Barlow v. Arnold

• Court: United States Circuit Court, District of Kentucky
• Citation: Barlow v. Arnold, 6 F. 351 (U.S. Cir. Ct., D. Ky. 1881)
• Decision Date: 01 March 1881
• Parties: BARLOW v. ARNOLD, Executrix, etc. [1]

6 F. 351

BARLOW v. ARNOLD, Executrix, etc. ^[1]

United States Circuit Court, D. Kentucky.

March, 1881

R. W Wooley and Muir & Heyman, for plaintiff.

Bijur &amp Davie and W. H. Cheef, for defendant.

BARR D.J.

This suit is brought to recover of defendant, as executrix, the sum of $100,000, with interest from July 29, 1872, which it is alleged was expended and lost by reason of, and upon, the fraudulent pretences and representations made by Philip Arnold to the plaintiff in reference to a pretended discovery of a diamond field on the borders of New Mexico and Arizona. The answer of the defendant traverses the allegations of the petition, and pleads and relies upon the statute of limitations, which bars such actions after five years. One of the paragraphs of the answer alleges that the cause of action accrued when the money was paid, in July, 1872, and when the alleged fraud was perpetrated; and the other paragraph sets up and relies upon the statute of limitations, upon the idea that the cause of action accrued when plaintiff discovered the fraud, or could with reasonable diligence have discovered it. This is alleged to have been in the month of November or December, 1872. The replication of plaintiff, in one of its paragraphs, attempts to avoid the allegation of the second paragraph in the answer by alleging the discovery of the fraud of Arnold within five years before the bringing of the suit, which was October 23, 1879. This paragraph of the replication has been held bad on demurrer, because it did not allege any facts showing or tending to show diligence in the investigation of the alleged fraud. Time was given plaintiff to amend his replication. This time has expired, and no amendment has been filed or tendered. The demurrer to the other paragraph of the replication was overruled. This paragraph (third) was perhaps intended to be a traverse of the third paragraph of the answer of the defendant, which sets up and relies upon the statute of limitations, upon the idea that the cause of action only accrued when the fraud was discovered, and that the burden of alleging and proving when the discovery was made, is upon the defendant.

The defendant now moves the court for judgment upon the plea of the statute, as pleaded in the second paragraph of the answer. This motion is based upon the theory that plaintiff's cause of action is presumed to have accrued when the fraud is alleged to have been perpetrated, and the money paid in consequence of said fraud; and that, to avoid the running of the statute from that time, the plaintiff must allege facts tending to show that, after using reasonable diligence, he did not discover the fraud until within five years before the institution of this suit.

If this be true, then defendant is entitled to a judgment on the plea of the statute of limitations, because that plea is not traversed or avoided.

The sixth section of article 3, c. 71, Gen. St., title, 'Limitations of Actions,' is in these words: 'In actions for relief for fraud or mistake, or damages for either, the cause of action shall not be deemed to have accrued until the discovery of the fraud or mistake; but no such action shall be brought 10 years after the time of making the contract or the perpetration of the fraud.'

In a previous section (second) of the same article and chapter, it is enacted that 'an action for relief on the ground of fraud or mistake' 'shall be commenced within five years next after the cause of action accrued.'

The question is, when does the cause of action accrue in such cases?

It is necessary for the defendant, under the Kentucky Code system, to plead the statute of limitations, but whether it is sufficient for him to assume that the cause of action accrued upon the perpetration of the fraud, and leave to the plaintiff to avoid the running of the statute from the perpetration of the fraud by the allegation and proof of a discovery of the fraud since its perpetration, is an undecided question in this state.

It may be argued that under section 6, if the defendant relies on the 10-year limitation as therein provided, he must allege that the fraud complained of was perpetrated more than 10 years before the bringing of the suit; and that if he relies on the five-year limitation of that section, he should allege the discovery of the alleged fraud more than five years before the institution of this suit. This argument would not be without force, but the objection...