Redd v. Brun

• Citation: 157 F. 190
• Decision Date: 08 November 1907
• Docket Number: 2,408.,2,407
• Parties: REDD v. BRUN et al. (two cases). [1]
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

157 F. 190

REDD v. BRUN et al. (two cases). ^[1]

Nos. 2,407, 2,408.

United States Court of Appeals, Eighth Circuit.

November 8, 1907

Syllabus by the Court

The statute of Colorado (section 2911, Mills' Ann. St.) which requires bills for relief on the ground of fraud to be filed within three years after discovery of the facts constituting the fraud, bars such suits three years after the discovery of facts which would awaken a person of ordinary prudence to an inquiry, which, if pursued with reasonable diligence, would lead to a discovery of the fraud.

The federal courts, sitting in equity, are not bound by, but they apply the doctrine of laches in analogy to, the statute of limitations of actions at law, and, in the absence of extraordinary facts and circumstances, decline to sustain suits commenced after the statutory period.

If a complainant would maintain a suit instituted after the expiration of the statutory limit, he must plead and prove especial facts or circumstances which show that he was not guilty of laches which take his case out of the ordinary rule and make it equitable to allow its maintenance after the statutory period has expired.

If he failed to discover the fraud within the statutory limit, he must plead and prove the time when he discovered it, the means by which he found it out, the impediments which prevented its earlier discovery, and the diligence he exercised.

If by the exercise of ordinary diligence he could have discovered it in time to have brought his suit within the limit fixed by the statute, he was guilty of laches, and his suit cannot be maintained.

Complainant had a judgment against T. in 1885 which he could not collect. In January, 1889, two tracts of land were conveyed to S., a sister of T., who in February, 1889, conveyed them to Thomson, who in November, 1895, conveyed them to Mrs. T. and Mrs. C., the wife and daughter of S., respectively. T. died on March 14, 1896, and the deeds were first recorded on March 16, 1896. Complainant brought suit to subject the property to the payment of the judgment more than five years after the deeds were recorded. The statutory limitation was three years after discovery of the fraud. The complainant first discovered in January, 1901, by inquiry among the friends and neighbors of T. that S. was his sister, and by search in the indices of the records, the conveyances in question, and no reason why an earlier discovery was not made, except the pendency of a suit to cancel the judgment, was shown. Held:

Complainant failed to establish any sound reason in equity why the doctrine of laches should not be applied in analogy to the statutory limitation, and he could not recover.

Ordinary diligence required him to examine the records in the name of T., at least once in three years, and if he had exercised the same diligence in 1896 or 1897 that he used in 1901, he would have discovered the fraud.

R. T McNeal, for appellant.

A. C Phelps, for appellees.

Before SANBORN and VAN DEVANTER, Circuit Judges, and PHILIPS, District judge.

SANBORN Circuit Judge.

These suits were brought in September, 1901, to subject two tracts of land, one held by Mrs. Kate E. Brun, who was formerly the wife of Hiram Robert Tillett, and the other by Mrs. Maud Stortes Conklin, who was the daughter of Mrs. Nancy A. Stortes, a sister of Tillett, to the payment of a judgment which the complainant, Jeremiah J. Mann, had recovered against Tillett and one Bloomfield in 1885, upon the ground that Tillett had purchased and paid for these tracts of land and had caused them to be conveyed to the defendants respectively, who were not bona fide purchasers, for the purpose of concealing his property, of preventing the complainant from collecting, and of defrauding him out of his judgment. The majority of the court are of the opinion that the evidence sustained the complainant's charge of fraud, and that he would have been entitled to a decree if he had instituted his suits immediately after he could have discovered the fraud by the exercise of reasonable diligence, a conclusion to which the writer does not assent.

There is, however, another question which demands decision before the decrees below, which dismissed the bills upon final hearings, can be reversed. It is, was the complainant guilty of laches? The statute of limitations of the state of Colorado provides that bills for relief on the ground of fraud shall be filed within three years after the discovery by the aggrieved party of the facts constituting such fraud, and not afterwards. 2 Mills' Ann.St. § 2911. Great Western Mining Co. v. Woodmas, 14 Colo. 90, 98, 23 P. 908. This statute bars a suit three years after knowledge of facts which would awaken a person of ordinary prudence to an inquiry, which, if pursued with reasonable diligence, would lead to a discovery of the facts constituting the fraud as effectually as it limits suits commenced three years after the discovery of the facts constituting the fraud. Swift v. Smith, 25 C.C.A. 154, 160, 79 F. 709, 715; Pipe v. Smith, 5 Colo. 146, 149; Rugan v. Sabin, 3 C.C.A. 578, 582, 53 F. 415, 420.

The national courts, sitting in equity, are not bound by the statutes of limitations of the states, but they apply the doctrine of laches in analogy to them. If a suit discloses no extraordinary facts or circumstances, they apply the bar of laches at the expiration of the time prescribed by the statute of the state for the limitation of an action at law of like character, but if unusual conditions or extraordinary circumstances make it inequitable to allow the prosecution of a suit after a briefer, or to forbid its maintenance after a longer, period than that fixed by the statute, the chancellor will not be bound by the statute, but will determine the extraordinary case in accordance with the equities which condition it. Kelley v. Boettcher, 29 C.C.A. 14, 21 85 F. 55, 62. If the complainant invokes the exercise of the judicial discretion of the court to permit the maintenance of his suit after the analogous statutory time has expired, the burden is upon him to show that he has been guilty of no laches. He must specifically plead and prove what the impediments were to the earlier prosecution of his claim, if he was ignorant of the facts alleged in the bill, how he came to be so long without knowledge of them, the means, if any, by which the defendant concealed them, how and when he first came to know them, and such other facts and circumstances as would appeal to the conscience of a chancellor. 'And especially must there be distinct averments of the time when the fraud, mistake, and concealment, or misrepresentation was discovered, and how discovered, and what the discovery is, so that the court may clearly see whether, by the exercise of ordinary diligence, the discovery might have been before made. For, if by such diligence the discovery might have been before made, the bill has no foundation on which it can stand in equity, on account of the laches. ' Stearns v. Page, 1 Story, 204, 215, 217, 22 Fed.Cas. 1183, 1187, No. 13,339; Hardt v. Heidweyer, 152 U.S. 547, 559, 14 Sup.Ct. 671, 38 L.Ed. 548; Stearns v. Page, 7 How. 819,...