286 N.W. 881 | Minn. | 1939
The answer alleged the ditch assessment was regularly assessed against plaintiff in the proceedings for the establishment and construction of the ditch, that payment was voluntary, and that plaintiff's claim, if any, was barred by the statute of limitations upon the ground that it had not accrued within six years prior to the commencement of the action.
The reply was a general denial with allegations that the amounts alleged in the answer to have been voluntarily paid were illegally withheld from plaintiff by defendant.
Upon the trial plaintiff introduced in evidence the final order of the district court establishing the judicial ditch, filed on October 11, 1918. It modified the viewers' report assessing against plaintiff the benefits to a county road by making the assessment against defendant. It was stipulated that the county auditor filed a lien for the assessment against plaintiff, which defendant collected in the manner stated. The lien filed by the auditor was in plain disregard of the court's order that the assessment be against defendant, not plaintiff. Plaintiff then offered to show that it had no knowledge or notice that defendant was collecting the ditch assessment installments in the manner stated, that plaintiff had not in fact authorized any of its officers to make or consent to the payments, and that it did not discover the fact of such payment until the fall of 1936, after the last installment was paid. The court below rejected all offers on the grounds that any amount collected by defendant from plaintiff constituted a voluntary payment of taxes, without regard to whether plaintiff had knowledge or notice of the ditch assessment by the county auditor or knew or consented to the payments. Plaintiff asserted that defendant would be liable, even if all the offers were excluded, upon the ground that alleged payments were unauthorized and illegal. The alleged bar of the statute of limitations was not reached or considered below.
Findings were made that plaintiff voluntarily paid the assessments with notice and knowledge, and judgment was ordered for defendant. *454
Plaintiff contends that the doctrine of voluntary payment can have no application in any aspect of the case upon the grounds that, where there is no legal authorization for an expenditure by public authority, the money paid may be recovered as an illegal expenditure to which the payee never acquired any right. It also claims that the evidence shows that it is entitled to recover on the grounds of fraud and mistake. Upon this hypothesis, plaintiff claims that it is entitled to judgment here. Defendant contends that the evidence shows voluntary payment and that plaintiff's claim is barred by the statute of limitations.
1. The doctrine of voluntary payment has no application to unauthorized payments of public funds. The basis of the rule in the case of individuals and private corporations, within certain limits not material here, is that they have the power to do as they wish with their own. But it is not so with the officers of a municipal corporation. Neither they nor the corporation may do as they wish with the corporation's funds. The powers and duties of municipal corporations and their officers are defined by law. Unless an expenditure is authorized by law, it can never be the act of the corporation. In City of Chaska v. Hedman,
Apparently the court treated the payments of the assessment as tax payments. A ditch assessment is not a tax as that word is ordinarily used. The distinction between a ditch lien and a tax *455
was pointed out in Clapp v. Minnesota Grass Twine Co.
2. The payment of the ditch liens by the county auditor out of plaintiff's tax collections was unauthorized. By statute the liability for assessment for benefits resulting from the construction of a judicial ditch is to be determined by the final order establishing the ditch, which has all the binding force of a judgment in rem. In re Judicial Ditch No. 4,
The county auditor's duties are defined by the statute. He is required to prepare a ditch lien statement showing the proportionate amount of the cost of construction of the improvement for which each tract of land is benefited, including "all public or corporate roads * * * as affected by the order of confirmation of the board or judge, as aforesaid." G. S. 1913, § 5543 (now G. S. 1923, § 6703). The county auditor's function in apportioning the cost of construction of a ditch to benefited lands is the same in principle as that of spreading taxes levied against property liable for the tax. In State v. Republic Steel Corp.
The county auditor had no right to file the ditch lien or collect the assessment contrary to the court's order. The lien as to the township was void, the collection of the assessment unauthorized. There was no authority for payment of the assessment.
3. This action was commenced in March, 1937. The assessment installments retained within six years prior to that date are not barred by the statute of limitations. Where, as here, there has been a tax settlement or apportionment of taxes collected whereby the amount due to each taxing district for taxes levied by it is determined, each taxing district is entitled to its full apportioned share. Acceptance of a less amount over a period of years does not operate as a waiver or estoppel to claim the balance of its share. Board of Supervisors v. City of Lincoln,
In any aspect of the case, the installments and interest retained within six years prior to March, 1937, may be recovered by plaintiff.
4. Whether or not the installments withheld more than six years prior to the commencement of the action are barred depends on facts which were not determined below. Plaintiff claims both fraud and fraudulent concealment. In either case the statute runs from the discovery of plaintiff's cause of action. The statute runs from the discovery of the fraud where the action is one for relief on the ground of fraud. 2 Mason Minn. St. 1927, § 9191(6).
We deem it proper, in view of a new trial, to suggest consideration of these principles apparently overlooked below. *457
If fraud is not proved, the cause of action here would be for money had and received or on implied contract, which must be commenced within six years under Id. § 9191 (1). Strough v. Board of Supervisors, supra; Rosedale School Dist. No. 5 v. Turner County,
In the absence of fraudulent concealment, a party's ignorance of the existence of his cause of action does not prevent the running of the statute of limitations. Weston v. Jones,
The point has not been raised whether or not a county may be held liable for fraud or fraudulent concealment. Whether it may be held liable on either ground under our decisions in Schussler v. Board of Commrs.
Nor was the question whether or not the filing of the lien statement constituted notice to plaintiff discussed. Like the record of a deed or other instrument relating to land, the filing of the lien statement is "deemed notice to all parties interested of the existence of such lien." G. S. 1913, § 5544 (now 2 Mason Minn. St. 1927, § 6840-45). But ordinarily the record of an instrument not entitled to record does not operate as constructive notice. Nesland v. Eddy,
The rulings of the court prevented inquiry, which might have shown actual knowledge or notice, or the lack of it. Since such notice or knowledge determines the time from which the statute of limitations commences to run in cases of fraud and fraudulent concealment, there should be wide latitude in the inquiry.
The applicability of the statute of limitations will not be considered on appeal, even though the question was raised below, if it was not passed on by the trial court, especially where, as here, the facts upon which its application depends are in dispute. 1 Dunnell, Minn. Dig. (2 ed.) § 384; Hardwick v. Ickler,
The case was decided upon an erroneous theory. The rule of voluntary payment is not applicable. Whether, or to what extent, the plaintiff's claim is barred by the statute of limitations can only be ascertained upon a new trial.
Reversed and new trial granted.
MR. JUSTICE HILTON, being incapacitated by illness, took no part. *459