Ross v. Central Railroad & Banking Co.

McCay, Judge. 1. The principal question in this case is the true construction of section 2688 of the Code, in those words of it which provide, among other exceptions to the statute of limitations, w cases of fraud debarring or deterring the other party from bis action until the fraud is discovered.” It is contended that if the plaintiff was deprived of his rights by fraud, no mo matter by whom, that the statute never went against him, hio matter who was in possession, until the fraud is discovered. That he, the plaintiff, stands as one under disability, as an infant, lunatic, and the statute does not run. On the other hand, it is contended, and so the court below decided, that the reply of fraud can only be made to the person guilty of the fraud, and that if the property has gone into the possession of one guiltless of any participation in the fraud, the statute runs in his favor from the date of his possession, no matter whéu the plaintiff may have discovered the original wrong. It is certainly a startling proposition insisted on by the plaintiff in error. It is simply this: that if one be deprived of his rights by fraud, that no length of time, no change of owner [373] ship, no bona fieles of new parties can ever bar the person wronged, or his heirs, until the fraud be discovered. To put a case: Suppose one, one hundred years ago, had been deprived of his rights by the spoliation of a will. So long as the fraud remains undiscovered, no matter what new parties, new interests and new rights may arise, the statutory bar never arises until the statutory period after the discovery of the fraud. It seems to me that this view of this section is utterly inconsistent with sections 2679 and 2683. Those sections expressly require the person setting up the prescription to have been tinctured with the fraud, or to have had notice of it, at the time of his going into possession, before they deny to his possession the character of being adverse. The construction of section 268S, as contended for, would make it depend entirely upon the discovery of the plaintiff, no matter how honest and bona ficlej$\e defendant may be, no matter how long his possession. The position is, that the person defrauded, and his heirs, are under disability, that they are out of the statute, by its express words, and that no matter how long the defendant, though entirely innocent, may have been in the open, avowed and notorious possession, he is not protected. So startling a proposition, one that unsettles every title in the state, requires a close examination. In my judgment such is not the meaning of the law makers. To state the proposition in other words, it is this: If the original wrong be a fraud no matter by whom, if the plaintiff can say that the fraud has only been discovered within seven years, he is entitled to recover, no matter how long and no matter how honest the claim and the possession of the defendant may be. This section of the Code first came into our law by the act of 1856 : See acts of 1855 and 1866, pamphlet, page 236. In that act, as well as by the Code, the statute of limitations was made in terms to apply to courts of equity as at law, and it is just here, where, in my judgment, the error of those who give the statute the construction, that this provision puts the plaintiff upon the ground of being under disability, arises. The provision did not exist in the English statute of limitations, nor in our [374] act of 1767, and the subsequent acts, until 1856. It was a rule adopted by courts of chancery in-England to regulate and-limit their power to interfere. They were not bound by the statute of limitations. They, however, refused redress when the plaintiff’s demand was a stale one, and they laid down the.broad rule that a demand never became stale against one guilty of a fraud until the fraud was discovered. It was not upon the ground that the plaintiff was under disability : Lord Redesdaee, in Hoveden vs. Lord Annesley, 2 Sch. and Lef. R., 634, lays down the rule and the reason of it as follows: “That the statute ought not i;n conscience to run; the conscience of the party being so affected that he ought not to be allowed to avail himself of the lapse of time.” Judge Story in the case of Pratt vs. Northam, 5 Mason Rep., 110, enunciates a similar doctrine. That was a case where an administrator had got into his hands, assets, bonds, etc., belonging to the intestate in England, which were not known by the heirs to have belonged to him, and the heirs had only lately discovered the fact, the administrator having made no return of such bonds, and fraudulently concealed, not only that he had them, but that they, in fact, existed. The suit was against the administrators of the security on his bond, and Judge Story says: “It is said here is a case of fraud, and fraud constitutes, in equity, a good exception to the statutes of limitation. But then the fraud must be the fraud of the party setting up the bar of the statute. If this statute is to be avoided by any fraud it must be the fraud of the parties themselves, and not of third persons with whom they have no connection or privity. There is no pretence in this case of any fraud on the part of the testator of these defendants, the security.” As I have said, the rule does not turn on the disability of the plaintiff, but on the fraud of the defendant. He, the guilty party, shall not be allowed to say that his own concealment of the plaintiff’s rights shall work in his favor. And the very -words of this section of the Code indicate this idea. It is not put or classed with disabilities, but under the head of exceptions, and the language is not [375] general in cases of fraud debarring the plaintiff, but debarring the other party, the party opposite to himself in the fraudulent transaction. For these reasons we think the charge 'of the judge was right. The defense'of the plea of prescriptive right was good in the defendant and those under whom it claims without notice. The réply of fraud was only good in case the conscience of the defendant was affected by the fraud. It is not a case of disability in the plaintiff, but a case where the law says to the defendant, you shall not take advantage of your own ’fraud, unless the plaintiff has kept still seven years after its discovery. 2. 'We think, too, that the act of 1856, and the Code, setting the statute of limitations in operation against unrepresented estates on the lapse of five years, applied to cases then in existence. They come within the letter of the law, that is, if the statute be treated, as beginning to run at the passage of the act, and there is no hardship or unfairness in so applying it. Such, too, has been the usual understanding of the act. Judgment affirmed. Trippe, Judge, concurred, but furnished no written opinion.