Kirkley v. Sharp

Lumpkin, Justice. This was an action by Mrs. Kirkley against Sharp. The substance of her declaration and of an amendment to the same are stated by the reporter. The trial judge, upon an eral demurrer made by the defendant, dismissed the case on the ground that the declaration showed upon its face that the plaintiff’s cause of action, not having been brought within four years from the time the right accrued, was barred by the statute of limitations. The case is not entirely free from difficulty, but after some reflection we have concluded that the better holding is, that under the facts alleged, the plaintiff is not barred. As a general rule, fraud, until discovered, prevents the statutory bar from attaching; but it is now well settled in this State that there must be reasonable diligence to detect the fraud. Marler v. Simmons, 81 Ga. 613, and cases cited. It seems, however, that the rule just stated is subject to some degree of modification or relaxation in cases where the plaintiff has been lulled into a sense of security by reason of a relation of trust and confidence between himself and the defendant, rendering it the moral duty of the latter to disclose the truth, and where, because of this confidence, the plaintiff has been actually deterred from sooner discovering the fraud, or even suspecting its perpetration. In such cases the failure to employ the necessary means to discover the fraud is sometimes held to be excusable. In the case of Gibbs v. Guild (1882), 9 Q. B. Div. 59, it was held, that in an action to recover, by way of damages money lost by the fraudulent representations of the defendant, it was a good reply to 'a defense of the statute of limitations that the existence of the defendant’s fraud was fraudulently concealed by him for more than six years before the action was brought, and that consequently the plaintiff did not [488] discover, and had no reasonable means for discovering, the fraud within the six years. Among the cases relied on in support of the judgment of Field, L, which was affirmed by the court of appeal, was that of Bree v. Holbeck, 2 Doug. 655, in which we find certain dicta of Lord Mansfield in accord with the conclusion announced. In 13 Am. & Eng. Enc. of Law, 727 and 728, it is stated that “in equity, a fraudulent concealment of a cause of action on the part of the defendant may keep the statute from running. It is held that the defendant forfeits his right to set up the statute of limitations where he has concealed his own fraud during the term of the statute, and that having himself by fraud made the statute run in his own favor, he cannot take advantage of it.” The text then proceeds to lay down that it has been held that the term set by the statute of limitations is absolute as to cases arising at common law, and that in such cases the operation of the statute cannot be delayed except by express statutory provisions. Attention, in this connection, is called to the fact that in Georgia (evidently referring to the act of March 6th, 1856 — Acts of 1855-6, p. 236; Code, §2931) and some other States, such provisions are incorporated in the statutes, and it is further said that: “Even in their absence, there is a general tendency to hold that since the statutes of limitations are designed to suppress fraud, they should not be so construed as to encourage fraud, if they admit of any other reasonable interpretation.” It is also remarked (p. 729) that “it is well to remember that the fraud in question is not that which gives, but that which conceals a cause of action,” citing the case of Gibbs v. Guild, supra, which, it is said, reviews all the English authorities and holds that even since the judicature act of 1873, “by which common law and equity, in a certain sense, were both abolished,” a fraudulent concealment of a cause of action will delay the operation of the statute. The question now under consideration was also touched [489] upon by Judge Lumpkin in the case of Conyers v. Kenan et al., 4 Ga. 308. On page 315, he refers to tbe case of Bree v. Holbeck, cited above. In Maryland, tbe statute provides tbat usual and ordinary diligence must be used to discover the fraud; and under this statute it was beld in Wear v. Skinner, 46 Md. 257, tbat concealment of tbe original fraud was enough, without tbe perpetration of another and independent fraud, to excuse tbe adverse party for remaining in ignorance. See, also, 2 Wood on Limitations, 701 to 712, and cases cited in note 2 on tbe latter page, all of which are more or less in point, among them being the- case of Wear v. Skinner, supra, and also that of Vigus v. O’Bannon, 118 Ill. 334. From tbe opinion of Magruder, J., we take tbe following pertinent extract, to be found on page 346 of tbe report last cited: “Tbe rale tbat, in cases of fraud, tbe statute of limitations begins to run only from tbe time of tbe discovery of tbe fraud, will not apply where tbe party affected by tbe fraud might, with ordinary diligence, have discovered it. But tbe failure to use such diligence may be excused where there exists some relation of trust and confidence, as principal and agent, client and attorney, cestid que trust and trustee, between tbe party committing tbe fraud and tbe party who is affected by it, rendering it tbe duty of tbe former to disclose to tbe latter tbe true state of tbe transaction, and where it appears tbat it was through confidence in tbe acts of the party who committed tbe fraud tbat tbe other was prevented from discovering it.” In Norris v. Haggin, 136 U. S. 386, it was beld tbat tbe plaintiff was guilty of laches in failing sooner to discover tbe alleged fraud from tbe consequences of which be sought relief; but Mr. Justice Miller seems to recognize tbe principle for which we are contending, as will appear from a dictum on page 392 in tbe following language: “It is a part of this general doctrine, tbat to avoid tbe lapse of time or statute of limitation, tbe fraud must have been one which was [490] concealed from the plaintiff by the defendant, or which was of such a character as necessarily implied concealment.” On the whole, therefore, we conclude that the court erred in dismissing the plaintiff’s action. In view of the allegations contained in the declaration, it was not, in our opinion, barred by the statute of limitations. Judgment reversed.