# Corvallis Sand & Gravel Co. v. State Land Board > Oregon Supreme Court · April 10, 1968 · 250 Or. 319 URL: https://www.frixlaw.com/law-library/cases/9848460 ## Case - **Full name:** CORVALLIS SAND & GRAVEL CO., Respondent, v. STATE LAND BOARD, Appellant - **Court:** Oregon Supreme Court - **Decided:** April 10, 1968 - **Citations:** 250 Or. 319; 439 P.2d 575; 1968 Ore. LEXIS 550 - **Precedential status:** Published - **Opinion:** Dissent by O'Connell - **Judges:** Perry, McAllister, Sloan, O'Connell, Goodwin, Denecke, Lusk - **Cited by:** 28 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9848460 ## How later opinions describe it (automated extraction) - explaining that state holds title to public trust resources but title is held “not in a proprietary capacity, but in its sov- ereign capacity, that is to say, as trustee for the public” - applying nullum tempus rule, the defense of laches is not available against “the government, state or national * * *” ## Opinion text O’CONNELL, J., dissenting. Plaintiff’s suit to enjoin the state’s action of ejectment is, in substance, a defensive maneuver resting upon the theory that the state’s delay in bringing its action constitutes laches. The principal question is, then, whether the defense of laches can be asserted against the state. There is ample authority in Oregon as well as elsewhere for the general proposition that the defense of laches is available against the state under proper circumstances. ① Defendant contends, however, that in the cases so holding the state was attempting to enforce a proprietary right rather than a public right and.that when the state brings an action to- enforce a public right, as defendant contends it did in *340 bringing the ejectment action, the'doctrine is not applicable. State v. Vincent, 152 Or 205 , 52 P2d 203 (1936) and- other cases support defendant’s contention that laches does not apply to the state when it is enforcing a public right. ② Plaintiff concedes that the eases so hold. However, plaintiff argues that the present case does not involve a public right but only a proprietary right. The battle line having been so drawn, the parties then narrow their argument'to the issue of whether the state’s assertion of its interest in the bed of a navigable stream is the assertion of a public or of a proprietary right. The issue is even more narrowly drawn because plaintiff concedes that rights such as the right of navigation, of fishing, of recreational use of various kinds are public rights, but contends that the right of the state to dispose of the bed of a navigable stream or the gravel therefrom is a proprietary right. ③ It is now well established that “no satisfactory test has been devised for distinguishing governmental from proprietary functions.” 2 Harper & James, Torts § 29.6, pp. 1621-22 (1956). As the authors observe, all of the functions of government “are — or should be— for the public benefit.” The immunity of government from suit should not be determined then by attempting to fit the case into one of two categories, whether governmental-proprietary, public-private, or jus publicum-jus privatum. Rather, it is necessary to ascertain in each case the interest of the public on one hand and the interest of the person asserting a claim against it on the other, and after weighing these interests de *341 cide which of them should, under the circumstances, be given preference. Sometimes the choice is not difficult to make. ④ Thus, it is easy enough to decide that the interest of the public in having the use of a stream for recreational purposes or for economic purposes in transport shall prevail over the interest of a person who, without license from the state and in the pursuit of private gain, interferes ivith that public use. But the problem takes on a different complexion when the interests of the entire community do not so clearly predominate. Such is the case when the state undertakes to sell public lands. ⑤ The only public benefit flowing from such sales is the acquisition of additional money by the state and its eventual use for state purposes. The same is true when the state leases the beds of navigable streams for the purpose of removing gravel. (OBS 274.530). When the state engages in transactions of this kind it should be regarded as standing in no different position than a private person and it should not be accorded any preferential treatment in litigation over such transactions. The point is well stated in 2 Davis, Administrative Law Treatise § 17.01, p. 491 (1958): «* * * [0]ne cannot readily see why the government in its business and property dealings should not be subject to the same rules of fairness that the courts apply to others engaging in such dealings. The problem that invites inquiry is: To the extent that the government engages in activities which have a private counterpart, why should the *342 government be immune from a principle of fairness that has been developed to guide the determination of issues between private parties'?” In the present case the real controversy is over the right to the gravel in the channel in question, a type of property which is dealt with by the state in the same manner as such property is dealt with by private persons. Therefore the state .should not be given preferential treatment, and the disposition of this case should be controlled by the same “principle of fairness” that would be applicable in litigation between private parties. The doctrine of laches applicable in litigation between private parties should be applied to the state in the proper circumstances. I believe that there are such circumstances in the present case. Since the state demurred to plaintiff’s complaint, the facts relevant to the defense of laches must be garnered from the complaint. The recitation of the facts in plaintiff’s complaint can be read to mean that plaintiff had a basis for asserting a claim to the channel in question on the ground that an avulsive movement of the river had occurred; that the state as early as 1933 knew that plaintiff and its predecessor were claiming private ownership in the channel; that the plaintiff has expended a large sum of money in the construction of its plant; and that due to the state’s delay in bringing suit the evidence establishing plaintiff’s claim is no longer available. These facts are sufficient to establish the defense of laches. ⑥ A subsidiary problem remáins to be disposed of. *343 It is argued plaintiff must lose because the state cannot be sued without its consent. Plaintiff’s suit, viewed apart from the state’s action of ejectment, would be barred by that proscription. But plaintiff’s suit is not to be so considered; it is a defensive maneuver made necessary by the state’s ejectment action. Plaintiff and defendant are essentially in the same posture here as the parties were in State v. Shinkle, 231 Or 528 , 373 P2d 674 (1962), except that in the Shinkle case the action was at law and a legal defense was raised by answer. There we held that if the state employs the machinery of justice to enforce a claim it is subject to defenses available to other plaintiffs. The same can be said where the defense is raised by a separate suit to enjoin the state’s suit or action, as it was in the present case. Apparently the majority would deny relief to plaintiff even though laches could be asserted against the state; this on the ground “that laches may not be used as a defense against a claim purely legal.” If a defendant has an equitable basis for barring recovery by the plaintiff, it is difficult to understand why it should make any difference whether the proceeding he seeks to bar was brought in a court of equity or in a court of law. Although we have retained the distinction between equity and law jurisdiction, it is not necessary to extend the distinction unreasonably. *344 • The majority opinion also holds that even if Corvallis Sand & G-ravel Co. had an equitable defense'to the ejectment action, it could not be asserted in a separate suit but would have to be raised by answer. ORS 16.460 provides that “(2) In an action at law where the defendant is entitled to relief, arising out of facts requiring the interposition of a court of equity, and material to his defense, he may set such matter up by answer, without the necessity of filing a complaint on the equity side of 'the court; and * * (Emphasis added.) It seems clear from this language that the legislature did not intend to prohibit-the raising of an equitable defense by cross bill, if a party chooses to do so. Churchill v. Meade, 92 Or 626 , 182 P 368 (1919) so holds. There the court said: “It will be noted that the language of the new enactment is permissive and not mandatory. It allows but does not compel the litigant to' interpose in the action at law equitable defenses. -This construction is apparent when we read that when the equitable matter is interposed the case shall proceed as a suit in equity until the equitable issues are determined. The effect of this statute is not to change the operation of the old rule giving a party an election to try out his defenses at law and, if unsuccessful, to urge his grounds for equitable relief by a proper suit. It may be said by a figure of speech that the statute opens a new door into chancery through the law- courts, whereas before, the entry must have been by a direct suit in that forum. As before, it is a matter of election with the litigant whether he . shall initiate his equitable defense in the law action or by an original suit.”' 92 Or at 632-33 . Later, in Hopka v. Forbes, 135 Or 91, 93 , 294 P 342 (1931), the court states that “The filing of a cross- *345 bill by a defendant in a law- action, interposing an equitable defense to. the action, is no longer permissible under our codé.” No mention is made of Churchill v. Meade, supra, and no attempt is made to explain the language of the statute which, as I have already indicated, is cast in permissive rather than mandatory terms. It seems obvious that the court in Hopka v. Forbes, supra, did not carefully consider the matter and for that reason I would not treat it as controlling upon us now. ⑦ We should hold that the defense of laches in the present case was properly raised-by plaintiff’s suit to enjoin the state’s action of ejectment. Thus in State of Oregon v. Hyde, 88 Or 1, 40 , 169 P 757 , 171 P 582 (1918), the court said: “We are committed to the principle that the doctrine of laches is applicable to the state: State v. Warner Valley Stock Co., 56 Or. 283, 304 ( 106 Pac. 780 , 108 Pac. 861 ).” ' See also, Withers v. Reed, 194 Or 541, 562 , 243 P2d 283 (1952); State ex rel Hallgarth v. School District No. 23, 179 Or 441, 461 , 172 P2d 655 (1946); State ex rel Security Savings & Trust Co. v. School District No. 9, 148 Or 273, 287 , 31 P2d 751 , 36 P2d 179, 181 (1934). Cf., City of Pendleton v. Holman, 177 Or 532, 542-47 , 164 P2d 434 , 162 ALR 249 (1945). See In re Estate of Moore, 190 Or 63, 75 , 223 P2d 393 (1950). ® Plaintiff relies upon the distinction frequently made between the jus publicum and the jus privatum. In those cases where the choice is not difficult the governmental-proprietary rubric may serve the intended policy function. It gives no guidance, however, in cases like the present one where the choice involves a more subtle balancing of public and private interests. The power of the state to sell land is provided for, e.g., in ORS 273.420, ORS 274.040, and ORS 274.&15. See Whitney v. Fox, 166 US 637 , 17 S Ct 713 , 41 L Ed 1145 (1897); Abraham v. Ordway, 158 US 416 , 15 S Ct 894 , 39 L Ed 1036 (1895); Foster v. Mansfield, Coldwater Etc. Railroad, 146 US 88 , 13 S Ct 28 , 36 L Ed 899 (1892); Denison v. McCann, 303 *343 Ky 195, 197 SW2d 248 (1946). As the court points out in Abraham, supra 158 US at 421 : “* * * one of the grounds upon which courts of equity refuse relief where the plaintiff is guilty of laches is the injustice of imposing upon the defendant the necessity of making proof of transactions long past, in order to protect himself in the enjoyment of rights which, during a considerable period, have passed unchallenged by his adversary, with full knowledge of all the circumstances.” It has been said that the party raising the equitable defense in. a separate suit must also be seeking affirmative equitable relief in addition to the injunction restraining the action at law. See 4 Pomeroy, Equity Jurisprudence § 1369 at 990 (5th Ed 1941). I see no reason for this requirement and I do not adopt it. Pomeroy, supra, rejects the suggested distinction between a pure defense and one which also seeks affirmative relief. However, even if-the requirement were. adopted, the prayer in plaintiff’s complaint could be construed as a request that its title be quieted though plaintiff regarded its action as “wholly defensive.” --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9848460. Public record. Not legal advice.