Schmitt v. Hager
| Decision Date | 30 January 1903 |
| Docket Number | 13,269 - (225) |
| Citation | 93 N.W. 110,88 Minn. 413 |
| Parties | JOHN W. SCHMITT v. FRED HAGER and Others |
| Court | Minnesota Supreme Court |
Action in the district court for Brown county by plaintiff, as trustee in bankruptcy for Fred Hager, bankrupt, to vacate, as being in fraud of creditors, a transfer of real estate made by defendant Fred Hager to defendant Mary Hager, his wife. Defendant Hager alone appeared and answered. The case was tried before Webber, J., who found in favor of plaintiff. From a judgment entered pursuant to the findings, defendants Hager appealed. Affirmed.
Statute of Limitations -- Failure to Plead.
The defendant in both legal and equitable actions, by answering to the merits and going to trial without in any manner attempting to avail himself of the defense of the statute of limitations, waives such defense, although it appears on the face of the complaint that the statute has run. The distinction in this respect between the defense of the statute and laches noted.
Hoidale & Somsen, for appellants.
H. L Schmitt, Jos. A. Eckstein and J. W. Schmitt, for respondent.
This is an action by the trustee in bankruptcy of the defendant Fred Hager against him and his codefendants to set aside a conveyance to his wife because fraudulent as to his creditors.
The complaint, besides other allegations, alleges these facts: Fred Hager on October 27, 1893, was indebted to C. H. Hornburg in the sum of $530, due November 1, 1894, and on March 9, 1896, he duly recovered and docketed a judgment against Hager for the balance of such indebtedness then unpaid. No part of the judgment has been paid. On October 27, 1894, Hager and his wife conveyed certain real estate owned by him to the defendant Gerhard Neeman, and he and his wife, the defendant Mary Neeman, conveyed it to Hager's wife, the defendant Mary Hager. Each of the deeds was made without consideration, and was made for the purpose of defrauding Hager's creditors, -- especially his creditor C. H. Hornburg. Hager was then, and ever since has been, insolvent, and has no other property out of which the judgment can be satisfied. The complaint does not allege when Hornburg first discovered the fraudulent character of the conveyances, but it does allege that the trustee did not discover such fact until after May 4, 1901. This action was commenced August 3, 1901, -- more than six years after the fraudulent transfer of the real estate, but less than six years after the judgment was recovered.
The defendants Fred and Mary Hager answered, alleging a defense to the action on the merits; but no attempt was made to plead the statute of limitations, nor was the question raised by demurrer nor in any other way until after the close of the evidence on the trial, unless it was raised by their objection to the admission of any evidence for the reason that the complaint does not state facts sufficient to constitute a cause of action against either of the defendants, without in any other way suggesting the question. The trial court found the facts as alleged in the complaint, and directed judgment for the relief prayed for. The judgment was so entered, and the answering defendants appealed therefrom.
The evidence received on the trial was not brought up, and the sole contention of the defendants on this appeal is that the complaint shows upon its face that the action is barred by the statute of limitations, because it appears therefrom that the action was commenced more than six years after the fraud was committed, and contains no allegation showing that the fraud was not discovered at the time it was perpetrated; hence the judgment must be reversed. It is true that an action to set aside a conveyance of land because fraudulent as to creditors is one for relief on the ground of fraud, and that such an action must be commenced within six years after the discovery of the facts constituting the fraud. G.S. 1894, § 5136, subd. 6. It is also true that, where the fraud was committed more than six years before the commencement of the action, the complaint should allege that the facts constituting the fraud were not discovered within six years next before the commencement of the action. The question, however, here to be decided, is not whether the defendants might have availed themselves of the defense of the statute of limitations by demurrer or answer, but it is whether they waived such defense by answering to the merits, and going to trial without raising it until it was too late for the plaintiff to amend.
Counsel for the defendants concede that in actions at law the defense of the statute of limitations is waived unless pleaded, but insist that the rule is otherwise in equitable actions, and that such defense is not waived in such an action by answering to the merits and going to trial. Several decisions of this court are cited, which are claimed to support this alleged rule. It is proper, before referring to the cases cited, to note the distinction between the strictly equitable defense of laches and the absolute defense of the statute of limitations. The latter is an absolute bar to a suit in equity, as well as to one at law; and, if asserted by the defendant and sustained by proof, it must be given effect in all forms of actions without regard to the equities, for the court in such a case has no discretion. But the defense of laches is not, like the statute of limitations, exclusively a matter of time, for it is purely an equitable defense, based upon grounds of public policy, which require, for the peace of society, the discouragement of stale demands, and is addressed to...
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