In Boyd v. Blankman, 29 Cal. 19, it was held that in such case the sale was not void, but the administrator could be held as trustee of the title.Summary of this case from Gray v. Quicksilver Mining Co.
[Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] Appeal from the District Court, Seventh Judicial District, Sonoma county.
Plaintiff recovered judgment, and defendant appealed.
W. Henry Jones, in pro per., for Appellant.
George Pearce, for Respondent.
JUDGES: Sawyer, J.
This action was brought to establish and enforce a trust in favor of the plaintiff, as the grantee and assignee of Mary Hina, the heir at law of Jack Hina, deceased, as to certain premises, that the defendant purchased at his own sale as administrator; and as incidental to the relief sought in respect to the alleged trust, the plaintiff prayed for an account of the rents and profits, and for the delivery of the possession of the premises.
The mortgage executed by Jack Hina in his lifetime, which it is alleged the defendant fraudulently procured to be assigned and foreclosed, and the sale and conveyance of the premises which it is alleged were fraudulently made for the benefit of the defendant, may be dismissed from consideration except so far as those matters bear upon the question of fraud in procuring the order of sale from the Probate Court, as the legal title, which was then in Mary Hina, was unaffected by those proceedings, because she was not made a party to the foreclosure suit. The questions we shall first consider, grow out of the fact charged by the plaintiff, and found by the Court below, that the defendant, while acting as one of the administrators of Jack Hina, deceased, purchased the premises per interpositam personam at his own sale, which he made under the order of the Probate Court. It is alleged in the complaint that the proceedings in the Probate Court, for the purpose of procuring the sale, and the sale itself, and all proceedings connected therewith, are wholly fraudulent and void. The plaintiff's counsel, however, contends that the sale is void only at the instance of the cestui que trust --that is to say, that the sale is voidable. His position is that Blankman, in selling the property as administrator, acted as the trustee of the heir; that his sale to himself did not discharge the trust; that the heir, as the cestui que trust, possessed the right to affirm or disaffirm the sale, and that such right was incident to the equitable estate which she possessed in the property. The defendant's position is that the sale was voidable only at the election of the heir, and coupled with that, is the further position that by the sale she became divested of every assignable right or interest in the land.
Effect of purchase, by an administrator, at his own sale, made by order of the Probate Court, of land belonging to the estate .
We may say here, that we cannot assent to the latter position of the defendant. If it is admitted that anything passed by the sale, it must be conceded that the legal title passed; and after the administration is closed, it would be difficult to charge the defendant as trustee in respect to the real property, unless he was vested with the legal title; but in regard to the equitable title, we are of the opinion that Mary Hina, by her deed to the plaintiff, gave evidence of her determination to disaffirm the sale; that at the time of its execution, she held the equitable title as fully as before the sale, and that by her deed she conveyed such equitable title to the plaintiff. And it admits of serious doubt whether the sale, confessedly in contravention of the rules of equity, even temporarily " set afloat" her equitable interest, so that an act of disaffirmance was necessary in order to attach it again to the property. There are strong reasons for holding that upon a sale of this character, the relation of the cestui que trust is not, by that fact alone, shifted from the property to the proceeds of the sale, but that, in order to cut her off from any recourse upon the land, and restrict her to the proceeds, there must be either some positive act of affirmance of the sale, or such an acquiescence in it, manifested by the receipt of the proceeds, or by a delay beyond the period fixed by the Statute of Limitation, in commencing proceedings to set it aside, or in some other manner, that the Court will deem it equivalent to, and presumptively a ratification of the sale. By her disaffirmance, she elects to have the legal title held as it was before the sale, and have the property remain subject to all the trusts with which it was formerly charged. In the absence of a disaffirmance, that is to say, of an assertion of her interest in the land within a reasonable time, the equitable interest of the cestui que trust is presumed to have become united to the legal title, in the hands of the trustee holding adversely to the cestui que trust. An illustration may be found in the case of a will, that gives to any legatee a portion of the estate of the testator, and to another legatee some of the first legatee's property. The will, of itself, does not divest the first legatee of any title to his own property, but his affirmance of the disposition made by the will, manifested by his election to take under it, is held in equity to pass his interest in what was his own property, to the second legatee; and if he relies upon his right, independent of the will, it cannot be said that he was at any time even temporarily divested of the title to his property that was attempted to be bequeathed. The right of election in the cestui que trust to affirm or disaffirm the sale, must have for its support some interest in the premises sold. He cannot acquire the equitable title by mere assertion, nor can it with much show of reason be said, that by indicating his election to have the legal title restored to its original status, he acquires any right or title he did not possess before making the election.
Sale of the trust estate and purchase of same by the trustee who holds the legal title .
In a case where the trustee holds the legal title, and the trust is to be executed by a sale of the property for money, and the trustee becomes the purchaser, and holds in his hands the money representing the purchase money, ready to be paid over to the cestui que trust, the money evidently is not the s money of the cestui que trust, as it would be considered had the sale been properly made to a third person, and it does not become his property until he elects to affirm the sale and receive the money; and if it is true that the purchase by the trustee divests the cestui que trust of his equitable interest in the land, then it follows that there is a time--the time intervening between the sale and the election by the cestui que trust --that he owns neither an interest in the land nor the money arising from its sale. Instead of saying, in the language of many of the cases, that the sale, as between the trustee and cestui que trust, is good unless the cestui que trust elects to avoid it, is it not more accurate to hold that the sale will become good, unless the cestui que trust elects to avoid it, before its ratification may be presumed from the lapse of time or other sufficient circumstances?
Is the purchase, by an administrator of the land of the estate, at his own sale, void, or is it merely voidable?
Is the sale void, or is it merely voidable? The doctrine that a purchase of the trust property, by a trustee for sale, made at his own sale, whether the purchase is affected by himself or through the interposition of another person, is voidable at the election of the cestui que trust, is as firmly established, and is supported by as clear and satisfactory reasons, as any rule in equity. Both parties hold that it was only voidable, and yet the question is involved in much perplexity, and when tested by the rules applicable to such cases, some doubt still remains. An administrator is the creature of the statute. He has no existence independent of the statute, and in taking upon himself the duties and trusts created by it, he assumes them with all the clogs and restrictions the statute has attached to the office. Those restrictions may be other or greater than those controlling persons acting under private appointment, in a capacity very analogous to that of an administrator, but the person accepting the trust, takes it not only with the powers, but with disabilities incident to the position. Among the restrictions is that contained in section one hundred and ninety-three of the Probate Act, that " no executor or administrator shall, directly or indirectly, purchase any property of the estate which he represents." This provision cannot be said to be in affirmance of the common law, for at law it was held that the legal title did pass by the purchase of the trustee, effected through the agency of a third person at the trustee's sale of the property, and it was only in a Court of equity that the sale was held not to pass the title. ( Jackson v. Van Dalfsen, 5 John. 43; Davoue v. Fanning, 2 John. Ch. 252.) Regarding the section as creating a personal disability to take property--as depriving him of the power and capacity to receive and hold the title for any purpose, it would seem impossible to escape the conclusion that the sale would be absolutely void. A conveyance made by the administrator to himself is ipso facto void, without regard to section one hundred and ninety-three, for it bears its own invalidity upon its face. But the conveyance to a third person after a sale to him, and a confirmation of the sale, although secretly made for the use of the administrator, gives such person a prima facie title to the land, and the invalidity of the title is made to appear, upon the fact being ascertained and determined in the proper Court, that the purchase was made by the administrator per interpositam personam. Before that fact is determined there would seem to be but little if any doubt that the third person who had taken the title for the administrator could pass it to a bona fide purchaser for a valuable consideration, without notice of the fraudulent purchase. It is true that if the sale is held to be absolutely void, he could not pass the title to an innocent purchaser; but the rules of equity, which were devised to protect the bona fide purchaser as well as the cestui que trust, would forbid that result, if it could be avoided consistently with the statute. The grantee of the purchaser at the administrator's sale, after having made all the inquiries that could be required of a prudent man, might be at the mercy of a fraudulent conspiracy between the persons interested in the administrator's sale, resulting in the proof that the sale, that had in truth been made to the purchaser named, was in fact made to the administrator, through the intervention of the nominal purchaser. On the other hand, the cestui que trust, if the administrator in fact purchased at his own sale, has several remedies which may afford him adequate relief. He may have the sale set aside and the administrator declared a trustee; he may sue upon the administrator's bond, or he may proceed to recover the penalty of double the value of the land sold, according to section one hundred and eighty-nine of the Probate Act.
A conveyance cannot be said to be utterly void, unless it is of no effect whatsoever, and is incapable of confirmation or ratification. The acceptance of the purchase money, with full notice that the administrator was the purchaser, per interpositam personam, would unquestionably amount to a ratification of the sale. The Court would not countenance a partial disaffirmance of the sale, that would enable the cestui que trust to hold on to the purchase money, and at the same time recover the land. ( Terrill v. Auchauer, 14 Ohio, 80.)
It is said by Mr. Chief Justice Spencer, in Anderson v. Roberts, 18 Johns. 528: " Whenever the act done takes effect as to some purposes, and is void as to persons who have an interest in impeaching it, the act is not a nullity, and therefore, in a legal sense, is not utterly void, but merely voidable. Another test of a void act or deed is, that every stranger may take advantage of it, but not of a voidable one." It is not declared by the statute that the purchase by the administrator is utterly void, but if it is held that the prohibition against his purchasing amounts to that, in effect, it does not necessarily follow that strangers can allege that the sale is void.
The statutes of the 13th and 27th Elizabeth, and the statutes of the States having the same general purpose, declare that sales, etc., made to hinder, delay, or defraud creditors shall be absolutely void; and the cases both in England and the United States holding that those sales are void only at the instance of the parties injured, are too familiar and numerous tos require citation. In Greene v. Kemp, 13 Mass. 515, the purchaser of the equity of redemption attempted to set up and rely upon the statute declaring that mortgages, etc., tainted with usury, were " utterly void," for the purpose of defeating a recovery of the possession of the mortgaged premises by the mortgagee, who had foreclosed, but the Court held that the mortgage was merely voidable, and that as the defendant was a stranger to the mortgage transaction, and possessed no title in the land, but only a right to redeem, he could not rely upon that defence, and that only the mortgagor and those who may lawfully hold the estate under him could set up the usury. (See also Jackson v. Henry, 10 John, 195; Dix v. Van Wyck, 2 Hill, 522.)
An examination of the Probate Act will disclose the intent of section one hundred and ninety-three; and it is apparent that the object was not to declare who might or who might not become a purchaser of the property of the estate; but it was to prevent the property from being sold at a price less than its true value, which might be the case if the administrator, either directly or indirectly, prevented competition among the bidders, by entering into the market, either personally or by his agents, or if, with a view of purchasing, he was tempted to undervalue the property in his proceedings respecting the sale. The protection to the estate designed by that section can be as fully secured by permitting the parties interested in the estate to set the sale aside and have the administrator declared a trustee, as it would be to construe the section so as to allow strangers to impeach the sale, with the consequent risk to the bona fide purchaser, without notice, from the administrator's agent, of losing the premises he purchased, relying on the apparent regularity of the probate proceedings and the confirmation of the sale.
The terms void and voidable are not always employed, either in the statutes or reports, with strict legal accuracy, but we find no case which, when critically examined in connection with the character of the action and the facts of the case, holds sales made in the face of a prohibition, such as is found in section one hundred and ninety-three, to be utterly void. Many cases are found in which the cestui que trust or his heirs have sued to set aside the sale, or to have the trust established and declared, and in those cases the Courts have said that the sales were void, or were fraudulent and void; that is to say, that when the cestui que trust, or those claiming title under him, manifest their election to disaffirm the sale, and commence a suit to set it aside, the Court pronounces the purchase by the trustee at his own sale void as against the cestui que trust, and sets it aside and declares the trustee still a trustee, and orders a new sale, or affords such other relief as the exigencies of the case demand. Such was the case of Michoud v. Girod, 4 How. 503, which was a suit in equity, by certain heirs of a deceased testator, against the legal representatives of one of his executors, who was also one of the heirs, to obtain the complainants' just share of the estate of the testator. The two executors had purchased the property of the testator through an agent, and one of the executors purchased of his co-executor his half of the property; and the executor who held all the property having died, the suit was brought against his legal representatives. It will be seen that there were no " strangers" to the transaction among either of the parties. The complainants allege that the sales were fraudulently made, and the defendants denied fraud in fact or intention on the part of the executors, and alleged that the sales were judicially ordered and conducted, that the purchases were rightfully made for a fair price and at public auction. The Court held that it would not in such a case enter into an investigation as to whether there was fraud in fact, or whether the sale was for a fair price and made at public auction, but that upon its being made to appear that the trustee had purchased at his own sale, the Court would set the sale aside as fraudulent and void, as against the cestui que trust without further inquiry. The language employed by Mr. Justice Wayne in delivering the opinion of the Court is comprehensive enough to express that the sale was absolutely void, but that point was not involved in the case, for if the sale was held to be fraudulent and void at the instance of the cestui que trust, that disposed of all the questions arising upon that branch of the case, and, as we have remarked, there were no strangers to the transaction before the Court, but as plaintiffs, only some of the heirs of the testator and the representatives of other of the heirs; and as defendants, the representatives of one of the executors. That the Court did not intend to go further than to hold the sale voidable, appears from the fact that the rule as to the disability to purchase, cited from Sir Edward Sugden, is, in the language of the Court, " the rule as to persons incapable of purchasing particular property except under particular restraints, on account of the rules of equity," and according to those rules the sale was merely voidable; also from the fact that the cases cited by the Court, among which Davoue v. Fanning, 2 John. Ch. 252, is relied on as a " critical and able review of the doctrine, as applied by the English Courts of Chancery from an early day, and has been received with very few exceptions by our State Chancery Courts, as altogether putting the rule upon its proper footing," hold that those sales are merely voidable; and from the further fact that Court proceeded to set aside the sale complained of, which was a useless proceeding if it was absolutely void.
Hardy v. De Leon, 5 Tex. 211, appears, by a series of amendments, to have been converted from an action to recover the possession of the premises, into a suit in equity to set aside a certain tax sale and an administrator's sale, which had been procured by the fraudulent combination of the defendants. The plaintiffs were the heirs-at-law of De Leon, deceased, and the defendants were the administrators of De Leon and the purchasers at the tax sale and the administrator's sale. The person who, it was alleged, purchased and took the title for the administrator, and who still held the title, was made a defendant. No other person than the administrator and the purchasers were made defendants, and consequently the question whether the sale was absolutely void did not arise. On this subject the Court limit their remarks to one short paragraph, and say that " a person cannot be both buyer and seller at the same time; " and after stating the rule on that subject as given by Chancellor Kent, (4 Kent, 5 Ed. 438,) say: " It therefore was not error to instruct the jury, in effect, that a purchase made by a Sheriff or an administrator at his own sale is deemed fraudulent in law, and that a fraudulent sale is void. Prima facie, the sale so made was void, and there do not appear to be any circumstances in the case requiring the Court to consider the qualifications to which the rule may be subject." No statute is mentioned that prohibits such a sale, and the rule referred to was the rule in equity, and was not the rule at law, except in case where the sale was made by the administrator directly to himself, which would be void on its face, because there would be but one party to the nominal contract; and as the case called for no expression of opinion whether a sale by the administrator to himself, through the agency of a third person, was a complete nullity, we think the language, that the sale " is deemed fraudulent in law," was inadvertently used, the Court merely intending to declare that the sale was fraudulent and void at the election of the heirs of the deceased. That such was the meaning of the Court, is very manifest, for Chancellor Kent, in immediate connection with the passages cited by the Court, says: " It may be here observed, as a general rule applicable to sales, that where a trustee of any description, or any person acting as agent for others, sells a trust estate, and becomes himself interested, either directly or indirectly, in the purchase, the cestui que trust is entitled as of course, in his election, to acquiesce in the sale or to have the property re-exposed to sale, under the direction of the Court," etc.
We have very clear and pointed authority on this question in the case of Terrill v. Auchauer, 14 Ohio St., 80. It is provided by the statute of Ohio that " no Sheriff or other officer making the sale of property, either personal or real, nor any appraiser of such property, shall either directly or indirectly purchase the same; and every purchase so made shall be considered fraudulent and void." The defendant, who had been one of the appraisers of the land at a foreclosure sale, purchased the land, received a deed, and went into possession. The plaintiff, who claimed under a deed of trust, brought an action to recover the possession of the land. The Court say, in substance, that the mischief which the statute aims to prevent is obviously that which arises from fraudulent appraisements, made with a view to the individual advantage of the appraiser, when he becomes a bidder at the sale, and that the mischief is as effectually prevented by holding the sale to be voidable at the option of the parties interested, on a proceeding for that purpose, as it would be by holding it to be an absolute nullity; while the injurious consequences may be avoided which would often follow if the sale be held to be strictly void. We attach far less force to the argument of the Court in that case, drawn from the construction of the word " considered" in the clause of the act declaring that " every purchase so made shall be considered fraudulent and void," as indicating that the purchase shall be held void when so adjudged by the Court, in a proceeding to avoid the sale, than we do to the other reasons advanced by the Court, and particularly those supported by the cases cited--( The King v. The Inhab. of Hipswell, 8 B. & C. 471; Pearse v. Morrice, 2 A. & E. 94; and Anderson v. Roberts, 18 John. 529)--holding that the word " void" will be construed as " voidable" when the provision is introduced for the benefit of the parties only, and not for public purposes, and to protect those who are incapable of protecting themselves.
We are of the opinion that by holding the sale to be void at the election of the heirs or other persons interested in the estate, the mischief intended to be prevented by the statute will be obviated, and at the same time those who, in good faith and without notice of the constructive fraud of the administrator, have acquired the title through the agent who purchased the property for the use of the administrator, will be protected from losses, which otherwise could only be effectually provided against by an utter refusal to purchase property that had been sold at an administrator's sale. Fraud by an administrator in procuring an order of sale of land without necessity .
Actual fraud is alleged and relied on by the plaintiff, and he assigns as error the finding of the Court against him on that issue. The fraud complained of, stated generally, consisted in the administrator's having procured an order of sale from the Probate Court, when there was no necessity for it. He represented in his petition, filed December 18th, 1850, that the estate was indebted seven hundred and seventy dollars on the Biron mortgage, and about two hundred dollars for other debts, and that the personal property was insufficient to pay the debts and the expenses of administration. His final account, filed April 2d, 1851, shows that on the 23d of October, 1850, he received from Mary Hina eight hundred and ninety dollars on account of the estate. Instead of applying the money to the satisfaction of the mortgage, he purchased it in the name of Bidleman, for his own benefit. Doubtless, the interest for two months--one hundred and forty dollars--was paid out of the money paid to him by Mary Hina. So far as the order of sale is concerned, and the fraud imputed to the defendant in procuring it, without any necessity, it would make no difference whether he left the mortgage unpaid in Biron's hands or caused it to be assigned to himself or to some third person for his use, for he having the funds in his hands, that might and ought to have been applied to the satisfaction of the mortgage, he should have taken the necessary steps to have procured an order that the funds in his hands be applied to that purpose; and the wrong consists in the fact that he procured an order of sale to raise money to satisfy a debt which either had been paid or ought to have been paid out of moneys in his hands belonging to the estate. The administrator was without justification, so far as appears from the evidence, in procuring an order of sale to raise means to pay that debt. The payment might have been made soon after the receipt of the money in October, and at that time the payment of the mortgage and two months' interest, requiring eight hundred and forty dollars, would have left in his hands fifty dollars. It is not charged, nor does it appear in the case that any of the property of the estate except the sum of eight hundred and ninety dollars and the lot in controversy, came to the possession of the defendant, and we may presume that the articles included in the inventory under the items " stoves, chairs, and household furniture, two hundred dollars; trunk and clothes, one hundred dollars," remained in the possession of the widow of the deceased; and it is not alleged that they came to the defendant's hands. At the time of filing the petition for sale, there had been allowed the claims of appraisers and others, amounting to two hundred and ten dollars, and although the claims may seem exorbitant, yet they had been allowed by the Probate Judge as well as the administrator; and, as valid claims against the estate, they, together with administrator's fees, accruing and accrued, were required to be paid; and the administrator, not having funds in his hands sufficient for that purpose, was authorized and it was his duty to have raised the required funds out of the real estate by sale or otherwise. A sale of a small portion of the real estate would probably have been sufficient; but the Probate Court had jurisdiction, and we think the exclusive jurisdiction to determine what portion of the real estate should be sold for that purpose; and although the Court may have erred in that respect, its judgment cannot be revised or set aside in this collateral manner. The error can be reached only by an appeal taken directly from the order of that Court.
And the same may be said in respect to the order of sale, so far as it is founded on the alleged indebtedness on the mortgage, conceding that it had been paid, (considering the assignment to Bidleman for the defendant as a payment by the estate, or as vesting the mortgage in the estate,) or that it was not a subsisting claim against the estate, or that it ought to have been paid by the administrator, still those were facts to have been proven before the Probate Court, on the hearing of the petition for sale. It is manifest that it was quite susceptible of proof, that the administrator had in his hands funds that should have been used for that purpose, and if those interested in the estate failed to offer the evidence they are in default; and if it was offered and was rejected by the Court, or having been received, the Court, notwithstanding the evidence, ordered the lot to be sold for the payment of the mortgage, it was error which might have been corrected on appeal; but if not so corrected, was final and conclusive upon the parties to the petition. The fraud, then, in procuring the order of sale, so far as the mortgage debt is concerned, amounts to this: that the administrator procured an order, either upon insufficient evidence, or contrary to the evidence that was accessible to the heir-at-law, and was or might have been introduced by her, which, instead of being a fraud of which another Court will take cognizance, is but the case of an error in the judgment of the Probate Court, or of neglect on the part of one of the parties to present his case; and we agree with the learned Judge of the Court below in his finding, that there was no actual fraud in procuring the order of sale, and in holding that in relation to the necessity or the sale, the plaintiff is concluded by the order declaring that it was necessary, and directing it to be made.
Ignorance as a ground of relief in equity .
It is proper to remark here that we do not concede as much force and consequence as do the counsel for the plaintiff to the fact that Mary Hina was an ignorant Kanaka woman, unacquainted with legal proceedings, and almost ignorant of our language. We cannot obliterate the recognized rules of law, requiring of all persons the diligence and attention demanded of a prudent man in the transaction of his own business, and establish a measure of care and diligence for each particular case. If she did not understand the value of the receipt she said Blankman gave her for the money she paid him, or if she did not comprehend the meaning or the object of the petition for sale, unless it is also proven that she relied upon Blankman for information respecting those matters, and that he misrepresented them, her ignorance of their objects, value, and meaning, affords no grounds for relief.
Statute of Limitations .
The defendant relies on the Statute of Limitations as a defence to the action. The statute is applicable alike to all causes of action--to a cause of action in equity as well as one at law. The statute governing this case is found in the fourth subdivision of division third of section seventeen of the act concerning the limitations of civil actions, which is as follows: " Within three years * * * an action for relief on the ground of fraud, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud." The cause of action accrued in 1851, the date of the purchase by Reis for the defendant at his sale as administrator. The defendant in his answer says " that the pretended cause of action in said complaint set forth, did not accrue at any time within five years next before the commencement of this action, and he sets up and relies upon the statute in such case made and provided in bar of said action, as if herein specially pleaded." The plaintiff in his replication denies " that the pretended cause of action in said complaint set forth did not accrue at any time within four years next before the commencement of this action; " and for a further replication, he says " that the several acts of fraud set forth and alleged in said complaint were not discovered by said Mary Hina or this plaintiff until within three years next preceding the commencement of this action." The Court found " that the knowledge that the purchase of said premises at the probate sale and at the foreclosure sale were made, and the lands held thereunder for the benefit of and in trust for the defendant Blankman, did come to Mary Hina more than five years before the commencement of this action." As the acts constituting the fraud complained of are alleged to have been committed more than three years before the commencement of the action, the complaint should have stated the discovery of them within the three years, ( Sublette v. Tinney, 9 Cal. 423,) but as the discovery within the three years is averred in general terms in the replication, and the issue thereupon was tried without objection in the Court below, the finding will be taken as if made upon an issue properly raised by the pleadings.
It is objected that the defendant has not set up the particular Statute of Limitations applicable to cases of this nature, and that in order to avail himself of the benefits of any of the provisions of the statute, he should have pleaded all the statutes upon which he intended to rely, in separate defences.
The defendant, relying for answer upon any provision of the Statute of Limitations is not required, nor do the rules of pleading permit him to allege matter of law. The facts are required to be stated which bring the case within the operation of the statute, and the Court will apply to them the law. To an action of ejectment the defendant pleads that the cause of action did not accrue within ten years next before the commencement of the action. This, though negative in form, is in fact an affirmative answer, and is in effect an averment that the cause of action accrued more than ten years before the commencement of the action. When tested by a demurrer, it will be found to be sufficient, for if it accrued more than ten, it must have accrued more than five years, next before the commencement of the action. The nature of the action, not the allegations of the defendant, will determine what statute is applicable as a bar to a recovery.
When the defendant demurs on the ground of the Statute of Limitations to a complaint, on the face of which it appears that the cause of action accrued anterior to the longest period prescribed as a bar, the demurrer is sustained, not because the complaint states as the time when the cause of action accrued, any period, the time from which to the commencement of the action, corresponds with the time prescribed in any particular statute as a bar, but because the time as stated since it accrued exceeds the time defined as a limitation of actions of that nature. If the plaintiff fails to state truly one of the essential parts of his cause of action, to wit, the time when it accrued--which, if stated, truly would show that he had no subsisting cause of action--it is impossible to see why the defendant may not aver the truth in that respect, and if it is established on the trial, secure the same result.
The Court below found that the knowledge that the purchase of the premises at the probate sale was made for the benefit of and in trust for the defendant, came to Mary Hina more than five years before the commencement of this action, and the plaintiff complains of the finding on the ground that it was unsupported by the evidence. The defendant contends that the saving clause of section seventeen of the Statute of Limitations is applicable only to actions founded on fraud in fact. The rights of a party seeking relief on the ground of constructive fraud in an action cognizable only in equity, were conserved until a discovery by the aggrieved party, of the facts constituting the fraud, and as the Statute of Limitations is now applicable alike to all causes of actions, it would be but reasonable to hold that parties should have the benefit of the saving clauses of the statute in that class of cases as well as those that were formerly within the statute, if it can properly bear that construction; and as neither the limitation nor the saving clause is confined to cases of actual fraud, we see no reason for giving the statute the restricted construction claimed for it by the defendant.
The evidence in the record fails to show a discovery by Mary Hina of the fact constituting the fraud--that is, of the purchase of the property by the defendant, per interpositam personam, at his own sale--within three years next before the commencement of the action; nor does it appear that the facts actually or presumptively within her knowledge were sufficient to have put her, as a person of ordinary intelligence and prudence, upon inquiry. She is chargeable with knowledge of the state of the account between the defendant and the estate; of the petition for sale, and the orders and proceedings thereon, and of the conveyance to Reis; and it may be conceded for the purpose of this question, that she knew that the defendant, instead of satisfying the Biron mortgage, procured it to be assigned to Bidleman, who foreclosed it and purchased the premises for the defendant's use at the foreclosure sale; that Reis conveyed the premises to Bidleman, who afterwards conveyed them to the defendant; that she believed, when she was turned out of possession by the Sheriff under the writ issued upon the judgment in ejectment recovered against her by Bidleman, that she was dispossessed by the defendant; and that she consulted counsel, or attempted so to do, about recovering the lot from the defendant. But all these facts are consistent with the apparent fact that Reis purchased in good faith for his own use, and they were not sufficient to put her upon inquiry as to the true character of his purchase. The fact that she cherished her claim to the lot, and intended at some time to institute proceedings for its recovery from the defendant, falls short of proving that she knew, or had any intimation of the capacity in which Reis acted in making the purchase. The respondent's counsel admits that Mary Hina may not have discovered for a time that the respondent became the purchaser through the intervention of another; and we are unable to find any evidence in the record tending to show that she afterwards made the discovery, or was put upon inquiry, until her conversation with Bidleman in 1861.
Judgment reversed, and cause remanded for a new trial.