Herndon v. Lewis

• Citation: 36 S.W. 953
• Parties: HERNDON v. LEWIS et al.
• Decision Date: 07 January 1896
• Court: Supreme Court of Tennessee

36 S.W. 953

HERNDON v. LEWIS et al.

Court of Chancery Appeals of Tennessee.

January 7, 1896.

Appeal from chancery court, Montgomery county; Charles W. Tyler, Chancellor.

Bill by Thomas Herndon against Thomas W. Lewis and others for breach of covenants in a deed. A demurrer to the bill was sustained as to J. M. Lewis, one of the defendants, and from a decree for complainant against the other defendants they appeal. Affirmed.

R. H. Burney, for appellants. W. M. Daniel and John F. House, for appellee.

WILSON, J.

The bill in this cause was filed in September, 1893, against Thomas W. and J. M. Lewis, citizens of Stewart county, and A. R. Gholson, a citizen of Montgomery county. T. W. Lewis made a general assignment for the benefit of his creditors in 1892, and Mr. Gholson is made a party as his assignee. The facts averred in the bill, constituting the gravamen of the suit, are these: In 1886 T. W. Lewis, for the consideration of $8,000, sold complainant a tract of 400 acres of land in Stewart county. By his deed he covenanted to convey title in fee simple. This land was devised to T. W. and J. M. Lewis by their father for life. Previous to his sale of the land to complainant, T. W. Lewis purchased from his brother, J. M. Lewis, the interest of the latter in the land, taking from him a deed conveying an absolute title. More than six years having elapsed from the execution of the deed by T. W. Lewis, the bill avers that said Lewis represented that he had a perfect title, and that he had perpetrated a fraud upon the complainant by the suppression of the truth, and that he had not discovered the fraud until a short time before this suit was commenced. The object of the bill was to rescind the contract of purchase, and recover back the purchase money, by having a decree therefor, and its satisfaction by a sale of the life estate of T. W. Lewis in the land, and by a decree sharing in the distribution of the fund arising under the assignment to Gholson. There was a demurrer to the bill, which was sustained as to J. M. Lewis. T. W. Lewis and his assignee answer, interposing the plea of the statute of limitations, and denying that any fraud was perpetrated upon the complainant, or that his vendor had concealed the state of the title to the land. The suit is therefore for a breach of the covenants of the deed of Lewis to the complainant. The defense is the statute of limitations of six years. The reply thereto, by anticipation, in the bill, is defect in the title, fraudulently concealed, in contemplation of equity, and the prompt bringing of this suit upon its discovery. Evidence was adduced bearing upon the essential issue, by both parties. The chancellor heard the cause June 11, 1895, and decreed, in substance: First. That the defendant Lewis sold the land in question to complainant, representing that he had an absolute title, and by deed with covenants of seisin and warranty, when, as a matter of fact he had only a life estate. Second. That the defendant knew at the time he made the sale that he had only a life estate. Third. That the complainant had the right to rely upon the representations of the defendant with respect to his title. Fourth. That the complainant is not chargeable with such negligence or carelessness as deprives him of his right to relief in equity because he failed to go to another county and examine the records to ascertain the state of his vendor's title before closing the trade, inasmuch as he brought suit in a month after discovering that the representations of the defendant as to his title were untrue. Fifth. That the statute of limitations did not begin to run until the fraud perpetrated was discovered by the complainant. Sixth. He gave a decree for the difference between the value of the life estate owned by the defendant, and the absolute estate he sold, to wit, $3,500, that being the difference agreed upon by the parties. To reverse this decree the defendants carried the case to the supreme court.

Two errors are assigned: First. "The chancellor was in error in holding that the cause of action was fraudulently concealed, within the sense of the law, in this case." Second. "As a matter of law, a concealment of a cause of action in a case of this kind does not prevent the running of the statute, and the holding of the chancellor to the contrary was erroneous." The court has had the benefit of able and exhaustive briefs and arguments from counsel of the contestants. They have collated the evidence, and arrayed the authorities, in support of their respective contentions. If we go amiss in reaching a correct conclusion it will not be the result of inattention of counsel in presenting the facts or the authorities; nor, in our opinion, will it result from any uncertainty as to the law. The difficulty in the case, as we see it, is in the application of well-established principles and rules of courts of equity to its facts.

We find the following facts: (1) Defendant sold complainant a tract of land situated in Stewart county, representing that his title thereto was absolute, when he had only a life estate in it. (2) He knew before and at the time he made the sale and executed the deed with covenants of seisin and warranty, conveying an estate in fee simple, that he held only a life estate in the land. (3) His title to the land passed to him under the will of his father, and this will, limiting his estate in the land to one for life, was a matter of record in Stewart county when the sale was made to complainant, and had been for some years. (4) Complainant lived in Montgomery county, but was occasionally at Dover, the county seat of Stewart county, where this will was of record. (5) He never examined the records of Stewart county to ascertain the character or extent of the title of his vendor, but relied upon the clear representations made by him that he had an indefeasible title. (6) If he had examined the records of Stewart county, and read the will, it would have disclosed to him the limitation of the estate in his vendor to be one for life. (7) Lewis, at and before the sale, was reputed to be a man of means, and stood well in the community for integrity and veracity. (8) The sale was made to Herndon, and the deed executed in Clarksville, Montgomery county. (9) Complainant never suspected that his title obtained by the deed of defendant was defective, nor discovered, as a matter of fact, that the covenants in the deed executed to him had been breached, until about a month before he brought this suit.

It is conceded that the covenants of this deed were broken as soon as it was executed, and that a right of action then existed for the breach. It is also conceded that more than six years had elapsed before suit brought. This being so, it is conceded that the statute of limitations of six years, pleaded in the answer, constitutes a perfect defense, unless there is in the cause some legal obstacle to its operation. The insistence of the complainant is that the defense of the statute interposed is inoperative, because there was a fraudulent concealment of his right of action, or the defect necessitating its enforcement in the courts. The reply to this, on the part of defendant, is twofold. First, that there was no fraudulent concealment, in the sense of the law in respect to the title to the land sold; second, that, if there was, it does not, in this character of case, stop the operation of the statute.

In support of his second contention just stated, counsel for defendant cites numerous authorities. We have examined all of them to which we have had access. We cannot accede to the proposition that, if there was a fraudulent concealment of the cause of action in this case, the statute of limitations would nevertheless operate as a bar to this suit. The Tennessee cases cited do not, as we understand them, sustain it. Most of them are arrayed in the able opinions of Judge Lurton in Hughes v. Brown, 88 Tenn. 578, 13 S. W. 286, and in Alvis v. Oglesby, 87 Tenn. 172, 10 S. W. 313. The writer of this was of counsel for Oglesby in the case supra, in which the statute of limitations was applied in his favor. The learned judge, in the opinion, held it to be a well-settled rule in courts of equity that the statutes of limitation are applicable in every case in equity, when the trust is not a technical one, of which courts of equity alone take cognizance. Upon this premise, the conclusion reached by him was logical and irresistible, — that a suit in equity by a distributee against the personal representative, for an accounting, or a devastavit, or distributive share, whether brought technically on his bond or otherwise, is barred, under section 2776, Code 1858, within 10 years after the cause of action has accrued, unless the distributee was within the saving clause of the section, inasmuch as our legislation had conferred jurisdiction upon our county and circuit courts, concurrent with that of the chancery court, to entertain such a suit. This holding, in principle, was not in conflict with previous decisions; for although, at an early date, our court held that our statute of limitations prescribing that certain forms of action shall be brought within the specified time did not, in terms, apply to courts of equity, they nevertheless held that courts of equity were bound equally with courts of law where there was a remedy at law. Hickman's Lessee v. Gaither, 2 Yerg. 200; Armstrong's Heirs v. Campbell, 3 Yerg. 232; Haynie v. Hall's Ex'r, 5 Humph. 291; and other cases. So this holding, also, involved, or carried in its scope, the statement or proposition that our legislation embodied in the Code changed our statutes of limitation so that they operated upon the cause, and not upon the form of action. But we do not understand that Judge Lurton, in either of these cases, advanced the proposition or announced the principle that this legislation had overthrown the doctrine that a court of equity would repel...