25 S.D. 300 | S.D. | 1910
Lead Opinion
This cause was before this court and judgment of the lower court affirmed in part anil modified, including in the judgment only such sums as accrued within six years next preceding the commencement of the cause of áction. The former opinion is in 23 S. D. 424, 122 N. W. 350. Rehearing was granted, and the cause is ag'ain before us; the only question being presented is as to the applicability of the statute of limitations.
It is conceded that the moneys involved in this suit are a part of a trust fund. The facts being fully stated in the former opinion, it will not be necessary to again state them in full. The trust relation here involved is an implied or constructive trust, and is classified by our statute (section 1609, Civ. Code) as an involuntary trust, arising by operation of -law. It is distinguished from a voluntary trust, which includes direct and express trusts, which are only created by direct contracts or by direct acts of the parties. 28 Am. & Eng. Ency. 865; 2 Story, Eq. Jur. 283 ; Wood v. Supervisors, 50 Hun, 1, 2 N. Y. Supp. 369; Strough v. Supervisors, 50 Hun, 55, 3 N. Y. Supp. 110; Strough v. Supervisors, 119 N. Y. 212, 23 N. E. 552; Dearborn County v. Lods,
Prior to 1890 the fee for collecting city taxes by the county was 4 per cent, under a general law, but by a law in relation to cities passed in 1890 the fee for such collection was reduced to x per cent, of the tax collected. The county treasurer being compensated by salary, the amount of fees thus collected went into the salary fund, to be used by the county in pajdng salary; the excess, if any, being -turned into the county general fund. The law of 1890 did not expressly repeal the general law allowing 4 per cent, for collecting city taxes, but only repealed it by implication, and many county treasurers, not knowing which law to follow still continued to retain for the county the 4 per cent., but with the full knowledge of the city authorities that it was so doing, and with full knowledge on the part of the city why it was so doing. Under section 1265, Pol. Code, 'the county treasurer was required to settle with and pay over to the city treasurer the amount of city taxes collected each month, and the city authorities could not help but know that the county was so retaining the 4 per cent., and why it was SO' doing. The county retained this excess over I per cent, publicly and openly and above board, claiming the absolute right in good faith to do so under the law. .Under these circumstances, we are of the opinion that the statute of limitations is operative and runs against each amount so' retained and misappropriated by the county from the date of each settlement with the city treasurer, and that back of six years, from the time of the commencement of this action, the statute of limitations is a
Another plain reason why the statute of limitations should apply in this case is because the trust here involved is not a direct or express trust, but is a constructive or implied trust. The case of Wood et al. v. Supervisors, 50 Hun, 1, 2 N. Y. Supp. 367, and the two cases of Strough v. Supervisors, one reported in 50 Hun, 55, 3 N. Y. Supp. 110, and the other in 119 N. Y. 212, 23 N. E. 552, are each cases -precisely in point in principle with the case at bar. These cases- were instituted by the township board of supervisors against the county board of supervisors to recover certain taxes collected by the county as the collecting agent of the township, a portion of which was misapplied by the county and converted to- the use and benefit of the county innocently and without intent to defraud. In these cases the courts held that the county was the agent of the township for the purpose of collecting the tax, and that the funds in the hands of the county were trust funds under an implied constructive trust. In AYood v. Supervisors the court said: “This brings us to the question: Can the county plead as a defense in bar of a recovery the statute of limitations, or is it precluded from so doing? The law supports the contention that it may. To prevent the application of -the statute in favor of a trustee the trust must be created b}^ the direct act of -the parties, and, when a person is charged as trustee by implication or constructive trust of law, he may claim the protection and benefit of the statute. It is only where there is an actual, continuing and subsisting trust that the trustee is precluded from setting up the statute of limitations. The trial court held that the provisions of the statute barring the right of action in six years were applicable -to the facts in this case. In this conclusion we concur. The only relief demanded against the county was a money judgment based on the alleged
And there is also another plain reason why the six-year statute of limitations should apply in this case. The plaintiff has sought its remedy in a court of law. The complaint seeks money judgment only, for money had and received. No equity power or jurisdiction is sought to be invoked. It is a complaint plainly on the law side of the court, in which either side was entitled to trial
If there, ever was a case where the statute of limitations should apply, it is in this class of cases. The city under our statute would be entitled to recover interest on each misappropriation from the date of settlement with the city treasurer. Since 1890 .counties have been retaining the 4 per cent, for collecting city taxes, with knowledge and implied consent of the city. The money has not been stolen by the county, but the taxpayer has had the benefit of it, but no-t in the particular place provided by law. Under such circumstances, it is an absolute injustice to the county that the city might be -permitted to lie idly by withoirt objection or without bringing suit, and thus be permitted to recover a large accumulation of interest from the county for this long-period of years.
We are of the opinion that the former judgment of this court was right, and should be adhered to, and it is ordered that this action be remanded to the circuit court with directions to ascertain by evidence the amount of said taxes paid to Turner
Dissenting Opinion
(dissenting). The nature of this litigation is disclosed by the decision of the trial court wherein it is found: That defendant is one of the organized counties of this state; plaintiff, a city of the third class located therein. “That between the 20th day of November, 1894, and -the 1st -day of December, 190C, the duly elected, qualified, and acting county treasurers of defendant county, as officers thereof,' collected for the plaintiff the sum of $38,621.85, in taxes as the city tax for the said city, and that the said amount of taxes was paid to the respective treasurers of the said county by the taxpayers of the said city as the city tax thereof; that at several times during each year from the 20th day of November, 1894, to the 1st day of December, 1906, the respective treasurers of the said county remitted to the said city the city taxes so collected by the said treasurers during said period of time, less 4 per cent, of the total amount of taxes so collected, which said treasurers retained as a commission for collecting the said taxes; -that -the total amount retained by the said treasurers of the said county during said period for collecting the said city -taxes was $1,544.73, or 4 per cent, of the total amount so collected; that the said treasurers of the said county during said period deposited the said sum of $1,544.73 retained as commissions as aforesaid in special salary fund of the said county; that out of the said special salary fund certain officer’s salaries were paid, and the balance remaining in the said fund at the end of each fiscal year was deposited by the proper county officers in the general fund of the county for the use and benefit of the county;” that payment of the difference between 1 and 4 per cent, on the amount of taxes so collected was demanded and refused January 8, 1907. And the-court concludes: “(3) That the defendant is made by law the agent -of the plaintiff to collect and enforce the collection of the said taxes, and the relationship existing between the plaintiff and defendant is a fiduciary one, and
After a careful re-examination of these propositions, I am entirely satisfied with the former decision of this court as to the first proposition, but not as to the second. “No tax,” declares the istate Constitution, “shall be levied except in pursuance of a law which shall distinctly state the object of the same, to which the taxes only shall be applied.” Const, art. 11, § 8. The taxes here involved were levied for the use and benefit of the plaintiff city. Having been levied and collected for that purpose, they cannot be applied -to any other, not even by express authority of the Legislature itself. The money' so collected, in contemplation of the law of this state, as expressed by its Constitution, remains in possession of the defendant county, and will so remain until applied to the object for which it was collected. This being so, its proper application cannot be prevented by legislation in the nature of limitations of actions or otherwise. The mandate of the Constitution is imperative and continuing. It cannot be evaded by legislation or the acts of public officers. This is not an action by the city or county against an individual tO' recover misappropriated funds. It is a controversy -between the taxpayers of the