Stivens v. Summers

1 Ohio Law Rep. 448 | Ohio | 1903

The record does mot suggest that the circuit court was unmindful of the doctrine of Jamison v. McNally et al, 31 Ohio St., 395, since its conclusion of law concedes that under our statute a deed may, at the suit of a creditor of the grantor, be set aside for constructive as well as for -actual fraud, and that these deeds were constructively fraudulent. Upon that point the briefs of counsel are in accord.

The proposition by which the judgment of the circuit court must be tested is stated by it in its conclusion of law: “That the plaintiff’s cause of action is barred by the statute of limitations.” The pertinent provision of the statute is in Section 4983, wMch defines the actions which may he brought within four years, that lastly stated being “'an action for relief on the ground of fraud, hut the cause -of action in such case shall not be deemed to have aconied until the discovery oí the fraud.” Of the facts found the following are brought imito prominence by the opposite views of counsel; the deeds were filed for record with the recorder of the county in which the lands are situated more tiran four years before tlie bringing of the action; the deeds were only constructively fraudulent; until within four years from the -bringing of her action the plaintiff 'did not have -actual notice of the execution of the deeds, nor did she prior to that time actually discover any of the facts which made the deeds fraudulent. The fraudulent deeds having been executed more than four years before tire beginning of the action, the precise question is whether it is within -the provision that “the cause of action in such -ease shall not be deemed to have accrued until the discovery of the fraud.” We- are not favored with the opinion of tire circuit court, but counsel urge that it properly concluded that the case is xuot within the saving clause of the statute because -the deeds were only constructively fraudulent, and because they were filed for record more than four years before -the action was brought. The numerous cases cited in support of this view will be found in the reporter’s abstract of the briefs. It is not necessary to analyze them separately. Most of them obviously depend upon provisions not found in our statute, or upon facts not found in the -present case. A statute providing that in 'an action for relief on the 'ground of fraud the cause of action shall not be deemed to have accrued until the discovery of the -fraud distinguishes itself from one which suspends the bar of the statute because of the fraudulent concealment of the cause of action; and this case involves no consideration arising out of the relation of trustee and beneficiary. When not influenced by peculiar provisions of recording acts the view generally taken is that the registration of a deed does not operate retrospectively so as to affect the holders of antecedent rights (Pomeroy Equity Jurisprudence, Secs. 656-8). This view has been consistently maintained in -this state (Leiby v. Wolf, 10 Ohio, 83, and cases following it; Sharp v. Myers, 1 Circ. Dec., 374; 2 C. C. R., 82, approved by this court in affirming the judgment). If we felt at liberty to depart from this doctrine -and to assume that the recording act affords a refuge to a fraudulent grantor or his fraudulent grantee -another 'difficulty would be encountered. Assuming that the plaintiff, was charged with knowledge of these deeds when they were left for record and of the fact that, they were by way of gift, knowledge of essential elements 'of fraud would' still 'be wanting. Such a deed by one who- retains property fully sufficient to discharge his debts is not a fraud iiponi his creditors. Since the action could not be maintained but for the facts found respecting the financial condition of the grantor at the time of making the deeds, and since the record 'did not' disclose -those facts, it can not be said -that the fraud was 'discovered until the plaintiff, from a different source, -received notice of such facts. A deed fraudulent as to creditors may recite the payment -of a fnl-1 'and valuable consideration by the grantee, 'and an examination of the record would not d-iselose to a -creditor o-f the grantor -that a cause of action has accrued in his favor. I.t wo-uld inform 'him that the laud conveyed can not be subjected to the payment of his claim because a valid title thereto has become vested in a purchaser for value. In such case it can not be said that the fraud -has- been discovered until the creditor has notice of the falsity of the recitation as to the consideration. It seems, therefore, that the judgment of the circuit court is not justified by the fact that the deeds were filed for record more th-an four years before- the action was brought. The apposite conclusion involves an erroneous view of the statute relating to -the recording of deeds, 'as well as -of that by which actions of this character are limited.

Hor is the conclusion of the circuit court justified by its finding that these deeds were -only constructively fraudulent. Usually, and in these cases always, the consequences of fraud are not determined by its character. In order that an act be constructively fraudulent it is essential that it would, either in the- particular case or in common experience, lead to consequences equivalent to those following actual fraud. By the act' of the debtor these lands h'ad been placed beyond the reach of an execution at law. The creditor’s resort to equity being thus made necessary, neither the principles nor the statutory provisions involved suggest that-his rights may he affected by -considering whether the act of the debtor proceeded from evil design or from am innocent mistake respecting his financial condition when the deed of gift was made. The language of the limiting section of the statute and of the saving clause obviously comprehends- constructive- as well as actual fraud. If being admitted that constructive frau-d is included in the provisions of the statute by which the- right of action is defined -amid) in that by which it is limited, an exception should not by interpretation be imported into that by which it is saved. The controlling fact found by tire circuit court is that the action was brought within four years after the actual discovery of the fraud. It is gratifying to believe that long and uniform practice has prepared the bar of tire state for these conclusions.

Judgment reversed and judgment for plaintiff.