Way v. Cutting, 20 N.H. 187

Way v. Cutting

20 N.H. 187 | Superior Court of New Hampshire | 1849

Gilchrist, C. J.

The several exceptions taken in the court below, and reported in this case, appear to resolve themselves into one question.

The general principle of natural justice and of positive law that precludes a party from deriving a benefit from his own wrong, has from an early period been applied by courts, both of law and of equity, to the construction of the statutes of limitation. It has accordingly been repeatedly held that a party shall not be protected by the lapse of time during which he has, by his own fraud, prevented the party whom he has injured from asserting his rights at law; and that he against whom the statute bar is interposed may avoid it by showing that he has been kept in *191ignorance of Ms claim till within ^htL-'period limited by law for bringing Ms suit, by tbe fraudulent practices of tbe party setting up tbe defence.

The case of South Sea Company v. Wymondsell, 3 P. W. 143, was a bill for relief against frauds in a contract between the defendant and the plaintiff’s cashier. The statute of limitations was pleaded, and it was decided that the plaintiffs might amend their bill by charging that the fraud was discovered within six years. The case of Lord Warrington was cited, in which precisely the same course was pursued to avoid the plea of the statute of limitations. These were cases in equity, wdiere, instead of special replications to meet the defence set up, the practice of the court is to give leave to charge the matter of avoidance by way of amendment to the bill.

In the case of Bree v. Holbeck, Doug. 656, the precise point did not arise, but the dictum and the reasoning of Lord Mansfield have since that time been generally adopted, and the case may be considered a leading one upon the doctrine in question. The replication alleged that the defendant, holding a paper purporting to be a mortgage to his intestate, sold it to the plaintiff as and for a good and genuine mortgage ; whereas, in truth, it was a forgery, and the fact was not discovered by the plaintiff till within six years. The replication was held bad upon demurrer, because it alleged no fraud on the part of the defendant. Ilis lordship said: “There may be cases which fraud will take out of the statute of limitations. But here every thing alleged in the replication may he true, without any fraud on the part of the defendant. He finds a mortgage among the papers of his intestate, and parts with it bond fide as a marketable commodity. If he had discovered the forgery and then got rid of the deed as a true security, the case would have been very different.”

The First Mass. Turnpike Corporation v. Field, 3 Mass. 201, was assumpsit upon a contract of the defendants to *192perform certain^S£^rfor the plaintiffs, wbicli was not done in the manner agreed. To a plea of the statute of limitations, the plaintiffs replied, that the defendants so executed the work that the contract appeared to be completed ; and they falsely affirmed that it was completed, but that in fact the work was not done according to contract, and the fraud was not discovered till within six years next before the commencement of the action. TJpon demurrer, the replications were held good, and the general principle affirmed that where the cause of action, though it have actually accrued, has, through the fraud of the defendant, been kept from the plaintiff’s knowledge, the statute does not begin to run till after the existence of the injury and claim have been made known to him.

These cases seem to be sufficient without adverting to many others which have been decided, to illustrate the general principle. No one of them appears to suggest the notion that the fraud by which the cause of action is concealed from the plaintiff need be other than that which caused or attended the original injury itself, in order to retard or prevent the operation of the statute. All that was said in the case in Peere Williams was, that the plaintiffs might amend their bill so as to charge that the fraud was first discovered to them within six years next before the commencement of their suit. There, fraud in the contract was the gravamen, and no other was pretended to have been made use of by the defendant except mere silence and inaction, by which the original fraud was kept on foot. The false averment by which the party was surprised had vigor enough to prevent for a time the detection of the wrong. The court evidently proceeded upon the ground that nothing more was needed to retard the operation of the statute, as a bar to the action, than the defendant’s persistence in the secrecy by which the original fraud was continually refreshed.

Such is the present case. The deceit by which the *193plaintiff was at first wronged, sufficed, through the silence and secrecy of its author, to keep him for a time in ignorance of the wrong. His cause of action was, therefore, most obviously concealed from him by the act of the defendant, having its beginning in the false representation by which he was induced to enter into the bargain, and continued and kept alive by the secrecy which followed. ,Ve are, therefore, of the opinion that the position assumed by the defendant, that some new act of fraud and concealment, beside the representation made at the sale, must be proved upon him in order to deprive him of the protection of the statute, is not supported by authority or sound reason.

Neither is he relieved by the fact that the plaintiff possessed the means of testing the truth of the representations which were made, and of detecting the fraud by which he had been deluded. Fraud is sometimes protected by its very boldness, and gains credit by the freedom with which it intrusts its victim with the means of detection.

It seems to us that the right which the buyer has to rely upon the representations of the seller, as to the property which is the subject of negotiation, would be of but little value, if the latter were bound to tell the truth only in, those cases in which the other party has no means of detecting the falsehood. And the true question is, whether the seller has in fact deceived the buyer by false representations, and not whether the latter might, by the exercise of any amount of diligence, under the promptings of a strong suspicion, have avoided the snare that was laid for him.

In the case of Farnam v. Brooks, 9 Pick. 212, cited by the defendant in argument, there was no pretence that the defendant had deceived or endeavored to deceive the plaintiff or the intestate by any false representations, or by willfully withholding material information.

*194The first question was, whether he had so fully understood and discharged his duty, as a trustee or an agent dealing with his principal, as to disclose all that he was legally bound to disclose respecting the property he was purchasing of his principal. The other question was, whether, upon the assumption that he had erred in this particular, the fraud which the law in such cases imputes to him is such as prevents the operation of the statute of limitations. In maintaining the negative of this question the learned judge used expressions which, taken in connection with the facts of the case, can scarcely mislead any one, but which were not intended as general propositions.

When the judge intimated, in that case, that the means of detecting the fraud was the same thing as the actual knowledge of it, he must have intended such means as the parties in that ease had possessed — where all the sources of information which the defendant possessed had been submitted, and examined in fact by competent persons, to the satisfaction of all concerned. In short, the “means of knowledge,” intended by the judge, are the same means possessed by the party charged with the fraud — means which place the two parties upon equal ground, which is not the case where the seller has quieted the vigilance of the buyer by false assertions, and diverted his attention from inquiries upon which he might otherwise have been put.

We are, therefore, of the opinion that the exceptions cannot prevail, and that there should be

Judgment on the verdict.