Relf v. Eberly , 23 Iowa 467 ( 1867 )

Wright, J.

l. Limitation, STATUTE OF 5 same in equity as at law: fmua. The statute provides that actions brought for relief on the ground of fraud in cases heretofore solely coqnizable in a cov/rt of chancery must be - ... _ ° . brought within, hve years alter their causes ° ^ * accrue and not afterward, except when otherwise specially declared. Rev. § 2740, clause 3. And then by the next section it is declared that: “In actions for relief on the ground of fraud as above contemplated, the. cause of action will not be deemed to have accrued until the discovery of the fraud by the party aggrieved.”

And now the very question to be determined, as the parties substantially agree, is, whether plaintiff’s case, as made by his petition, was, prior to this statute and within its meaning, “ solely cognizable in a court of chancery.” For it is not insisted that the petition does not sufficiently aver a want of knowledge on the part of the aggrieved, of the fraud until within five years before the commencement of this suit.

No statute has been brought to our attention containing provisions similar to ours. And while the general rule is that the statute of limitations does not apply eo nomine to suits in equity, but that nevertheless a court of chancery acts in analogy, if not in obedience to their provisions, deeming it right, in cases of concurrent jurisdiction at least, that a party should not evade their effect by resorting to another forum; we say while this is the general rule, in this State our statute, ex vigore suo, operates in both courts alike, and not in equity by the mere discretion or courtesy of the chancellor. This we think is clear enough from the language of the act itself as well as from the whole tenor and spirit of our code, which is for “civil practice in law and in equity.”

2. — where jurisdiction is concurrent, Our opinion therefore is, that in cases of fraud when the plaintiff’s remedy is concurrent, that is when he could have the same relief either at law or in , equity, the action must he commenced within five years after the peipetration of such fraud, and that he could not sue within that time after the discovery thereof. Phares v. Walters, 6 Iowa, 107; Wright v. Le Claire, 3 Id. 221, and cases there cited.

3. ■ — ■ «mecílation of contract. Starting with these premises, it seems to us that the real question is, whether in this case plaintiff’s equitable is concurrent with his legal remedy, or whether, , ° * m the language ot the statute, he asks relief on the ground of fraud in a case, before the statute, solely cognizable in a court of chancery.

Now it is frequently said that fraud, accident and trust are the peculiar objects of a court of equity. And it is just as true that every kind of fraud is equally cognizable in a court of law. And this is no less true of many accidents and trusts, as mistakes in receipts, wrong payments, bailments and the like. 3 Black. 431; Story’s Eq. Jur. 60. And from this it would seem to follow, that if we stand upon the thought, that for every fraud a party may have some remedy in a court of law, there would be nothing to which this statute would apply. In other words, if the proposition is, that the statute only refers to cases of fraud, where there was no remedy in any other than an equitable forum, then there would be none to which it would apply, for all fraud may be redressed at law. Not, it is true, as effectually and completely as in equity. The one may give damages, the other afford relief by restoring to the party injured, the property of which he was deprived by such fraud. And this reasoning, strikes us, as in conflict with the view of the statute urged by counsel for appellee.

But let us look a little more narrowly at the language of these sections. Actions brought for relief ’ on the ground of fraud, in cases heretofore solely cognizable, etc., must be brought within five years, etc., but the cause is not treated as having accrued, until the fraud is discovered. Now, it seems to us, that the words “ relief and “ in casesf are important and cardinal in arriving at the meaning of the legislature. Thus, in this ease, plaintiff seeks to rescind the contract to set aside the deed, and that the parties be restored to all their rights as they stood before the perpetration of the fraud. This relief he never could have had at law, it could only be granted in a court of chancery. True, he could at law, have recovered his damages, but this was not the relief peculiarly within the province of equity to grant.

So again, take the case of a bill in equity to account— if no more was sought —no other relief claimed than at law — the statute would equally apply in both cases. But apply the same rule to Ferris v. Henderson (12 Penn. 49), where a claim for services was sustained against a master after forty years, who had obtained them by falsely representing to the party rendering them that he was a slave, and we will see that while he might have sued at law, and should have done so within the time fixed by statute, yet in equity he was not thus limited, though the relief was the same.

Then again, we are not mistaken in assuming that courts of equity have always inclined to grant relief and avoid the bar of the statute, in cases of fraud, when the plaintiff has been in ignorance of his rights. And indeed in this country and in England, there has been no little struggle over the question whether, in a court of law, the. statute will run until the party affected is conscious of the fraud. Angelí ón Lim. ch. 18, and particularly §§ 184-186. Those courts recognizing the bar, as in Troup v. Smith (20 Johns. 33), adopt the rule that it will not do to go beyond the precise terms of the statute. On the other hand the argument is, that every statute is to be expounded reasonably, so as to suppress and not to extend the mischiefs which it was designed to cure. Sherwood v. Sutton, 5 Mason, 143. In equity, however, the settled doctrine is, that if the fraud was not known, the statute should not operate as a bar, or begin to run until it has been discovered — the reason being, that it ought not in eonseience to run, for the conscience of the party being so affected, he ought not to be allowed to avail himself of the length of time. Hoverden v. Lord Annesly, 2 Sch. & Lef. 634. This being true, we have a key to the object and purpose of the statute before us. It intended, by the use of guarded and concise language, to protect the rights of parties and to recognize their right to relief, not in every case allowed by the prior rule, but in those cases where the relief asked was alone grantable in a court of equity.

Once more we remark, that the argument that a different rule should not apply, because a party seeks relief in an equitable instead of a legal forum, is the one that strikes us as of most force in favor of appellee’s construction of the statute. But its error consists in the assumption, that the relief here asked could have been granted at law. The case is alone cognizable in equity, for there alone can this contract be rescinded. True, as already stated, plaintiff might have proceeded at law to recover damages for the fraud. So in the case of a contract to convey, the vendee might sue for a breach of the bond. If he asks a specific performance however, his only remedy is in equity. So too where a party goes into equity to obtain a discovery and thus gives the court jurisdiction, which it would not otherwise have. There, the jurisdictions are regarded as concurrent, and by thus giving the jurisdiction, the statute cannot be avoided if it would apply at law. And so we might illustrate the thought with other cases, but these will suffice. The distinction is, that here plaintiff is in the only proper forum; and as different rules of evidence and for the trial of the cause apply — so they do, when we inquire whether plaintiff brings himself within the saving clause of the statute. See the cases before cited, as also McLenan v. Sullivan, 13 Iowa, 526.

The question is not free from difficulty. After giving to it our best thought however, keeping in view the . equity of the statute, as well as its letter and meaning, we feel constrained to hold that this demurrer should have been overruled.

Beversed.