Pipe v. Smith, 5 Colo. 146

Pipe v. Smith

5 Colo. 146 | Colo. | 1879

Elbert, C. J.

The appellant claims through Loveland, and his right to the relief prayed is of no better or higher character than would be Loveland’s right, if himself complainant.

The premises in dispute were within the exception contained in the probate judge’s deed to Loveland of December 23,^1864, and title did not pass. Pipe v. Smith, 4 Col. 444.

Whatever claim Loveland had to the premises is based on his agreement of December 11, 1863, with certain citizens of the town of Golden City. This agreement, in fact, forms the basis of the present action. For the purposes of this decision, we need not enter upon the question of the validity of the agreement, for if its validity be admitted, the action is barred, by the Statute of Limitations. But for the allegation of fraud the provisions of section 1683 would be applicable to and would bar the action; this allegation, however, brings the action within the provisions of section 1682, General Laws, p. 597.

The claim is that in virtue of this agreement, after having conveyed to occupants the lots to which they were respectively-entitled, the probate judge held the residue of the town site entry in trust for Loveland; that the deed of December 23, *1571864, to Loveland, was not a full discharge of this trust, but only a partial execution of it; that he was still entitled under the agreement to receive a further conveyance of the premises excepted from the operation of his deed, there being no legal claimants thereto under the town site act; that the defendant, Smith, was not entitled under said act, and that the conveyance to him by the probate judge by his deed of October 11, 1869, was in fraud of Loyeland’s rights and equities under the agreement. The bill seeks to have this deed annulled and title decreéd to appellant as grantee of Loveland.

Although the fraud charged is constructive, it is within the statute. Wilmerding v. Russ, 33 Conn. 75; Keeton v. Keeton, 20 Mo. 531. It consisted, as is claimed, in the execution of the deed to the defendant Smith, when (1) he had not filed his statement, as required by the town site act, within the ninety days, and (2) when he was not an occupant of the premises.

Bills for relief on the ground of fraud must be filed within three years after the discovery by the aggrieved party of the facts constituting the fraud. Gen. Laws, Sec. 1682. The deed from the probate judge to Smith, which is sought to be annulled as fraudulent and void, was executed October 11, 1869. This action was commenced May 9, 1878, more than eight years thereafter.

The bill does not allege when the facts constituting the fraud were discovered. The rule, is that where the fraud is committed more than three years before the commencement of the action, the complaint should show that the discovery was made within the three years next preceding the commencement of the action. Carpenter v. The City of Oakland, 80 Cal. 444; Sublette v. Tenney, 9 Cal. 423; Ang. Lim. sections 183, 296. He must not only allege his ignorance of the fraud, but when and how he discovered it. Carr v. Hilton, 1 Ourtis, c. c. 390; Moore v. Green, 2 Curtis, c. c. 203. The bar of the statute aj ipeared on the face of the bill,'and the demurrer was properly sustained. Ang. Lim. 294, and cases cited. Sublette v. Tenney, supra.

*158Again, we are of the opinion that the facts stated in the complaint would preclude a finding of discovery. within the three years preceding the commencement of the action, if alleged. Loveland and his grantees, prior to the decree, were dealing with property, the subject not only of a Us pendens, but the subject of a public trust under the laws of Congress. The exception in Loveland’s deed was of lots. * * * in litigation, and the title yet undetermined by the probate judge holding them in trust for the occupants of the town site of Golden City, under the pre-emption laws of Congress, for the use of the occupants thereof, and he was thereby charged with notice of the litigation and its results. The probate judge found Smith entitled under the law, and his deed to Smith was nor only a recognition of this title, but a denial of Loveland’s claim to the premises. Loveland’s right of action, if any he had, then accrued.

In the absence of fraud, an action seeking to enforce the trust claimed to be created by the agreement, would have been barred under the provisions of section 1683, after five years. The allegation of fraud, however, brings the action within the provisions of section 1682; and the statute commenced to run upon the discovery of the facts constituting the fraud.

As before said, the existence of two principal facts are claimed as rendering the deed to the defendant Smith fraudulent and void. (1) The defendant Smith filed no statement claiming the premises within the ninety days, as required by the act. (2) He was not an occupant of the premises or the bona fide owner of improvements thereon. Neither were matters susceptible of concealment; the first was a matter of record, and involved its inspection; the second was of easy ascertainment, involving an examination of the premises. The right he claimed under the agreement, the notice of the litigation, his knowledge of the deed, should have put him upon inquiry. An inspection of the record and an examination of the premises, would have disclosed his right of action. *159It was the duty of purchasers to examine Loveland’s title. The very terms of the agreement put purchasers from Love-land upon inquiry, as to what action had been taken by the probate judge respecting' the premises in dispute. The probate judge’s records and files were accessible and open to inspection. An examination would not only have shown the result of the litigation, but the facts constituting the fraud. Not only this, but the plaintiff in this case had actual notice of the adverse claim of Smith by the commencement of the action of ejectment in May, 1873, five years prior to the commencement of this suit. In fact, the discovery of the fraud three years prior to the commencement of the suit, is impliedly, if not directly, admitted by the bill, but its effect is sought to be avoided by the allegation that the plaintiff considered that the facts constituted a good defense at law.

In answer to this it is sufficient to say that ignorance of the law respecting the remedy which it provides will not prevent the.statute from running. Independently of statute, courts of equity would not allow the statute to run in the case of fraud until after the discovery of the facts constituting the fraud. Ang. Lim. Secs. 183-185 et seq.; Troupe v. Smith, 20 Johns, 33, section 1,682, is but an enactment of this equitable doctrine, with a fixed period of limitation.

But whether it be enforced as a statutory provision or an • equitable rule, it is subject to the same rule of diligence touching the discovery of the fraud. Courts of equity will not interfere if a party slumbers on his rights or the means of detecting the fraud. Ang. Lim. Sec. 190; Young v. Cook, 30 Miss. 330; Johnson v. Johnson, 5 Ala. 103; Veazie v. Williams, 3 Story, 530; McClure v. Ashley, 7 Richardson’s Eq. R. 440.

The presumption is that if a party affected .by any fraudulent transaction or management, might with ordinary care and, attention» have seasonably detected it, he seasonably had actual knowledge of it. Ang. Lim. 187, and cases cited.

In Farnham v. Brooks, 9 Pick. 212, it was said that full possession of the means of detecting a fraud, was the same as knowledge.

*160Loveland and his grantees cannot'be permitted to sleep on their rights for eight years, either with knowledge of the fraud, or with the means of its detection within their power by the least ordinary diligence.

The action must be regarded as barred by the statute, and the judgment of the court below is affirmed with costs.

Affirmed.