Stancill v. . Norville

Adams, J. The ultimate purpose of the action is to revive the two deeds of trust executed by B. H. Stancill to Henry C. Bourne and O. D. Ingram respectively as trustees and to subrogate the plaintiffs to the rights of the beneficiaries who were creditors of the grantor. The plaintiffs seek equitable relief on the ground of mistake — the mistake consisting in the entry of payment and satisfaction on the registry of each deed of trust when they bad no actual knowledge of the Norville judgment. In their brief the plaintiffs assert that the real mistake of which they complain was the failure of the Prudential Company to discover the Norville judgment, which bad apparent priority over the deed of trust that the Prudential Company bad agreed to accept under the impression that it would be a first lien upon the land. It is provided in C. S., 441(9), that suits for relief on the ground of fraud or mistake must be commenced within three years from the time the cause of action accrues, and this section is pleaded in bar of the plaintiff’s recovery. The only questions debated in the briefs are the bar of the statute and the alleged right of subrogation. If the action is barred the doctrine of subrogation need not be considered. Tbe subsection just cited was formerly confined to actions for relief on tbe ground of fraud in cases theretofore solely cognizable by courts of equity; but in 1879 tbe Legislature inserted tbe word “mistake” *461 after the word “fraud” and in 1889 struck out the clause restricting relief for fraud or mistake to cases cognizable only in courts of equitable jurisdiction. Battle’s Bevisal, 150; Public Laws, 1879, ch. 251; Public Laws, 1889, ch. 269. While this clause remained in the statute it was regarded as a legislative declaration that the effect of the statute could not be defeated unless the fraud or mistake was such that the jurisdiction of a court of equity was alone competent to afford relief. Blount v. Parker, 78 N. C., 128; Jaffray v. Bear, 103 N. C., 165. But with the clause omitted the statute makes all actions subject to the same rule whether or not they were formerly cognizable solely in courts of equity. Alpha Mills v. Engine Co., 116 N. C., 798; Little v. Bank, 187 N. C., 1. As the section is now written three years is the period prescribed for the commencement of actions for relief on the ground of fraud or mistake; but the cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting such fraud or mistake. When does the statute of limitations begin to run? In the earlier cases it was said that the limitation prescribed is not three years from the mistake, but from its discovery. Stubbs v. Motz, 113 N. C., 458; Bonner v. Stotesbury, 139 N. C., 3; Tuttle v. Tuttle, 146 N. C., 484, 493. Afterwards when the question of actual or constructive discovery arose the Court applied the principle that the means of knowledge is equivalent to knowledge and that a party who has the opportunity of knowing the facts constituting the fraud or mistake cannot be supine or inactive and for this reason assert a want of knowledge. Peacock v. Barnes, 142 N. C., 215. The result, as declared in a number of subsequent cases is this: the statute runs from the time the fraud or mistake is discovered or should have been discovered in the exercise of ordinary care. Sinclair v. Teal, 156 N. C., 458; Jefferson v. Lumber Co., 165 N. C., 46; Ewbank v. Lyman, 170 N. C., 505; In re Johnson, 182 N. C., 522, 528; Latham v. Latham, 184 N. C., 55, 65; R. R. v. Hegwood, 198 N. C., 309, 316. The statement in Taylor v. Edmunds, 176 N. C., 325, 329, that the statute begins to run from the discovery of the facts was evidently intended to distinguish the discovery, actual or constructive, from the breach of contract as the time when the period of limitation began to operate. It has been correctly held that the simple registration of a deed is not sufficient to give notice that a fraud has been committed. Modlin v. R. R., 145 N. C., 218, 227; Tuttle v. Tuttle, supra; Rhodes v. Tanner, 197 N. C., 458. It is claimed that by analogy a docketed judgment is not sufficient notice of mistake. Mistake or fraudulent representations in procuring the execution of a deed do not usually appear upon the *462 face of the instrument or upon the registry, and neither the instrument nor the registry generally imparts or necessarily suggests notice of fraud. It is otherwise when the record itself constitutes an encumbrance upon property the title to which is under investigation. In this ease the docketed judgment was a lien on the land and was itself an encumbrance which an examination of the record would have disclosed. Sanderlin v. Cross, 172 N. C., 242. The statute of limitations began its course when the mistake complained of should have been discovered. There is no evidence of fraudulent concealment as in Dunn v. Beaman, 126 N. C., 766, and S. v. Gant, 201 N. C., 211. The action was instituted on 3 May, 1929, and we are of opinion that upon the agreed facts it is barred by the statute of limitations. Error.