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KIRBY v. LAKE SHORE & MICHIGAN SOUTHERN RAILROAD.

decided: January 10, 1887.

KIRBY
v.
LAKE SHORE & MICHIGAN SOUTHERN RAILROAD.



APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.

Author: Harlan

[ 120 U.S. Page 134]

 MR. JUSTICE HARLAN, after stating the case as above reported, delivered the opinion of the court.

The case made by the plaintiff is clearly one of which a court of equity may take cognizance. The complicated nature of the accounts between the parties constitutes itself a sufficient ground for going into equity. It would have been difficult, if not impossible, for a jury to unravel the numerous transactions involved in the settlements between the parties, and reach a satisfactory conclusion as to the amount of drawbacks to which Alexander & Co. were entitled on each settlement. 1 Story Eq. Juris. § 451. Justice could not be done except by employing the methods of investigation peculiar to court of equity. When to these considerations is added the charge against the defendants of actual concealed fraud, the right of the plaintiff to invoke the jurisdiction of equity cannot well be doubted.

Did the Circuit Court err in adjudging that the suit was barred by the statute of limitations?

By the Code of Civil Procedure of New York in force prior to September 1, 1877, the period of six years was prescribed as the limitation for --

"1. An action upon a contract, obligation, or liability, express or implied," except a judgment or sealed instrument.

"6. An action of relief, on the ground of fraud, in cases which heretofore were solely cognizable by the court of chancery; the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of

[ 120 U.S. Page 135]

     the facts constituting the fraud." Voorhees' Code, § 91; 4th ed. 86; 5th ed. 69-70.

The Code which went into operation September 1, 1877, prescribed the like limitation for actions upon contracts, obligations, or liabilities, express or implied, other than judgments or sealed instruments; but, in place of subdivision 6 of § 91 of the old Code, was substituted the following:

"5. An action to procure a judgment, other than for a sum of money, on the ground of fraud, in a case which, on the thirty-first day of December, 1846, was cognizable by the court of chancery. The cause of action in such a case is not deemed to have accrued until the discovery, by the plaintiff or the person under whom he claims, of the facts constituting the fraud." N.Y. Code, as amended in 1877, § 382.

The Circuit Court, deeming the jurisdiction in equity and at law to be concurrent in cases like this, was of opinion that the question of limitation is controlled by the local statute, and, upon the authority of Carr v. Thompson, 87 N.Y. 160, adjudged that this action was not, within the meaning of § 382 of the Code, one "to procure a judgment, other than for a sum of money, on the ground of fraud;" and that, consequently, the cause of action accrued upon the commission of the alleged frauds (which was in 1871), and not at the date of their discovery, on the 16th of April, 1873. As this view is controverted by the appellant, and is the main ground upon which appellees rely for an affirmance of the judgment below, it must be examined.

It is not clear that the decision in Carr v. Thompson goes as far as the circuit judge supposed. That was an action against an agent to recover moneys obtained from his principals and converted to his own use, by means of false and fictitious accounts, rendered from time to time, and which he represented to be correct and just. Fraud, although charged, was not regarded by the state court as the basis of the action. It was not deemed a suit to recover damages for the fraud practised, but one merely to recover damages for the ...


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