Court Opinion

ID: 3956547
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:17:42.903348+00
Date Added: 2024-06-11T07:43:39.364161
License: Public Domain

I have been unable to concur in the conclusion reached by my associates, and as briefly as I can will state the contrary view entertained by me. The majority opinion proceeds upon the theory that, notwithstanding the fact that the evidence may sustain the verdict, to the effect that appellee was originally injured through the negligence of appellant, from which injury he finally suffered loss and damage in the amount of the verdict, and that, for a grossly inadequate consideration, he was induced to release his right by fraudulent means on the part of appellant's servants, he must nevertheless suffer the loss of such damage merely because of a technical fault in failing to institute his suit for relief in time. The question presented, therefore, is of grave concern, not only to appellee, but to all others in the future who may find themselves in a like situation. It is likewise of serious import to appellant, for, if the two instead of the four year statute of limitations should be applied, appellant is entitled to that repose and freedom from suit which, on grounds *Page 137 
of public policy, it has been deemed wise to provide.
It may not be amiss to further premise that appellee alleged that he did not fully know that his injuries would incapacitate him beyond recovery until October 22, 1911, and the jury evidently so found, inasmuch as they returned a verdict for appellee under the court's instruction that to recover he must have instituted his suit "within two years from the time it became known to him, or by the use of reasonable diligence he could have known the nature and extent of his injuries." If this finding has sufficient support in the evidence, it is, of course, conclusive in appellee's favor on the issue of limitation even as applied by the majority. But, accepting the conclusion of the majority that appellee certainly knew as early as October, 1908, the nature and full extent of his injuries, and hence of the falsity of the representations which induced him to execute the release set out in his petition and copied in the opinion of the majority, the writer nevertheless thinks that it is the four, and not the two, year statute of limitation that should be applied to the circumstances of this case.
Had appellee declared on his original cause of action alone, it would not have been necessary on the part of appellant to plead the release as a defense. In such case appellee's petition would have been subject to exception as presenting an action barred by limitation. It was essential, therefore, that appellee go farther. He did so. He set up the release executed by him and the fraud which induced its execution, and sought its cancellation. Had he failed either to allege or to prove the fraud, and thus secure cancellation, his suit must likewise have failed, for the release in that event would have constituted a bar to his original cause of action. Appellee was therefore forced to plead as he did, and his action was and is essentially one in equity to cancel, with a prayer for relief that restores his rights as they were at the time of executing the release. To this action, as is conceded in the majority opinion, the four-year statute of limitation applies.
There is a class of cases to which the rule of the majority properly applies; but this, I think, is distinguishable from them. Those are cases where the fraud relied upon is of a character that renders the instrument in question void ab initio, as where the instrument has been misread to the parties executing it, or where there has been a surreptitious substitution of one paper for another. In such cases courts of law, as contradistinguished from courts of equity, may take cognizance of the question, and treat the instrument as never having had force or vitality — as having at no time constituted an obstruction to a recovery of that which the instrument apparently casts upon another. Courts of law, therefore, proceed upon the theory that limitation begins at the period when the original cause of action arose, and that it never in fact ceases, though perchance it may be suspended by fraud until such time as the fraud was or ought to have been discovered, when the complaining party is again made chargeable with the limitation made applicable by the statute to the original right. This class of cases may be illustrated by the following decisions and authorities therein cited, to wit: Girard v. St. Louis Car Wheel Co., 27 S.W. 648, 123 Mo. 358, 25 L.R.A. 514, 45 Am. St. Rep. 556; I.  G. N. Ry. Co. v. Harris, 65 S.W. 885; Och v. M., K.  T. Ry. Co., 130 Mo. 27, 31 S.W. 962, 36 L.R.A. 442; George v. Tate, 102 U.S. 564, 26 L. Ed. 232.
In the case here, however, the fraud relied upon does not touch the instrument itself. Appellee knew its exact terms and its legal effect, which in terms is fully sufficient to forever discharge any right of recovery upon his original cause of action. The fraud relied upon to defeat the release antedates and is wholly extraneous from its execution. Appellee signed the precise instrument which he intended to sign, and it is voidable only, and not void. In all such cases the integrity and binding force of the contract must stand until a court of equity sets it aside. A court of law cannot do so. See the following cases and authorities therein cited: George v. Tate, 102 U.S. 564, 26 L. Ed. 232; State v. Stuart, 111 Mo. App. 478, 86 S.W. 471; Hancock v. Blackwell, 139 Mo. 440, 41 S.W. 205; Vandervelden v. C.  N.W.Ry. Co. (C. C.) 61 F. 54. It can make no difference in applying the principle that our courts administer both legal and equitable relief, or that the issues relating to cancellation and those relating to an action for damages are tried at the same time. Nor, as it seems to me, can it be material that the instrument sought to be set aside constitutes a release of damages, or a discharge of a right of action, instead of a conveyance or other form of contract. In either case he has the right to be placed in statu quo.
If the foregoing views as to the character of the release under consideration are correct, it must logically follow that after its execution it operated until set aside as an insuperable obstacle to appellee's original cause of action. Until then he had no right of action on the original cause alone. The primary purpose of this suit, therefore, was, as of necessity it must be, if maintainable at all, to cancel the release under consideration. In such cases, in the absence of circumstances not pleaded in this suit, it takes four years to bar the plaintiff's right, notwithstanding as incidental to the relief of cancellation the plaintiff also seeks as is allowable, the further relief of full compensation for that thing of value which he released to appellant. See C., T.  M. C. Ry. Co. v. *Page 138 
Titterington, 84 Tex. 218, 19 S.W. 472, 31 Am. St. Rep. 39.
It is true that appellee might have instituted his suit earlier; but was he compelled to in the absence of any plea on appellant's part Involving a defense of delay other than the two-year statute of limitation? To my mind under such circumstances it is fully sufficient that his suit was instituted, as was done, within four years from the time of his discovery of the fraud, or from the time when, in the exercise of proper care, he should have discovered it.
It is thought that the following decisions of our own courts support the conclusions noted, viz.: McCord v. Nabours, 101 Tex. 496, 109 S.W. 913,111 S.W. 144; Evans v. Goggan, 5 Tex. Civ. App. 129, 23 S.W. 854; Railway Co. v. Jowers, 110 S.W. 946. Quoting from the headnote in the case of McCord v. Nabours, supra, it is said: "In an action to set aside for fraud a sale of corporate stock, and recover dividends collected thereon by the defendant as stockholder, the latter claim, as well as the former, was cognizable in equity, and governed by the limitation of four years instead of two years." The case of Evans v. Goggan, supra, by the Court of Civil Appeals for the Third District, seems clearly in point. That was a suit for the cancellation of a contract of purchase of a piano, and to recover the amount paid on the ground of the fraud alleged. The fraud charged was not such as rendered the instrument void, and the suit was not only entertained, but the court, in disposing of one of the assignments, used the following language, which has application here: "Appellant complains of a charge of the court which applied the two-year statute of limitation to plaintiff's prayer for recovery of the amounts paid on the contract upon its cancellation. The charge in this respect was erroneous. The suit was for rescission of the contract, and upon judgment of that character the consequences of rescission would follow. The question was: When would the right to a rescission be barred? The statute does not specifically provide for it, but provides that every other personal action `for which no limitation is otherwise prescribed shall be brought within four years next after the right to bring the same shall have accrued, and not afterward.' Rev.St. art. 3207. It has been decided that the statute of four years applies to an action for rescission of a contract consummated in fraud. Cooper v. Lee, 75 Tex. 114, 12 S.W. 483. If, then, the plaintiff is entitled to a rescission, and is not barred by limitation in that action, he would be entitled to complete restoration of his rights upon rescission, The amount paid on the contract should be restored to him, and its recovery would not be governed by a different period of limitation from that which would govern the action itself. The two-year statute, as for debt, or open account, or money had and received, would not apply."
If the time at my command admitted, other cases of like character could doubtless be found; but those last cited will illustrate the view I have attempted to present In each of the cases cited the ultimate object of the plaintiff was to recover money or other thing of value lost by virtue of some contract or instrument sought to be annulled; but the relief so sought was held to be incidental to the cause of action for cancellation, and that the four-year statute of limitation alone was applicable.
Other grounds for reversal have not been considered by the writer; but I feel impelled to conclude that the judgment herein should not be reversed on the ground stated by the majority.