123 Kan. 538 | Kan. | 1927
The opinion of the court was delivered by
The principal question involved in this action was whether a certain instrument in form a deed, was in fact a mortgage.
On September 27, 1915, the plaintiff John H. Miller executed an instrument which purported to convey legal title to real estate in Pittsburg, to Thomas R. Cloney, for a named consideration of $2,000. Plaintiff alleged that he owned the property; that a mortgage amounting to $539.75 was about to be foreclosed and the property sold; that being uneducated in the English language, and un
The defendant, Cloney, answered in effect that the warranty deed was an outright conveyance for a consideration of $558.25 and was never intended to be or to operate as a mortgage. He also alleged that he had mortgaged the property, paid taxes thereon, and had expended considerable sums of money for improvements and repairs on the property. One of his defenses was that the plaintiff’s action was barred by the statute of limitations.
A jury was called to pass upon the disputed facts and it returned a finding that the instrument was intended to be and was a mortgage, and judgment was accordingly entered. There was testimony to the effect that plaintiff had worked for defendant and had been advised and helped by him previous to the transaction in question, that he had been advised by him and had relied on his advice, and had previously found it to be good. He testified that he went to Cloney when the mortgage was to be foreclosed, told him he did not have the money to pay the debt and that Cloney advised him that the debt must be paid and if plaintiff would make a deed to him he
A number of points are raised by the defendant, Cloney, one of which is that the action is one for relief upon the ground of fraud and that the statute of limitations began to run within two years from the discovery of the fraud, that the execution of the mortgage in which the mortgagor claimed to be the owner of the property, was notice to Cloney that the plaintiff claimed to own it and started the statute of limitations. He further contends that m> confidential relation between the parties existed as pleaded and that the instruction given by the court defining confidential relationship was erroneous.
Upon a motion for judgment on the pleadings and also upon the evidence, the defendant raised the question that plaintiff’s action was based upon fraud and was barred by the two-year statute of limitations. It was pleaded and the evidence showed plainly enough that the deed was in fact a mortgage when .executed and was so intended and regarded by Cloney. According to the accepted testimony, Cloney several years after the execution of the instrument still recognized that it was made to secure the indebtedness which he had assumed and paid and that plaintiff was entitled to a reconveyance when the indebtedness against the property had been discharged by the rentals received. That is indicated by the statement of plaintiff several years after the instrument was executed, that the rentals he had received were yet insufficient to discharge the obligations against the property and further that they would not be discharged for a considerable time, and that he would notify plain
As to the contention that this is an action based on fraud which must be brought within two years aftfer the discovery of the fraud,. and that plaintiff must be held to have discovered the fraud when Cloney placed a mortgage on the land, which was recorded in 1922, while the legal title of the land was in Cloney, it was held by him only in trust until the obligations against it had been paid. Until he renounced the trust and claimed ownership as against plaintiff, the statute did not begin to run. (Hunter v. Coffman, 74 Kan. 308, 86 Pac. 451; Clark v. Shoesmith, 91 Kan. 797, 139 Pac. 426.) While the defendant Cloney placed a mortgage on the property which was recorded in 1922, the plaintiff had no actual knowledge of it nor any notice that he claimed adverse ownership until 1923. . The rule of constructive discovery does not apply in cases of this kind. The fraud was not in the execution of the instrument, but it was in the subsequent repudiation of the agreement and trusteeship of Cloney. Until the plaintiff had actual notice of the fraud, the statute did not begin to run. It was not set in motion by the so-called constructive discovery. (Duffitt v. Tuhan, 28 Kan. 292; Doyle v. Doyle, 33 Kan. 721, 7 Pac. 615; St. Clair v. Craig, 77 Kan. 394, 94 Pac. 790, 101 Pac. 3.) The action was brought within two years from the time the fraud was actually discovered by the plaintiff.
The judgment is affirmed.