Court Opinion

ID: 8188112
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:10:53.941502+00
Date Added: 2024-06-11T16:40:30.019092
License: Public Domain

Tbe respondents moved for a bearing, and tbe following opinion was filed January 31, 1905:
Maeshall, J.
Tbe motion for rehearing, in this case, as all such motions wbicb are made in tbe proper professional spirit are, was welcomed here and has received consideration. There was no need whatever for tbe learned counsel’s apology for making it. It were better if they bad omitted from tbe argument tbe words “Well, as I understand tbe aversion of this court to rebearings.” It involves an assumption tbat has no foundation whatever. This court has no “aversion” to tbe assertion by any attorney of any right wbicb tbe statute, court rules or tbe practice affords him. It has no feeling but tbat of respect for all considerate efforts of members of the profession to safeguard tbe rights of their clients and to aid tbe court in tbe proper administration of justice. Occasions have been improved to admonish practitioners to exercise care not to subject their clients to the burdens of additional eost by inconsiderate motions for rebearings, and if it be necessary in order tbat such admonition shall be efficient in tbat regard it might well be repeated. It is well appreciated here tbat *662counsel may‘inadvertently overlook some important matter’ and that the court may do so, giving rise reasonably to the-thought that if such matter had been fully presented and considered a different conclusion might have been reached. No feeling of hesitancy exists here to correct errors of counsel or the court’s own errors whenever there is opportunity therefor. However diligent we may be to discover the right of any matter, mistakes are liable to occur, calling for motions for rearguments. That is well understood. The ultimate-end sought by all is to weigh out justice with the greatest possible certainty and accuracy and nothing consciously is allowed here to stand in the way thereof. Certainly, no “aversion” to the reception of a motion for a rehearing so stands. The statutory right to make such motion is a valuable aid to the end sought when invoked with that careful consideration of a case which should always be devoted thereto before exercising it. Brown v. C. & N. W. R. Co. 102 Wis. 150, 77 N. W. 748, 78 N. W. 771; Illinois S. Co. v. Bilot, 109 Wis. 430, 84 N. W. 855, 85 N. W. 402. If counsel conclude that a question for any cause has been overlooked or not adequately presented, and a re-presentation of the case in that regard may, with reasonable probability, change the result, they should perform the duty to their clients and the court to make the-motion to that end.
Counsel now present for consideration propositions which only incidentally, if at all, were mentioned on the former argument. They frankly confess that the importance of such propositions was not appreciated by them, if thought of seriously at all, until aroused in that regard by some questions propounded from the bench on the argument. We will say,, however, at the outset, that the subjects iAvolved did not pqss here without the most careful study, as the result will now more fully indicate.
Counsel’s second proposition, it would seem, ought to have ñrst place. “The right of action at law upon the subscrip*663tion list signed by these defendants did not accrue in favor of tbe corporation in 1892, and it did not accrue until these plaintiff stockholders made their demand for action in February, 1899, and the defendant then denied any liability and refused to take any action.” In support of that it is said there was no right of action in advance of a call being properly made and the maturity of the demand thereunder, the statute on that subject and the ai’ticles of organization of the corporation and its by-laws being referred to. We have not heard before anything to indicate that any one supposed this to be an action to recover upon the contractual liability of stockholders. There is no suggestion in the complaint that it is of that character. On the contrary, the whole theory from first to last has been that it is an action against the promoters and trustees of a corporation to recover unlawful profits they obtained while acting in a fiduciary capacity 'for it. The claim of the plaintiffs all through the case is that defendants, while acting in such fiduciary capacity, purchased land at one price and turned it over to the corporation ostensibly at cost, but really for an advance of over $50,000, and that to the extent of the profits so obtained they became liable to such corporation. The mere statement of tire real nature of the action, which is fully set forth in the history of the case accompanying the former opinion, renders it unnecessary to say more on this point.
Counsel’s next proposition is that “the defendants are es-topped from setting up and receiving the benefit of the six-years statute of limitations.” That presents the question of whether such statute, as to an action in favor of a corporation against its officers, runs while they themselves are the ones clothed with the sole authority to protect its interests and fraudulently neglect to do SO'. True-, as said by counsel before and as said now, the corporation was powerless to enforce its right to recover the unlawful profits through the instrumentality of its officers, since they were the guilty parties and con-*664¿rolled what should and what should not he done in its behalf. Formerly, we said: Counsel insist that under such a situation the statute ought not to apply, hut no authority is cited to our attention as a basis for varying the unqualified language thereof, and so far as we can discover there is none to fit the case in hand. Reflection has resulted in counsel planting themselves squarely and confidently on the unqualified doctrine that the statute of limitations does not run in favor of one seeking to take advantage of it, as to a cause of action based on fraud, so long as the adverse party has no knowledge of the facts constituting such fraud. A large number of authorities are cited to our attention as supporting that view, commencing with Encking v. Simmons, 28 Wis. 272, where Dixon, C. J., used language by way of argument suggesting that a view was then entertained, at least by himself, that the statute of limitations might be avoided for actual fraud. No question in that regard, however, was in any wise involved in the case, even incidentally, nor was the doctrine suggested indorsed as good law by the writer of the opinion, except inferentially:
• “There is (said the chief justice), for example, very much and very high authority for saying that the bar of the statute of limitations may be avoided at law for fraud in the party seeking to take advantage of it.”
True, there is such authority that way, but also true when ■analyzed the same is found to have no application whatever to •a situation wholly otherwise regulated by statute, as in this •state. It is significant- that the remark quoted, though made over thirty years ago, has not since been referred to in any opinion in this court, and that the doctrine there said to. be supported by “very much and very high authority” has never been incorporated into our system. A brief history of such doctrine will fully clear up all uncertainty, if any exists, as to whether it should be adopted here.
The whole system of extinguishing rights, or rights of ac*665tion, by delay in tbeir enforcement is really statutory. True, •at an early day in England by tbe dictum of Lord Mansfield in Bree v. Holbech, 2 Doug. 654, tbe idea is said to bave been •originally advanced tbat fraudulent concealment prevents tbe running of -tbe statute of limitations. It is truly said by tbo text-writers tbat sucb idea was never judicially incorporated into tbe English sytem as law, but was by act of Parliament. At an early day in tbis country it was adopted by some of tbe states, notably by Massachusetts and Maine, and later was •adopted by some others. It was incorporated into tbe statutes of many of tbe states in some form, in some cases being restricted, either expressly or by judicial construction, to actions at law, and in others to actions in equity. Tbat accounts for all of tbe decisions referred to in Encking v. Simmons,, and tbe large addition now cited to our attention by ■counsel. In Wood, Limitations (2d ed.) § 274, tbe matter is referred to in these words:
“In Massachusetts, before tbe present statutory exception ■existed, tbe fraudulent concealment of a cause of action was held to be a good replication to a plea of tbe statute. In Maine, also, tbis'rule was adopted. Tbe doctrine of these cases was predicated upon a dictum of Lord Mansfield, in an English case; but tbis dictum seems never to bave been followed in tbe English cases in actions at law, nor do tbe American cases before cited seem to bave been generally followed in tbis country.”
There are three general classes of authorities found in the books on tbe subject under discussion and unless tbe statutory differences giving rise thereto are appreciated one is ■quite liable to fall into confusion as to bow tbe law ought to be declared under a statute like ours. Tbe first includes tbe ■states where there is no statute on tbe subject, bolding tbat fraud concealed by tbe person invoking tbe statute of frauds postpones its operation. They are, in tbe main, tbe following: Massachusetts and Maine,’ prior to tbe adoption of tbeir statutes on tbe subject, Vermont, Rhode Island, New Hampshire, *666Louisiana, New Jersey, Arkansas, Delaware, Pennsylvania and Texas. Sixteen of tbe cases cited by counsel are from those states. That they throw no light on what the rule ought to be where the matter is governed by statute, seems plain. The second class includes the states having a general statutory exception to the running of the limitation statutes in case of concealed fraud until the discovery of the facts by the injured party. They are: Maine and Massachusetts, after the adoption of their present statute, Connecticut, Alabama, Georgia, Indiana, Illinois, Mississippi, Maryland, Michigan and New Mexico. Ten of the cases cited to our attention axe from those states, and no time need be spent in showing, their inapplicability to the case in hand. The third class includes states having such a statutory exception in cases cognizable in eqiiity, or solely so cognizable. They are: Iowa, Colorado, Florida, Kentucky, North Carolina, South Carolina, Kansas, Missouri, New York, Ohio, Nebraska, Nevada,. California, Arizona, Minnesota, Utah, Idaho, Montana, Wyoming and this state. Of the sixty or more cases cited by counsel, there is no Wisconsin case, — except Fnclcing v. Simmons, 28 Wis. 272, which decided nothing on the subject, as we have seen, — and no others in such class, except Oakland v. Carpentier, 13 Cal. 540; Ryan v. L., A. & N. R. Co. 21 Kan. 365; Ft. Scott v. Schulenberg, 22 Kan. 648; Arnold v. Scott, 2 Mo. 14. An explanation of those cases can be very briefly given. The California case was not an action at law, or an equitable action to enforce one at law, as is the case before us, but was strictly an action cognizable only in equity, and so in harmony with the statute on the subject.' The court held that the limitation period did not begin until the discovery of the. facts constituting the fraud. The same is true of the first of' the Kansas cases referred to, and the other, so far as it touches on the subject at all, seems to be against the contention, counsel seeks to maintain. As to the Missouri case, counsel was either misled by the syllabus, which.does not correctly state-*667the rule of the case, into citing the decision, or by a citation in some publication where the author was so misled. The decision was based on a clause of the Missouri statute which provided that any obstruction of the action, whether by direct or indirect means, will, while it lasts, postpone the running of the limitation period. We have no such statute. The case-was explained and limited in Smith v. Newby, 13 Mo. 159, where it was said that the syllabus was misleading.
As to concealed fraud postponing the running of the statute' of limitations respecting a cause of action at law, it has been expressly repudiated in the following states having statutes-similar to ours: New York, Troup v. Smith's Ex’rs, 20 Johns. 33; Kentucky, Ellis v. Kelso, 18 B. Mon. 296, where a clerk made a fraudulent entry upon his employer’s books, and it was held that the statute ran from the date of the entry; North Carolina, Hamilton v. Shepperd, 3 Murph. 115; South Carolina, Miles v. Berry, 1 Hill, 296, where the maker of a note fraudulently obtained possession of it, and ' kept it until the statute had run upon it, and it was held that such fraud did not prevent the running of the .statute.. The same rule has been declared in the following cases belonging to the first class, or having a statutory provision like-that which ruled Arnold v. Scott, 2 Mo. 14: Mississippi, Wilson v. Ivy, 32 Miss. 233; Virginia, Rice v. White, 4 Leigh, 474. The same rule prevails in states belonging to the second class: Tennessee, York v. Bright, 4 Humph. 312; Smith v. Bishop, 9 Vt. 110; Fee’s Adm’r v. Fee, 10 Ohio, 469.
_ Thus it will be seen that of all of the authorities cited by counsel there is no support whatever for the proposition advanced that under a statute such as ours the running of the-■statute of limitations, except in the particular class of cases referred to in such states, is affected by fraud, while a careful classification of them with reference to the statutory differences under which they were made and judicial declarations, all, directly or by implication, sustain the conclusion to which *668we formerly arrived. There are expressions of judges of .great ability to tbe effect that there is much conflict and confusion in the authorities on this subject, but it is believed that the supposed conflict does not exist in fact to any considerable ■extent. Substantially all of what appears to have led to a contrary view, by a proper classification of the decisions according to the various statutes, will be found to have no real basis. We have not attempted here to do more than to ■classify them in a general way.
Counsel suggest that the language quoted in our former opinion from Bank of Hartford Co. v. Waterman, 26 Conn. 324, is not authoritative because it was entirely unnecessary to the case, and, further, because many cases could have been found at that tiipe where it had been held that fraud, concealed, prevented the running of the statute of limitations. True, there were such cases and we have briefly, but fully, explained them in harmony with the views formerly expressed. The quotation voices the law under the Connecticut statute.
Several federal cases are cited to our attention, which, when rightly understood, are unimportant. Bailey v. Glover, 21 Wall. 342, is the most significant of them. That is to the effect that under the federal system the rule is, as to cases not gpverned by state statutes and decisions, the court being left free to declare the law according to its own views, and there being no federal statute interfering therewith, the running of the statute of limitations is postponed in case of fraud, concealed by the party invoking such statute, till the adverse party discovers the same. If there had been a United States statute expressly providing when fraud shall so operate, the decision would doubtless have been that all cases not covered ■thereby were excluded. In Troup v. Smith’s Ex’rs, 20 Johns. 33, the court was urged to engraft on the statute of limitations •of New York an exception saving actions at law from the operation of such statute in case of concealed fraud, preventing *669tbeir being commenced witbin tbe limitation period, and replied thereto, thus:
“The dictum of Lord MaNseield, in Bree v. Holbech, 2 Doug. 654, is the only instance in which such a position was ever advanced in Westminster Hall; and when it is further considered, that his lordship had an inclination to entrench on courts of equity, that mere dictum cannot be regarded as authority. . . . Courts of law are expressly bound by the statute. ... I know of no dispensing power which courts of law possess, arising from any cause whatever.” The-court said further, substantially: The statute having made-provision for the postponement of the running of the statute of limitations in certain cases it would be an assumption of legislative authority to introduce any other. “The plaintiff’s case may be a hard one; but that affords no reason for construing away a statute of great public benefit, and which, in many cases, is a shield against antiquated and stale demands.”'
That decision made over seventy years ago has stood the test of time without a word of criticism in New York, or elsewhere under a like statutory system to that which the court-had under consideration.
In Miles v. Berry, 1 Hill, 296, speaking on the same subject, the court said:
“Many of the difficulties, in cases upon the statutes of limitations, have arisen from losing sight of the words of the statute, and looking to what appeared to be just and right between the parties. The judges here and elsewhere have, howrever, set about the work of reform -in this respect, and are now endeavoring to conform to the statute.” To allow the time-of the discovery of the fraud to be regarded as that of the maturity of the injured party’s cause of action “would be to make and allow, by judicial construction, an exception to the-statute of limitation, which the legislature did not think proper to make.”
In line therewith Chancellor KENT said in Demarest v. Wynkoop, 3 Johns. Ch. 129-142: “The doctrine of any inherent equity creating an exception as to any disability, where-*670■the statute of limitations creates none, Ras been long, and, I believe, uniformly exploded. A statute is to be read as it is ■written without any arbitrary substitution or addition to its meaning.” To the same effect are Carden v. L. & N. R. Co. 101 Ky. 114, 39 S. W. 1027; Powell v. Koehler, 52 Ohio St. 103, 39 N. E. 195; 19 Am. & Eng. Ency. of Law (2d ed.) 212.
In the light of the foregoing, it would seem that the right of the matter under discussion is unmistakable. The statute, sec. 4222, Stats. 1898, provides that “the cause of action in such case is not deemed to have accrued until the discovery, l^/By the aggrieved party, of the facts constituting the fraud.” Ey one of the most familiar canons of construction all other cases are thereby excluded. “Kxpressio unius esirexclusio al-teriusP The mere fact that the enforcement of the statute according to the foregoing leads occasionally, as it does seem-y ingly in this case, to great hardship does not furnish the ■slightest reason why the courts should ingraft an exception upon it. The enactment of the lawmaking power within its legitimate field must not be obstructed by the judicial administration. Such power is ample, if it sees fit, to extinguish any right enforcible by an action, if judicial remedies for . such enforcement are not invoked within such reasonable time as it sees fit to name. The possessor of the right may be under disability to personally enforce the same within the pre- ■ scribed period by reason of infancy, insanity, imprisonment ■ or other cause, and yet the statute in general terms, not containing any exception to save the right, will extinguish it. Vance v. Vance, 108 U. S. 514, 521, 2 Sup. Ct. 854; Carden v. L. & N. R. Co. supra. The legislature is the judge, and the sole judge in such matters, subject to no judicial review whatever, so long as it acts within the boundaries of reason. It is far better that occasionally one should suffer severely from the enforcement of the law, as the court finds it, than ■that they should endeavor to bend the law out of its manifest *671•scope to avoid that result. The truth of the saying that “hard cases make bad law” we need not go far to demonstrate. After courts have done all that they can by the exercise of the .greatest diligence to steer clear of the danger in that regard they cannot hope to be universally successful.
We should not close this opinion without referring, at least briefly, to the doctrine urged upon our attention that equity will always furnish a remedy for any wrong, other than a mere moral transgression, if legal remedies are inadequate or do not exist at all. It is not infrequently that we see that valuable doctrine invoked where it has no proper place. It is never applicable to give a remedy for a wrong, so called, which is not a wrong at all, because the written law makes it otherwise. Such wrongs, if the injuries may be.so designated at all, are not within the maxim “there is no wrong without a remedy.” Rowell v. Smith, ante, p. 510, 102 N. W. 1.
The last suggestion of counsel is that respondents having proceeded in good faith should not be made to pay costs in this court or in the court below. Such a practice, if once adopted, would compel the defendant in most any case to wholly, bear the burden necessary to his defense, since, generally, the plaintiff thoroughly believes in his side of the case. There is no good reason for making this case an exception.to the general practice of awarding costs to the defendant where in an equity action he prevails as to the entire cause of action •set forth in the complaint. According to the conclusion to which we have arrived the defendants have so prevailed.
By the Gowrt. — The motion is denied.