Court Opinion

ID: 7278781
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:03:31.384555+00
Date Added: 2024-06-11T16:18:58.362196
License: Public Domain

■Nr. Chief Justice Smytii
dissenting:
I dissent because I believe the action is barred by the Statute of Limitations, and, if not, equity has lost jurisdiction of the Davidsons. Our Code, says that no action of this character “shall he brought after three years from the time when the right to maintain such action shall have accrued.” Sec. 12G5 | 81 Stat. at L. 1389, chap. 854]. The properties involved were exchanged on December 9, 1910, and the representations complained of became effective on that date. This action was not commenced until April 28, 1915, or more than four years after the making of the representations. In equity “where relief is asked on the ground of actual fraud, especially if such fraud has been concealed, time Avill not run in favor of the defendant until the discovery of the fraud, or until, Avith reasonable diligence, it might have been discovered.” Kirby v. Lake Shore & M. S. R. Co. 120 U. S. 130, 136, 30 L. ed. 569, 572, 7 Sup. Ct. Rep. 430. Sec also cases cited therein, and Lewis v. Denison, 2 App. D. C. 387. The obligation to allege and prove the time Avhen tlio fraud was discovered is on the party Avho asserts it. In Wood v. Carpenter, 101 U. S. 135, 140, 141, 25 L. ed. 807-809, it is said: “A party seeking to avoid the bar of the statute on account, of fraud must aver and sIioav that he used due diligence to detect it, and, if he had the means of discovery in his poAver, he aa7ill he held to have known it.” And also: “In this class of cases the plaintiff is hold to stringent rules of pleading and evidence, ‘and especially must there he distinct averments as to the time when the fraud, mistake, concealment, or misrepresentation was discovered, and Avliat the discovery is, so that the court may clearly see whether, by ordinary diligence, the discovery might not have been before1 made.’ * * * ‘This is necessary to enable the defendant to meet the fraud and the timó of its discovery/” See also Hardt v. Heidweyer. 152 U. S. 547, 559, 38 L. ed. 548, 552, 14 Sup. Ct. Rep. 671; Stearns v. Page, 7 How. 819-829, 12 L. ed. 928-932; Moore v. Greene, 19 How. 69—72, 15 L. ed. 533, 534; Beaubien v. Beaubien, 23 How. 190, 16 L. ed. 484; Badger v. Badger, 2 Wall. 95, 17 L. ed. 838; Buckner v. Calcote, 28 Miss. 432-434; *287Nudd v. Hamblin, 8 Allen, 130; Salinger v. Black, 68 Ark. 149, 60 S. W. 229; Mason v. Henry. 152 N. Y. 529, 46 N. E. 837. Appellant did not allege nor offer to prove that her husband before his death was not fully aware of all the misrepresentations of which she complains. “'Having failed to do this, they are [she is] barred by the statute pleaded from maintaining this suit.” (Salinger v. Black and Mason v. Henry, supra.) Since tlie statute commenced to run during the lifetime of Mr. Bradley, his death did not suspend it; for it is the law- that, “after it has begun to run, its running will not be suspended because of the subsequent death of either party, or because of the lapse ox time before either has a personal representative.” Handy v. Smith. 30 W. Va. 195, 3 S. E. 604; see also Boyd v. Munro, 32 S. C. 249, 10 S. E. 963; Campbell v. Wilson, 2 Mackey, 497. Mr. Bradley sustained an injury in December and died in the following January. From this it is sought to draw the inference that he did not know of the fraud; but, as L have just observed, there is no pleading to support suc-h an inference.
if. lnnvovor, we assume, without allegation or proof, which we may not do. that Mr. Bradley had no knowledge of the fraud, bow is it with the plaintiff, Mrs. Bradley? She signed with him the deed of the Columbia Road property; therefore participated in the exchange. Under the will of her husband, all bis property became hors; hence, the right to maintain this action. The* will was admitted to probate in Maryland February 7, 1911, nearly four years before the inauguration of the present suit. Plaintiff alleges that some time; after April 8. 1912, “she became suspicious of the character of said exchange,” and that “after an investigation * * she recently discovered'’ that the value of the property had been misrepresented. It took ber then, according to this allegation, more than three years to make the discovery. This does not establish much diligence. The allegation, however, is in effect, denied, for the Davidsons in their answer charge laches, and assort that plaintiff’s “'cause of action did not occur within the three years prior to the filing of this suit.'’ But that apart, the allegation is not'sufficiently definite. The Supreme Court of the United States in Wood v. *288Carpenter, supra, ruled that the following statement ivas demurrable: “And the plaintiff further avers that he had no knowledge of the facts so concealed by the defendant until the year A. D. 1872, and a few weeks only before the bringing of this suit.” Commenting on this the court said: “A general allegation of ignorance at one time and of knowledge at another are of no effect. If the plaintiff made any particular discovery, it should be stated when it was made, what it was, how it was made, and why it was not made sooner.” (101 U. S. p. 140.) In the case at bar the plaintiff satisfied none of these requirements.
.Even if her allegation were sufficient, her proof would not sustain it. Her counsel, in the course of the trial, said with reference to April 8, 1912: “This is when we discovered that the property was not what it was represented to he.” Here is a distinct admission that on that date she knew of the fraud. That was more than three years before suit was brought. The answer made to. this is that she did not then know that the Davidsons, Bradley’s agents, had accepted commissions from the other side a2id thereby committed a fraud upon her husband. Forrest v. Wardman, 40 App. D. C. 520; Fox v. Patterson, 43 App. D. C. 484; Mannix v. Hildreth, 2 App. D. C. 259. If this constitutes a part of her cause of action, she is in the same plight touching it as with respect to the misrepresentations. She has neither alleged nor proved that she was not fully aware of it at the time it occurred, and hence has not brought herself within the doctrine of the Wood Case.
Even if it were otherwise, knowledge that the Davidsons had received commission from the other side was not necessary to her cause-of action, and formed no part of it. Her suit is for misrepresentations. If she prevailed, her damages would be compensatory, not punitive. The fact that the misrepresentations were made by an agent who had been guilty of another fraud could not in any way affect the cause of action, or the amount of damages to which she would bo entitled. Fraud in fact is not essential to actionable misrepresentations. “Whether the party thus misrepresenting a fact knew it to be false, ór made the- assertion without knowing whether it were *289true or false, is wholly immaterial; for the affirmation of what one does not know, or believe to be true, is equally, in morals and law, as unjustifiable as the affirmation of what is known to be positively false.” Smith v. Richards, 13 Pet. 26, 36, 10 L. ed. 42, 47; see also Cooper v. Schlesinger, 111 U. S. 148, 28 L. ed. 382, 4 Sup. Ct. Rep. 360; 20 Cyc. 36; 12 R. C. L. sec. 94.
After her husband’s will was admitted to probate, a caveat was filed against it. Long litigation followed. Finally appellant succeeded. It is said that while the prohate contest was pending she could not bring action against the Davidsons, because her right to do so came to her from the will, and that was in question. There are two answers to this. In the first place, under the laws of Maryland where the prohate contest was tried, the fact that a caveat had been filed, and the validity of the will thereby drawn into question, did not prevent her as sole executrix from suing to conserve the estate. Munnikhuysen v. Magraw, 35 Md. 280; Pacy v. Cosgrove, 113 Md. 315, 77 Atl. 1114. Even if this were not true, the statute was not suspended bv the litigation, because there is no provision in our Statute of Limitations which says so. The statute makes several exceptions, but that is not one of them. Since it is not, we have no right to read it into the statute. Many years ago it was said by Chancellor Kent: “The doctrine of any inherent equity creating an exception as to any disability, where the Statute of Limitations creates none, has been long, and, I believe, uniformly exploded.” Demarest v. Wynkoop, 3 Johns. Ch. 142. The same view is expressed in dille rent language by the supreme court of California in Tynan v. Walker, 35 Cal. 634, 95 Am. Dec. 152. “The clause,” said the court, “ ‘after the cause of action shall have accrued,’ does not, in our judgment, imply, in addition, the existence of a person legally competent to enforce it by suit. * * * Obviously, if the term Tight of action’ implies the existence of a person competent to commence an action, there was no occasion for special provisions relieving persons not competent from the operation of the statute.” This language is applicable to our statute. Considered, therefore, *290from any angle, appellant's action is barred by the Statute of Limitations.
But if it were not, the ease would have to be affirmed because equity lost jurisdiction over the Davidsons. The bill, as we have seen, charged that they misrepresented the value'- of the apartment house and induced Bradley to exchange his property for it; that, while acting as Bradley's agent, they secretly and fraudulently served as the agents of O’Neill, or the real owner of the apartment house, and were paid commissions by him or the real owner; that O’Neill was a straw man used by them as a channel to secure for their own use the Columbia Road property; that when O’Neill paid the commission he and those, representing him knew that the Davidsons were the agents of Bradley, and that, by reason of the fraud alleged, the Davidsons obtained for their own use the Columbia Road property, or an interest in the same, or a cash consideration in lieu thereof. I f the allegations that the Davidsons by fraud had acquired an interest in the property were true, equity would have jurisdiction- for the purpose of effecting a reconveyance and an accounting. The Davidsons, however, deny that they ever acquired the Columbia Road property or any interest therein, and no one testifies that they did. Nor did they have any interest in the apartment house. "When counsel for plaintiff was interrogated by the court as to whether he would endeavor to establish that they had, he answered: “I am not going to off er any testimony upon that point. I am going to rely upon this situation that they got a commission of $400 from the other side. * * * They necessarily had an interest in the Fillmore apartment to the extent of $400.” We cannot assent to this. Proof that the owner corrupted the Davidsons by paying them a commission was not proof that they had an interest in the property.
It was said that they were in combination with O’Neill, or the real owner, to the end that they might secure the title, and that since equity has jurisdiction ovOr O’Neill for the purpose of ordering a reconveyance and an accounting, if necessary, it also has power over the Davidsons. But there is no proof of any combination whatever between them and O’Neill. The *291Davidsons deny it. They say that whatever dealings they had wore with Simpson and Sullivan, O’Neill’s agent. O’Neill testified that he never met or knew either of the Davidsons before the trial in the lower court, where one of them was pointed out to him ; that he would not know the other one if he saw him, and that he never had any communication with the Davidsons concerning* the exchange “in any shape or form.” This is uneontradieted. His admission of the combination, by not answering the allegations of the bill, is not binding upon the Davidsons, because it was made long after the object of tin; conspiracy had been effectuated. “After the accomplishment or abandonment of the common design, no declaration of a conspirator will affect another, and such declarations, if offered in evidence, should be excluded.” 1 R. C. L. p. 520, § 61; see also Brown v. United States, 150 U. S. 93, 98, 37 L. ed. 1010, 1013, 14 Sup. Ct. Rep. 37; Spies v. People, 122 Ill. 1, 237, 3 Am. St. Rep. 320, 12 N. E. 865, 17 N. E. 898, 6 Am. Crim. Rep. 570; United States v. Gunnell 5 Mackey, 196; People v. McQuade, 1 L.R.A. 273 and note, (110 N. Y. 284, 18 N. E. 156). If Simpson and Sullivan, not parties here, corrupted the Davidsons by paying them a commission, that would not prove or tend to prove a conspiracy between the Davidsons and O’Neill without some proof that the latter had authorized or approved it, and there is none. Erom the mere fact of an agency to sell a piece of real estate, w’e cannot infer an authority to do an unlawful tiling. Benton v. Minneapolis Tailoring & Mfg. Co. 73 Minn. 498, 506, 76 N. W. 265. Since, then, the Davidsons had no interest in the properties exchanged, and were not combined with O’Neill, the alleged owner, or the actual owner whoever he may he, there was no occasion for applying to equity for relief. The law provided an adequate remedy in an action for damages on account of the misrepresentations, if any, made by the Davidsons, and they wTere entitled to a jury trial of the facts involved in the controversy.
In saying this I do not forget the principle that, where equity has jurisdiction for one purpose, it will retain it for all purposes necessary to do full justice to the parties. It is also true that, where the equity asserted fails, the court will not retain *292tlie action for the purpose of giving relief obtainable at law. “The rule is that where a cause of action cognizable at law is entertained in equity on the ground of some equitable relief sought by the bill, which it turns out cannot, for defect of proof or other reason, be granted, the court is without jurisdiction to proceed further, and should dismiss the bill without prejudice.” Dowell v. Mitchell, 105 U. S. 430, 432, 26 L. ed. 1142, 1143, citing other eases; see also Dakin v. Union P. R. Co. 5 Fed. 666; Kessler v. Ensley Land Co. 123 Fed. 567. The equity .charged against the Davidsons failed, as we have seen, and hence the ground upon which equitable jurisdiction rested disappeared. The circumstance that equity had power over O’Neill to order a reconveyance and an accounting, if found proper, makes no difference, since O’Neill and the Davidsons were not in combination. The equity which will permit the court to retain the case must affect the party over whom the jtirisdiction is exercised. Bradford v. Long, 4 Bibb, 225. If this wrere not so, a plaintiff could deprive a defendant of a jury trial b.y joining him with a defendant against whom there was an equitable claim. But this cannot be done.
It is said that it was necessary for the plaintiff to go into equity for the purpose of discovering that the Davidsons had received commissions from both sides. If the fact that the plaintiff desired to obtain information from her opponents entitled her to maintain an equitable action against them, where otherwise she would have to proceed at law, it would be in the power of every plaintiff to make his action one cognizable in equity, and thereby deprive the defendant of his constitutional right to a trial by jury. Manifestly, this is not the law.
A court of equity will always punish fraud with an unsparing hand when the subject is properly before it, which is not the (¡ase here. If the plaintiff over had a cause of action against the Davidsons, a matter about which I express no opinion, it was in .law, not in equity; and were it not for the bar of the statute, the case should be reversed, with directions to the. lower court to permit the plaintiff, if so advised, to transfer her cause *293to the law side of the court. Put since, in my judgment, it is barreal, the ease should be affirmed.
A motion for a rehearing was denied February 25, 1918, but the decree was amended so as to remand the cause for a new trial. •