Title: City of Port Arthur v. Tillman

State: texas

Issuer: Texas Supreme Court

Document:

398 S.W.2d 750 (1965) The CITY OF PORT ARTHUR, Petitioner, v. Harrell G. TILLMAN et al., Respondents. No. A-10444. Supreme Court of Texas. July 28, 1965. Rehearing Denied January 19, 1966. *751 Cary Young, City Atty., Port Arthur, George B. Wikoff, Asst. City Atty., for petitioner. W. J. Durham, Dallas, for respondents Tillman & Tillman. Johns & Willard, Mack H. Hannah, III, Beaumont, for respondents Paul, Bridges, Prejean and others. HAMILTON, Justice. Petitioner, City of Port Arthur, as successor and subrogee to the rights of Jefferson County Water Control and Improvement District No. 11, brought suit against respondents, Harrell G. Tillman and wife, D. D. Tillman, Mack Hannah, Jr., Hamilton Paul, Emily Bridges, Isaac Prejean and Frank Boutte. As an incorporated city in the state of Texas, petitioner alleged that it had annexed the above-mentioned water district on December 26, 1959, pursuant to Article 1182c-1, Vernon's Ann.Civ.Stats. It succeeded to the powers of the district as well as to its assets and liabilities and was charged with the duty of performing all of its functions and services. On March 20, 1962, petitioner allegedly discovered the fraud of the Tillmans practiced upon its predecessor, the water district, on February 13, 1959, some ten months earlier than the formal annexation by the city. The city, as subrogee, filed this action on June 19, 1962, also alleging that the respondents Hannah, Paul, Bridges, Prejean and Boutte, as directors of the Jefferson County Water Control District No. 11, had violated and breached various of their statutory duties as trustees and directors of said district and were liable in damages for such actions on their official bonds in the amount of $5,000 each. The respondents in reply to said pleading filed special exceptions urging the two-year statute of limitations, asserting that petitioner's pleadings upon their face showed that the City of Port Arthur's alleged cause of action against said respondents was barred by the two-year statute of limitations. The trial court after hearing sustained said respondents' special exception urging the two-year statute of limitations. The City of Port Arthur refused to amend, whereupon the trial court dismissed its suits against the respondents. The City of Port Arthur appealed to the Court of Civil Appeals, which affirmed the judgment of the trial court. 382 S.W.2d 138. We hold that the trial court and the Court of Civil Appeals erred in sustaining respondents' special exceptions urging the two-year statute of limitations, Article 5526 (Title 91), Vernon's Ann.Civ.Stats., against the petitioner, the City of Port Arthur. The two-year statute of limitations as to the incorporated City of Port Arthur is not applicable in this case because of Article 5517, Vernon's Ann.Civ.Stats., which is as follows: In the case of Brazos River Authority v. City of Graham, 163 Tex. 167, 354 S.W.2d 99 (1961), we wrote the following: As applied to this action, since the two-year statute of limitations falls within Title 91, petitioner is not barred from bringing this suit against any of the respondents on petitioner's various theories as set out above. When the petitioner formally annexed the water district and became subrogated to its rights, only some ten months of the limitation period had run against the water district. Article 5517 applied to the petitioner at that time and the two-year statute of limitations does not apply. The judgments of the Court of Civil Appeals and the trial court are reversed and the cause is remanded to the trial court for trial. On motion for rehearing respondents have raised the point that even if Article 5517, Vernon's Annotated Civil Statutes, does prevent the two-year statute of limitation, Article 5526, Vernon's Annotated Civil Statutes, from barring petitioner's alleged cause of action, that Article 5544 will bar the city's cause of action. Article 5544 is as follows: The trouble with respondents' argument is that Article 5544 is a part of Title 91, just as is Article 5526, and 5517 keeps it from applying to incorporated cities. As quoted in our original opinion, "The right * * * of incorporated cities * * * shall not be barred by any of the provisions *753 of this Title, * * *." [Emphasis ours.] Respondents make the further point that the City of Port Arthur was taking over said Water District No. 11 for the purpose of engaging in a proprietary enterprise and that Article 5517 should not be construed to immunize the city from the statutes of limitation in such a situation. They say that to do so would cause the statute to conflict with the equal protection of the law provisions of the Texas and United States Constitutions. They argue that the statute, as we have construed it, exempting cities from the effect of the limitation statutes in Title 91 is an unreasonable classification and is unconstitutional. They cite us to no cases so holding and we have not found any. We have concluded that the classification is not unreasonable. We overrule respondents' motion for rehearing.