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§2018. What amounts to concealment.

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A mere failure by the defendant to disclose the facts on which a cause of action is based is not ordinarily sufficient to preclude him from setting up the statute. There must be some artifice or positive action to prevent the plaintiff's acquiring knowledge. Where, however, the basis of the action is itself fraud, subsequent silence is often regarded as a continuance of the original fraud so as to preclude the defendant from asserting the statute. Thus, one who steals or secretly converts property is regarded as fraudulently concealing continuously his liability until it is discovered by the owner, and the statute will not run against him until he discovers the facts. And in a number of statutes it is broadly provided that in actions for relief on the ground of fraud, the statute shall not begin to run until discovery of the fraud.5

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Where the defendant had exclusive or peculiar knowledge of the facts on which his liability was based, and sustained a relation of trust or confidence to the plaintiff making it his duty to disclose the facts in question, silence will amount to a fraudulent concealment, even though there is no such tech

2 Wood v. Carpenter, 101 U. S. 135, 143, 25 L. Ed. 807; Bates v. Preble, 151 U. S. 149, 38 L. Ed. 106, 14 Sup. Ct. 277; American Nat. Bank v. Fidelity & Deposit Co., 131 Ga. 854, 63 S. E. 622, 21 L. R. A. (N. S.) 962; Wood v. Williams, 142 Ill. 269, 31 N. E. 681, 34 Am. St. Rep. 79; Lancaster v. Springer, 239 Ill. 472, 88 N. E. 272; Terry v. Davenport, 185 Ind. 561, 112 N. E. 998; Graham v. Walters, 31 Ind. App. 77, 66 N. E. 182, 99 Am. St. Rep. 244; McBride v. Burlington, etc., R. Co., 97 Iowa, 91, 66 N. W. 73, 59 Am. St. Rep. 395; Perry v. Wade, 31 Kans. 428, 2 Pac. 787; State v. Yates, 231 Mo. 276, 132 S. W. 672; Smith v. Blachley, 198 Pa. 173, 47 Atl. 985, 53 L. R. A. 849; Culpeper Nat. Bank v. Tidewater Imp. Co., 119 Va. 73, 89 S. E. 118; Boyd v. Beebe, 64 W. Va. 216, 61 S. E. 304, 17 L. R. A. (N. S.) 660. A refusal to allow the

plaintiff to examine the defendant's books is insufficient. Fidelity & Casualty Co. v. Jasper Furniture Co., 186 Ind. 566, 117 N. E. 258.

3 American Nat. Bank v. Fidelity & Deposit Co., 131 Ga. 854, 63 S. E. 622, 21 L. R. A. (N. S.) 962. But see Smith v. Blachley, 198 Pa. 173, 47 Atl. 985, 53 L. R. A. 849; Boyd v. Beebe, 64 W. Va. 216, 61 S. E. 304, 17 L. R. A. (N. S.) 660.

4 Bulli Coal Min. Co. v. Osborne, [1899] A. C. 351; Conditt v. Holden, 92 Ark. 618, 123 S. W. 765, 135 Am. St. Rep. 206; Quimby v. Blackey, 63 N. H. 77; Lightfoot v. Davis, 198 N. Y. 261, 91 N. E. 582, 29 L. R. A. (N. S.) 119, 139 Am. St. Rep. 817. Cf. Blount v. Parker, 78 N. C. 128; Howk v. Minnick, 19 Oh. St. 462, 2 Am. Rep. 413. 'See Perry v. Wade, 31 Kan. 428, 2 Pac. 787.

• American Nat. Bank v. Fidelity

nical trust as to make applicable the rule governing trusts and trustees.7

§ 2019. Discovery of fraud.

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One who with reasonable diligence might have discovered fraud or fraudulent concealment is chargeable with knowledge from the time when it should reasonably have been discovered. This is so provided by statute in England as to some cases at least, and in the absence of statute, a similar rule has been applied in the United States. On discovery of the facts enabling him to sue, a plaintiff is entitled generally not merely to a reasonable additional time for bringing action, but to the full statutory period computed from the discovery; 10 but in a few jurisdictions the statutes prescribe either an absolute period beyond which the action cannot be delayed even for concealed fraud, or fix a period after the discovery of the fraud within which action must be brought."1

& Deposit Co., 131 Ga. 854, 63 S. E. 622, 21 L. R. A. (N. S.) 962; Vigus v. O'Bannon, 118 Ill. 334, 8 N. E. 778; Wilder v. Secor, 72 Ia. 161, 33 N. W. 448, 2 Am. St. 236; Blackeney v. Wyland, 115 Ia. 607, 89 N. W. 16; Faust v. Hosford, 119 Iowa, 97, 93 N. W. 58; McCoon v. Galbraith, 29 Pa. 293; Cobb v. First Nat. Bank, 91 Texas, 226, 42 S. W. 770. But see Birckhead v. DeForest, 120 Fed. 645, 57 C. C. A. 107. Failure to notify the other party of a mistake by him in making an over-payment, will not extend the period of the statute. Shain v. Sresovich, 104 Cal. 402, 38 Pac. 51; Evert v. Tower, 51 Wash. 514, 99 Pac. 580, 21 L. R. A. (N. S.) 950. See also Sankey v. McElevey, 104 Pa. 265, 49 Am. Rep. 575.

7 See infra, § 2033.

83 and 4 William IV. c. 27, § 26. See Lawrence v. Norreys, 15 A. C. 210; Willis v. Howe, [1893] 2 Ch. 545.

Wood v. Carpenter, 101 U. S. 135, 25 L. Ed. 807; Swift v. Smith, 79 Fed. 709, 25 C. C. A. 154; Sedalia School

Dist. v. DeWeese, 100 Fed. 705; Thayer
v. Kansas L. & T. Co., 100 Fed. 901,
41 C. C. A. 106; Simpson v. Dalziel
135 Cal. 599, 67 Pac. 1080; Frost v.
Arnaud, 144 Ga. 26, 85 S. E. 1028;
McDonald v. Bayard Savings Bank,
123 Iowa, 413, 98 N. W. 1025; Black
v. Black, 64 Kans. 689, 68 Pac. 662;
Donaldson v. Jacobitz, 67 Kan. 244, 72
Pac. 846; Shakopee First Nat. Bank v.
Strait, 71 Minn. 69, 73 N. W. 645;
Hudson v. Kimbrough, 74 Miss. 341,
20 So. 885; Callan v. Callan, 175 Mo.
346, 74 S. W. 965; Cole v. Boyd, 68 Neb.
146, 93 N. W. 1003; Bankers' Surety
Co. v. Willow Springs Beverage Co.
(Neb.), 176 N. W. 82; Higgins v.
Crouse, 147 N. Y. 411, 416, 42 N. E.
6; Smith v. Blachley, 198 Pa. St. 173,
47 Atl. 985, 53 L. R. A. 849; Bass v.
James, 83 Tex. 110, 18 S. W. 336;
Irwin v. Holbrook, 32 Wash. 349, 73
Pac. 360.

10 Oelkers v. Ellis, [1914] 2 K. B. 139, 150. And see cases in the two preceding sections, passim.

11 Porter v. Smith, 65 Ala. 169;

§ 2020. Ignorance of facts.

Ignorance of the plaintiff of his rights or of the facts on which his rights are based, when such ignorance is not due to fraudulent concealment by the defendant, is not generally held to prevent the running of the statute. 12 In a few statutes, however, ignorance in special cases is made a ground for not computing the statutory period until the injured party knew, or should have known, the facts. A few decisions, also, without statutory authority, have applied the same principle to ignorance that has been applied to fraudulent concealment. The Pennsylvania Supreme Court has held that where a defendant had trespassed on the plaintiff's land by mining coal under it, of which the plaintiff was ignorant, the statute ran only from the discovery of the facts, or from the time when the discovery might have been made, 13 saying: "Mere ignorance will not prevent the running of the statute in equity any more than at law; but there is no reason, resting on general principles, why ignorance that is the result of the defendant's conduct, and not of the stupidity or negligence of the plaintiff, should not prevent the running of the statute in favor of the wrongdoer." 14

Heflin v. Ashford, 85 Ala. 125, 3 So. 760; Nave v. Price, 108 Ky. 105, 55 S. W. 882; Ruff v. Milner, 92 Mo. App. 620.

12 Granger v. George, 5 B. & C. 149; Howell v. Hair, 15 Ala. 194; Campbell v. Long, 20 Ia. 382; Lougee v. Reed, 133 Ia. 48, 110 N. W. 165. To these cases may be added a fortiori the minority decisions which hold that even though a defendant has fraudulently concealed the cause of action, the period of the statute is not thereby extended, see supra, § 2017, and those which hold that though fraudulent concealment may prevent the statute from running, mere silence does not amount to fraudulent concealment. See supra, § 2018.

13 Lewey v. H. C. Fricke Coke Co., 166 Pa. 536, 31 Atl. 261, 28 L. R. A. 283, 45 Am. St. Rep. 684.

14 The court added: "In the English

courts this question has arisen quite frequently. The old rule applied in the courts of law was that the statute might be successfully pleaded as running from the date of the trespass. In the courts of equity where an account for the coal that has been taken was asked for, it was applied only from the discovery of the trespass: McSwinny on Mines, 543; see also Hovenden v. Lord Annesley, 2 Sch. & L. 607, 634. If after discovery, or the happening of any circumstances calculated to put the owner on notice, he slept on his right till the statutory period had expired he was held bound by the statute in equity precisely as he would have been at law. If he knew, or if by the exercise of reasonable care he might have known of the trespass, the statute ran from the discovery, or the time when discovery could have been made. Bainbridge on Mines,

In a decision in the District of Columbia the same argument was applied to a breach of warranty.15

515, 516. It was against good conscience to permit one who had taken the property of another without the owner's knowledge, and who had failed to disclose or to account for what he had taken, to avail himself of the statute while the owner remained in ignorance of his loss. When compensation was sought by means of a bill for an account it was held that the statute began to run at the time of discovery regardless of the time of taking. The same question was also encountered in actions to recover for injuries done on the surface by subsidence due to the withdrawal of support. When the action was trespass, it was generally held that the statute ran from the date of the removal of the support which was the trespass to which the injury was due; but when the action was case the subsidence was treated as the consequence of the wrongful removal of the coal or other underlying stratum, and the damages suffered as consequential. The happening of the injury was upon this ground held to give a cause of action against which the statute would run only from its date. The removal of the supports might not be known to, or be discoverable by, the owner of the surface until the subsidence revealed it; and unless the injury consequential to the trespass could be treated as creating a cause of action, in most cases redress for a substantial injury would be denied altogether. 34 L. J. Q. B. 181; Backhouse v. Bonomi, 9 H. L. Cas. 503; Smith v. Thackerah, 15 Am. Law Reg. (N. S., vol. 5), 761, and note. The reason for the distinction exists in the nature of things. The owner of land may be present by himself or his servants on the surface of his possession no matter how extensive they may be. He is for this

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reason held to be constructively present wherever his title extends. He cannot be present in the interior of the earth. No amount of vigilance will enable him to detect the approach of a trespasser who may be working his way through the coal seams underlying adjoining lands. We are disposed to hold therefore that the statute runs against an injury committed in or to a lower stratum from the time of actual discovery, or the time when discovery was reasonably possible. But it is enough for the purposes of this case to hold that inasmuch as equity is administered in this State through the common-law forms of action, the plaintiff need not be turned out of a court of law in order to be admitted at the equity side of the same court. He may not be entitled to statutory damages but he is entitled to compensation in the same manner that he would have been on a bill for an account. For this purpose the equitable rule that the statute shall run only from discovery, or a time when discovery might have been made, should be applied by courts of law."

15 In P. H. Sheehy Company v. Eastern I. & Mfg. Co., 44 D. C. App. 107, 110, L. R. A. 1916 F. 810, the court said: "The contention in support of the judgment below is that when property is sold with a warranty of soundness the cause of action for breach of that warranty occurs immediately upon the sale and delivery of the goods, and the Statute of Limitations begins to run from that time.

"The following authorities are relied upon in support of the proposition: 25 Cyc. 1091, 1092; Battley v. Faulkner, 3 Barn. & Ald. 288, 22 Revised Rep. 390; Brackett v. Martens, 4 Cal. App. 249, 87 Pac. 410; Fairbanks M. & Co. v. Smith (Tex. Civ. App.), 99 S.

§ 2021. Laches of creditor in removing disability to sue.

"The bar of the statute cannot be postponed by the failure of the creditor to avail himself of any means within his power to prosecute or to preserve his claim." 16 Thus, though the Supreme Court of Kansas has always held that the death of the debtor suspends the operation of the Statute of Limitations," it has also held that the operation of the statute is suspended after the death of the debtor for the fifty days only, during which the creditor could not apply for the appointment of an administrator, or, at most, for a reasonable time after the expiration of the fifty days; 17 and this decision was not only accepted by the Supreme Court of the United States as establishing the law of Kansas, but was stated to be "in accord with well-settled principles." 18

W. 705; Allen v. Todd, 6 Lans. 222; Baucum v. Streater, 50 N. C. (5 Jones L.) 70. Of the cases cited above only one, Allen v. Todd, directly supports the proposition.

"It cannot be said that a person should assert a right before he has knowledge of, or is chargeable with knowledge of, the same. He must ordinarily have had such opportunity to ascertain his position as would be sufficient in the case of a man of ordinary intelligence and prudence under the circumstances of the case. . . . If, then, it was not practicable for plaintiff to discover the true condition of the sardines, it ought to be allowed a reasonable time within which to make that discovery, and the statute of limitations would not begin to run until such time. Shearer v. Park Nursery Co., 103 Cal. 415-419, 42 Am. St. Rep. 125, 37 Pac. 412; Felt v. Reynolds Rotary Fruit, etc., Co., 52 Mich. 602, 604, 18 N. W. 378; Lewey v. H. C. Fricke Coke Co., 166 Pa. 536, 543, 28 L. R. A. 283, 45 Am. St. Rep. 684, 31 Atl. 261; Beach v. Branch, 57 Ga. 362-366."

So in Texas & P. Ry. Co. v. R. W.

Williamson & Co., 106 Tex. 294, 187 S. W. 354, it was held that "where cotton was shipped on a through bill of lading from Texas via New Orleans to Liverpool, England, and a portion of it destroyed by fire while in defendant's possession, the consignor not being under duty to keep track of the shipment while in transit, the Statute of Limitations did not begin to run till plaintiffs, not being negligent, actually learned of the non-delivery."

16 Bauserman v. Blunt, 147 U. S. 647, 656, 37 L. Ed. 316, 13 S. Ct. 466, citing Richards v. Maryland Ins. Co., 8 Cranch, 84, 3 L. Ed. 496; Braun v. Sauerwein, 10 Wall. 218, 19 L. Ed. 895; United States v. Wiley, 11 Wall. 508, 513, 514, 20 L. Ed. 211; Kirby v. Lake Shore & M. S. Railroad, 120 U. S. 130, 140, 30 L. Ed. 569, 7 S. Ct. 430; Amy v. Watertown, 130 U. S. 320, 325, 32 L. Ed. 953, 9 S. Ct. 537.

17 Toby v. Allen, 3 Kans. 399; Hanson v. Towle, 19 Kans. 273; Nelson v. Herkel, 30 Kans. 456.

17 Bauserman v. Charlott, 46 Kan. 480, 26 Pac. 1051.

18 Bauserman v. Blunt, 147 U. S. 647, 13 S. Ct. 466, 37 L. Ed. 316.

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