Opinion ID: 1679692
Heading Depth: 2
Heading Rank: 2

Heading: did the trial court err in granting summary judgment for cal-maine by applying section 15-1-49 of the mississippi code of 1972?

Text: The lower court, in its separate orders granting Cal-Maine's motions for summary judgment, determined that appellants' actions against Cal-Maine had clearly manifested themselves at least by February 28, 1979, which the trial court found to be the date that appellants became completely aware that their investment was gone and that they would receive no return. The lower court then concluded that the actions, which were filed on April 2, 1986, were barred by the general six-year statute of limitations provided for in § 15-1-49 of the Mississippi Code of 1972. Appellants argued below, and now on appeal, that the present case is controlled not by the six-year statute of limitations found in § 15-1-49, but instead by the ten-year limitations period found in § 15-1-39. In this regard, § 15-1-39 provides that: Limitations applicable to actions involving certain trusts. Bills for relief, in case of the existence of a trust not cognizable by the courts of common law and in all other cases not herein provided for, shall be filed within ten years after the cause thereof shall accrue and not after, saving, however, to all persons under disability of infancy or unsoundness of mind, the like period of time after such disability shall be removed. However, the saving in favor of persons under disability of unsoundness of mind shall never extend longer than thirty-one years. In reviewing the above statute, it should be noted that by its own terms, the ten-year statute of limitations is restricted, in case of the existence of a trust not cognizable by the courts of common law ... We have construed this provision to make the ten-year limitation applicable to both express and implied trusts. Hook v. Bank of Leland, 134 Miss. 185, 98 So. 594 (1924). However, the application of § 15-1-39 is limited, in that the cause of action and remedy of the case must be purely and exclusively equitable, Id., or the general six-year statute of limitations will be applied. In the present case, the chancellor below determined in separate orders that both Wholey and Rodgers' actions were one based upon fraud, which is cognizable by the courts of common law. Once this determination was made, the lower court granted Cal-Maine's summary judgment motions on the basis that the actions were barred by the six-year statute of limitations. Thus, this Court's key inquiry on appeal should be whether or not appellants' actions are cognizable at law, i.e. fraud as found by the chancellor, or whether they are a pure equitable matter, mandating the application of § 15-1-39. Hook, supra . In their complaints, appellants alleged that Cal-Maine had fraudulently converted the capital of the limited partnership to its own use, made concealed profits through self-dealing, breached its fiduciary duty to the limited partners and failed to exercise good faith and integrity with respect to partnership affairs. Appellants requested an accounting of all records, books, and affairs of National Farming Program/1973, and further that Cal-Maine be ordered to pay overall unlawful charges and profits. Still, the critical question is whether the actions were in the nature of fraud, or a trust not cognizable by the common law courts. In this regard, Miss. Code Ann. § 79-12-41 (1972) concerning partnership dealings provides in part that: Partner accountable as a fiduciary. (1) Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property. (Emphasis added) This code section comports readily with appellants' argument that their causes of action were in nature of a constructive trust arising out of the relations of the limited partnership. It is further stated that: Taking secret commission or profit. A confidant or fiduciary may be held as a constructive trustee in respect of secret profits or commissions obtained by the violation of a confidence or duty that he should be carrying out rather than violating, whether his conduct is affirmatively fraudulent, whether his principal or confider suffers loss from the violation of duty, and whether the confider or beneficiary affirms or disaffirms the breach of confidence. The rule is applicable in the case of parties to a community of interest creating fiduciary relationships among them, or about to enter into such a community of interest. The very fact that one party conceals his true interest from the other indicates a purpose to gain some advantage at the other's expense, or a belief that disclosure would influence the other in deciding whether and upon what terms to enter into the community of interest. (Emphasis added) 76 Am.Jur.2d Trusts, § 232 at p. 455 (1975). Again, appellants alleged below that Cal-Maine made secret profits from the limited partnership by breaching its fiduciary duty to the limited partners. As seen above, this is one of the situations in which a constructive trust may be properly applied. In Stebbins v. Hayes, 379 So.2d 898 (Miss. 1980), this Court looked to the allegations in the complaint in determining that the theory of the case was in the nature of an implied trust or the right to a partnership accounting, so as to mandate the application of the ten-year statute of limitations in § 15-1-39. So to, the present complaints were based upon the breach of a fiduciary duty by Cal-Maine giving rise to the imposition of an implied trust, and of necessity a partnership accounting. The lower court erred when it applied the six-year statute of limitations and granted Cal-Maine summary judgments on this point.