Jordan v. Howard

• Decision Date: 25 March 1932
• Citation: 246 Ky. 142,54 S.W.2d 613
• Parties: JORDAN et al. v. HOWARD.
• Court: Kentucky Court of Appeals

54 S.W.2d 613

246 Ky. 142

JORDAN et al. v. HOWARD.

Court of Appeals of Kentucky

March 25, 1932

As Modified on Denial of Rehearing December 13, 1932.

Appeal from Circuit Court, Magoffin County.

Action by Harris Howard against Eliza M. Jordan and others. From judgment for plaintiff, defendants appeal.

Reversed with directions.

John H Gardner, of Winchester, Forman & Forman, of Lexington, and Robt. H. Winn, of Mt. Sterling, for appellants.

Woodford Howard, of Prestonsburg, for appellee.

STANLEY C.

In 1913, under an order of court, a large body of land of B. F Gardner, a mental incompetent, was sold to Harris Howard for $26,625. Complications developed over the title and attacks were made upon the validity of the sale. One of the cases reached this court in Gardner v. Howard, 197 Ky 615, 247 S.W. 933. Some of the heirs were not parties to that suit and another was filed by them. Howard appears to have made a settlement with most if not all of the interested parties. The case at bar was instituted by Howard, the purchaser, against the heirs of Gardner, who had died in 1920, for a shortage in the acreage of the tract he had acquired under the judicial sale. Several substantial defenses were set up and attacked, including an issue of fact as to there actually being a shortage. Plaintiff's deed called for a body of land as described hereinafter, and which he says was for 1,200 acres. He claimed in the suit first that there were only 1,004 11/17 acres, which was corrected to an allegation of 1,063 11/17 acres. Following a judgment for $3,921.38, covering a shortage of 136 6/17 acres at the average price, and interest, in favor of the plaintiff, the contest has been brought to this court. Waiving all others, it seems sufficient to consider and discuss only one of the interesting points developed and argued. The court is of the opinion that plaintiff's right to recover for the shortage, if any such right existed, was barred by limitations.

An action for shortage in acreage, in the absence of a specific warranty as to quantity, is founded upon fraud or mistake by reason of which one has been required to pay for something he did not get. Burton v. Cowles' Adm'x, 156 Ky. 100, 160 S.W. 782; Morris v. McDonald, 196 Ky. 716, 245 S.W. 903; Riner v. Catron, 230 Ky. 290, 19 S.W.2d 970. There is no claim of any actual or affirmative fraud in this case. It is based upon a mistake, and in the early case of Crane v. Prather, 27 Ky. (4 J. J. Mar.) 75, reaffirmed in Grundy's Heirs v. Grundy, 51 Ky. (12 B. Mon.) 269, and consistently followed, the same limitations are held to apply to a mistake as to fraud in the conveyance of land.

For convenient consideration we quote the germane portions of the controlling statutes.

Section 2515, establishing the period of limitations, is: "An action for relief on the ground of fraud or mistake *** shall be commenced within five years next after the cause of action accrued." Supplementing this statute is section 2519, defining the term "cause of action accrued," to wit: "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. ***"

The provision has been materially modified by interpretation, or, as some may choose to call it, by judicial legislation. In the Grundy Case, supra, following Ewin v. Ware, 41 Ky. (2 B. Mon.) 65, the limitation under the statute was held not to commence "running until, by the exercise of ordinary diligence, the discovery of the mistake was made, or until it ought to have been made." This rule, resting upon the equitable doctrine of laches, has been declared so repeatedly and consistently as to have become as much imbedded in the statute as if it had been so expressed in the enactment.

Going much further, section 2519 qualifies the limitations established by section 2515 by this proviso: "*** But no such action shall be brought ten years after the time of making the contract or the perpetration of the fraud."

The principle and interpretation of the two sections are considered in Eversole & Co. v. Burt & Brabb Lumber Co., 160 Ky. 477, 169 S.W. 846; and Johnson v. Fetter, 224 Ky. 788, 7 S.W.2d 241.

To avoid the effect of these statutes, the plaintiff contended that he did not discover that there was a shortage until September, 1925, when he was notified of it by the company to whom he had sold certain timber, and that the suit was brought within four months after he definitely ascertained that fact and the quantity short. This right of avoidance was vigorously controverted by invoking the concomitant rule as to his duty to discover the mistake by the exercise of ordinary diligence; and that charge was brought in issue by the pleadings and the evidence.

This suit was filed May 12, 1926. The sale of the property was made September 1, 1913. The commissioner's report was filed and deed executed bearing the approval of the judge, on January 9, 1914; but for some undisclosed reason no order confirming the report and directing the execution of the deed was entered until December 28, 1918, on which date it was entered nunc pro tunc. Plaintiff had been put in possession of the property upon the execution of the deed in January, 1914. He did not finish paying for the land until about the date of the maturity of the last purchase-money bond, September 1, 1918; and this is the date he puts forward as being that from which the limitations began to run, if it be decided that the later date of September, 1925, when he was advised of the shortage, should not control. This would bring the case within the ten-year limit.

The sale of the property, the delivery of the deed, and the taking of possession all occurred more than ten years before the filing of the suit to recover for a shortage. It would, therefore, seem at first impression that the positive injunction against maintaining the action after the lapse of ten years "from the time of making the contract or the perpetration of the fraud" or, as enlarged by the interpretation, the making of the mistake, is an insurmountable barrier. Statutes of limitations are based on the accrual of a right of action and, therefore, begin to run from the time the cause or the foundation of the right came into existence. Suits of this character when the purchase money has been paid are regarded as being founded upon an implied contract to refund money fraudulently or mistakenly collected. That doctrine rests upon the idea that the purchaser has paid for land he didn't get and there is no injury or loss until the money is paid. Hence, the cause of action arises upon the final payment and limitations begin to run then. Nave v. Price, 108 Ky. 105, 55 S.W. 882, 21 Ky. Law Rep. 1538; Burton v. Cowles' Adm'x, supra; Graham's Adm'r v. English, 160 Ky. 375, 169 S.W. 836, 837; Eversole & Co. v. Burt & Brabb Lumber Co., supra; Morris v. McDonald, supra; and Robertson v. Jefferson County, 205 Ky. 479, 266 S.W. 27.

Under those authorities, we sustain appellee's alternative claim that limitations did not commence until the date the final payment was made...