Case Name: Howell and others vs. Howell and others
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1861-12-30
Citations: 15 Wis. 55
Docket Number: 
Parties: Howell and others vs. Howell and others.
Judges: 
Reporter: Wisconsin Reports
Volume: 15
Pages: 55–61

Head Matter:
Howell and others vs. Howell and others.
By the statutes of 1849, bills for relief in eases of trust not cognizable m courts of common laiv, were required to be filed within ten years after the cause of action accrued. A similar limitation is contained in the Bevised Statutes of 1858.
The decision in Parka'm. Zcme, 4 Wis., 1, that an action may be barred by a statute of limitations passed after the cause of action accrued, if a sufficient and reasonable portion of the term of limitation within which the bill might have been filed, remained after the enactment of the statute, is cited and followed.
Where one partner bought land with partership funds without the consent of his co-partner, and had the conveyance made to a third person, who took it with knowledge of the facts, a cause of action accrued immediately to the co-partner.
It is not necesssary that there should have been, in such a case, a denial of the trust, before the statute of limitations would begin to run. That doctrine is applicable only to express or acknowledged trusts, where the trustee has af-terwards repudiated the rights of the cestui que trust, and setup a claim to the trust property in his own right, and not to those implied or equitable trusts which spring from the originally wrongful and fraudulent act of the party to be charged, and which have never been recognized or admitted by him.
The word “ answer,” in sec. 1, chap. 138, E. S., 1858, is used in a general sense so as to signify any pleading by which an issue either of law or of fact is made or tendered on the part of the defendant.
The defendant may avail himself bi the statute of limitations on demurrer to the complaint, if it appear upon the face of it that the statute bar was complete before the action was commenced, and if that is one of the causes of demurrer assigned.
f it does not so appear on the face of the complaint, the defendant must answer, stating the facts which show him to be within the protection of the statute. He cannot, as m other cases of an insufficient statement of the cause of action, take the objection upon general demurrer, or upon the'trial, it being omitted in the answer, or after default.
Where, owing to intervening facts, the action has not been barred, and the plaintiff relies on showing them for the purpose of taking the case out of the statute, it would seem tbat he should be required to state them in his complaint.
APPEAL from tbe Circuit Court for Jefferson County.
Tbe complaint in tbis action alleges that in May, 1847, "William Howell and bis brothers Walter and Robert entered into a partnership in a general mercantile business in tbe state of New Jersey; that William put into tbe business $2500, Walter some amount which tbe plaintiffs are unable to state, and Robert put in no money or property; that in May, 1848, Robert, witb tbe consent of Walter, but in tbe absence of William and without bis consent, sold all tbe partnership pr0perty for about $2000, (which was much below its value, an(j foss than the individual interest of said William therein), and removed to Wisconsin, and immediately on his arrival bought with a portion of said money, a tract of land described in the complaint, which he caused to be conveyed, on the 15th of June, 1848, to the defendant Henry S. Howell, who paid no consideration for it and took the title with the full knowledge of all the facts above stated; that at the time of the sale of the partnership property, the firm was indebted to William Howell for the capital which he ,had put into the business, besides his share of the profits which had been made; and that in the year 1862, William advanced $500 more in full discharge of the debts of the firm; that said Robert and Walter have always refused to account for the assets of said firm; and that the plaintiffs are the infant children and the widow of said William, who died intestate on the 3rd of November, 1858. Prayer, that the interest of the plaintiffs in said land may be declared by the judgment of the court, and that said Henry be required to convey said land to them according to their respective interests, &c., and for general relief.
The defendants demurred to the complaint, assigning, among other reasons, that it appeared on the face of the complaint that the plaintiffs’ claims were barred by the statute of limitations. The court sustained the demurrer.
John Winans, for appellants,
contended that the question whether the action was barred by the statute of limitations could not be raised by demurrer, but by answer only (R. S. 1858, p. 818, sec. 1; Lefferts vs. Hollister, 10 How. Pr. R., 383; Butler vs. Mason, 16 id., 546; 24 Barb., 150); that when partners buy real estate with partnership funds, but not for partnership purposes, it is held to be a withdrawal of so much of the capital stock, or a diversion of the profits pro tanto between them, and they hold the real estate not as partners but as tenants in common, (Bisset on Part., 56; 4 Mass., 429; 11 id., 459); and that the statute of limitations does not apply as between tenants in common, except incase of an actual ouster, nor in case of a trust unless tbe trust is denied. 3 Wis., 699; 8 id., 289.
Dec. 30, 1861.
Gill, Barber & Fribert, for respondents,
insisted, among otber things, that the only remedy one partner has against another for a supposed balance in his favor, is to ask and obtain a settlement of all the partnership transactions; citing 9 Wis., 268 ; Coll, on Part., §§ 264, 818, 320; Story on Part., 221, 348, and notes; 2 La., 10; 1 Dev. & Bat. Eq., 524, 553.

Opinion:
By the Court,
DIXON, O. J".
It is unnecessary for us to determine whether this action can be sustained without an accounting and settlement of the affairs of the firm of Howell & Co., or to consider the condition of the lands with reference to the partnership, since, assuming the action to be maintainable in its present form, we are still of opinion, upon the facts stated in the complaint, that it is barred by the statute of limitations. The counsel for the appellants conceded at the argument, if an accounting was to be had, that their remedy was cut off by the statute, but seemed to suppose, if that was unnecessary, that the proceedings to enforce the implied trust arising from the application of William Howell's money to the purchase, was still open, on the ground that the trust had never been denied. We think he is mistaken in the application which he seeks to make of the doctrine of Sheldon vs. Sheldon, 3 Wis., 699. The cause of action accrued in June, 1848, when the land was purchased, and consequently more than ten years had elapsed before the decease of Willi am Howell, which was in November, 1858. By the statutes of 1849 (sec. 26, chap. 127), bills for relief on the ground of fraud were required to be filed within six years after the discovery of the facts, and in case of the existence of a trust not cognizable by the courts of common law (sec. 27), within ten years after the cause thereof accrued. Similar limitations are contained in the present Revised Statutes, chapter 138, sections 16, 22. In Parker vs. Kane, 4 Wis., 1, it was held that though the statute was not in existence at the time the cause for filing the bill accrued, yet as a sufficient and reasonable portion of the term of limitation within which the bill might have been filed, remained after tpe enactment of tbe statute, tbe action was barred. See also Smith vs. Packard, 12 Wis., 371. It follows tbat tbe canse 0f action set forth was barred in tbe lifetime of William Howell, unless, as counsel supposed, it was necessary tbat there should have been a denial of tbe trust before tbe statute would begin to run. But tbat doctrine is applicable only to express or acknowledged trusts, where tbe trustee has af-terwards repudiated tbe rights of tbe cestui que trust, and set up, a claim to the trust property in bis own right, and not to those implied or equitable trusts which spring from tbe originally wrongful and fraudulent acts of tbe party to be charged, and which were never recognized or admitted by him. It was of such express or acknowledged trusts tbat tbe court was speaking in tbe case referred to, and it would be as absurd to apply tbat doctrine to these implied trusts, as it would be to apply tbe ten years' limitation to those where a denial of tbe trust has never taken place. It would be to abrogate tbe statute of limitations altogether in actions of this nature, or to say tbat it was not intended to apply to them; for as tbe party to be charged has no occasion to deny tbe trust until called upon to execute it, which is usually done by action, and as this might be delayed until after the expiration of tbe ten years, so it might be postponed for an indefinite period in tbe future. This was clearly not tbe intention. Tbe trust in such cases originates in a fraud, which is in itself as complete and absolute a denial of tbe rights of tbe injured party as it is possible to have, and every day which passes without reparation of the injury is a continuation or repetition of it. William Howell might have commenced bis action tbe moment tbe land was purchased, and consequently it was barred before bis death.
Tbe statute of limitations is one of tbe grounds assigned in support of tbe demurrer, and tbat tbe defendants may avail themselves of it in this way, is also questioned by counsel. At tbe common law it was, in general, necessary to plead it specially (1 Chit. Pl., 479, 481, 498, 506; 4 Wis., 249), but in equity advantage might be taken of it by demurrer, whenever tbe objection appeared bn tbe face of tbe bill. Story's Eq. Pl., § 484, 503, 751. Mr. Van Santvoord gives it as bis opinion tbat under tbe Code tbe defendant may in all cases demur whenever it appears on tbe face of complaint tbat tbe plaintiff's claim is barred by tbe statute, on tbe ground tbat tbe complaint is defective, as showing a state of facts constituting no cause of action. Yan Sant. PL, 268-9, 688-9. It is not improbable tbat be is correct in this position. At all events, as this is a proceeding in equity in which, according to tbe old practice, tbe demurrer would have been well taken, we think it to be so now.
Order affirmed.