Phalen v. Clark

19 Conn. 421 | Conn. | 1849

Chürch, Ch. J.

The allegations in this bill, admitted by the demurrer to be true, for the present purpose, disclose an aggravated fraud on the part of the defendants, resulting in an injury to the plaintiffs, of no ordinary amount. The first point of defence is, that, notwithstanding this concurrence of wrong and injury, there is no remedy provided, at least in a court of equity ; and is based upon the claim, that the ground of recovery has its origin in an illegal transaction — a violation of the law — in which the plaintiffs took part.

The difficulty, in this part of the case, is not so much to determine what the true principle applicable to this subjei _is, as to determine its application to the facts alleged in the bill. We suppose it to be a well settled doctrine, that, if a plaintiff requires any aid from an illegal transaction to esta > lish his demand, he cannot recover it; or in other words, if he is unable to support it, without relying upon an unlawful agreement between himself and the defendant, he must fail. But if the parties have been engaged in business, either ma-lum in se, or merely prohibited by law; yet if the cause of action be unconnected with the illegal act, and is founded upon a distinct and collateral consideration, it will not 1 affected, by their former unlawful conduct. Booth v. Hodgson, 6 Term R. 405. Ex parte Bell, 1 Mau. & Sel. 752. Simpson v. Bloss, 7 Taun. 240. ( 2 E. C. L. 89.) Fivaz v. Nicholls, 2 Man. Gran. & Scott, 509. 511. (52 E. C. L. 500. 511.) Bartle v. Coleman, 4 Peters 184. Faikney v. Reynous, 4 Burr. 2069. Armstrong v. Toler, 11 Wheat. 258.

The lottery from which the ticket in question was issued, was legally granted, by the legislature of Rhode-Island; and the defendant, Clark, was constituted, by the plaintiffs, the managers, their agent for the sale of tickets. Clark resided in Hartford, in this state; and this ticket, with others, remained in his hands unsold, after the drawing of the lottery, and was then the property of the plaintiffs. Subsequently to all this, and while the ticket remained in the hands of Clark, not as the plaintiffs’ agent to sell, but as a mere depositary, to return on demand, the transaction took place, of which the plaintiffs complain.

The bill does not expressly allege, nor is it necessarily to be inferred from it, that Clark actually sold, or offered to sell, any tickets in this lottery ; or that it was intended he should offer them for sale in this state, and thereby violate any law of the state. But yielding the contrary to the claim of the defendants, and granting that the plaintiffs, by constituting Clark their agent in this state, had violated the statutes of the state prohibiting lotteries, and the sale of foreign lottery tickets ; a majority of the court are not persuaded, that, for this cause, the plaintiffs are without j-emedy.

Clark was only an agent of the plaintiffs to sell tickets in a lottery to he drawn ; his powers were necessarily restricted to this ; and as soon as the drawing was completed, his powers ceased, and his agency as completely terminated, as if destroyed by an express revocation. If there had been any-illegal connexion between the plaintiffs and Clark before, now it ceased, and a new relation existed. The plaintiffs had forfeited no right of property in the unsold tickets, and Clark had acquired none : they were only a deposit in his hands. It was under this new relation, that the acts were committed, which are complained of, in this bill, as fraudulent. The fraudulent conspiracy between Clark and the Pink-neys, was entirely independent of any statute provisions in this state, regarding the sale of foreign tickets ; and the fraud-lent conduct of these parties, resulting from the combination, and producing the serious injury charged, was perpetrated in Rhode-Island, whose laws did not condemn, but sanctioned, every thing which had been done by the plaintiffs. Suppose Clark had used the ticket fo- any other unlawful purpose affecting the plaintiffs; as if by a forgery, he had so altered it, as to resemble a ticket in some other class of the same lottery, and in this way had abstracted money from the plaintiffs, would the law deny a remedy ? We think not. Indeed, we see no necessary connexion between the original agency of Clark, as the plaintiff’s lottery broker, and the subsequent frauds of Clark and the other defendants, by which this large amount of money has been fraudulently obtained.

We do not admit the claim of the defendants, that this bill cannot be sustained, without proving and relying upon what is claimed to be the original illegality of Clark's agency, apparent from the allegations in the bill. Such allegations were made, as is often done in common law pleadings, only as inducement, or a historical introduction to the material and traversable parts of the bill.

2. A further objection to this proceeding is, that the remedy at law is adequate, by an action of indebitatus assumpsit. There is no doubt but such an action could have been sustained, in a case like this ; but from this it cannot be assumed, that a court of law would have exclusive jurisdiction. Fraud, here, lies at the foundation; it is the ground of complaint, and the plaintiffs seek relief from its effects. Lord Hard-wicke has said, that a court of equity has undoubted jurisdiction to relieve against every species of fraud., Chancellor Kent too, lays it down as a principle, that fraud and damage, coupled together, will entitle the injured party to relief, in any court of justice. The leading case of Booth v. Lord Warrington, 4 Brown’s Parl. Cas. 163. (Toml. ed.) in this feature, cannot well be distinguished from the present. Evans v. Bucknell, 6 Ves. 174. Bacon v. Bronson, 7 Johns. Ch. R. 194. 1 Sto. Eq. 195. But if a case sounds in damages merely, a court of equity cannot often have occasion to interfere. Russell v. Clark’s exrs., 7 Cranch 68. Hardwick v. Forbes’ admr. 1 Bibb 212.

In the present case, the plaintiffs claim, that the reasons are imperative why this couit should perform its legitimate duty in relieving against the fraud charged. The bill alleges, that the defendants carefully and fraudulently concealed all knowledge of the truth of the facts complained of, from the plaintiffs, for a period of more than six years, whereby the statute of limitations, by their fraud, bars a recovery in a court of law.

We forbear to determine the question, whether an action at law, under such circumstances, would be barred, or not; being aware of the conflicting opinions expressed on this subject, and especially of the adjudged cases in the state of New-York. Troup v. Smith’s exrs., 20 Johns. R. 33. Leonard v. Pitney, 5 Wend. 30. Allen v. Mille, 17 Wend. 202. Humbert v. Trinity Church, 24 Wend. 587. These cases have proceeded upon the ground, that, as fraud is not among the saving exceptions of statutes of limitation, a court of law cannot regard it as such, and must, therefore, disregard a replication of fraud made to a plea of the statute. With such a weight of authority sustaining that principle, we cannot, with propriety, turn the plaintiffs round to a court of law, to try the experiment of a remedy there ; and especially, as the defendants do not admit that any such replication to a plea of the statute of limitation, would be available.

The question, therefore, for us, must be, are the facts alleged in this bill sufficient to justify this court in affording the relief prayed for, notwithstanding the lapse of time? Or, under what circumstances will a court of equity disregard the statutes of limitation ? These statutes do not, in terms, extend to any but actions or proceedings at law; and generally, the particular forms of action to which they apply, are specified. In analogy to these, courts of equity often act, and especially in cases where lapse of time will be productive of the same evils in the application of equitable, as of 1 * x legal remedies. And furthermore, courts of equity consider these statutes as obligatory upon them, when they are called upon to enforce only legal rights, as otherwise, their effect would be eluded, by a mere change of forum. Troup v. Smith’s exrs., 20 Johns. R. 33. Elmendorf v. Taylor, 10 Wheat. 152. Cholmondeley v. Clinton & al. 2 Jacob & Walker, 1. Roosevelt v. Mark, 6 Johns. Ch. R. 266.

While we concede the full effect of the foregoing principles, we deny their application, by courts of equity, to cases of fraud like the present — cases where a defendant, by his own fraudulent acts and representations, has allayed all reasonable suspicion of his original fraud, and thus attempted to obtain an unconscientious advantage, by a lapse of time. To yield such advantage to a defendant, would be to disregard the most prominent ground of equitable jurisdiction, and to permit the hands of that court to become bound, by the very fraud against which it ought to afford relief. We do not say, nor do we intend to admit, that a court of equity has jurisdiction, because a remedy at law has been lost, by the running of the statute of limitations ; or by reason alone, that a party has remained too long ignorant of his rights ; but we believe, from authorities, and more than all, from the weight of moral and equitable principles, that the fraud of the defendants, as set forth in this bill, ought to deprive them of the aid of the statute, especially in a court of equity.

If the legal title to my estate be endangered, or even if a cloud be thrown over it, by the fraud of another, no one denies the power of a court of equity to give me relief: and if the rights which I have to a legal remedy to establish such title, be defeated, by a like fraud, is not the principle the same? It is an ordinary branch of equity power to enjoin a party from prosecuting or defending, in consequence of an unconscientious advantage obtained over his adversary, either by fraud, accident or mistake. The direct effect this bill, is but enforcing the same principle, in a different form. It is. bat saying to these defendants, you shall not shield yourselves behind the statute of limitations, where your own fraud has placed you. Eden on Injunctions, 14. Carrington v. Hollabird, 19 Conn. R. 84.

A review of some of the cases decided, both in England and in this country, we think, will sustain the doctrine we advance. As early as the year 1714, the principle was enforced in the highest court of England, in the case of Booth v. Lord Warrington, 1 Brown’s P. Ca. 445. 4 Id. 163. before referred to. That was a case, in which, by the fraudulent representations of the defendant, the plaintiff had been induced to believe, that at his request the defendant had paid, or was bound to pay, a large sum of money, to procure for him a marriage with a lady of fortune. The marriage took effect; and the plaintiff, led by the continuous misrepresentations of the defendant, paid to him the money stipulated. Nine years afterwards, the original fraud and subsequent management to delude the plaintiff, was discovered ; and then it was ascertained, that the defendant bad neither paid, - nor was bound to pay, a farthing, on account of the marriage. The plaintiff then exhibited his bill in chancery, to have the money, thus fraudulently obtained from him, restored. The defendant pleaded the statute of limitations; and the questions propounded for argument were — First, whether an action at law could be maintained to recover damages for this fraud 1 Secondly, if it could, at what time did the cause of action accrue? Thirdly, whether, supposing the fraud had not been discovered, until after the expiration of six years from the accruing of the cause of action, a court of equity, after that time, could give relief? And upon the argument, the bill was sustained, and the doctrine claimed by the plaintiffs here, recognized. That case has since been cited with approbation, by jurists and by courts. 2 Sto.Eq. 730. Sherwood v. Sutton, 5 Mason, 143. Lord Redesdale, in the case of Bond v. Hopkins, 1 Sch. & Lef. 429. declared, that where a title exists at law and in conscience, and the effectual exertion of it at law is uncon-scientiously obstructed, relief should be given in equity And the same judge, in Hovenden v. Lord Annesley, 2 Sch. & Lef. 634. says, “ that the reason why the statutes of limitation in case of the defendant's fraud, ought not to prevail in a court of equity, is, that the conscience of the party, being so affected, he ought not to be allowed to avail himself of the length, of time.”

In Cholmondeley v. Clinton, 2 Jac. & Walker, 141. it was holder), that, in case of an equitable estate, “ the statute of limitations would be a bar where there has been no fraud and in Troup v. Smith’s exrs. 29 Johns. R. 47. Spencer, Ch. J. says, in allusion to the before mentioned doctrine of Lord Redesdale : “ this is very intelligible and sound doctrine, in a court of equity and that courts of equity are perfectly right in saying, “ that a party cannot in good conscience avail himself of the statute, when by his own fraud, he had prevented the other party from coming to a knowledge of his rights.” In the case of Sherwood v. Sutton, 5 Mason, 143. the same doctrine is very distinctly and fully recognized, and is said to apply, as well to cases in which the jurisdiction of courts of law and equity is concurrent, as to such as are exclusively of equitable cognizance. The supreme court of the United States, in Michoud v. Girod & al., 4 Howard, 561. in discussing this subject, say: “In a case of actual fraud, we believe no case can be found in the books, in which a court of equity has refused to give relief, in the life-time of either of the parties upon whom the fraud is proved.” The First Massachusetts Turnpike Co. v. Tidd, 3 Mass. R. 201. was an early and well considered case, and has been noticed and approved, by many other cases in this country, in which the Chief Justice says; “If this knowledge is fraudulently concealed from the plaintiff, by the defendant, we should violate a sound principle of law, if we permitted the defendant to avail himself of his own fraud.” To the same effect are the cases of Homer v. Fish, 1 Pick. 435. Weller v. Fish, 3 Pick. 74. Jones v. Conway, 4 Yeates 109. Bishop v. Little, 3 Greenl. 405. These were actions at law, in which fraud was replied to pleas of the statute of limitations; and if we should disregard them as governing authorities in a court of law, as has been done the courts of the state of New-York; yet we cannot disregard the great principles of equity contained in them, and which it is the clear duty of a court of equity to apply and enforce.

Elementary writers of acknowledged authority, have recognized this doctrine as the settled law. 2 Sto. Eq. 738. 2 Sw. Dig. 233. Fonbl. Eq. 262. in notis. 1 Daniel’s Ch. Pl. & Pr. 611. 2 Id. 736. 2 Greenl. Ev. 448.

We perceive no good reason why this principle should be discarded by courts of equity, when acting on subjects of which courts of law might have a concurrent jurisdiction ; ° J because, as is said by Story, J., in the before cited case of Sherwood v. Sutton, “ cases of fraud form an implied exception, to be acted upon by courts of law and equity, according to the nature of their respective jurisdictions.” And this is aptly elucidated, by a case put by Chitty, in 1 Chitt, Gen. Pr. 770. “ Thus, suppose more than six years have elapsed since a bill of exchange became due, and it has been lost, and therefore relief is sought in a court of equity; the statute of limitations would be a bar there, as much as in a court of law, unless there were some circumstances of fraud, justifying an exception.” Such an exception, we think, is entirely justified, in the present case. We have seen no judicial opinion, anywhere expressed, adverse to these views, except that of Justice Cowen, in Humbert v. Trinity Church, 24 Wend. 587. in which he insists, if a court of equity acts concurrently with a court of law, that in such court, the statute of limitations is a good defence, although pleaded in protection of fraud. It does not appear, that any other member of the court entertained the same views. And it must strike the moral sense strangely, as it seems to us, if it be true, as was said by, Spencer, Ch. J., “ that a party cannot, in good conscience, avail himself of the statute of limitations in a court of equity, when, by his own fraud, he has prevented the other party from coming to a knowledge of his rights,” if the same court will allow conscience to be perverted, if it so happen, that a court of law can act concurrently on the same subject! Or, in other words, if such court must say, we will defeat and restrain fraud, if it come to pervert equitable interests alone ; but if it be practiced to subvert rights which are both equitable and legal, we will not interpose!

A majority of the court are of opinion, that the bill is sufficient.

In this opinion Waite, Storrs and Hinman, Js., concurred.

Ellsworth, J.

The facts stated in this bill, if true, present a very strong case of equity in favour of the plaintiffs. But if the transaction is a manifest violation of the law of the state, no equitable consideration should induce us to give to it our judicial sanction, or to rescue from merited loss, those who have trampled on the law of the land.

The legislature have, in clear and expressive enactments, utterly forbidden all lotteries, lottery agencies, lottery offices, and whatever may be an auxiliary in the sale of lottery tickets. The whole are driven from the state. They have no sanction or tolerance here. Nor can we be invaded, with impunity, from abroad. In my judgment, these plaintiffs and defendants stand alike exposed to the penalties of the law, and alike without right to supplicate our aid for redress.

After much reflection, I am unable to agree with my learned brethren in the opinion and judgment just expressed, while, 1 trust, I have an equal abhorrence with them, of the fraudulent conduct imputed to the defendants. The difference between us consists in the different views we take of the transaction.

I lay it down as an important position in this opinion, that the plaintiffs cannot succeed, without proving the substantial facts set forth in their bill, — not isolated parts of them, but substantially the whole, as one single transaction, each part lending essential aid to every other and to the whole. The distinguished counsel of the plaintiffs have not inadvertently encumbered this record with useless matter. They were aware of the difficulties to be encountered, and have carefully avoided every material statement or averment not essential, in their judgment, to their recovery. They have designedly stated their own case ; and we may hold them to the proof of it, and the consequences and character of it.

The facts are substantially these. The plaintiffs were owners of a lottery in Rhode-Island; they employed Clark, one of the defendants, in the city of Hartford, to sell their tickets; and for that purpose, from time to time, sent him tickets, and among them, the ticket in question. Clark sold tickets, and made daily returns to Providence, of the sales of the preceding day, at his agency in Hartford. By the mail of Monday, the 18th clay of January, he returned a sale of this ticket, as having been made, at his agency, on Saturday preceding, to Gaylord Finney. The plaintiffs received this return, and acting upon it as true, paid the prize, a few days after, to Gaylord Pinney, or his agent, A. S. Beckwith; the -ticket being presented to them, at Providence, and payment demanded, according to the terms thereof. They then proceed to say, that the ticket was not sold on Saturday, but remained their property when it was drawn; that Gaylord Pinney never really owned it, but held and presented it for payment, for the benefit of Clark.

Upon these facts, I think the plaintiffs are not entitled to relief, and that, the questions of right and jurisdiction, are properly raised on demurrer. In paying the prize ticket, when it was presented for payment by the holder, they did no more than they promised to do, and intended to do, when they sent the ticket to Hartford, to be sold ; though it is true, they knew of no fraud in the transfer of the ticket. But is this material 1 I think not. The claim stated, is not so much for the isolated fact of paying money, ignorantly, as it is for fraud in Clark in putting off the ticket and making a false return, which they adopted as true, and thus paid the prize to the wrong person, as they say. From the first, the plaintiffs intended to carry out the sale as returned— as a sale made by their agent in Hartford, on the 16th of January, to sanction and perfect it, and crown it with success, by paying the prize money. If they suffer loss in the premises, it is by reason of fraud in their agent. This is the real transaction : it is money paid.; a consideration executed in an unlawful affair, and not, as said, the isolated and innocent payment of money through fraudulent pretences.

The plaintiffs claim to dissect the transaction, and to sue to recover back their own money. This is not their case, as stated; but they rest,and must rest their right to recover, on fraud in their agent — fraud in a forbidden agency. They have seen fit to put such a case on the record; and they must, as I have before said, make it out in proof. Much has . been said about the payment of the money in Providence, where the lottery and selling of tickets is lawful; but this can make no difference : the payment is an act in the progress and consummation of the illegal enterprise against the laws of this state. Suppose the ticket had been honestly sold to Gaylord Pinney, on Saturday, as it was returned to be ; then the payment would be good, and a mere carrying out and consummating of the agency; so that the case must turn upon the character of the transfer by Clark, — upon the fidelity of Clark, or rather his want of fidelity ; which brings the case to a claim against an agent for a breach of trust. There is a trust forbidden ; the lottery is forbidden; the agency is forbidden : the sale is forbidden; the return of the sale, the adoption of it, the payment of the ticket sold in Connecticut, if not forbidden, are all destitute of merit, in the eye of the law, and can lay no foundation for a claim in our courts of justice.

Let me illustrate my views, by a few analogous cases. Suppose A issues notes in the form of bank bills, to be used as a general currency, (which is contrary to the statute,) and puts them into the hands of B to circulate; and he circulates them, and one is presented to A, by some stranger, to be redeemed, and A redeems it; can A sue B or the stranger, to recover back the money as Ids, because B put the bill into circulation fraudulently, or only nominally? Suppose a person employs another to circulate through the state licentious books, for a commission for sales and for appointing sub-agents ; and the person makes return, that so many books are sold, and so many sub-agents appointed ; and is paid accordingly, by his employer : can the money be recovered back, upon discovering that this is all a pretence ? Or if the sub-agents should call for their commission, or their wages, and should be paid ; can the money be recovered back, upon discovering that these men are not agents, but have conspired to get money falsely ? Or suppose, instead of commissions, books or some collateral articles were to be delivered to the agent or agents ; and upon a false return made and acted on, they are delivered: can they be recovered back ? Clearly not. And the title need not be changed either. The truth is, the thing done, was done to accomplish what is forbidden. The employer has kept his/ promise — that is the whole. The contract is executed — the consideration has passed, and the law leaves the parties where it finds them.

But let us see what the plaintiffs are to gain, by treating the payment of the money in Providence, as an isolated affair. The bare payment of the money raises no equity in their favour. It is rather to be presumed they owed it, and only paid their debt. We must go further back, and still further, until, finally, we reach the very transaction disclosed on this bill. Now, I maintain, that on such a case, they cannot recover at law, in any form of action, however general, nor in equity. In Simpson v. Bloss, 7 Taunt. 245., the rule applicable to this class of cases is well laid down and illustrated. There money was loaned, by the plaintiff to the defendant, in anticipation of its being repaid out of moneys to be paid the parties, who had jointly won a bet at a horse race ; but the stake-holder became insolvent, and the money was never paid over to the plaintiff; he therefore sued the defendant in assumpsit to pay back the money he received from the plaintiff — i. e., the plaintiff’s money. Gibbs, Ch. J., in giving the unanimous opinion of the court, says : “This bet was confessedly illegal, and the defendant insists, that the plaintiff’s claim cannot be supported, because it grows out of an illegal transaction. The plaintiff insists, that this demand is collateral to that transaction.” “ Here the plaintiff pays ten guineas to the defendant, who was his partner in the bet, upon a confidence that he shall get the whole bet of twenty-five guineas from Brograve; and not being able to do so, he seeks by this action, to recover it back. How can he make out his claim, but by going into proof of the illegal transaction on account of which it is paid ? He says, the payment was on a condition that has failed “ and it is impossible to prove the failure of this condition, without going into the illegal contract, in which all the parties were equally concerned. We think, therefore, that the plaintiff’s claim is so mixed with the illegal transaction, that it cannot be established, without going into proof of that transaction, and therefore, cannot be enforced in a court of law.”

The same rule is laid down in Fivaz v. Nicholls, 2 M. G. S. 500. (52 E. C. L.) Tindal, Ch. J., says, “ I think this may be determined on the short ground, that the plaintiff is unable to establish his claim, as stated upon the record, without relying upon the illegal agreement originally entered into between himself and the defendant. This is an objection that goes to the very root of the action. Suppose, instead of resisting the action, the plaintiff had paid the money; he could not have recovered it back :\had he attempted to do so, he would have been met by the maxim of law, ex dolo malo non oritur actio. \ If he could not succeed in such an action, I do not see how he can recover damages in a court of law for an injury incidentally resulting from the same state of circumstances, inasmuch as he must put, in the very front of his declaration, the illegal agreement to which he has been a party.” P.512,3. Maulé, J., says, “ the principle has been conceded, that the plaintiff cannot recover, where, in order to maintain his supposed claim, he must set up an illegal agreement to which he himself has been a party.” P. 513. y

It appears, that in these cases, the claim was made, that the ground of action was collateral to the illegal transaction, independent of it, and not affected by the fraud ; but the argument met with no favour from the judges. The same rule is laid down in Roby v. West, 4 N. Hamp. 285. Buck v. Buck, 1 Campb. R. 547., and, with greater or less distinctness, in the numerous cases cited at the bar. The case in New-Hampshire is worthy of special notice. The court say, in answer to the claim, that the transaction may be viewed in parts: “ But the contract between the parties was not a simple contract of sale. The defendants contracted to employ the plaintiff as their agent to sell lottery tickets upon commission, and he contracted to be thus employed. This is the body of the contract. One of the stipulations was, it is true, that the tickets, which he did not sell nor return to the defendants, previous to a certain time, should be considered as purchased by the plaintiff. But that stipulation was only part of an entire contract, the main object of which was directly contrary to the statute. The parties then stand in pari delicto; and in such a case, the illegality of the contract renders it void.” P. 269. “ We have considered the question whether the parts of the contract may be separated, and the plaintiff permitted to recover on that part in which a sale to him is stipulated. The plaintiff cannot recover, unless he is entitled to recover upon the whole case.” P. 290.

It was settled in Simpson v. Bloss, that the test whether a demand connected with an illegal transaction is capable of being enforced at law, is, whether the plaintiff requires any aid from the illegal transaction, to establish his case. In Booth v. Hodgson, 6 Term R. 405. 409., Lord Kenyon, in answering a claim similar .to the one now made, says ; “ They say to the court, ‘ suffer us to garble the case, to suppress such parts of the transaction as we please, and to impose that mutilated state of it on the court as the true and genuine transaction, and then we can disclose such a case as will enable our clients to recover in a court of law.’ Such is the substance of this day’s argument. It is a maxim in our law, that a plaintiff must show, that he stands on a fair ground, when he calls on a court of justice to administer relief to him. Now, is that the case with these plaintiffs ?” “ Ashhurst, J., the plaintiffs wish us to decide this case upon a partial statement of the facts ; thereby admitting, that if the whole can be disclosed, they have no prospect of success : but we must take the whole case together.” P. 410. 1 will not add further on this point.

Then, as to the statute of limitations. I have not been able to surmount the difficulty it creates to the plaintiffs’ recovery. Viewed as the plaintiffs claim the transaction should be, a mere isolated payment of money, their case is, substantially, an action at law for money obtained by false pretences. Such a claim, in this state certainly, belongs exclusively to a court of law. How has it found its way into a psourt of equity 1 Has the legislature only enlarged the jurisdiction of courts of equity, by passing a statute of repose ? Is this the object of providing, that after a lapse of years, a fraudulent transaction shall not be investigated, because it may not be safely done ? This cannot be; and yet, that argument must lead to this, as I will by and by show. Certainly, this statute is not confined to particular courts of justice, nor to particular modes of proceeding: it is binding in all courts, and in every form of legal investigation. And so stringent is its application, that an admission of the wrong is no waiver of the statute of limitations, even in equity; nor is an admission that a debt is unpaid, a waiver of the statute, without some evidence of a new promise. And now, to avoid the statute, when fraud is charged, the claimant has only to step into a court of equity, where there is no jury, if he can only make out the fraud was secret, (and truly it would be a singular fraud, if it were not secret,) and he hears no more of the statute. The books are full of authority, at home and abroad, that upon mere legal rights, as this confessedly is, the statute of limitations is as perfect a bar in equity as at law. Where is this doctrine to lead us ? Are we to go into equity for fraud in the sale of patent rights ? in the sale of horses ? in recommending the credit of a mer- - chant ? for secret libels ? secret slander ? assaults committed under the cover of darkness ? But, it is said, this fraud was secret. As I have already intimated, what fraud was ever committed otherwise than secretly, and with design and cooperating efforts, that then, and afterwards, the fraud should be undisclosed ? And if this removes the statute, then it becomes a dead letter. Let it be always remembered, that in this' ⅞ case, nothing is alleged to have been done within eight years, l and nothing was done at the time, but what constituted the f very fraud itself, or the particular mode of accomplishing it. ¡ Nothing more was done, indeed, than is to be found in the commission of any secret fraud, or secret conspiracy to do wrong. I see not but now, every right to property, or I claim for damages, even ejectment for land, may, at ever so: remote a period, be prosecuted in equity, if there was only, at the first, secrecy in the wrong complained of.

Many authorities have been cited on the argument of the case. They are referred to and commented upon, with ■ signal ability, by the late judge Cowen, in his opinion, in Hum-bert v. Trinity Church, 24 Wend. 587. 593. 619., where this equitable doctrine is discussed and decided, without a dissenting voice, so far as appears, at great length. He confidently asserts, that there is no case to be found, where a mere legal right has been sustained in equity, after the statute has run, because of secrecy, and contrived secrecy, in the original fraud.

The cases in England and in this country, are not harmonious, nor easily reconcilable. I will only say, that in the absence of any decision in this court, I choose to adopt the views herein briefly expressed, as most reasonable, and I think, most in harmony with established principles of law and equity.

Judgment reversed, ^(a)

(a) After the reversal of the judgment of'the superior court, the cause was entered in that court for trial, and a committee were appointed to find the facts. On a subsequent hearing before the committee, Gaylord Pinney, mentioned in the bill, was called, by the plaintiffs, as a witness, and was examined by them. The hearing being then postponed until the next, or a future day, for a further examination, the witness could not be found ; whereupon the plaintiffs withdrew their suit.

Case Details

Case Name: Phalen v. Clark

Court Name: Supreme Court of Connecticut

Date Published: Jun 15, 1849

Citation: 19 Conn. 421

Court Abbreviation: Conn.