Court Opinion

ID: 9542751
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:38:10.300675+00
Date Added: 2024-06-11T15:08:51.210076
License: Public Domain

MOISE, Justice (dissenting). In my view the majority have fallen into error in their conclusion that the statute of limitations does not apply in this case. They hold, if I understand the opinion correctly, that the four-year statute of limitations, applicable to actions seeking relief on the ground of fraud (§ 23-1-4, N.M. S.A.1953), may not be invoked when the action is between husband and wife. They do this by asserting that fraud is only incidental or collateral to the cause of action, and cite and quote from Lotspeich v. Dean, 53 N.M. 488, 211 P.2d 979 (1949). However, that case merely held that no title could pass by a forged deed, and that failure to sue and assert fraud within the statutory four-year period could not result in making the void deed effective to pass title. The fraud was clearly only incidental. Here, the question arises not because the deed was void but, rather, out of the conduct of the grantee — admittedly fraudulent. I cannot agree that the fraud was collateral, and do not think Lotspeich v. Dean, supra, is applicable. We have a situation here where the husband-grantee’s conduct was presumptively fraudulent, as held in Beals v. Ares, 25 N.M. 459, 185 P. 780 (1919). The relief sought by the wife in this action is a declaration that the deed executed by her conveying her interest in the property to her husband should be cancelled and set aside because she did not have independent legal advice. The conduct of the husband in having her execute the deed without such assistance is what is held in Beals v. Ares, supra, to be constructively fraudulent. It is this method of dealing which is the basis for the attack on the deed. The action is one based entirely on fraud — constructive, true — but fraud, nevertheless. Indeed, the majority recognize it when they say, “The primary and principal questions are (a) whether the conveyance was fraudulent, and (b) was appellant’s cause of action barred by the statute of limitations.” How does the later statement that “fraud is only an incident to the cause of action” coincide with this ? How can it be only an incident and still be the principal question? I submit that it cannot be and, further, that it is the principal question. As I read the opinion of the majority, the rationale is something like this: The fraud is only incidental to the action and accordingly the statute of limitations for fraud is not applicable. Since the statute is not applicable, the fraud may be established even though more than four years have passed, and thus furnish the principal grounds to set aside the deed. In Beals v. Ares, supra, this court noted that in California the husband is in the position of a trustee and the wife that of a beneficiary, and stated that such was the relationship of the parties when dealing with each other. This being true, it seems to me that the decisions of this court in Reagan v. Brown, 59 N.M. 423, 285 P.2d 789 (1955) and Patterson v. Hewitt, 11 N.M. 1, 66 P. 552, 55 L.R.A. 658 (1901), aff’d 195 U.S. 309, 25 S.Ct. 35, 49 L.Ed. 214 (1904), are decisive of the issue here. In Reagan v. Brown, supra, after setting forth § 23-1-4, supra, the court also quoted § 23-1-18, N.M.S.A. 1953, which reads: “None of the provisions of this chapter shall run against causes of actions originating in or arising out of trusts, when the defendant has fraudulently concealed the cause of action, or the existence thereof from the party entitled or having the right thereto.” The court stated that while a son, who by operation of law inherited from his mother when she died intestate as the result of his criminal act in murdering her, might be considered to be a constructive trustee, in the particular case the statute of limitations had run and, accordingly, such a holding was not possible. I quote the language of the court: “Although these two sections [23-1-40 and 23-1-18] have been in effect since their adoption in 1880, we appear to have but one case where the question whether they applied to trusts was decided, that of Patterson v. Hewitt, 1901, 11 N.M. 1, 66 P. 552, 55 L.R.A. 658, affirmed, 1904, 195 U.S. 309, 25 S.Ct. 35, 49 L.Ed. 214. This Court said, at pages 39, 40, of 11 N.M., at page 564 of 66 P.: “ '* * * It cannot well be said that this section [23-1^1, supra] is alone applicable to actions at law, so as to exclude agreements establishing trusts relations cognizable in courts of equity and it would seem that the section was intended to be broad enough to include equitable actions, for the reason that another provision applies the same limitations to actions for relief upon the ground of fraud, which is a recognized basis for the exercise of equitable jurisdiction. s%: ;]* j{< ‡ i|í “ ‘This section [23-1-18, supra] does not apply, of course, to all trusts, but it is applicable directly, to trusts other than those where the defendant has "fraudulently concealed the cause of action, or the existence thereof, from the party entitled or having the right thereto.” There is no attempt in this case to show that there was any fraudulent concealment of the cause of action, or the existence thereof, from the appellants. * * * ’ “It is true the Court was there considering an express trust, but we think its statement in the second paragraph above was sound. If it was not intended that actions on constructive trusts should be included within the all-inclusive words, ‘and all other actions not herein otherwise provided for and specified within four (4) years’, of § 23-1-4, then why have we § 23-1-18 that the provisions should not run against causes of action ■originating in or arising out of trusts when the defendant has fraudulently concealed the cause of action, or the existence thereof, from the party entitled or having the right thereto? The question answers itself and we are unable to agree with plaintiff’s argument that we do not have a statute of limitations on trusts.” Primus v. Clark, 48 N.M. 240, 149 P.2d 535 (1944), is relied on by the majority. In that case the court did not decide if the statute of limitations applicable to fraud actions was controlling in courts of equity, but remanded the case to the trial court with a direction that after hearing evidence it should determine if the cause of action was barred by the statute of limitations, or whether plaintiff was otherwise estopped by her laches. In the instant case if the statute of limitations is applicable, as I believe it is, the only proof whereby its effect might be avoided is found in certain testimony to the effect that the husband had threatened the wife with death if she asserted any claim to the property. Even though no avoidance is pleaded, we assume that this proof might support a finding of duress. However, during what period did it exist, and when did it cease? In my view, the burden was on the wife to plead and prove grounds for avoidance of the statute of limitations. She should establish facts out of which the duress arose, Shultz v. Ramey, 64 N.M. 366, 328 P.2d 937 (1964), and also that the duress continued to a time within the period of limitations. See Pacheco v. Fresquez, 49 N.M. 373, 380, 164 P.2d 579 (1946); Beck v. Searson, 29 S.C.Eq. (8 Rich.Eq.) 130 (1856); Little v. Bank of Wadesboro, 187 N.C. 1, 121 S.E. 185 (1924); Annot., 121 A.L.R. 1294, 1296 (1939). The opinion of the majority contains other misconceptions and misapplications of law, but the foregoing discussion points up my principal objections. Accordingly, I will not further extend this dissent. Since the trial court concluded that the action was barred by the statute of limitations, which I believe was applicable, and made no finding of fact whereby the operation of the statute could be avoided, which was indeed proper because of the absence of proof, it is my conclusion that the decision should be affirmed. The majority having concluded otherwise, I respectfully dissent.