42 N.J. Eq. 39 | New York Court of Chancery | 1886
The bill states that in 1862, after the bank was incorporated, it appointed the defendant its cashier, and that he assumed the duties and emoluments of the office accordingly, and took into his custody all the moneys, securities, papers, books and accounts of the bank, and so became bound to account to the bank therefor ; that he continued to hold the office continuously for twelve years; that during the whole of that time, and while he was
The complainants’ counsel insist that the plea is not good because it sets up the statute of limitations as a bar to a claim that the defendant fraudulently obtained the complainants’ money and fraudulently concealed the fact that he had done so up to a period within six years before the time of filing the bill. The plea of the statute is a good plea in equity as well as at law. Where the complainants’ claim is based upon a fraud which the defendant has concealed uxrtil sufficient time has run to enable him to set up the statute, the statutory period will not, in equity, be considered to have commenced until the fraud is discovered or until it would have been discovered had reasonable diligence been exercised. Todd v. Rafferty, 3 Stew. Eq. 254; Story Eq. Jur. § 1521. It is not so at law. Somerset Freeholders v. Veghte, 15 Vr. 509. Direct trusts, as between trustee and cestui que trust, are not reached by the statute. But the case in hand is not one of those to which the statute is not applicable. The alleged fraud was in the embezzlement by the defendant, while acting as cashier of the complainants, of their money entrusted to his hands. The claim against him arising therefrom is one cognizable at law. If so, the statute applies to it in equity. Kane v. Bloodgood, 7 Johns. Ch. 90; Ang. on him. § 178. The complainants’ counsel insist that in the case of Williams v. Reilly, 14, Stew. Eq. 137, it was held that one who was sued in this court for dereliction and malfeasance in an office similar to that held by the defendant, could not avail himself of the statute of limitations. In that case, the suit was indeed against the defendant for dereliction and malfeasance in the office of treasurer of a savings bank, and it was held that the statute of limitations was not a defence to the bill; but it was so adjudged on the ground that he was a member of the board of managers of the bank, and the object of the bill was to charge him, in the interest of the depositors, with dereliction of duty as a manager holding an
The plea in this case is what is known as an anomalous plea, because it is partly affirmative and partly negative—affirmative in setting up the statute, and negative in denying the fraud. Story Eq. Pl. § 802 ; Lang. Eq. Pl. § 101. And that is the form of a plea of the statute in such a case. Mitf. Eq. Pl. 269 ; Story Eq. Pl. § 754.
It is a rule that anomalous pleas must always be supported by an answer in subsidium as to the allegations which constitute the replication and as to all charges of evidence, if any, in support of such allegations. Lang. Eq. Pl. § 101; Pea. Pl. in Eq. 171. The plea in this case is not accompanied by an answer. No objection is made, however, to it on that account. On the subject of concealment, the bill merely alleges that the defendant, while cashier and president, concealed the fraud, so that the complainants did not discover it until 1881, and it prays answer without oath. A mere unsworn general denial would therefore have answered the call of the bill in respect to the alleged concealment. The object in requiring the answer is to obtain a discovery which may prove a case which will displace the bar. But where the bill contains a general charge of fraud merely, with no specification, and waives answer upon oath, discovery in aid of the complainants’ charge of fraud is practically and substantially waived also. In view of these considerations, and of the fact that no objection is made on the ground that the defendant has not answered, the requirement of the rule, may in this case very properly be disregarded. The plea is good in form and substance.