No suit, action or proceeding at law or equity for the recovery of judgment upon, or the enforcement or collection of, any sum of money claimed due from any city, town or village in this state, or from any officer of any city, town or village in this state, arising out of or founded upon any ordinance, trust relation or contract, or any appropriation of or conversion of any real or personal property, shall be commenced except within three years next after the date of the act of omission or commission giving rise to the cause of action, suit or proceeding. No suit, action or proceeding to recover damages for personal injury or death resulting from the negligence of any city, town or village or any officer thereof shall be commenced except within two years next after the date of the injury. All such suits, proceedings or actions not so commenced shall be forever barred.

History: Laws 1941, ch. 181, § 1; 1941 Comp., § 27-122; 1953 Comp., § 23-1-23; 2011, ch. 153, § 1.

Cross references. — For provisions of the Tort Claims Act, see 41-4-1 NMSA 1978 et seq.

The 2011 amendment, effective June 17, 2011, increased the limitation period for claims for personal injury or death from one to two years.

Estoppel. — Equitable considerations may estop the city from prevailing on its defense of the statute of limitations. Molinar v. City of Carlsbad, 1987-NMSC-032, 105 N.M. 628, 735 P.2d 1134.

Equal protection. — This section does not violate the equal protection clauses of state and federal constitutions. Espanola Hous. Auth. v. Atencio, 1977-NMSC-074, 90 N.M. 787, 568 P.2d 1233.

Rational basis for time limitation. — Since cities in this state are clearly limited in their expenditures and in their ability to raise money to meet extraordinary expenses, a rational basis exists for limiting the time period in which a suit may be brought against a city to one year, as opposed to a three-year period for suits against the county or state. Espanola Hous. Auth. v. Atencio, 1977-NMSC-074, 90 N.M. 787, 568 P.2d 1233.

No impairment of contract. — Application of the saving clause of this section does not unconstitutionally impair the obligations of contract where reasonable time was allowed for pursuit of a cause of action accruing prior to the statute. Hoover v. City of Albuquerque, 1954-NMSC-043, 58 N.M. 250, 270 P.2d 386, overruled on other grounds by Jemez Prop. v. Lucero, 1979-NMCA-162, 94 N.M. 181, 608 P.2d 157.

Not special legislation. — Prohibition against special legislation does not apply to this section, since it is framed in general terms and operates on all causes of action distinguished by a reasonable classification. Hoover v. City of Albuquerque, 1954-NMSC-043, 58 N.M. 250, 270 P.2d 386, overruled on other grounds by Jemez Prop. v. Lucero, 1979-NMCA-162, 94 N.M. 181, 608 P.2d 157.

Violation of trust. — The legislative intent was to exclude necessity of repudiation of trust relation, or notice thereof, and to bar actions founded upon trust relations with municipalities within the time limited. Hoover v. City of Albuquerque, 1954-NMSC-043, 58 N.M. 250, 270 P.2d 386, overruled on other grounds by Jemez Prop. v. Lucero, 1979-NMCA-162, 94 N.M. 181, 608 P.2d 157.

Appropriation of realty. — This section is specifically made applicable to actions for any appropriation of real property. Buresh v. City of Las Cruces, 1969-NMSC-171, 81 N.M. 89, 463 P.2d 513.

Inverse condemnation. — The three-year limitation of this section applied to an "inverse condemnation" action against a municipality and to a purported written promise to pay growing out of the same matter. Buresh v. City of Las Cruces, 1969-NMSC-171, 81 N.M. 89, 463 P.2d 513.

The three-year limitation set forth in this section applies to an inverse condemnation action against a municipality. McClure v. Town of Mesilla, 1979-NMCA-112, 93 N.M. 447, 601 P.2d 80.

Nuisance causing personal injury. — An action for personal injuries based on negligence of a city which is filed more than one year after the date of injury is barred by this section, even where the negligent conduct of the city constitutes maintenance of a nuisance. Seiler v. City of Albuquerque, 1953-NMSC-066, 57 N.M. 467, 260 P.2d 375.

Section inapplicable to negligence suit involving public employee of public utility. — Section 41-4-15 NMSA 1978 of the Tort Claims Act, allowing two years to bring suit, and not the one-year limitation of this section, applies to a suit for negligence of a public employee in the operation of a public utility. Cozart v. Town of Bernalillo, 1983-NMCA-053, 99 N.M. 737, 663 P.2d 713).

Action accrues when employment contract initially breached. — When city employees alleged breach of an employment contract because they did not receive pay raises when their job duties were expanded as required under the city's merit system ordinance, the action accrued at the time of the initial breach by the city, not with each paycheck that did not include the raise. Tull v. City of Albuquerque, 1995-NMCA-123, 120 N.M. 829, 907 P.2d 1010.

Action accrued when municipality stopped providing health insurance. — Where, in 1997, when plaintiffs retired, the municipality's personnel policy manual provided that the municipality would continue health insurance coverage for plaintiffs through the municipality's group plan and pay seventy-five percent of plaintiffs' premiums; in 2000, the municipality elected to be covered under the New Mexico Retiree Health Care Act, Section 10-7C-1 NMSA 1978 et seq., and notified plaintiffs that their health insurance coverage would terminate effective December 31, 2000, that plaintiffs could elect to receive coverage from the Retiree Health Care Authority, and that the municipality would contribute to the premiums plaintiffs paid to the authority; after December 31, 2000, the municipality paid between fifty and fifty-five percent of plaintiffs' premiums; the municipality stopped paying plaintiffs' on August 17, 2005; and plaintiffs filed suit on April 2, 2013 to recover damages for reduced and terminated premium payments, the municipality breached its obligation to provide insurance coverage to plaintiffs under the municipality's group plan and to reimburse seventy-five percent of plaintiffs' premiums on January 1, 2000 when it stopped providing coverage and paid less than seventy-five percent of plaintiffs' premiums and plaintiffs' claims were barred by the three-year statute of limitations. Beggs v. City of Portales, 2013-NMCA-068, 305 P.3d 75.

Single wrong with continuing effects. — Where, in 1997, when plaintiffs retired, the municipality's personnel policy manual provided that the municipality would continue health insurance coverage for plaintiffs through the municipality's group plan and pay seventy-five percent of plaintiffs' premiums; in 2000, the municipality elected to be covered under the New Mexico Retiree Health Care Act, Section 10-7C-1 NMSA 1978 et seq., and terminated plaintiffs' health insurance coverage effective December 31, 2000; the municipality agreed to pay a portion of the premiums plaintiffs paid to the Retiree Health Care Authority; after December 31, 2000, the municipality paid between fifty and fifty-five percent of plaintiffs' premiums; the municipality stopped making payments on plaintiffs' premiums on August 17, 2005; plaintiffs filed suit on April 2, 2013 to recover damages for reduced and terminated reimbursement payments; the municipality breached its obligation to pay seventy-five percent of plaintiffs' premiums on January 1, 2000 when it paid less than seventy-five percent of the premiums, and plaintiffs argued that each deficient payment of the premiums constituted an individual breach of contract and that the statute of limitations began to accrue against each payment when it became due, there was a single breach of contract with continuing consequences that did not affect the statute of limitations and plaintiffs' claim was barred by the three-year statute of limitations. Beggs v. City of Portales, 2013-NMCA-068, 305 P.3d 75.

Extensions for disability inapplicable against municipalities. — Section 37-1-10 NMSA 1978, extending the period of limitations for minors and incapacitated persons, does not apply to actions against municipalities, which must be commenced as provided by this section. Noriega v. City of Albuquerque, 1974-NMCA-040, 86 N.M. 294, 523 P.2d 29, cert. denied, 86 N.M. 281, 523 P.2d 16.

Action revived. — An action filed December 29, 1941, was revived under this section though previously barred and this is true even though there was only an implied or resulting trust. Crist v. Town of Gallup, 1947-NMSC-012, 51 N.M. 286, 183 P.2d 156.

Mistake of one party. — Oil company's claim that it overpaid oil and gas royalties to city for sixteen years was barred by the statute of limitations; the period of limitations was not tolled by the mistake of the oil company, where the mistake could have been discovered any time during the sixteen-year period, had the oil company examined its accounting records. City of Carlsbad v. Grace, 1998-NMCA-144, 126 N.M. 95, 966 P.2d 1178.

Section 37-1-23 NMSA 1978 cannot be made applicable to cities because this section specifically applies to cities and these sections contain conflicting and irreconcilable provisions; the two statutes are inconsistent concerning the binding effect that written or unwritten contracts will have upon a city and the length of the statute of limitations to be applied. Spray v. City of Albuquerque, 1980-NMSC-028, 94 N.M. 199, 608 P.2d 511.

Recoupment defense permitted. — It is generally recognized that equitable recoupment is allowed as a defense in oil and gas cases, even if the party asserting the defense would be barred from bringing an action for affirmative relief under this section. City of Carlsbad v. Grace, 1998-NMCA-144, 126 N.M. 95, 966 P.2d 1178.

Law reviews. — For article, "Survey of New Mexico Law, 1979-80: Property," see 11 N.M.L. Rev. 203 (1981).

For note, "Trends in New Mexico Law, 1995-96 - Contracts - Implied Employment Contracts Based on Written Policy Statements Are Not Subject to Governmental Immunity: Garcia v. Middle Rio Grande Conservancy District," see 27 N.M.L. Rev. 649 (1997).

Am. Jur. 2d, A.L.R. and C.J.S. references. — Inclusion or exclusion of first and last day for purposes of statute of limitations, 20 A.L.R.2d 1249.

Entry or endorsement by creditor on note, bond or other obligation as evidence of part payment which will toll the statute of limitations, 23 A.L.R.2d 1331.

Death action against municipal corporation as subject to statute of limitations governing wrongful death actions or that governing actions against a municipality for injury to person or property, 53 A.L.R.2d 1068.

Recovery of exemplary or punitive damages from municipal corporation, 1 A.L.R.4th 448.

State statute of limitations applicable to inverse condemnation or similar proceedings by landowner to obtain compensation for direct appropriation of land without the institution or conclusion of formal proceedings against specific owner, 26 A.L.R.4th 68.

64 C.J.S. Municipal Corporations § 2201; 54 C.J.S. Limitations of Actions §§ 18, 19, 262.