Court Opinion

ID: 4932976
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:10:32.676042+00
Date Added: 2024-06-11T08:14:33.486166
License: Public Domain

Appleton, C. J.
At a meeting of the directors of the plaintiff corporation held April 20, 1860, it was voted that certain bonds of the company to the amount of sixty-eight thousand dollars should be delivered to the defendant, the president of the company “to be used by him, the said president, for the company, as he shall deem expedient.”
At a meeting of the directors held May 28, 1862, Mayo the defendant and Wilson the plaintiff in interest, being present, it was voted to sell the bonds in Mayo’s hands to him for $4000, and that “the note be retained by said treasurer as security to the directors for the several amounts by them advanced to said company, and now due them, as individuals, from said company, and when collected shall be divided to said directors in proportion to the sum actually due each.”
A note was given by Mayo for the sum of $4000 to the plaintiff corporation dated May 28, 1862.
.At a meeting of the directors held July 13, 1864, Wilson being absent, it was voted that the directors cancel the note given by Mayo, May 28, 1862, for $4000.
The referee has found in substance that this cancellation was. obtained through the fraudulent misrepresentations of the defendant, and that the plaintiff in interest first knew on January 7, 1868, of the fraud by which this cancellation was affected.
The statute of limitations is pleaded in bar. As the note was dated May 28, 1862, and this suit was commenced January 3, 1870, the action upon the note cannot be maintained unless the plaintiff can bring his ease within R. S., 1871, c. 81, § 92, which is in these words: “If a person liable to any action mentioned herein, fraudulently conceals the cause thereof from the person *569entitled thereto, or if a fraud is committed which entitles any person to an action, the action may be commenced at any time within six years after the person entitled thereto discovers that he has just cause of action.”
The plaintiffs rely upon the fact that the surrender of the note was obtained through the misrepresentation and fraud of the defendant and that the plaintiffs and the officers, excepting the defendant, and the directors for whose benefit the note was held were ignorant of such fraud and misrepresentation until January 7, 1868.
The cause of action was the note of the defendant. Its existence was known to the officers of the plaintiff corporation and to those for whom it was held in trust. Its existence was never concealed. The statute of limitations began to run from the maturity of the note.
The surrender of the note may have been fraudulently obtained. But the fraudulent settlement of an existing cause of action, by means of false representations and by the concealment of the truth, is not the concealment of the cause of action which is thereby settled. It is the settlement of a known and existing cause of action, not the concealment of an existing but unknown cause of action. Rice v. Burt, 4 Cush. 208. It is in and of itself a substantive grievance, for which redress may be sought, but not the original cause of action.
The cases all show that upon this branch of the section the action is not maintainable. Cole v. McGlathry, 9 Greenl., 131. McKown v. Whitmore, 31 Maine, 448. Rouse v. Southard, 39 Maine, 404. Nudd v. Hamblin, 8 Allen, 130. Argall v. Bryant, 1 Sandf., S. C., 98. Northrop v. Hill, 57 N. Y., 351.
If a fraud has been committed, which would entitle the plaintiff to an action, “the action may be commenced at any time within six years after the person entitled thereto discovers that he has just cause of action.” But the “just cause of action” must be one arising from the fraud committed and discovered. It is for the fraud committed. This clause of the section has no reference to the original cause of action, for that being well known could not *570be discovered. The knowledge of the existence of the note was contemporaneous with its existence. The limitation is from the discovery of the cause of the fraud, and the “just cause of action” is for the fraud. But this action is not for a fraud committed, if one has been committed entitling the party defrauded to a “just cause of action,” but for the original note, which long before the commencement of this suit had been barred by the statute of limitations.
It becomes unnecessary to examine the various other grounds of exception alleged by the counsel for the defendant.

Exceptions sustained.

Walton, Barrows, Danforth and Virgin, JJ., concurred.