Hudson v. Kimbrough

• Decision Date: 23 November 1896
• Citation: 74 Miss. 341,20 So. 885
• Court: Mississippi Supreme Court
• Parties: R. G. HUDSON, SURVIVOR, v. T. A. KIMBROUGH, ADMR

20 So. 885

74 Miss. 341

R. G. HUDSON, SURVIVOR, v. T. A. KIMBROUGH, ADMR

Supreme Court of Mississippi

November 23, 1896

October 1896

FROM the chancery court of Sunflower county HON. W. R. TRIGG Chancellor.

The co-partnership, of which appellant is the survivor, employed appellee's intestate, who was an attorney at law, to collect a debt due the firm from third parties. The other facts are sufficiently stated in the opinion of the court.

Affirmed.

W. S Chapman and T. J. Mansion, for appellant.

Complainants need not allege they used reasonable diligence, etc., because the parties sustained the relation of client and attorney. On demurrer, complainant need not allege he brought suit within three years from the time the fraud was first discovered, because the fraud is admitted, which gives the court jurisdiction.

Bigelow, in his excellent work on fraud, makes the statement that a client who sues an attorney for money collected, and alleges concealed fraud, etc., is not required to allege that he brought his suit within the statutory period from the time of the knowledge of the fraud, but that it is on defendant to make this affirmative defense.

Calhoon & Green, on same side.

An attorney, whose duty, arising out of the confidential relation, was to pay over money promptly upon its collection, and who, two months after its collection, wrote that he had not collected it, and two years after collecting it informed his client that he had not collected anything, but would collect and remit on his return home, should not be allowed to keep the client's money behind the defense of the statute of limitations, unless he shows that he had removed the deceptions practiced, and that his client at some time had been undeceived by him. There is no pretense that the attorney ever accounted; on the contrary, it is averred that he fraudulently concealed the collection. So "there was nothing that the greatest diligence could take hold of to lead to a knowledge of" the collection. Edwards v. Gibbs, 39 Miss. 173.

"It is a general rule in equity that the statute of limitations only begins to run, in cases of fraud, from the time of the discovery of the fraud, but the party complaining of the fraud, and seeking to avoid the statute on that account, must show that he used due diligence to detect it, and if he have the means of discovery in his power, it will be equivalent to a knowledge of the fraud." In order to excuse the use of proper diligence, it is well settled, upon reason and authority, that there must exist some relation of trust and confidence--as, principal and agent, client and attorney, cestui que trust and trustee--between the party committing the fraud and the party who is affected by it, which rendered it the duty of the former to disclose to the latter the true state of the transaction, and showing that it was through confidence in the acts of the party who committed the fraud that the other was prevented from discovering it. . . . It has long been the settled rule in England that where a party has been kept in ignorance of his rights by the fraud of the person sought to be charged, the statute shall not begin to run until after the fraud has been discovered. Buckner v. Calcote, 28 Miss. 434, 597; Livermore v. Johnson, 27 Miss. 284.

Mayes & Harris, for appellees.

This action is based on open account. The petition shows affirmatively that the attorney converted the petitioner's money to his own use on April 21, 1883. The three years' statute, therefore, would ordinarily have barred this debt on April 21, 1886, which was five years before the bill in this case was filed, and also five years before the debt herein set up was probated. But it is claimed that this was a case of concealed fraud, and, therefore, that the three years' statute of limitations, because of the operation of § 2679 of the code of 1880, did not run from the date of the conversion. Suppose that be admitted? The provision of the statute is that the three years' statute shall begin to run from the time at which the fraud shall be discovered, or from the time at which, with reasonable diligence, it might have been first known or discovered. Now, our contention is that petitioner did not exercise reasonable diligence; that if he had exercised such reasonable diligence, he might have discovered the payment of this amount at a date long prior to such time as would have been three years before the probate of his demand--that is to say, long prior to the month of March, 1888.

OPINION

WOODS, J.

In a limited and narrow sense, the relation subsisting between the attorney and client, as shown in the case at hand, in which is involved only the collection of a single claim, may be characterized as one of trust, but it is not of the class of express and continuing trusts covered by the principles announced in Livermore v. Johnson , 27 Miss. 284; Buckner v. Calcote , 28 Miss. 432; and Edwards v. Gibbs , 39 Miss. 166, which are cited by and relied upon by the learned counsel for appellant. This...