Court Opinion

ID: 5448094
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:14:28.624542+00
Date Added: 2024-06-11T08:32:14.662146
License: Public Domain

McFarland, J.,
concurring.—I concur in the judgment of affirmance. I also concur in the conclusion that the deed from Ralston to Sharon did not create a trust in favor of Ralston’s creditors, and the only action which the Burlings had, if any, was- against Sharon personally. In this view it is not important whether or not the Burlings were creditors of Ralston. Upon the question of the statute of limitations and loches I adhere to my former opinion (39 Pac. Rep. 49), as follows:
“ Moreover, we think that the action is barred by the statute of limitations, and is stale from loches. Of course, the statutory period has run two or three times unless the case is saved by the clause of section 338 of the Code of Civil Procedure, which provides that in an action based upon alleged fraud, the statute does not commence to run until the discovery of the facts constituting the fraud. This action is founded upon the contract between the Burlings and William Sharon, made on December 24, 1875, which was an executed contract; and the statute commenced to run on that day, except so far as its running was delayed by a want of knowledge of the fraud by which said contract is alleged to have been procured. But ‘ the means of knowledge are the same thing, in effect, as knowledge itself’ (Wood v. Carpenter, 101 U. S. 143), and one who makes a charge of fraud for the first time, many years after its alleged perpetration, must show that within a reasonable time he has used due diligence to discover it, has followed up circumstances which would have put a prudent man upon inquiry, and has not slept upon his rights until the lapse of time and the death of parties *501charged with the fraud have destroyed the means of a full, fair, and satisfactory investigation in a court of justice. Moreover, in such a case, the complaint must state facts from which it will appear to the court that ordinary prudence could not have discovered the fraud within the statutory period. ‘The circumstances of the discovery must be fully stated and proved, and the delay which has occurred must be shown to be consistent with the requisite diligence/ ( Wood v. Carpenter, supra.) Statutes of limitations are in great part founded upon the probability that during the course of many years witnesses will die, and recollections of events long past will become indistinct in the memories of the living.
“ In the case at bar sufficient facts are not stated to show that the alleged fraud could not, with requisite diligence, have been sooner discovered. There was great-opportunity for discovering the fraud, if any such existed, before the contract between the Burlings and William Sharon was made. That contract was not made in a hurry. Sharon’s representations, alleged now to have been false, were not immediately accepted as true and promptly acted upon. Negotiations were continued for four months. Ralston, as appears from the complaint, was widely known in business circles, and had been accredited with great wealth. It is averred in the complaint that he was perfectly solvent, and that he had real and personal property, which passed to Sharon under the deed, of the aggregate value of $9,000,000. It is averred, also, that he had real property of the value of $6,000,000. If that was the fact, and the Burlings really had a legal claim against Ralston, it is almost beyond comprehension why they did not discover it, if not before the $200,000 contract, at least before the death of William Burling, or before the lapse of the statutory period of limitation. The slightest examination of public records would have put them on the trail of the fact. It does not appear that they demanded an examination of the books, papers, etc., of Ralston. But no discovery was made, and it does not appear that any reasonable *502efforts were made for a discovery of the alleged facts upon which this action rests, until ten years after the date of the contract, and until after the death of said William Sharon. And it is averred that then ‘ the means by which they obtained any information was by inquiring among their friends and acquaintances whether they, said persons, had any information relating to the dealings of said Sharon with said trust estate, and whether they had any information regarding the property which was conveyed by said Ralston to said Sharon in trust, as aforesaid.’ But such means were always within the power of appellants and the Burlings; and there are no sufficient facts alleged to show that the delay is 1 consistent with the required diligence.’ (See Angell on Limitations, secs. 187, 190; Hecht v. Sidney, 72 Cal. 363; Moore v. Boyd, 74 Cal. 167.)
. “ Moreover, apart from the question of strict statutory limitation, the claim of appellants is too stale to be enforced in a court of equity. ‘No rule of law is better settled than that a court of equity will not aid a party whose application is destitute of conscience, good faith, and reasonable diligence, but will discourage stale demands, for the peace of society, by refusing to interfere when there has been gross loches in prosecuting rights, or where long acquiescence in the assertion of adverse rights has accrued. The rule is peculiarly applicable where the difficulty of doing entire justice arises through the death of the principal participants in the transactions complained of, or of the witness or witnesses, or by reason of the original transaction having become so obscured by time as to render the ascertainment of the exact facts impossible.’ (Hammond v. Hopkins, 143 U. S. 250.) In speaking of this rule, this court, in Bell v. Hudson, 73 Cal. 288, 2 Am. St. Rep. 791, said: ‘ It is a material circumstance that the claim was not made until after the death of those who could have explained the transaction.’ In the case at bar William Burling and William Sharon, ‘the principal participants in the transactions complained of,’ were both dead before the commencement *503of the action. It is quite apparent that no court could do ‘ entire justice’ in the premises without the testimony of William Sharon. Of course, if the suit had been commenced within a reasonable time, and William Sharon had died before his testimony could have been taken, the want of his testimony would simply have been one of those natural misfortunes which sometimes come to litigants. But William Sharon lived for ten years after the transaction complained of. William Burling died two years after the transaction, fully satisfied—as is averred—that it was a fair one. James W. Burling did business for several years afterward, and, until he became an insolvent, was also satisfied with the fairness of the transaction. There was perfect acquiescence by all parties for ten years, and while Sharon lived. It was not until he died, and his testimony was forever beyond human reach, that the claim of appellants grew up and took the form of a suit against his successors.
It is a claim which equity should not now entertain.”
Rehearing denied.