160 Va. 392 | Va. | 1933
delivered the opinion of the court.
The appellant, who was the complainant in the court below, instituted a chancery suit against W. W. Marsden and H. W. Marsden, the purpose of which was to establish the amount due upon a note of $1,000, and to enforce a deed of trust which secured said note, by selling a certain parcel of land for the satisfaction of the debt. The defendants demurred to the bill and amended bills, but the demurrer was overruled. They then filed a short joint answer in which all of the allegations in the bills were denied. Evidence was taken and the cause heard upon the merits. The trial court denied the prayer of the bills and dismissed them by a decree of August 26, 1931.
There is no conflict in the material facts which are as follows: On October 1, 1907, J. J. Burke and wife and L. C. Garnett and wife being the former owners of the tract of land now in controversy, executed their note for $1,000, payable to the L. E. Mumford Banking Company, six months after date, and a deed of trust upon the land to secure the payment of the note. The note matured on April I, 1908. On February 12, 1912, Burke and wife and Gar-
After the original bill had been filed the facts last above stated came to the knowledge of counsel for the appellant and he filed two amended or supplemental bills of complaint in which the new matter was alleged and it was further alleged that while the title to the property was in the name of W. W. Marsden it in fact belonged to H. W. Marsden and that W. W. Marsden never at any time had any interest in it. It was also alleged that through the fraud of the defendants, Sadler had been prevented from foreclosing the deed of trust until after it was barred by the twenty year statute of limitation. The joint answer of H. W. and W. W. Marsden was filed after the amended and supplemental bills had been filed.
On motion of counsel for complainant, it was sought to make Mrs. Ella M. Marsden, wife of H. W. Marsden and one of the grantees in the deed from W. W. Marsden, a party defendant to the suit but the trial court by its decree, over
The appellant contends that the decree is erroneous and that he' is entitled to have the deed of trust enforced to satisfy his debt. He contends that H. W. Marsden was and is the true owner of the property; that he bought it and had the title placed in his brother’s name for the sole purpose of defeating his creditors who had claims against him at the time the title was placed in the name of W. W. Marsden and that if this be true, H. W. Marsden is now estopped by his own fraud to plead the statute of limitations to the deed of trust. He further contends that if W. W. Marsden was the true owner, he was guilty of such fraud that he too would be estopped to plead the statute of limitation against the deed of trust.
No formal plea of the statute of limitation was filed in the cause. It was raised by the demurrer which we have seen was overruled. It was not raised in the joint answer which was very brief. We think it pertinent to quote it at length. It is as follows: “For answer to the plaintiff’s bill the defendants, W. W. Marsden and H. W. Marsden, deny each and every allegation in the bill filed in this cause except those referring to matters of record in the clerk’s office of Mathews county. W. W. Marsden and H. W. Marsden.”
The defendants contended that the statute of limitation (Code, section 5827) barred the enforcement of the deed of trust; that W. W. Marsden was the true owner of the property ; that when the statute barred the deed of trust, W. W. Marsden owned the property free of any lien and being the
The material facts have been stated and they are supported by the uncontradicted evidence which was introduced. H. W. Marsden, when testifying in the cause, did not deny a single allegation contained in the bills and he did not deny that he had admitted to witnesses that he had burned the note. He did not deny that he had on several occasions declared to witnesses that he was the real owner of the property and that he had stated to witnesses that he had bought the property and placed the title to it in his brother’s name in order to defeat his own creditors who had valid claims against him at that time. He testified that he had bought the property from his brother, W. W. Marsden, and had turned over to him his (H. W. Marsden’s) interest in his mother’s estate, valued at about $1,000 in payment for it and that the property was worth around $5,000.
W. W. Marsden, who is personally before the court by reason of the answer he filed in the cause failed to testify.
Adverting to the inception of the transaction, the record does not disclose any of the circumstances surrounding the delivery of the deed to W. W. Marsden by Burke and Gar-nett. These circumstances might have shed light upon the transaction and were peculiarly within the knowledge of W. W. Marsden but he has preferred not to testify in the cause. If W. W. Marsden was the true owner he has failed to explain why he permitted his brother H. W. Marsden to exercise all of the acts of control and ownership over the property, paying the taxes and interest and using and enjoying the property presumably without paying rent for some sixteen years.
Unless W. W. Marsden and H. W. Marsden are estopped by their own fraud to plead the twenty year statute of limitation as a bar to the enforcement of the deed of trust, it is clearly unenforcible and the decree of the lower court
The fraud' of H. W. Marsden has been clearly proven. The evidence conclusively shows that he, by his false promises and representations made to the appellant with the intent to deceive him, induced him to delay action with the result that appellant lost his right to enforce the deed of trust, which no doubt he would have enforced to collect his debt, within the statutory period, had he not been misled and prevented from so doing by the said promises and representations.
Counsel for the defendants in their brief concede that fraud will repel the bar of the statute of limitation, for they say “* * * the twenty year limitation is an absolute bar unless extended in the manner provided in this section (Cohen v. Jenkins above), or unless repelled by fraud which is properly alleged and proved by clear, positive, cogent and convincing evidence * * In addition to this, the law seems to be well settled that where a debtor, by his fraudulent acts and representations, has misled the creditor and induced him to refrain from instituting proceedings to protect his rights, until after the bar of the statute has fallen, the debtor is estopped to plead the statute of limitations as a defense. In 17 R. C. L. page 884, this is said:
“A debtor has frequently been held to be estopped from relying on the statute as a defense where, by acts of a fraudulent character, he has misled the creditor and induced him to refrain from bringing suit within the statutory period. And if a defendant intentionally or negligently misleads a plaintiff by his misrepresentations, and causes him to delay suing until the statutory bar has fallen, the defendant will be estopped from pleading the statute of limitations. And the prevailing view seems to be that the doctrine of estoppel applies where the creditor, before the debt is barred, is
See, also, 37 C. J., page 725, and Culpeper Natl. Bank v. Tidewater Improvement Co., 119 Va. 73, 89 S. E. 118.
Of course, we do not intend by what is here said to hold that an oral promise will remove the bar of the statute of limitations.
Our conclusion is that H. W. Marsden, by his own fraud, has precluded and estopped himself from relying upon the statute of limitations as a defense in this cause, and if he were and is the real owner of the property and W. W. Marsden had no interest in it, the deed of trust is still a lien and the property could be sold to satisfy it.
If W. W. Marsden were the real owner, is he estopped to rely upon the statute of limitations by reason of the fraud of H. W. Marsden, his brother? In other words, did W. W. Marsden participate in the fraud which his brother committed ?
The record discloses circumstances which strongly tend to incriminate W. W. Marsden. He knew that the title to the property was in his name because he made a conveyance of it; he knew that the deed of trust in question was a lien upon the property, because he assumed the payment of the debt secured thereby; he knew that Sadler held the note, because his letter shows that he refused to endorse a renewal; he knew that the deed of trust would soon be barred because the records of the clerk’s office disclosed this fact; he knew that his brother was living on the land,
So far as the record discloses, W. W. Marsden was never in Mathews county and has never seen the property. It would be highly improbable that any person would buy a tract of land without first informing himself about its value and the purposes for which it might be used and this is usually accomplished by a personal inspection and view of the premises. In addition to the circumstances narrated, W. W. Marsden, though personally before the court by his general appearance and the filing of an answer, knowing full well that the appellant had charged him with fraud, failed to testify in the cause or deny the fraudulent allegations other than the general denial contained in his brief answer.
All of these circumstances tend strongly to show that W. W. Marsden was a party to the fraud. They are certainly sufficient, in so far as the peculiar facts of this case are concerned, to establish a prima fade case of fraud against him, which ordinarily would require him to show his good faith in the transaction. From the circumstances, several distinct badges of fraud appear and for them to go unchallenged by him leads one to believe that he and his brother were guilty of a fraudulent conspiracy, by which the appellant was defrauded of $1,000. The final result of it all, if the appellant is not permitted to enforce the deed of trust, is that W. W. Marsden has obtained a $1,000 interest in his mother’s estate without cost to him; H. W. Marsden has
The court is not unmindful of the rule which requires one who alleges fraud to affirmatively prove it by clear, strong and convincing evidence. It is not intended by what is said in this opinion to change or modify that rule in any respect, but when the evidence in a case, involving charges of fraud clearly shows a number of badges of fraud, such as those shown under the peculiar facts and circumstances of this case, which are sufficient when unexplained, to make a prima facie case of fraud, if the defendant fails to prove his good faith in the transaction, it will ordinarily be set aside. If the creditors of H. W. Marsden had instituted suit against W. W. Marsden to set aside the deed made conveying the property to him, on account of fraud, and such circumstances as appear here had been shown in such a suit, and Marsden had failed to prove his good faith in the transaction, or" failed to explain the incriminating circumstances, there could be no doubt that a court of equity would have set it aside.
This court held in Hickman’s Ex’r v. Trout, 83 Va. 478, 3 S. E. 131, 136, that “Certain circumstances are often referred to as indicia of fraud, because they are usually found in cases where fraud exists. Even a single one of them may be sufficient to stamp the transaction as fraudulent. When several are found in the same transaction, strong and clear evidence will be required of the upholder of the transaction to repel the conclusion of fraudulent intent.”
See also Lipman v. Norman Packing Co., Inc., 146 Va. 461, 131 S. E. 797, where the same principle is applied.
No doubt, many pertinent facts and circumstances, which would have shed much light upon the transaction
Our conclusion is that the defendants, W. W. Mars-den and H. W. Marsden are precluded and estopped by their own fraud from relying upon the statute of limitation contained in Code, section 5827, as a bar to the enforcement of the deed of trust sought to be enforced in the bills of complaint filed in this case. We are of the opinion that the trial court erred when it refused to implead Mrs. Ella M. Marsden as a party defendant. Of course, her rights in the premises, if any she has, cannot be adjudicated at this time. The cause will be remanded to the circuit court with the direction that she be made a party defendant and given an opportunity to establish her rights, if any, in the subject matter of this suit. If she succeeds in establishing any rights or interest in the property, then only the interest therein of W. W. Marsden and H. W. Marsden may be sold under the deed of trust to satisfy the debt due the appellant, but if she fails to establish any interest in the property, the entire property may be sold for the purpose of satisfying the appellant’s debt.
Reversed and remanded.