Partrick v. Groves, 59.

• Decision Date: 05 January 1934
• Docket Number: No. 59.,59.
• Citation: 169 A. 701
• Parties: PARTRICK et ux. v. GROVES.
• Court: New Jersey Supreme Court

169 A. 701

PARTRICK et ux.

v. GROVES.

No. 59.

Court of Errors and Appeals of New Jersey.

Jan. 5, 1934.

Appeal from Court of Chancery.

Suit by Charles W. Partrick and wife against William F. Groves. From an adverse order, defendant appeals.

Affirmed.

William R. Wilson, of Elizabeth, for appellant.

Louis C. Lehmann, Jr., of Elizabeth, for respondents.

HEHER, Justice.

Appellant complains of an order restraining him from setting up the statute of limitations as a defense to an action at law, instituted against him by respondents, to recover moneys of respondents fraudulently appropriated by appellant to his own use. Appellant, an attorney at law, converted moneys turned over to him by respondents for the payment of installments on the principal of a mortgage covering a property owned by the latter. These payments by respondents to appellant covered the period beginning July, 1922, and ending June 30, 1927. Respondents did not learn of appellant's unlawful appropriation of the moneys until May, 1930. Thereafter, and until the final hearing in a suit to foreclose the mortgage, appellant insisted that he was authorized by the mortgagee to receive these moneys on his behalf. At the final hearing this asserted agency was repudiated by appellant, and, shortly thereafter, on August 1, 1932, respondents instituted the action at law.

Appellant maintains that there was no jurisdiction in equity for the making of the order complained of. This contention is without merit. The gravamen of the bill of complaint was that appellant's fraudulent conduct in appropriating the moneys to his own use, and in concealing the unlawful conversion of the moneys, was followed by a fraudulent representation, persisted in until final hearing of the foreclosure suit, that he was the duly authorized agent of the mortgagee for the collection of these moneys. Appellant's fraudulent conduct caused respondents to subject their claim to the bar of the statute of limitations, and equity will not permit him to hold the advantage thus obtained. This is a firmly established rule. In Howard v. West Jersey & S. S. R. Co. 102 N. J. Eq. 517, 520, 141 A. 755, 757, affirmed 104 N. J. Eq. 201, 144 A. 919, Vice Chancellor Learning, in applying the apposite rule, said: "It must be recognized that the statute of limitations is for the benefit of individuals, and not to secure general objects of policy; hence it may be waived by express contract or by necessary implication, or its benefits may be lost by conduct invoking the established principles of estoppel in pais. Freeman v. Conover, 95 N. J. Law, 89, 112 A. 324. Also it should be noted that, while the doctrine of estoppel in pais rests upon the ground of fraud, it is not essential that the representations or conduct giving rise to its application should be fraudulent in the strictly legal significance of that term, or with intent to mislead or deceive; the test appears to be whether in all the circumstances of the case conscience and duty of honest dealing should deny one the right to repudiate the consequences of his representations or conduct; whether the author of a proximate cause may justly repudiate its natural and reasonably anticipated effect; fraud, in the sense of a court of equity, properly including all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another."

Courts of equity ordinarily act in obedience and in analogy to the statute of limitations, but they will not allow the bar of that statute to prevail where it would further manifest injustice. Lincoln v. Judd, 49 N. J. Eq. 387, 24 A. 318...