Briggs v. Buzzell
| Decision Date | 03 July 1925 |
| Docket Number | 24,729 |
| Citation | 204 N.W. 548,164 Minn. 116 |
| Parties | RAY A. BRIGGS AND ANOTHER v. MERCHANT P. BUZZELL |
| Court | Minnesota Supreme Court |
Action transferred to the district court for Hennepin county. The case was tried before Waite, J., who ordered judgment in favor of defendant. Plaintiffs appealed. Reversed.
Definition of laches.
1. The pith of the doctrine of laches is unreasonable delay in enforcing a known right. In a general sense it is such negligence in asserting a right as will bar one from obtaining equitable relief. Whether the delay was culpable or not depends on many circumstances, among which are actual or imputable knowledge of the facts and resulting prejudice from the delay, either to the defendant or to those who have equities to be protected.
Negligent ignorance of facts no excuse for laches and greater diligence required when facts are shown by public record.
2. The time within which to sue begins to run, not from the perpetration of a fraud, but from the discovery thereof. Ignorance of the facts due to negligence does not excuse laches. The defrauded party should make such inquiry and investigation as the known facts and circumstances reasonably suggest or permit. A greater degree of diligence is required where the facts are a matter of public record and an inspection of the record is suggested by ordinary prudence.
Evidence insufficient to show plaintiffs had lost right to sue for rescission of contract.
3. The evidence did not warrant a finding that, by their laches plaintiffs had lost their right to maintain a suit for the rescission of a contract obtained by the defendant's misrepresentation.
1. See Equity, 21 C.J. pp. 210, § 211, 211, § 211, 223 § 219, 244, § 242.
2. See Equity, 21 C.J. pp. 245, § 242, 247, § 244, 248, § 244, 250, § 247.
O'Brien, Horn & Stringer, for appellants.
Theodore W. Thomson, for respondent.
This is an action for rescission of a contract for the purchase of a motion picture theater near the State University. The plaintiffs were defeated and have appealed from the judgment. The jury's determination of certain specific issues was adopted by the court, with additional findings which would entitle plaintiffs to judgment, save for the court's finding of laches. The sole question presented is whether this particular finding can be sustained.
The contract of purchase is dated August 3, 1921. The purchase price was $34,500, of which $10,000 was paid in money and property when the contract was made. The balance was payable in monthly installments of $175. The plaintiff Ray A. Briggs operated the theater from August 13, 1921, until February 20, 1922, and made five payments between those dates, the last on January 14, 1922. He ceased to operate the theater because the attendance fell far short of what defendant is alleged to have represented it to be.
The jury's findings established the making of the representation and its falsity. At a supplemental hearing evidence was introduced which, in conjunction with the evidence laid before the jury, tended to show the following state of facts:
Disappointed by the attendance in August, plaintiff inquired of defendant why it was so light. He was assured that it was always so until the University students came back in the fall. He made a similar inquiry in September and received the same answer. In October the inquiry was repeated and the answer was that the students did not patronize theaters to any extent until they had been back about six weeks. In November defendant's answer to like inquiries was that the attendance at the University had fallen off and that this explained the lack of patronage of the theater. At this time plaintiff began to suspect that he had been defrauded and made some outside inquiries about the previous attendance, but got no definite information until the last week in January, 1922, when he was allowed to examine the record of the "ticket tax" paid to the United States by the former proprietor of the theater and discovered that the attendance had been much less than defendant had represented it to be.
The court found that "prior to December 1, 1921, and at all times thereafter, plaintiff * * * had notice and knowledge of facts from which he might and ought, in the exercise of reasonable diligence, to have obtained all the information respecting the truth or falsity of defendant's representations as aforesaid which he possessed at the time of the commencement of this action; that no notice of the desire of plaintiff to rescind said agreement was given to defendant prior to the commencement of this action;" and that plaintiff had not ratified the contract after an actual and complete discovery of the fraud.
The evidence shows that the fraud was actually discovered on or about January 31, 1922; that thereupon plaintiff engaged counsel to bring suit; and that the interval between February 1 and 21 was occupied in gathering evidence and preparing the case for presentation to the court; so the ultimate question is this: Was the failure to commence the action before February 21, 1922, such laches as justified the court in closing its doors upon plaintiffs when they came seeking relief in equity?
The trial judge thought that laches was established because the average daily attendance was only 120, whereas defendant had represented that the house, which seated 468 persons, was always filled to capacity at least once a day. To the mind of the court so great a difference could not be satisfactorily explained and would necessarily and quickly lead any intelligent man to the conclusion that he was the victim of deception. In a memorandum accompanying the findings the court said that plaintiff should have made inquiry of employes who, for a time after the purchase, remained in plaintiff's service, and of the patrons of the theater and that he should have examined the records in the office of...
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