Teall v. Slaven

• Decision Date: 30 December 1889
• Citation: 40 F. 774
• Parties: TEALL et al. v. SLAVEN et al.
• Court: U.S. District Court — Northern District of California

40 F. 774

TEALL et al. v. SLAVEN et al.

United States Circuit Court, N.D. California.

December 30, 1889

Syllabus by the Court

There may often be a remedy, at law, for fraud, but where it is desirable to remove a cloud from the title to real estate by decreeing a cancellation of a fraudulent conveyance, that remedy, being more complete, courts of equity will take jurisdiction, and grant appropriate relief.

In providing for limitations of actions founded on fraud, the legislature has adopted the principle established by courts of equity, that the cause of action shall not be deemed to have accrued until the 'discovery of the facts constituting the fraud;' and to ascertain what conditions constitute a discovery, within the meaning of such statutes the principles established in equity jurisprudence, whence the idea was derived, must be applied.

The established principles as to the discovery of fraud, are That the party must be diligent in making inquiry; that means of knowledge are equivalent to knowledge; that a clue to the facts, which if diligently followed would lead to a discovery, is, in law, equivalent to a discovery.

Where a deed alleged to be fraudulent, bearing evidence of fraud upon its face, has been duly recorded upwards of 30 years, it affords just as strong evidence of fraud to the parties defrauded, as it does to subsequent purchasers. As to the parties defrauded, the question, of what the record imparts knowledge, is not as in the case of subsequent purchasers, a question of statutory constructive notice, but of diligence.

Where a bill to annul a conveyance on the ground of fraud is filed more than 30 years after the performance of the acts of fraud complained of; and, in order to bring the case within the statutory exceptions, it is alleged, that, 'the acts constituting fraud' have only been discovered within 3 years before the filing of the bill, it is, also, necessary to set forth in the bill, specifically, what the impediments were to an earlier prosecution of the claim; how the complainant came to be so long ignorant of his alleged rights; the means used by the respondent to keep him in ignorance, and how he first came to a knowledge of his rights.

The non-residence and continued absence of the complainant from the state does not excuse a want of diligence in ascertaining his rights.

It is alleged in the bill, that T., a citizen and resident of New York owning land in California, executed a power of attorney to D., to take exclusive possession and control of the same and to sell and convey it at his discretion, which power of attorney was duly recorded and remained unrevoked till the death of T., on August 12, 1857; that after the death of T., on September 17, 1857, D. by virtue of said power of attorney executed in the name of D. a conveyance expressing a consideration of $5,000, to R., of a large amount of said real property situated in the city of San Jose, the said conveyance bearing date August 1, 1857, 11 days prior to the death of T.; that on the same day, for a like consideration expressed, R. conveyed the same property to D., by deed bearing the same date; that said conveyances were made without consideration, and for the fraudulent purpose of enabling D. to appropriate said property of T. to his own purposes; that said conveyances were acknowledged on September 17, and recorded on October 3, 1857; that the numerous respondents are grantees direct, and mesne, from D., and that they purchased with a knowledge of the title of T.; that D. in his life-time, and respondents, and their grantors, since D.'s death in 1876, concealed these fraudulent acts from complainants, a portion of the heirs of T., who have always lived in the state of New York and never have been in California, and that they did not discover these fraudulent acts until some time in the year 1887, a short time before the commencement of this suit. Held, (1) that the suit is barred by the statute of limitations of California; (2) that the cause of suit is stale, and will not be enforced within the established principles of equity jurisprudence; (3) that during the 32 years that have elapsed since the death of T., and the 14 years since the death of D., presumably the only parties who knew their exact relations to each other, and to this land, no sufficient diligence has been exercised by complainants to preserve their right of suit; and (4) that the impediments to a prosecution of the rights of complainants; how they were so long ignorant of them; the means of concealment adopted by respondent, and how complainants first came to a knowledge of their rights, are not sufficiently set out in the bill.

This is a bill filed by three parties claiming to be a portion of the heirs at law of Oliver Teall, deceased, and entitled to three-fifteenths of the property in question, against many defendants, said to be 336 in number, to set aside a conveyance from said Oliver Teall, by his attorney in fact, Davis Devine, to A. L. Rhodes, and a conveyance from A. L. Rhodes to said Davis Devine, made in 1857, on the ground of fraud, and to compel a conveyance of their undivided share of property, which consists of a large number of lots, said to be 1,000 or more, situate in the city of San Jose. The other heirs, with one exception, who is made a defendant, declined to join, and for that reason are not made parties. The bill alleges, that, the deceased, Oliver Teall, in 1852, made a power of attorney to Davis Devine, giving him full power to take possession of, and to control and sell all real estate owned by said Teall in San Jose, which power of attorney was duly acknowledged and recorded on March 16, 1852; and that it continued in force and unrevoked down to the time of the decease of said Teall.

That said Teall died August 12, 1857; that on August 1, 1857, and down to his death, Teall owned the property in question; that at a date unknown, but by a deed bearing date August 1, 1857, said Davis Devine, as the attorney in fact of said Teall, purporting to act under the said power of attorney, conveyed said property to one A. L. Rhodes, and thereupon, on the same day, said Rhodes conveyed the same to said Devine; that the several deeds of conveyance expressed a consideration of $5,000 each, but that in fact no consideration was paid by either; that the conveyance by Devine was not authorized by Teall, but was made for the fraudulent purpose of obtaining the property for himself; that the conveyances, although bearing date August 1, were not, in fact, executed till September 17, 1857, on which day they were acknowledged; that they were recorded on October 8, 1857, and are still of record; that the defendants in this case are in possession of their respective portions, either under conveyances direct, or mesne, from said Devine, made subsequent to the record of said pretended, and fraudulent conveyances; or as heirs or devisees of said Devine; that 'said possession was taken by said defendants, and each of them, with full notice of the title of said Oliver Teall, and his heirs to said premises, and of the relation of principal and agent subsisting between him and said Devine, as heretofore averred at the time of the date of said pretended and fraudulent conveyances, and are not purchasers of said premises or any part thereof in good faith and for value. ' This it will be observed, is somewhat indefinite and evasive, as it merely alleges that at the date of those conveyances, the parties knew that Teall owned the property, and the relation of the parties, but it does not aver squarely that they or any of them knew that the conveyances were made without consideration for a fraudulent purpose, unless it can be inferred from the averment of the legal conclusion, merely, that they were 'not purchasers in good faith.' The bill, also, avers that the land was within the pueblo of San Jose, and was confirmed to the city for the benefit of its grantees; that a patent was issued to the city on June 4, 1884, and that a portion has already been conveyed by the city of San Jose to some of the defendants, and the legal title under the patent to the remainder is still vested in the city. In the second amended bill are the following additional allegations: That complainants are natives and citizens of the state of New York; that they have always resided in said state, and were never in the state of California; that Devine died in 1876, and during his life, and after the death of Teall, he 'carefully concealed the truth of the facts, as alleged, from complainants, and falsely represented to them, that the said Devine was the owner of the property described,' and after Devine's death, his heirs and others claiming under him, 'concealed the truth from the complainants, and persistently, falsely, and fraudulently represented to claimants that all of said property belonged to said Devine in his life-time;' and all on record at his death belonged to him; 'that none of complainants knew of said conveyances, to-wit; said conveyance from Davis Devine as agent of Oliver Teall to A. L. Rhodes, and said conveyance of A. L. Rhodes to Davis Devine, until the year 1887;' and 'that the said false and fraudulent representations made by said Devine and by his widow, and by their agents, etc., were believed by the complainants to be true, until the year 1887, when they were informed and became cognizant of the truth, as herein set forth in their bill of complaint.'

J. B. Lamar, J. E. Foulds and W. H. Castle, for complainants.

Estee, Wilson & McCutchen and S. F. Leib, for respondents.

Before SAWYER, Circuit Judge.

SAWYER J.

The foregoing statement contains all the allegations of the bill in any way affecting the points at issue, after having been twice amended; and...