Middleton v. Pruden, s. 26488, 26489.

• Decision Date: 18 March 1938
• Docket Number: Nos. 26488, 26489.,s. 26488, 26489.
• Parties: MIDDLETON . v. PRUDEN et al. PRUDEN et al. v. MIDDLETON.
• Court: Georgia Court of Appeals

57 Ga.App. 555

196 S.E. 259

MIDDLETON .

v.PRUDEN et al.

PRUDEN et al.

v.MIDDLETON.

Nos. 26488, 26489.

Court of Appeals of Georgia, Division No. 1.

March 18, 1938.

Syllabus by the Court.

1. The Code § 3-807, provides, "If the defendant, or those under whom he claims, shall have been guilty of a fraud by which the plaintiff shall have been debarred or deterred from his action, the period of limitation shall run only from the time of the discovery of the fraud." The fraud, mentioned in this statute, which is necessary to toll the statute of limitations until the discovery of the fraud which gives rise to the cause of action, must be actual fraud, in-volving moral turpitude, which "debars and deters" the plaintiff from his action; and while the fraud that gives rise to the cause of action may or may not be considered as a circumstance which incidentally aids in the establishment of the fraud which "debars or deters" the plaintiff from his action, yet the establishment of the fraud that gives rise to the cause of action does not necessarily establish the fraud that "debars or deters" the plaintiff from his action mentioned in Code, § 3-807.

2. Fraud which tolls the statute of limitations must be such actual fraud as could not have been discovered by the exercise of ordinary diligence, in the absence of any confidential relation. Frost v. Arnaud, 144 Ga. 26, 85 S.E. 1028.

Error from Superior Court, Floyd County; J. H. Hawkins, Judge.

Action for damages for fraud by M. M. Middleton against V. B. Pruden and others. Judgment for defendants, and plaintiff brings error, and the defendants file a cross-bill of exceptions.

Judgment affirmed and cross-bill dismissed.

Maddox & Griffin, of Rome, for plaintiff in error.

Barry Wright and Henry J. Fullbright, Jr., both of Rome, for defendants in error.

MacINTYRE, Judge.

Middleton, the plaintiff in error, brought suit in the superior court of Floyd county to the April term, 1935, asking for a rescission and cancellation of a bond for title given him by Mrs. Pruden and her two daughters in 1919, on the ground that the trade for the land was induced by the fraudulent statement of one of the vendors, Mrs. Pruden, as to title; that in the exercise of due diligence he had only recently, in 1934, discovered the false statement as to the title, and had discovered that the title was unmarketable in that there were contingent remainders outstanding against which he had no protection. Mrs. Pruden and the other two defendants in that case filed demurrers. These demurrers were overruled in the superior court and they took a bill of exceptions to the Supreme Court, where the case was reversed on the ground of laches of the plaintiff Middleton in bringing his action. Pruden v. Middle-ton, 182 Ga. 687, 186 S.E. 732. After the remittitur was sent down to the clerk of the trial court the case was dismissed. Middleton thereupon brought this second suit on the same statement of facts to the January term, 1937, of the superior court of Floyd county, but on the law side of the court. The second suit was a tort action based on fraud and deceit, alleging, in general language, actual and intentional fraud in the representations as to the title instead of the fraud as alleged in the original equity suit. Otherwise the allegations were substantially the same, but the prayers in the second suit were for damages in tort.

The defendants contend that the plaintiff's action is barred by the statute of limitations. In the instant case the petition alleged that the deed, which showed that there were outstanding contingent remainders which made the title defective, was recorded in 1877 and that the bond for title was made September 20, 1919, and although the false representations were made on that date, the plaintiff did not discover the falsity thereof until September, 1934. As we construe the petition, the only false and fraudulent representation alleged was that Mrs. Pruden told the plaintiff, before the bond for title was made, that when her two children arrived at the age of twenty-one she could make the plaintiff a good title and after her two children became of age she stated that she could now make him a good title and the trade was then made. We might here say that these statements would indicate that, for some unstated reason, if the defendant did convey title to the plaintiff prior to the time her children became of age the title would be defective. Then, is it not the natural inquiry why, after the children became of age, would the title become good? Especially since the defendant gave no definite or specific reason why the title would have been defective up until this time? Then would not the natural thing be to make some investigation as to why this change in the status of the title existed? And would not a resort to the deed record have shown how and in what manner the defendant obtained the title, and would it not have likewise disclosed the defect in the very deed by which the defendant claimed title?

Code § 3-807, provides, "If the defendant, or those under whom he claims, shall have been guilty of a fraud by which the plaintiff shall have been debarred or deterred from his action, the period of limitation shall run only from the time of thediscovery of the fraud." In determining whether fraud by which the plaintiff had been "debarred or deterred" from his action mentioned existed, we should in order to differentiate it (in a sense, insulate it), from the question of the allegations of fraud from which the cause of action sprang. And then we should look only to the facts (in their relation to the tolling of the statute of limitations), to see whether or not that kind of fraud mentioned in said section has been alleged, and it should be borne in mind that constructive fraud as well as actual fraud might give rise to a cause of action, whereas the only kind of fraud which would toll the statute of limitations is actual fraud. If this were not true, there would be no statute of limitations against fraud which gave rise to a cause of action unless and until it was discovered, even though it were obvious that the fraud could and should have been discovered by the exercise of ordinary care. In considering the issue whether or not the statute of limitations is tolled until the discovery of the fraud, the special difficulty may to some degree disappear if we bear in mind that the fraud which gave rise to the cause of action may be considered only as a circumstance incidental to the proof of guilt of a fraud by which the plaintiff has been "debarred and deterred" from bringing his suit. In this state the courts have held that the fraud referred to in the Code, § 3-807, which tolls the operation of the statute of limitations, is not necessarily the same fraud which gives rise to the cause of action. The fraud referred to in this section must be actual fraud involving moral turpitude. Barrett v. Jackson, 44 Ga.App. 611, 162 S.E. 308. In this case the cause of action (if any) sprang from the fraudulent act of the defendant Mrs. Pruden. It is not always an easy matter to distinguish between fraud that is the gist of the...