Hinkson v. Sauthoff
| Decision Date | 07 February 1956 |
| Parties | Charles E. HINKSON, Sr., Appellant, v. Harry SAUTHOFF et al., Respondents. |
| Court | Wisconsin Supreme Court |
David S. Novick, Madison, Norman N. Rosen, Madison, of counsel, for appellant.
Spohn, Ross, Stevens, Lamb & Pick, Madison, for respondents.
The instant action for fraud was commenced February 23, 1954, or nearly twenty-one years after the alleged fraudulent sale of the 408 shares of capital stock in the corporation had been made by the executor of the Park E. Hinkson estate to the widow of the deceased. The allegations of fraud set forth in the amended complaint center upon the event of such private sale. The sole issue on this appeal is whether plaintiff's action is barred by section 330.19(7), Stats.
Such statute imposes a six-year statute of limitations upon an action for fraud but contains the following proviso:
'The cause of action in such case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud.'
As pointed out in Thom v. Sensenbrenner, 1933, 211 Wis. 208, 210, 247 N.W. 870, the amendment made to such statute by ch. 24, Laws of 1929, had the effect of making the above quoted proviso applicable to actions at law as well as suits in equity, while prior thereto it had been limited to the latter. However, the sentence of the statute quoted above was not changed by such 1929 amendment, so prior decisions of this court interpreting such sentence have lost none of their force as precedents. Particularly pertinent is the following interpretation of such statutory provision in O'Dell v. Burnham, 1884, 61 Wis. 562, 569, 21 N.W. 635, 639:
'When the information brought home to the aggrieved party is such as to indicate where the facts constituting the fraud can be effectually discovered upon diligent inquiry, it is the duty of such party to make the inquiry, and if he fails to do so within a reasonable time he is, nevertheless, chargeable with notice of all facts to which such inquiry might have led.' (Emphasis supplied.)
In Ludington v. Patton, 1901, 111 Wis. 208, 242, 86 N.W. 571, 581, the court declared:
'In must be conceded that the statute of limitations [then sec. 4222, Stats., now sec. 330.19(7)] commenced to run against appellant from the time she obtained knowledge of the fraud or might have obtained such knowledge by the exercise of reasonable diligence.' (Emphasis supplied.)
A more recent decision holding to the same effect is Gottschalk v. Ziegler, 1932, 208 Wis. 55, 62, 241 N.W. 713.
We deem it to be well settled by these decisions that under the provisions of sections 330.19(7), Stats., a cause of action for fraud is barred if the aggrieved person was placed in possession of facts which, if followed by diligent inquiry, would have disclosed the fraud. It is the contention of counsel for the defendants that the proper application of this principle to the facts of the instant action requires affirmance of the judgment of dismissal.
Because the determination by the trial court, that plaintiff's cause of action is barred by the statute of limitations, was made by summary judgment, we are necessarily confined in our review of the facts to those admitted in the pleadings or appearing in the affidavits filed which were not controverted by the affidavits submitted by the opposing party, or parties. What are the facts known to plaintiff which, if followed by diligent inquiry on his part, would have disclosed the alleged fraud?
Foremost among such facts is plaintiff's knowledge that any rights he may have had in the 408 shares of stock in the corporation are necessarily grounded upon the provisions of his father's last will and testament. While the plaintiff did not expressly deny in his affidavits that he had knowledge of the provisions of such will, he did make the general allegation that he never examined the probate proceedings in his father's estate. Due diligence on his part required that he read such will and know the contents thereof. The will bequeathed the property in equal shares to the plaintiff and his sister subject to a life estate in his mother. It was further expressly provided in the will that, if the testator's widow should remarry, her life estate would terminate and in lieu thereof she would receive one-third of the testator's property outright, and the plaintiff and his sister would each receive one-third thereof.
Plaintiff also knew that his mother married a man by the name of Gillette within a few years after his father's death and prior to the annual stockholders' meeting of the corporation held March 1, 1935, and, in spite of such fact, that no stock certificate was ever issued to him for the one-third of said 408 shares of stock.
At the time of his father's death the...
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In re Milwaukee
...the court concluded that the bank was on notice of the potential fraud well before the suit was filed. Similarly, in Hinkson v. Sauthoff, 272 Wis. 33, 74 N.W.2d 620 (1956), the plaintiff claimed that he was defrauded by the sale of corporate stock from his father's estate; his mother allege......
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In re Archdiocese of Milwaukee
...the court concluded that the bank was on notice of the potential fraud well before the suit was filed. Similarly, in Hinkson v. Sauthoff, 272 Wis. 33, 74 N.W.2d 620 (1956), the plaintiff claimed that he was defrauded by the sale of corporate stock from his father's estate; his mother allege......
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Peters v. Kell
...have disclosed the fraud, this is equivalent to discovery of the fraud itself for the purpose of such statute. Hinkson v. Sauthoff, 1956, 272 Wis. 33, 37, 74 N.W.2d 620. However, inasmuch as we have reached the conclusion that Mrs. Peters has failed to establish a cause of action for fraud,......
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