Z. S. Claggett v. Jesse C. Crall

Z. S. Claggett v. Jesse C. Crall. January Term, 1874. 1. Vendor and Vendee: False Representations: Title. Prior to the statutes of 1868 a party, who acted with ordinary prudence, might rely on the representations of a vendor of real estate as to the condition of his title, even though a prior deed of such vendor was on record at the time; and if such representations were false and fraudulent and the title failed, might maintain an action for such fraud. 2. Limitation: Discovery of Fraud. The cause of action on such fraud would not accrue until the discovery of the fraud, and might be brought at any time within two years thereafter. Error from Atchison district court. Action brought by Claggett against Crall. The petition is as follows : “The plaintiff complains of the defendant, and says that on or about the twenty-fourth of May, 1864, he purchased of the defendant, and defendant sold and conveyed to him by deed of general warranty of that date, (a copy of which is hereto ^'attached as part hereof,) at the price of $300, cash in hand then paid by plaintiff to said defendant, the following described parcels and tracts of land, to-wit, [describing 120 acres in Jackson county, state of Kansas ;] that at the time of said purchase, and at the time of the execution of said deed of conveyance, said defendant was not the owner of the said land, and had no right or title whatever to the same, he the said defendant having on or about the fifth of March, 1861, sold and conveyed said tract of land, by deed of warranty, (a certified copy of which is hereto attached and filed as part hereof,) to one G. W. Gillespie, of which fact plaintiff had no knowledge, and did not learn the same until as hereinafter stated; and said defendant, well knowing that he had no right or title to said land, and for the purpose of cheating and defrauding plaintiff, fraudulently concealed said fact from plaintiff. And plaintiff says that at the time of said purchase, and at the time of the execution and delivery of said deed of conveyance by defendant to'plaintiff, the defendant, for the purpose of inducing plaintiff to purchase said land and take said deed of conveyance for the same as aforesaid, did then falsely and fraudulently represent that he was the owner in fee-simple of the same, and had the legal title thereto, when he well knew that he was not the owner of said land, and had no right or title whatever to the same, and well knew that he had already conveyed said land by deed of warranty to the said Gillespie as hereinbefore stated. And plaintiff says that, relying upon said statements, he did purchase said land, believing, as defendant stated, that he had the title thereto, and did take said deed of conveyance as before stated and paid defendant the $300, as hereinbefore stated, and as recited in said deed. And plaintiff further shows to the court and says that he was, at the time of said purchase and execution and delivery of said deed, and still is, a citizen and resident of Washington county, state of Maryland; and relying on defendant’s statements and warranty aforesaid, and believing that he was the owner in fee-simple of said land, he has paid the taxes on said land as follows, to-wit, [stating payments from 1864 to 1869, amounting to $80;] and that in the spring of 1871 the plaintiff for the first time discovered that defendant had practiced a fraud upon him, and then first learned that defendant had no title to said premises at the time of plaintiff’s purchase of the same and of the execution and delivery of said deed to him, and then first discovered that defendant’s representations and warranty, made at the time *of said purchase and execution of said deed, were false and fraudulent, and then learned that defendant had conveyed said land to said Gillespie, before the sale and conveyance made by him to plaintiff. And plaintiff says that said land has been wholly lost to plaintiff; that one Wyatt, the vendee of said Gillespie, now claims to be the owner in fee-simple of said land, and to have the legal title thereto, and is in possession of the same. And plaintiff says that by reason of the fraudulent representations of defendant, as herein stated, and the fraud and deception practiced on him by defendant, he has been damaged in the sum of $600. Wherefore,” etc. Grail answered, settingup several defenses, one of which was ageneral denial, and one was the statute of limitations. At the November term, 1872, of the district court, a jury was impaneled to try the case. Crall objected to the introduction of any testimony under the petition. The court sustained the objection, directed the jury to return a verdict for the defendant, and gave judgment in favor of defendant for costs. W. W. Guthrie and Thos. Metcalfe, for plaintiff in error. Plaintiff’s action was not barred until two years after discovery of the fraud which induced the action. Civil Code, § 18, cl. 3; Yossv. Bachop, 5 Kan. *69. Plaintiff living abroad, and from year to year paying the taxes, without objection, through an agent, could have no notice to put him upon inquiry. If he had a right to buy upon defendant’s representations, he had a right to so rest until put on inquiry. In no case does the rule of caveat emptor apply to transactions predicated on fraud. In this case, the fraud was “secret and concealed” within case of Martin v. Smith, 9 Amer. Law Beg. 694. Defendant secured plaintiff’s confidence by exhibiting his title, which would have been perfect but for the fact of a subsequent conveyance to Gillespie, then known to defendant, and by him concealed from plaintiff. *The court also erred in directing a verdict for defendant, against plaintiff’s objection, without any trial, and then refusing a new trial. His case thereby has become res adjudicata, without trial. S. H. Glenn, for defendant in error. The plaintiff was bound to take notice of the prior deed and the contents thereof to Gillespie, placed on record March 11, 1861. Gen. ' St. 187, § 20. This cause of action is not an action for relief on the ground of fraud, or to set aside a conveyance, but an action in damages for breach of warranty. The cause of action set up alleges fraudulent conveyance on the twenty-fourth of May, 1864, (no pretense that any representations were made since,) and seeks to recover damages therefor; and the cause of action accrued the moment the bargain was completed by conveyance of the premises to the plaintiff. Ang. Lim. 190; Troup v. Executors of Smith, 20 Johns. 33; Leonard v. Pitney, Wend. 30; Allen v. Mille, 17 Wend. 202. It does not matter that the alleged fraud was not discovered. It was the act of misrepresentation, and not the resulting damages, which constitutes the cause of action. Martin v. Smith, 9 Amer. Law Beg. 694; Northrop v. Hill, 61 Barb. 136. The ease cited from ■61 Barb, is specially in point, being under similar statute to our own state. Fraud must be secret and concealed to prevent the statute from running. There was no concealment in this case; the facts were of public record. When the petition shows the action is barred by the statute, it does not state facts sufficient to constitute a cause of action, which may be taken advantage of by objection to the admission of evidence. Zane v. Zane, 5 Kan. *134. The cause of action accrued to plaintiff, according to petition and exhibits, on the twenty-fourth of May, 1864, and was barred by the statute in five years from that date.- íAn action maybe maintained by tbe buyer of a patent-right on the false representation of the sellers that they were possessed of a patent giving them exclusive right for an improvement in spring-bed bottoms, and that there was no like patent authorized, known by 1he sellers to be false, which induced the purchase, although by searching the records of the patent-office the buyer might have discovered the fraud. McKee v. Eaton, 26 Kan. 226. Applies to action for damages, Young v. Whittenhall, 15 Kan. 579; principal and agent, Main v. Payne, 17 Kan. 608; knowledge to agents, no notice to corporation or its stockholders, Ryan v. Leavenworth, A. & N. W. Ry. Co., 21 Kan. 365; suspicion of, not tantamount to discovery, Marbourg v. McCormick, 23 Kan. 38. See, also, Perry v. Wade, 31 Kan, 428; S. C. 2 Pac. Rep. 787. [MAJORITY — Brewer, J.] Brewer, J. In May, 1864, Crall sold and conveyed certain lands in Jackson county to Claggett. Prior to that time, *and in March, 1861, Crall had conveyed the same lands to G. W. Gillespie. The deed to Gillespie was recorded in March, 1861. Claggett was a non-resident, and the negotiations were carried on through an agent in Atchison county. The petition alleged that at the time of the sale to Claggett, Crall produced a patent for the lands, and fraudulently represented that the lands were still his, and that plaintiff relied on these representations, and did not discover their falsity until 1871. Suit was brought in May, 1872. Was it barred? This action is not one for breach of the warranty, but an action for fraud. It is not brought on the covenants of the deed, but for the fraudulent representations whereby the plaintiff was induced to part with his money for nothing. No testimony is before us, the case going off in the district court on an objection to the introduction of testimony under the petition; so the allegations of the petition must be taken as true. No motion was interposed to have the petition made more definite and certain, so that any defect in omitting to state fully and exactly the false representations made, is waived. The land was in a distant county from that in which the negotiations were consummated, and in a state other than that in which the plaintiff resided.' That such an action will lie, unless cut off by some statutory provision, see Eames v. Morgan, 37 Ill. 260 ; Kirkland v. Lott, 2 Scam. 13 ; Weatherford v. Fishback, 3 Scam. 170 ; Watson v. Atwood, 25 Conn. 313. The statutes of 1868 (Gen. St. 187, c. 22, § 20) provide that every deed, etc., “shall from the time of filing the same with the register of deeds for record, impart notice to all persons of the contents thereof; and all subsequent purchasers and mortgagees shall be deemed to purchase with notice.” Under that section it may be that a subsequent purchaser would not be heard to say that he had no notice of a prior deed, or was imposed upon by the false representations of his vendor, as to the title. But this statute can have no retroactive effect so as to change the rights of the parties growing out of these prior transactions. The statute of 1862 contains no *such declaration as to the effect of a record of a deed. It simply provides that no deed is of any validity against subsequent purchasers, for a valuable consideration, unless recorded. Comp. Laws, 355, c. 40, § 13. A párty then might, under that statute, if he acted with ordinary prudence, rely on the representations of his vendor as to the condition of his title, and if these representations were false and fraudulent, and the title failed, maintain his action for the fraud practiced upon him. The petition alleges that this fraud was not discovered until 1871. The case is therefore brought within the limitation statutes of both 1862 and 1868. There may be a question, which we shall not anticipate nor decide until the facts are more fully presented, as to whether the plaintiff was not guilty of negligence in not discovering the true condition of the title during the seven years between 1864 and 1871, and, therefore, chargeable with notice of the fraud prior to the time at which he alleges in his petition the fraud was discovered. The judgment of the district court is reversed, and the case remanded, with instructions to grant a new trial. (All the justices concurring.)