Page images

known or discovered." In Illinois, it is held that there is no rule which requires a trustee or cestui to execute and record any instrument to counteract the record of a forged release of the trust deed. Nor is the owner of land limited to any particular period for commencing proceedings, at law or in equity, against a forger of title to his land, to vindicate his good title against the fraudulent claim of the forger, or one claiming under him. He may bide his time, and trust to the strength of his title.2 In Minnesota, it is held that, under the statute, time commences to run for a fraudulent conversion from the time of its discovery. In Louisiana, an action by a judgment creditor, to annul a mortgage on the ground that it was fraudulent, was held to be barred by the statute in one year. In West Virginia, the statute is held to run against a suit to set aside a conveyance as fraudulent against creditors, founded on the charge that its provisions are such as to render it voidable, as matter of law, from the time when the deed was made; but that it does not run against a suit founded on the charge of a fraudulent intent, in fact, except from the time of discovering the fraud." In Iowa, an action by a tenant in common to recover possession of the common property which is fraudulently held by his co-tenant, and to which the latter has acquired a tax deed, is not held to be barred at the expiration of five years from the recording of the deed. In Arkansas, under the code of practice, when courts can exercise equitable and legal jurisdiction, if the administrator pleads the statute of limitations in a suit founded on a cause of action accruing in the lifetime of his intestate, fraudulent conversion and concealment by the intestate may be given in evidence in answer to such plea.7

1 Wear v. Skinner, 46 Md. 347. See also Findley v. Stewart, 46 Iowa, 655.

2 Chandler v. White, 84 Ill. 435. Where parties secured to themselves the legal title of a Mexican grant, by the presentation to the board of land commissioners of a worthless document, as a transfer of the grantee's interest, whereby a fraud was committed upon the heirs of the grantee, held, that the patentees would, in equity, be converted into trustees, and that the statute of limitations would not commence to run, in such case, against the right of the heirs, until their discovery of the fraud. Hardy v. Harbin, 4 Sawyer (U. S. C. C.), 536. The payee of a promissory note, executed by a principal and surety, altered the same, with the consent of the principal only, by extending the time of payment, and then transferred the same, by delivery merely, to a creditor whom he owed in payment of the debt. Upon the maturity of the note as altered, the cred

itor brought suit thereon against the makers, whereupon the surety, by reason of such alteration, defeated a recovery; and, the principal proving insolvent, the creditor, within six years from such action, but more than six years from the transfer of such note, instituted suit against the .payee, his debtor, who pleaded the six years' statute of limitations. It was held, on demurrer to a reply alleging that the plaintiff had no notice of such fraud until such action on the note, that the action is not barred, the plaintiff's right of action being postponed, by such fraud, until the discovery thereof. Bescher v. Paulus, 58 Ind. 271.

3 Commissioners v. Smith, 22 Minn. 97. Brewer v. Kelly, 24 La. Ann. 246; Powell v. O'Neill, id. 522.

5 Hunter v. Hunter, 10 W. Va. 123. Austin v. Barrett, 44 Iowa, 488; Muir v. Bozarth, id. 499.

7 Meyer v. Quarteman, 28 Ark. 45.

It is an invariable rule that the fraud must have been one which was concealed from the plaintiff by the defendant, or which was of such a character as necessarily implied concealment. And the acts which are claimed to constitute the fraud are evidenced by public record or by judicial proceedings, and it cannot be claimed that there was such a concealment as would prevent the operation of the statute.1

In this case MILLER, J., among other things, said: "The acts which constituted the fraud as alleged in the bill were open and public acts. The note and mortgage were recorded in the proper public office of the proper county. The possession of the defendants was obtained by judicial proceedings which are open to everybody's examination, and which were probably well known in the entire community. The very circumstances were in 1869, and that plaintiff consulted a lawyer upon this subject shows that he was aware of the fact that the plaintiffs were contesting his right to the property, but if he had made any inquiry at all he must have known upon what they rested their title.

"Nor does the statute apply when the party affected by the fraud might, with ordinary diligence, have discovered it. But the failure to use such diligence may be excused when the party has been lulled into security by reason of some relation of trust and confidence, as principal and agent, client and attorney, cestui que trust and trustee, between the parties committing the fraud and the party who was affected by it, rendering it the duty of the former to disclose to the latter the true state of the transaction, and when it appears that it was through confidence in the acts of the party who committed the fraud that the other was prevented from discovering it." 2

The omission to disclose to the owner a trespass upon land, if there is no fiduciary relation between the parties, and the owner has the means of discovering the facts, and nothing has been done to prevent him from discovering them, is not a fraudulent concealment, within the statute. But where an agent or an officer of a corporation falsely represents that he has paid a debt of his principal or of the corporation, and thereby induces the payment of the amount to him, the cause of action does not arise until the fraud is discovered. The fraudulent concealment must have been that of the party sought to be charged, and a mere allegation or proof that it was the act of his agent will not be sufficient, unless he is in some way shown to have been instrumental in, or cognizant of, the fraud; 5 and in all cases the plaintiff takes the 3 Nudd v. Hamblin, 8 Allen (Mass.),

1 Norris v. Haggen, 136 U. S. 386.

2 Way v. Cutting, 20 N. H. 187; 130. Bricker v. Lightner, 40 Penn. St. 199; Livermore v. Johnson, 27 Miss. 284; Vigus v. O'Bannon, 118 Ill. 346; Atlantic National Bank v. Harris, 118 Mass. 147; Wear v. Skinner, 46 Md. 257; Wilson v. Ivy, 32 Miss. 233.

4 Atlantic Bank v. Harris, 118 Mass. 147. But procuring the settlement and discharge of an existing cause of action by fraudulent means is held not such a fraudulent concealment as is within the statute. Penobscot R. R. Co. v. Mayo, 65 Me. 556.

5 Stevenson v. Robinson, 39 Mich. 160.

burden of establishing the fraud, so as to bring his case within the statute.1 So, too, it must relate to the cause of action, and does not apply to the concealment of property, so that it cannot be reached upon execution. Except where made so by statute, mere ignorance of one's rights does not prevent the operation of the statute.3

1 Evans v. Montgomery, 50 Iowa, 325. Proof of a mere non-user of corporate powers is not a concealment of the corporation such as to suspend the running of the statute. Fort Scott v. Schulenberg, 22 Kan. 648. So where a guardian refused to settle with his ward, and put him off for several years, saying that he had the matter fixed, it was held that the evidence did not disclose such fraud as would take the case out of the statute. Jones v. Strickland, 61 Ga. 356. In an action by a judgment plaintiff, who had been induced by one in collusion with the debtor to sell the judgment for half its amount, it was held that the six years' limitation of the Indiana statute to "an action for relief against frauds " commenced to run when the fraud was perpetrated, and was not avoided by a replication alleging that the debtor fraudulently concealed the facts alleged in the complaint, touching the incumbering or conveying of the property, the confession of judgment, his ownership, &c, and that the plaintiff had no knowledge of them until a short time before the suit was brought. Wood v. Carpenter, 101 U. S. 135. See also Mercantile Bank v. Carpenter, id. 567. In Sweet v. Hentig, 24 Kan. 497, the indorser of a note made several payments thereon, trusting to the payee's promise to credit him with them, and take a judgment for

the balance; but, failing to obtain a performance of such promise, he sought to enjoin the collection, to the extent of such payments, of a judgment for the whole amount of the note. Held, that the fact that both parties were officers in a com pany, and had intimate personal and confidential relations with each other, did not take the case out from the bar of the statute of limitations.

2 Humphreys v. Mattoon, 43 Iowa, 556. In Rice o. Burt, 4 Cush. (Mass.) 208, the concealment of property by an insolvent debtor from his assignee, and the concealment from a creditor of fraudulent acts, which if known would have enabled the creditor to avoid the debtor's discharge, was held not to constitute a fraudulent concealment of the plaintiff's cause of action. In Fleming v. Culbert, 46 Penn. St. 498, the investment of money in bonds, &c., by an attorney in fact, instead of remitting it to his client, was held not a fraudulent concealment which would suspend the statute. See also Munson v. Hallowell, 26 Tex. 475.

8 Foster v. Rison, 17 Gratt. (Va.) 321; Campbell v. Long, 20 Iowa, 382; Bassand v. White, 9 Rich. (S. C.) Eq. 483; Bank v. Waterman, 26 Conn. 324; Abell v. Harris, 11 G. & J. (Md.) 361; Martin v. Bank, 31 Ala. 115; Davis v. Cotten, 2 Jones (N. C.) Eq. 430.

VOL. II. - 16



SEC. 277. Statutory Provisions as to. 278. What are Mutual Accounts.

SEC. 279. Merchants' Accounts. 280. Stated Accounts.

SEC. 277. Statutory Provisions as to. Formerly the doctrine relative to mutual accounts was predicated upon the rule advanced in Catlin v. Skoulding,1 that the statute only attached from the date of the last item on either side of the account. This rule was generally adopted in this country. In most of the States this rule has now been adopted

1 Catlin v. Skoulding, 6 T. R. 189. See also Cranch v. Kirkman, Peake's Cas. 164.

2 Hutchinson v. Pratt, 2 Vt. 149; Wood v. Barney, 2 id. 369; Davis v. Smith, 4 Me. 337; Penn v. Weston, 20 Mo. 13; Cogswell v. Dolliver, 2 Mass. 217; Belles v. Belles, 12 N. J. L. 339; Pridgen v. Hill, 12 Tex. 374; Swearingen v. Harris, 1 W. & S. (Penn.) 356; Thomas v. Hooper, id. 467; Chambers v. Mooks, 25 Penn. St. 256; Sickles v. Mather, 20 Wend. (N. Y.) 72; Coster v. Murray, 6 Johns. (N. Y.) Ch. 522; Ramchander v. Hammond, 2 id. 200; Union Bank v. Knapp, 3 Pick. (Mass.) 96; Tucker v. Ives, 6 Cow. (N. Y.) 193; Chamberlin v. Cuyler, 9 Wend. (N. Y.) 126; Edmonstone v. Thompson, 15 id. 559; Bass v. Bass, 6 Pick. (Mass.) 364; Ashley v. Hills, 6 Conn. 248; M'Clellan v. Croften, 6 Me. 308; App v. Driesbach, 2 Rawle (Penn.), 287; Brady v. Calhoun, 1 Penn. 140; Moore v. Munro, 4 Rand. (Va.) 488; Newsome v. Persons, 2 Hayw. (N. C.) 242; Davis v. Tiern, 2 How. (Miss.) 786; Fitch v. Hillary, 1 Hill (S. C.), 292; Taylor v. McDonald, 2 McCord (S. C.), 178; Kimball v. Brown, 7 Wend. (N. Y.) 322; Swearingen v. Harris, 1 W. & S. (Penn.) 356; Thompson v. Hopper, 1 W. & S. (Penn.) 467; Hay v. Kramer, 2 S. & W. (Penn.) 137; Ingraham v. Sherard, 17 S. & R. (Penn.) 347; Beltzhoover v.

Yewell, 11 G. & J. (Md.) 212; Trumbull v. Stroecker, 4 McCord (S. C.), 215; Buntin v. Lagow, 1 Blackf. (Ind.) 573; Hibler v. Johnson, 18 N. J. L. 266; Knipe v. Knipe, 3 Blackf. (Ind.) 300; M'Naughton v. Norris, 1 Hayw. (N. C.) 216; Sumter v. Morse, 2 Hill (S. C.), 92; Mandeville v. Wilson, 5 Cranch (U. S.), 15; Toland v. Spring, 12 Peters (U. S.), 300; Smith v. Ruecaster, 7 N. J. L. 357. But in New Hampshire this doctrine is denied. Blair v. Drew, 6 N. H. 235.

Hannan v. Engleman, 49 Wis. 278; Turnbull v. Strohecker, 4 McCord (S. C.) 210; Van Swearingen v. Harris, 1 W. & S. (Penn.) 356; Mauney v. Coit, 86 N. C. 463; Waffle v. Short, 25 Kan. 503; Keller v. Jackson, 58 Iowa, 629; Chambers v. Chambers, 78 Ind. 400; Gunn v. Gunn, 74 Ga. 555; Flournay v. Wooten, 71 id. 168; Ford v. Clark, 72 id. 760; Kutz v. Fleischer, 67 Cal. 93; Ware v. Manning, 86 Ala. 238.

See Gage v. Dudley, 64 N. H. 271, and Livermore v. Rand, 26 N. H. 85, where this doctrine is denied, following the rule adopted in Blair v. Drew, 6 N. H. 235.

See also Perry v. Chesley, 77 Me. 393, and Lancey v. R. R. Co., 72 id. 38, where it is held that the last item of an account does not save the statute unless there are other items within six years.

by positive enactment. Thus, in Maine, the statute1 provides that" in all actions of debt or assumpsit to recover the balance due, in cases where there have been mutual dealings between the parties, the items of which are inserted, whether kept or proved by one party or both, the cause of action shall be deemed to accrue at the time of the last item proved in such account; " and a similar provision exists in the statute of Massachusetts, New York, Alabama, Arkansas, Colorado, Delaware, Florida, Indiana, Iowa, Mississippi, Missouri, Minnesota, North Carolina, South Carolina, Oregon, California, Michigan, Wisconsin, Nevada, Tennessee, Arizona, Dakota, Idaho, Montana, New Mexico, and Utah. In Rhode Island, New Jersey, Kentucky, Maryland, Virginia, West Virginia, and Pennsylvania, the provision is substantially the same as in the statute of James. In Virginia and West Virginia an action must be brought upon any store account for goods charged therein within two years. In Texas, in all accounts, except between merchant and merchant, their factors and agents, the respective time or date of the delivery of each article charged must be specifically stated, and the statute runs against each item from the date of delivery, unless otherwise agreed. In Louisiana, the accounts of retailers of provisions and liquors, and the accounts of all merchants, whether selling by retail or wholesale, are barred within three years from the time when the articles charged shall have been furnished, but upon open accounts the statute does not run until five years.

SEC. 278. What are Mutual Accounts. - Mutual accounts are made up of matters of set-off, or, in other words, are accounts between parties who have a mutual and alternate course of dealings,' under an implied

In Gage v. Dudley, ante, the accounts between the parties could hardly be said to be mutual accounts, within the meaning of the term, and no agreement between the parties, express or implied, was shown, to apply the yearly balance between the parties as they were applied, although both parties testified that each understood -not showing, however, how the other understood it that the balance should be applied to reduce the balance of indebtedness of others.

The theory upon which the doctrine relative to mutual accounts rests, is, that there is a mutual understanding between the parties, either express or implied, that they will continue to credit each other until one or the other signifies a contrary intention, when the balance will be ascertained, and then become due and payable.

Gunn v. Gunn, 74 Ga. 555; Dunn v. Flemming, 73 Wis. 545; Kutz v. Fleischer, 67 Cal. 93; Roots v. Mason, &c. Co., 27 W. Va. 483; Webster v. Byrnes, 32 Md. 86; Chapman v. Goodrich, 55 Vt. 354; Hodge v. Manley, 25 id. 210; Dyer v. Walker, 51 Me. 104; Mattern v. McDivett, 113 Penn. St. 402; Partridge v. Schwartz, 136 Mass. 30; Adams v. Carroll, 85 Penn. St. 209; Abbey v. Hill, 64 Miss. 340; Stewart's App., 105 Penn. St. 307; Hollywood v. Reed, 55 Mich. 308; Adams v. Patterson, 35 Cal. 122; Lark v. Cheatham, 80 Ga. 1; Ford v. Clark, 72 id. 760; Dickinson v. Williams, 11 Cush. (Mass.) 258; Wooley v. Osborne, 39 N. J. Eq. 54. 1 Appendix, Maine.

2 Robarts v. Robarts, 1 M. & P. 487; Ingraham v. Shepard, 17 S. & R. (Penn.) 347; Fox v. Smith, 7 Miss. 346.

« PreviousContinue »