other taxing municipalities which are interested.

In the case of Gustaveson v. Dwyer, 78 Wash. 336,139 P. 194, 83 Wash. 303, 145 P. 458, cited by the majority, it was held that a county holds, in a governmental capacity, property which it has acquired through tax foreclosure proceedings. The case cited was twice argued before this court, first to a department thereof, an opinion having been rendered affirming the judgment appealed from, and later to the court sitting En Banc, after which another opinion was written, by which the result reached by the department was affirmed for somewhat different reasons. It appeared that Gustaveson, the plaintiff, instituted the action for the purpose of recovering possession of a tract of real estate which the defendant was holding under a claim of right, based upon alleged adverse possession for the statutory period. The court cited § 167 of the code, supra, and held that the statute of limitations did not run in favor of the defendant's claim based upon adverse possession while the title to the land rested in the county in trust for the state and other political subdivisions.

In the opinion rendered after the hearing before the court EnBanc, it was held that the county acquired the land through the tax foreclosure, in its governmental capacity, as distinguished from its proprietary capacity, and that the statute of limitations would not run against the county, acting in its governmental capacity. The court cited the case ofWest Seattle v. West Seattle Land Improvement Co., 38 Wash. 359,80 P. 549, in which it was held that adverse possession by a private individual, of property within the boundaries of a public highway, would not operate to divest the title of the municipality. In the West Seattle case, the statute above cited, providing that the statutes of limitation operate against a county or municipal subdivision thereof, was not mentioned. In referring to the West Seattle case, this court, in the second opinion filed in the Gustaveson case, said:

"While our general statute of limitations applies to actions by or for the benefit of counties and other municipalities (Rem. Bal. Code, § 167; P.C. 81, § 79), it has been held that the statute does not apply as against a municipality so as to permit the acquisition of title by adverse possession to a portion of a street within the municipality. West Seattle v. West SeattleLand Improvement Co., 38 Wash. 359, 80 P. 549."

This was the effect of the West Seattle case, even though the statute was not referred to therein.

In the second opinion in the Gustaveson case, many authorities are cited, the court deciding that the general statute of limitations, though by its terms applicable to counties, does not run against the county in favor of an adverse possessor of land acquired through tax foreclosure, while the title is vested in the county, for the reason that the county holds the land in its governmental capacity.

Appellants argue, in support of their contention that they should prevail in this action, that the district is acting in its governmental capacity, and that its right is not barred by the statute of limitations.

The West Seattle and Gustaveson cases were correctly decided. To permit the title of a county or a city, to land embraced within the boundaries of public streets, to be defeated by prescriptive rights gained by adverse possession, or to permit the title of a municipal corporation, to land which it owns in its governmental capacity, to be so defeated, impinges upon the basic processes of government. The rights here sought to be enforced by appellants more nearly resemble those involved in a fiscal accounting between municipal subdivisions of the state. Whether respondent converted the property or the proceeds, the situation would be the same. Brown v. Board of Education,148 Okla. 97, 298 P. 249; Los Angeles v. Los Angeles County,9 Cal. 2d 624, 72 P.2d 138, 113 A.L.R. 370.

In the early case of Citizens' Nat. Bank v. Lucas, 26 Wash. 417,67 P. 252, 56 L.R.A. 812, 90 Am. St. 748, this court, referring to our statutes of limitation, said:

"It seems to us that the legislature in the passage of this act attempted to provide a limitation for every kind of action that could be brought in the courts."

In the case of Douglas County v. Grant County, 98 Wash. 355,167 P. 928, this court referred to the portion of the opinion in the case last cited which we have just quoted, and held that an action by Douglas county against Grant county, based upon the act of the legislature constituting the defendant county and providing that the county should pay to Douglas county a certain proportion of the bonded and warrant indebtedness incurred by Douglas county prior to the division (Laws 1909, chapter 17, p. 19, Rem. Rev. Stat., § 3937 [P.C. § 1521]), was barred by the two-year statute of limitations. Rem. Rev. Stat., § 165 [P.C. § 8172]. The plaintiff, Douglas county, based its claim directly upon an act of the legislature, but, notwithstanding that fact, this court held that the action was barred by the statute.

If one converts county funds or property of which he is official custodian, the statute of limitations operates in his favor. It is not easy to understand why a different rule should apply in case of wrongful appropriation by another governmental agency. In this connection, the supreme court of Oklahoma, in the case of Brown v. Board of Education, supra, said:

"The contention of the plaintiff amounts in law to this: If the county treasurer had personally used the funds of the plaintiff, then the three-year statute of limitations would apply; however, if the county treasurer, instead of personally appropriating the money, passed it over to the credit of the county, and the county used the money, the statute of limitation never applies. We do not understand the logic of the difference.

"We think that the right of the plaintiff to recover in this case must be inherent within itself and is not dependable upon the identity of the defendant."

It may be assumed that the statute would not run against the lien of assessments levied by appellant district, so long as such assessments stand upon the books of the county treasurer, but that is not the situation here. Respondent has acquired the property through tax foreclosure proceedings. Appellant district is not, in this action, seeking to enforce any lien in its favor.

In the recent case of State ex rel. Seattle v. King County,4 Wash. 2d 589, 104 P.2d 575, we said: "All taxes are canceled by force of the statute (Rem. Rev. Stat., § 11293) with vesting of the title in the county." See, also, quotation from the same case, supra.

After the sale of the property by the county, appellant district would be entitled to receive a proportion of the proceeds of the sale. It might receive its assessments in full, or it might receive only a portion thereof. No question is here presented as to the operation of the statute of limitations against any claim which appellant district may have if at any time in the future the county sells the property now embraced within the airport.

I am convinced that it should be held that Rem. Rev. Stat., § 167, supra, applies to appellants' cause of action.

Appellants contend that, even though it be held that the statute of limitations applies, the trial court erred in holding that, under the circumstances of this case, the action was barred by the statute. In support of this contention, it is argued that it does not appear that the commissioners of appellant district knew that respondent had assumed ownership over tax foreclosed property against which the district had unpaid assessments, or that respondent had improved such property as a portion of its airport. As above stated, appellants had pleaded lack of knowledge of these facts on their part, until a short time prior to the institution of the action. Basing their argument upon the proposition that respondent held title to the property in trust, appellants contend that the statute did not begin to run until knowledge on their part of the breach of trust.

The trial court found that appellants knew of the adoption of the resolution by the commissioners of respondent, and that respondent had improved the property by the construction of the airport. Appellants argue that this finding is not supported by the evidence. Appellants' allegation of lack of knowledge on their part was denied by respondent in its answer, and I fail to find in the record evidence which supports appellants' allegation of lack of knowledge.

In the case of Noyes v. Parsons, 104 Wash. 594, 177 P. 651, this court said:

"A general allegation of ignorance at one time and knowledge at another is of no effect. Hardt v. Heidweyer, 152 U.S. 547. In order to excuse a want of knowledge of the fraud, a pleading must set forth what were the impediments to an earlier prosecution of the claim, how the pleader came to be so long ignorant of his rights, the means, if any, used by the opposing party fraudulently to keep him in ignorance, or how and when he first obtained knowledge of the matter alleged in the pleading.Pearsall v. Smith, 149 U.S. 231."

The case of Teeter v. Brown, 130 Wash. 506, 228 P. 291, is to the same effect.

It is the general rule that one seeking to bring himself without the operation of the statute of limitations must bear the burden of proving facts which show that the statute should not operate. 2 Jones on Evidence (2d ed.) 1026, § 559. This court has followed the rule in several cases. Conaway v. Co-operativeHomebuilders, 65 Wash. 39, 117 P. 716; Roberts v. PacificTel. Tel. Co., 93 Wash. 274, 160 P. 965; Davis v. Rogers,128 Wash. 231, 222 P. 499; Reeves v. Davis Co., 164 Wash. 287,2 P.2d 732; Bay City Lumber Co. v. Anderson, 8 Wash. 2d 191, 111 P.2d 771.

One of the commissioners of appellant district testified that each month the county treasurer issued a statement of collections and disbursements, but this is far from supporting appellants' contention of lack of knowledge on the part of the district's officers, concerning the action of respondent in establishing the airport and in including within the boundaries thereof certain lands, against which were unpaid assessments in favor of the district. The action of the county commissioners in establishing the airport by resolution, is matter of public record, and it is admitted that appellant district not long thereafter received from respondent a large payment on account of assessments against property included within the airport.

I am convinced that appellants are not entitled to prevail on this appeal because of any supposed lack of knowledge on their part of the proceedings of the county commissioners in establishing the airport, and including therein the tracts of land against which appellant district, prior to the tax sale to the county, had liens for unpaid assessments.

In my opinion, the judgment appealed from should be affirmed, and I accordingly dissent from the conclusion reached by the majority.

SIMPSON and DRIVER, JJ., concur with BEALS, J.