Little v. Bank of Wadesboro

Hoke, J. Our statute of limitations, C. S., ch. 2, sec. 444, subsec. 9, provides that actions for relief on the ground of fraud or mistake shall be brought within three years next after the cause of action accrues, the cause of action not to be considered as accruing until the discovery by the aggrieved party of the facts constituting the fraud or mistake. It will be noted from the language used, “relief on the ground of fraud,” that the statute has and was intended to have a *5 broader meaning tban the ordinary common-law actions for fraud and deceit, and in our opinion clearly applies to any and all actions legal or equitable where fraud is the basis or an essential element of the action. And this being true, it extends and should be applied to the suit as constituted in the present record. While there is a suggestion made in Dixon v. Green, 178 N. C., 205, that undue influence is not always and necessarily fraudulent, when it is made to appear that one taking advantage of another’s weakness has acquired a controlling influence over him, and has exerted it in a given case on an owner of property to such an extent as to entirely supplant the owner’s will in the matter, and cause him to make an improvident and harmful disposition of his property that he would not otherwise have made, this is properly considered fraud of a pronounced type, so much so that in such instance “fraud” and “undue influence” are generally used together as expressing one and the same idea, and in this jurisdiction and elsewhere relief is awarded on that theory. Myatt v. Myatt, 149 N. C., 137; In re Abee’s Will, 146 N. C., 273; Posten v. Gillespie, 58 N. C., 258; Wright v. Howe, 52 N. C., 412; Marshall v. Flynn, 49 N. C., 199; Boardman v. Lorentzen, 155 Wis., 566, reported also in 52 L. R. A., N. S., 476; Whitcombe v. Whitcombe, 205 Mass., 310; 12 R. C. L., 230-231. In Myatt’s case, supra, it was held: “While undue influence sufficient to set aside a deed does not necessarily include moral turpitude, or even an improper motive, yet, when the deed is the result of a dominant influence exercised over the mind of the grantor by another, so that the mind of the grantor is suppressed or supplanted and the deed expresses the will of the actor producing the result, the deed so obtained is not improperly termed fraudulent.” In the Wisconsin case, supra: “He who obtains property by will or otherwise through undue influence or consciously taking advantage of the incompetency of the owner, commits a fraud and of a most serious character.” And in the Massachusetts case, “Undue influence is a species of fraud, or it partakes of the nature of fraud, whether it consists of deception or of coercion without deception.” In this connection, a helpful reference as to the meaning of the term “fraud” and its inclusive nature appears in Oil Company v. Guano Company, post, 157, opinion by Associate Justice Stacy. This being the correct interpretation of the allegations of the complaint, and evidence offered by plaintiff in their support, this cause of action comes clearly within the statutory provision of three years as above set forth, and it was prejudicial error for the court to have made a contrary ruling. *6 It is suggested for appellee that in cases like the present, the statute does not begin to run till the influence is removed. That is the rule very generally prevailing and it has been virtually so held with us. Oldham v. Oldham, 58 N. C., p. 89, and other cases; 25 Cyc., p. 1195. But this, to our minds, only serves to emphasize the harmful significance of the error complained of. Under our law, as stated, the statute does not begin to run until the influence complained of has ceased. All that the jury have determined on this question is that in answer to the third issue they find that the deed of November, 1914, was procured by undue influence of L. L. Little. Whether and when such influence may have ceased, or whether it continued until three years next before action brought, and was of a kind to prevent the grantor from taking orderly and proper steps to question the validity of the deed, has never been considered or passed upon and could not be, owing to the ruling of his Honor that in any aspect of the fkcts the cause of action was not barred. Again it is contended that this is an action to impress a trust upon the property, and in such cases the statute of limitations is the general statute of ten years, as his Honor ruled, which time had not elapsed when the suit was instituted. We have held in some cases that the general statute of ten years will apply when the suit is to have one declared trustee for another’s benefit and the pertinent facts come directly within the effect and operation of the statute. Sexton v. Farrington, 185 N. C., p. 339, and authorities cited. But in this case the alleged right to impress a trust upon this property is dependent upon the validity or invalidity of the deed from plaintiff to his brother, Walter, and if the right to assail this deed is barred by the statute, any and all claim to the proceeds in the possession and control of defendants is also barred. For the purposes of this claim, the proceeds from a sale of the property stands in the place of the property itself, and if the one is protected by the statute, the other is also. Sprinkle v. Wellborn, 140 N. C., p. 163. As a matter of fact and by correct interpretation, this is not an action to impress a trust upon property, but one to recover the proceeds of property acquired by fraud and undue influence and of which defendant’s predecessor in title had full notice. For the error indicated there should be a new trial of the cause and it is so ordered. New trial.