Opinion — Beadles v. Smyser

BEADLES v. SMYSER.

209 U. 8. Argument for Appellant,

BEADLES v. SMYSER, MAYOR OF THE CITY OF

PERRY, OKLAHOMA.

ERROR TO AND APPEAL FROM THE SUPREME COURT OF THE

TERRITORY OF OKLAHOMA,

No. 150. Argued March 4, 1908.—Decided April 6, 1908.

While this court cannot review judgments of the Supreme Court of the

Territory of Oklahoma unless the amount involved exceeds $5,000, where

the judgment also directly involves the validity of other judgments the

amount in controversy may be measured by the aggregate of such judg-

ments.

The principles of right and justice upon which the doctrine of estoppel in

pais rests, are applicable to municipal corporations.

Where public property of a municipality cannot be seized on execution

and the municipality enters into a valid agreement with judgment cred-

itors to apply the judgment fund to judgments in order of entry and

complies therewith, it cannot, after the expiration of the statutory period

when 2 judgment becomes dormant for failure to issue execution, plead

the statute of limitations as a bar to those judgments not yet reached

for payment under the agreement. The municipality is estopped both

on the contract and on the ground of equitable estoppel, and so held as

to judgments against a city in Oklahoma.

17 Oklahemsa, 162, reversed.

THE facts are stated in the opinion.

Mr. A. G. C. Bierer, with whom Mr. S. H. Harris and

Mr. Frank Dale were on the briefs, for plaintiff in error and

appellant :

The action being in mandamus to compel a city to recog-

nize the validity of plaintiff’s judgments and to pay out the

moneys already accrued in the judgment fund upon these

judgments, and to continue to make levies to enforce the same,

the statutory period of limitation fixed by law for civil actions

does not run against the relief asked. Duke, Mayor, et al. v.

Turner et al., 204 U.S. 623.

BY TS EE OL Besar ALLS gee TO Sai lnk

394 OCTOBER TERM, 1907.

Argument for Appellant, 209 U. 8.

The section of the Oklahoma statute permitting the en-

forcement of a judgment by execution and providing for the

dormancy of such judgment if execution is not issued within

five years, has no application to judgments against municipal-

ities in this Territory which are collectible only by the levy

of taxes which are required by the law to be made to create

a judgment fund out of which to pay such judgments.

The cases of Hart v. City of New Orleans, 12 Fed. Rep. 292;

State ex rel. Courter v. Buckles, 35 N. E. Rep. 846; Laredo v.

Benavides, 25 8. W. Rep. 482, cited by Supreme Court of

Oklahoma, reviewed and distinguished from the case at bar.

Oklahoma law provides for collecting judgments by tax in-

stead of execution.

That it is and has been throughout the life of all these judg-

ments the duty of the city of Perry to make a levy of five mills

on the dollar to provide a fund with which to pay these judg-

ments is clearly declared by our statute. Sec. 1, art. 5, p. 83,

Statutes of 1897; Session Laws of 1899, § 1, c. 8, p. 103; Wil-

son’s Stat. of 1903, § 466.

The cases cited by the Oklahoma Supreme Court in the

cases of Beadles v. Fry, 15 Oklahoma, 423, are inapplicable to

the facts in the case at bar. Newton v. Arthur, 55 Pac. Rep.

446; Israel v. Nichols, 14 Pac. Rep. 428; Brockway v. Oswego

Township, 4 Pac. Rep. 79; and Baker vy. Hummer, 2 Pac. Rep.

808, discussed and distinguished.

Statutes of limitation do not run against municipal obli-

gations of the character of judgments in Oklahoma. Barnes v.

Turner, 14 Oklahoma, 284; Freehill v. Porter, 4 Pac. Rep.

646; Lincoln Co. v. Luning, 133 U.S. 529.

The placing of the obligations in question into judgments

which are to be paid out of the judgment fund of the city,

does not in any way affect the principles applied in the Barnes

or Duke vy. Turner case. United States v. County of Macon,

99 U.S. 582; A., 7. & S. F. Ry. Co. v. Territory of New Mexico,

72 Pac. Rep. 14; Darcy v. Mumpford, 58 Georgia, 119; United

States ex rel. Field v. Township of Oswego, 28 Fed. Rep. 55.

orm?

BEADLES v. SMYSER.

209 U. S. Argument for Appellees.

The city of Perry recognized these judgments as valid judg-

ments and continued to levy taxes to provide money in the

judgment fund to pay these judgments, and mandamus, which

is the only execution against a municipality, could not have

issued until the city refused to recognize and pay the judg-

ments in 1905. Alter v. State, 86 N. W. Rep. 1080.

The city of Perry having ratified and approved the agree-

ment among the judgment creditors to pay these judgments

in their order of rendition, and having carried out this agree-

ment in the levy of taxes and the payment out of the judg-

ment fund of these tax moneys for all these years, should now

be held to be estopped from pleading the dormancy of these

judgments even if otherwise they could have become dormant.

Mr. A. N. Whitesice and Mr. H. B. Martin, for defendants

in error and appellees, submitted:

This court has no jurisdiction of this action, because the

amount involved is less than $5,000.00.

If the validity of plaintiff's judgments were conceded, the

only cause of action appearing upon the face of the alternative

writ is against Fry, the treasurer of the city, and that said

cause of action cannot involve more than the amount of money

in the hands of the treasurer, which is less than the amount

necessary to give this court jurisdiction of the subject-matter

of the action.

A judgment against a city of the first class under the stat-

utes of Oklahoma Secomes dormant after five years from the

date of its rendition if execution shall not be sued out within

that time and such judgment cannot be revived without the

consent of the judgment debtor unless it be revived within

one year from the time it becomes dormant. Section 4337,

statutes of Oklahoma, 1893; Lafayette County v. Wonderly,

92 Fed. Rep. 313; Beadles v. Fry, 82 Pac. Rep. 1041, and cases

cited; Statutes of Oklahoma, 1893, §§ 4325 and 4332. All

these statutes were adopted from the State of Kansas, whose

courts have frequently construed them as we contend they

396 OCTOBER TERM, 1907.

Opinion of the Court. 209 U. 3.

should be. See Angell v. Martin, 24 Kansas, 334; Myers v.

Kotham, 29 Kansas, 19; Tefft v. Citizens’ Bank, 36 Kansas,

457; Mawhinney v. Doane, 40 Kansas, 681; Tibbetts v. Deck,

41 Kansas, 492; Bradford v. Loan Co., 47 Kansas, 587; Raff v.

State, 48 Kansas, 45; Railroad Co. v. Butts, 55 Kansas, 661;

New Hampshire Bank Company v. Ball, 57 Kansas, 812;

Reeves v. Long, 63 Kansas, 700; Steinback v. Murphy, 70

Kansas, 487.

As to the necessity of reviving judgments against municipal

corporations within the statutory periods of time, see Brock-

way v. Oswego Township, 4 Pac. Rep. 79; Ware vy. Pleasant

Grove Township, 59 Pac. Rep. 1089; City of Chanute v. Trader,

132 U. 8. 210; Field v. Township of Oswego, 28 Fed. Rep. 55;

Coulan v. Doull, 133 U. S. 596; M’Aleer v. Clay Co., 42 Fed.

Rep. 665; Lajayette Co. v. Wonderly, 92 Fed. Rep. 313.

Mr. Justice Day delivered the opinion of the court.

This is a proceeding to review the judgment of the Supreme

Court of the Territory of Oklahoma, affirming the judgment

of the District Court of Noble County in that Territory, de-

nying a peremptory writ of mandamus to the plaintiff in error,

also plaintiff below, seeking to compel the recognition of cer-

tain judgments and the levy of taxes by the city officers of the

city of Perry, a city of the first class, in Noble County. The

action was begun March 12, 1906, in the District Court upon

a petition, which set forth the ownership in the plaintiff of

judgments against the city of Perry, rendered, with two ex-

ceptions, in the year 1898; the other two réndered in January

and March, 1899, and aggregating the sum of $16,304.51, in-

cluding interest and costs.

The petition avers that these judgments were rendered on

warrants issued by the city of Perry upon the general fund

of the city; that no funds having been provided for the pay-

ment of plaintiff’s and certain other judgments, on Decem- .

ber 3, 1901, the judgment creditors of the city entered into an

BEADLES v. SMYSER.

209 U.S. Opinion of the Court.

agreement with the city treasurer of the city by signing a

certain paper writing, to wit:

“T, the undersigned, judgment creditor, holding judgment

against the city of Perry, Noble County, Oklahoma Territory,

hereby ask that the city treasurer pay all judgments against

the city of Perry in order of rendition, hereby waiving right

to payment pro rata, if such right exists, and this waiver shall

apply to all grantees and assigns. Said judgments are in

amounts and dates as follows:” [Here follows a list of the

judgments. ]}

At that time the outstanding unpaid judgment indebt

ness of the city of Perry amounted to $22,000, all of the owners

of which, excepting the sum of $4,000, signed the agreement;

that the waivers thus signed were presented to the city council

of the city, which adopted the following resolution:

“Whereas, the judgment creditors holding judgments

against the city of Perry have practically all signed written

waivers of the right, if such right exists, to payment of said

judgments pro rata, and therein consent to the payment of

said judgments in the order of their rendition against said

city:

“Therefore, be it resolved, That the city treasurer is hereby

authorized and directed to pay the said judgments existing

against the city of Perry in the order of their rendition out of

the funds now on hand and as they shall accrue in the judg-

ment fund.”

That thereafter the city treasurer followed the plan thus

outlined of paying judgments up to the early part of the year

1905, and the judgments prior to those sued upon by the plain-

tiff were paid off in that way. And it is averred that under

the laws of the Territory of Oklahoma a judgment fund must

be created to satisfy a judgment against a municipality, and

a judgment of that kind can be paid in no other way. And

that under the laws of Oklahoma no execution can be levied

upon a judgment against the municipality, and that during

the time since the rendition of the judgments the city of Perry

398 OCTOBER TERM, 1907.

Opinion of the Court, 209 U.S.

has had no property subject to levy upon execution, and that

the judgments of the plaintiff could not have been paid, and

taxes levied for that purpose, because there had not been

sufficient money in the judgment fund of the city of Perry

to pay the judgments or any part thereof. That under the

agreement of December 3, 1901, payments of judgments

against the city have been made, but in the order of rendition

the fund has been paid upon judgments prior to the plaintiffs.

That under the law of the Territory, during the life of the

said judgments, at least since the year 1899, it has been the

duty of the city of Perry to levy annually a tax not to exceed

five mills on the dollar on all the property of the said city, to

create a judgment fund, and that said city has made said levy

annually, and paid judgments down to the early part of 1905,

since which time the city treasurer of the city of Perry, under

the direction of the mayor and city council, has declined to

pay the plaintiff's judgments or any proportion of the same,

and that there has aecumulated in the hands of the city treas-

urer $2,286.96, the judgment fund of said city. And that

at all times down to the beginning of the year 1905 the city

of Perry has recognized the binding force and validity of said

judgments; that the mayor and council and treasurer of said

city decline and refuse to recognize the validity of the plain-

tiff’s judgments or pay any part thereof, and deny any lia-

bility thereon, solely on the ground that the same have be-

come dormant and barred by the statute of limitations of the

Territory of Oklahoma. And other averments are made as

to the inability of the plaintiff to otherwise collect their money

upon the judgments than by payment by a levy at five mills

on the dollar of the taxable property of the city. And the

plaintiff prayed a writ of mandamus against the mayor, city

council and treasurer of said city, commanding them to recog-

nize the said judgments and to continue to make the five-mill

levy allowed by the law for the judgment fund for the pay-

ment of said judgments against the city, as provided by law.

An alternate writ of mandamus was issued, reciting the al-

eae

BEADLES v. SMYSER.

209 U.S. Opinion of the Court.

legations of the petition, to which the defendant filed an

amended answer, in which they set up that each and all of

the judgments set out in the alternate writ of mandamus have

become dormant because no execution was issued on any of

said judgments, and no proceeding begun for the revival of

any of them and the same were barred by the statute of limi-

tations of the Territory.

The plaintiff filed a motion for judgment upon the amended

answer and prayed the issuance of a peremptory writ of man-

damus upon the ground that the amended answer failed to

state any legal reason why said peremptery writ should not

be issued. The defendant moved the court for judgment on

the pleadings, on the ground that all *he judgments were

barred by the statute of limit«tions. The court sustained the

motion of the defendant and entered final judgment in the de-

fendant’s favor, upon the ground that all the judgments set

out in the alternate writ of mandamus have become dormant

and are barred by the statute of limitations.

Upon proceedings in error in the Supreme Court of the

Territory of Oklahoma this judgment was affirmed on the

authority of Beadles v. Fry, 15 Oklahoma, 428. The present

case is reported, 17 Oklahoma, 162.

The question is first made as to the jurisdiction of this court,

because it is averred that the sum of $5,000 is not involved,

but we are of the opinion that the issue made and decided

involved the validity of the $16,000 and upwards, of judg-

ments described in the petition and amended writ. The

prayer of the petitioner was for a continuous levy of taxes for

the amount permitted by law to be applied in payment of

the judgments. The answer set up that all the judgments

were barred by the statute of limitations, and the District

Court of Noble County determined that the judgments and

each and all of them set out in the petition and alternate writ

of mandamus had become dormant and were barred by the

statute of limitations. This judgment was affirmed by the

Supreme Court of Oklahoma.

PAP wenn LE LINC" ANN IE AIP: ATE SOUPS ODO EN ete

400 OCTOBER TERM, 1907.

Opinion of the Court. 209 U.S.

Appeals and writs of error are allowed from the Supreme

Court of Oklahoma to this court where the value of the prop-

erty or the amount in controversy, to be ascertained by the

affidavit of cither party or other competent witness, exceeds

$5,000. Supp'ement U. 8. Revised Stats. vol. 1, p. 724.

We think the judgment in this case involves the validity

of all the plaintiff's judgments, and that the amount in con-

troversy is not simply the fund in the hands of the treasurer,

but the amount of all the judgments concerning which relief

was sought and which were directly adjudicated to be barred

by the statute of limitations.

The question made in the case is whether the judgments are

dormant by the statute of limitations of the Territory of Okla-

homa or failure to issue execution thereon for the period of five

years, and because the same were not revived within one year

after they became dormant. The statutes of Oklahoma in

2 Wilson’s Statutes of 1903, provide as follows:

Section 4635. “If execution shall not be sued out within five

years from the date of any judgment that now is or may here-

after be rendered, in any court of record in this Territory, or if

five years shall have intervened between the date of the last ex-

ecution issued on such judgment and the time of suing out

another writ of execution thereon, such judgment shall be-

come dormant, and shall cease to operate as a lien on the es-

tate of the judgment debtor.”

Section 4623 is as follows:

“An order to revive an action against the representative or

successor of a defendant shall not be made without the con-

sent of such representative or successor unless in one year

from the time it could have been first made.”

And section 4630 provides:

“If a judgment becomes dormant it may be revived in the

same manner as prescribed for reviving actions before judg-

ment.”

It is contended by the counsel for the appellant that this

case is governed by the ruling of this court in Duke, Mayor

BEADLES v. SMYSER. 401

209 U.S. Opinion of the Court.

&e. v. Turner and others, 204 U. S. 623. We are of opinion

that { .o question here involved was not determined in that

case. There was no question of a judgment becoming dor-

mant under the statute of limitations for want of execution

within five years. The point decided in that case was that

the petition for mandamus was not a civil action within the

meaning of the Oklahoma Code, barred by the three-year

statute of limitations, and the question was whether the re-

lator had slept upon his rights for such an unreasonable time

as to prejudice the rights of the defendant and preclude re-

lief by mandamus. In this case the underlying question is

not as to whether a writ of mandamus is the proper remedy,

but is, whether the judgment is dormant by reason of the stat-

ute of limitations and incapable of being enforced against the

municipality.

The Supreme Court of Oklahoma held that the statute

made no exception, and that notwithstanding the averment

of the petition that the city of Perry had no property liable to

be reached on execution, that unless execution were issued

within the five years, or the judgment revived within one year,

it had become dormant for failure to comply with the law.

There is some difference of view in the opinion of the courts

upon the subject of executions against municipalities, and in

some of them it is held that property of a municipality may be

reached on execution which is held for profit and not charged

with any public trust or use. It was held in this court that

the public property of a municipal corporation cannot be

seized upon execution. Klein v. New Orleans, 99 U.S. 149.

Judge Dillon, in his work on Municipal Corporations (4th ed.)

notices the differences of ruling on the subject, and states as

his own conclusion § 576:

“On principle, in the absence of statutable provision, or

legislative policy in the particular State, it would seem to be

a sound view to hold that the right to contract and the power

to be sued give to the creditor a right to recover judgment;

that judgment should be enforceable by execution against the

VOL. CCIX—26

PR wwe re. ORDA RP RATEN oh CSP E IL MLE BOER: SLI NE CATE MER LEAR

402 OCTOBER TERM, 1907.

Opinion of the Court. 209 U.S.

strictly private property of the corporation, but not against

any property owned or used by the corporation for public

purposes, such as public buildings, hospitals and cemeteries;

fire engines and apparatus, waterworks, and the like; and that

judgments should not be deemed liens upon real property

except when it may be taken in execution.”

Accepting the decision of the Supreme Court of Oklahoma,

rendered in 15 Oklahoma, supra, construing the statute so

as to permit the issuance of execution against the municipality,

with the right to levy upon the private property of the corpo-

ration if it has any, could the city take advantage of the fail-

ure to issue execution under the circumstances shown in this

case? This subject was briefly disposed of in the opinion in

that court, and of it the learned court said (15 Oklahoma, 436):

“Tt is alleged that this agreement and resolution of the city

council prevented the running of the statutes. This resolution

was passed at a time when the plaintiff's judgments were m

full force and effect. The city council did not attempt to re-

new its liability on these judgments. Without expressing our

views as to whether such judgments should be paid pro rata,

or in order of priority as to date, we are of the opinion that

the council could not change the law, and if the resolution

purported to change it, it would be void; and if it was in con-

formity with the law it would not change the relation of the

parties.”

That the principles of right and justice, upon which the

doctrine of estoppel in pais rest, are applicable to municipal

corporations, is recognized by textwriters and in well-con-

sidered cases. In 1 Dillon on Municipal Corporations (4th ed.),

in a note to § 417, that learned author says:

“Any positive acts (infra vires) by municipal officers which

may have induced the action of the adverse party, and where

it would be inequitable to permit the corporation to stultify

itself, by retracting what its officers had done, will work an

estoppel.”’

And this case does not rest on the ground of equitable es-

BEADLES v. SMYSER. 403

209 U.S. Opinion of the Court.

toppel alone. The manner of liquidation of these judgments

was the subject of express contract between the parties.

In the present case, by the action of the city council, the

judgment creditors were so placed that during the time, at

least while the city council were carrying out the arrangement

of December 3, 1901, in good faith, they could not consistently

with fair dealing and the terms of the contract on their part,

issue an execution to seize the property of the municipality;

had they undertaken to do so a court of equity would have

promptly restrained such proceedings.

It is averred, and not denied, that up until the year 1905

the city council made a levy cach year for the largest amount

which the statute permitted, to create a judgment fund out

of which to pay, and out of which was regularly paid, the out-

standing judgments against the city, and that these payments

continued until the plaintiff’s judgments were reached, which

were next in order. While thus acting to the limit to which

the law permitted, and in good faith carrying out the arrange-

ment between the partics, it is perfectly apparent that the

plaintiff was not in a position to seize by execution any prop-

erty of the municipality

If it could be held, as the authorities indicate (2 Dillon on

Municip. Corp., 4th ed., §850, note 1), that when execution

cannot be issued on a judgment against a municipality, man-

damus may take its place, the action of the city council in

making the arrangement in question would have equally pre-

vented the plaintiffs from availing themselves of that writ.

In this case the agreement made by the parties in Decem-

ber, 1901, was being continuously carried out until 1905. And

during that time the city of Perry was doing all it could be

compelled by mandamus to do in levying taxes to the full

amount required by law for the payment of judgments against

the city. The court would have no power by mandamus to

compel the levy of taxes which the law did not authorize.

United States v. Macon County Court, 99 U. S. 582.

As we have said, the principles of natural justice and fair

404 OCTOBER TERM, 1907.

Opinion of the Court. 209 U.S.

dealing are alike applicable to municipal corporations as to

individuals, and to permit the city to escape the payment of

judgments, whose validity is not otherwise questioned, for

failure to issue execution or sue out a writ of mandamus dur-

ing the time when the action of the city officers was such as

to prevent the exercise of the right, would be to permit the

action of the representatives of the city, who have had the

benefit of the contract during the time both parties were ob-

serving its obligations, to work a gross injustice upon the cred-

itors holding valid judgments against the municipality.

ye have been referred to no case precisely in point. Anal-

ogous cases are not altogether wanting. In Mercantile Trust

Co. v. St. L. & S. F. Rwy., 69 Fed. Rep. 193, it was held that

a stay of execution in the record prevented the judgment be-

coming dormant. In Marshall v. Minter, 43 Mississippi, 678,

it was held that the statute did not run during the time an

3 injunction was in force, sued out by the adverse party and

Fe afterwards dissolved.

It is not argued at the bar in this case that the arrangement

q with the judgment creditors was void for want of power in

i the municipality to make the arrangement of December, 1901,

: and we fail to see any valid reason why the municipality might

not enter into this arrangement. It was permitted by law

to make an annual levy of five mills on the dollar. 1 Wilson’s

: Statutes, 1903, § 466. If the judgment creditors and the

: municipality saw fit to make an arrangement by which the

: amount of this annual levy might be distributed by the con-

¥

sent of the creditors among them in accordance with the

priority of their judgments, we perceive no reason why this

may not be legally done. The effect of this arrangement was

to prevent the judgment creditor from taking such steps as

; the law permitted to collect his judgment, and, upon princi-

; ples of common right and justice, it would not do to permit the

city to carry out such an arrangement during nearly all the

five years’ period, and then meet its obligation by a plea of

the statute of limitations upon the ground that the judgments

iv Albithes«

WARE & LELAND »v. MOBILE COUNTY. 405

209 U.S. Argument for Plaintiffs in Error.

had become dormant, while both parties were recognizing

their binding obl gation and doing all that the law permitted,

to effect their satisfaction, and had entered into a contract

which prevented the judgment creditors from taking steps

to avail themselves of their right to collect their judgments by

execution or by writ of mandamus.

For these reasons the judgment of the Supreme Court of

Oklahoma Territory is

Reversed, and the cause remanded to the Supreme Court of the

State of Ok’ahoma for further proceedings in accordance

with this opinion.