Atchison, Topeka & Santa Fe Railway Co. v. Atchison Grain Co.

The opinion of the court was delivered by

Johnston, C. J. :

A rehearing of this cause was allowed mainly for the purpose of a further consideration of the application of the statute of limitations to the causes of action stated in the petition. Counsel' for the parties have presented.the question again with *586 marked ability and a full citation of authorities. In the former opinion the averments of the petition were set out at length, and a repetition at this time is unnecessary. (A. T. & S. F. Rly. Co. v. Atchison Grain Co., 70 Pac. 933.) They disclose the fact that the causes of action set up were founded on the violation of an oral contract, and cannot be classed as an action for relief on the ground of fraud. It is true there is an allegation that the railway company covertly and fraudulently entered into arrangements with other shippers whereby it gave them rates of transportation so much lower than those given to plaintiffs as abso-. lutely to bar them from handling grain. This, however, was only a statement that an express contract between the parties was broken, the breach of which was relied upon for á cause of action. Since the gist of the action was the violation of a contract, it is manifest that it does not fall within the third subdivision of section 18 of the civil code (Gen. Sta't. 1901, § 4446), viz., “action for relief on the ground of fraud,” wherein is added the express exception that “the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud.” On our first consideration, the conclusion was reached and stated that “concealment and fraud constitute an implied exception to the statute of limitations, and a party who wrongfully conceals material facts, and thereby prevents a discovery of his wrong, or the fact that a cause of action has accrued against him, is not allowed to take advantage of his own wrong.”

Counsel for plaintiff in error press upon our attention the question whether, where the legislature, having confined the exception to “action for relief on the ground of fraud,” there is any reason or warrant for applying it to other causes of action. It is insisted *587 that the court cannot imply or create exceptions additional to those specifically provided in the statute. The legislature declared that “civil actions, other than for the recovery of real property, can only be brought within the following periods after the cause of action shall have accrued, and not afterwards.” Among others enumerated is the one involved here— “Within three years : An action upon a contract not in writing, express or implied.” The legislature then declares certain exceptions in addition to the one appended to the cause of action for relief on the ground of fraud. In section 19 of the code (Gen. Stat. 1901, §4447) an exception is made in favor of a person under a legal disability at the time a cause of action accrues. Another exception is made in section 21 of the code (Gen. Stat. 1901, §4448), where the defendant is out of the state or has absconded and concealed himself. Another is created in section 22, where the ■cause of action arose in another state or country. In section 23 an exception is made in case of a reversal or failure of an action otherwise than upon the merits. In section 24 provision is made for starting the statute anew by a payment or acknowledgment of indebtedness. These exceptions., and we do not know that all have been stated, show that the attention of the legislation was directed to exceptions to the general rule, and the question is whether the court can add to those provided by the legislature and in effect amend the code.

The effect of making an exception to an act of limitation was considered in Swickard v. Bailey, 3 Kan. 507. It was there said :

“This action shows conclusively that the legislative mind was directed to the subject we are considering. The provision is not as broad as in the judgment of *588 many it should be, but the fact that any exception at all was made is strong evidence that no other or greater one was intended. At all events, according to the most familiar of the canons of interpretation, the court is bound to say, that having mentioned one exception, all others were intended by the legislature to be excluded.”

See, also, Perry v. Wade, 31 Kan. 428, 2 Pac. 787, and Stinson v. Aultman, 54 id. 537, 38 Pac. 788.

In Bank of the State of Alabama v. Dalton, 9 How. 522, 529, 13 L. Ed. 242, in the matter of engrafting on a statute of limitation exceptions not found therein, the court said :

“The legislature having made no exception, the courts of justice can make none, as this would be legislating. In the language of this court in the case of McIver v. Ragan, 2 Wheat. 29 [4 L. Ed. 175] : ‘ Wherever the situation of the party was such as, in the opinion of the legislature, to furnish a motive for excepting him from the operation of the law, the legislature has made the exception, and it would be going far for this court to add to those exceptions.’ The rule is established beyond controversy.”

The supreme court of Tennessee, in discussing the matter of exceptions to a statute of limitations where the legislature had made none, remarked that it was “well convinced that this court has no such power; that it is our duty to administer the law regardless of particular cases of hardship, and that it belongs exclusively to the legislature to alter the law if it is oppressive or inconvenient. It is believed that such has been the course of decision, with slight aberrations in reference to the act of limitations for centuries.” (Cocke and Jack v. McGinnis, Mart. & Yerg. 361, 17 Am. Dec. 809.)

The same question was before the supreme court Of *589 "Wisconsin in Woodbury v. Collins, Shackleford, and another, 19 Wis. 65, and it was said :

“In the construction of statutes of limitation, general words are to have a general operation ;• and where thefe cannot be found in the statute itself some ground for restraining it, it cannot be restrained by arbitrary addition or retrenchment. No exceptions can be claimed in favor of particular persons or cases, unless they are expressly mentioned.”

There may be strong reasons for making an exception where there is concealment of a cause of action or where the element of fraud enters somewhat into the breach of the contract upon which an action is brought. The legislature, however, after considering' the subject, did not deem it wise to make such exception, but on the other hand positively declared that concealed fraud should operate to toll the statute in the single action brought for relief on the ground of fraud. While concealment is alleged and wrongs akin to fraud are charged by the grain company, it does not ask that the contract be set aside because of the fraud, but, relying oh that contract, asks to recover the loss sustained by its breach.

The fraudulent concealment that a right of action for the breach of a contract exists does not change the nature of the action nor shift it into the class named in subdivision 8 of section 18 of the civil code. In fact, the petition in this case did not allege a fraudulent concealment of the cause of action, but only went so far as to say that “defendant succeeded in concealing the fact of such discrimination from plaintiff until less than eighteen months prior to the filing of this petition.” How it succeeded in concealing the fact is not stated. Whether it was by silence, misrepresentation, or some affirmative action, *590 is not pleaded, nor is there any averment as-to what diligence was used by the grain company in uncovering the discrimination, or that the means of discovery-were not within its reach all of the time. As soon as-the grain company found itself unable to ship grain or compete with others engaged in the same business, it suggested an inquiry, and if inquiry had developed the discrimination, it cannot assert a want of knowledge. Ordinarily, a means of knowledge is equivalent to knowledge. Even if the facts constituting-fraudulent concealment had been specifically set out, it could not have affected this action for the reason that it is not founded on fraud, and, therefore, not. subject to the statutory exception. In Perry v. Wade, supra, it was said :

“Of course the mere concealment of a cause of action, or the concealment that a cause of action had ever accrued or ever had any existence, does not of’, itself bring the case within the above-quoted provisions of subdivision 3, § 18, of the civil code, nor does-it prevent the statute of limitations from running.”

In Stinson v. Aultman, supra, it was held that the-provision with reference to the accrual of a cause of' action upon the discovery of the fraud of the defendant, has no application to an action based on a contract. In discussing the claim that the fraudulent conduct of the defendant prevented the plaintiffs from enforcing their contract, it was said :

“What they do claim is that his fraudulent conduct prevented them from knowing that they had a claim which they might enforce against him — prevented them from collecting the amount of the Newman note from Stinson himself. The concealment by Stinson of the fact that they at one time had a cause-of action which they might have enforced against him does not alone, and of itself, constitute a legal fraud. *591 As the plaintiff’s cause of action is founded solely on a written instrument on which an action might have been brought more than five years before the commencement of this action, it is barred by the statute of limitations.”

In some of the states fraudulent concealment of a cause of action is made to extend the time of bringing the action for the period of limitation after the discovery that a cause of action exists; but the code of this state makes no such provision, except as to actions for relief on the ground of fraud. So far as actions founded upon agreements or contracts are concerned, the operation of the statute depends upon the nature of the cause of action and not upon the time that a plaintiff discovers that he has a right of action. The action accrues when the contract is violated and not at the time when the plaintiff learns* that it has been violated. In the absence of a statute making concealment an exception to the statute of limitations, the courts cannot create one, however harsh and inequitable the enforcement of the statute may be. (Fee’s Administrator v. Fee, 10 Ohio, 469, 36 Am. Dec. 103 ; Lathrop and wife v. Snellbaker, 6 Ohio St. 276; Howk v. Minnick, 19 id. 462, 2 Am. Rep. 413 ; The State, ex rel., v. Standard Oil Company, 49 id. 137, 30 N. E. 279, 15 L. R. A. 145, 34 Am. St. Rep. 541; Smith v. Bishop, 9 Vt. 110, 31 Am. Dec. 607; Jas. Peak v. Lafayette Buck and wife, 3 Baxt. 71; Troup v. Smith, 20 Johns. 32; Allen v. Mille, 17 Wend. 202; Exkorn v. Exkorn, 1 Hun, App. Div. 124, 37 N. Y. Supp. 68; Miller v. Wood et al., 116 N. Y. 351, 22 N. E. 553 ; Freeholders of Somerset v. Veghte, 44 N. J. L. 509 ; P. P. Mast & Co. v. Easton, 33 Minn. 161, 22 N. W. 253 ; Jacobs v. Frederick, 81 Wis. 254, 51 N. W. 320; Blount v. Parker, 78 N. C. 128; Wood, Lim., 3d ed., § 274.)

*592 The action abcrued when the alleged wrongs were committed and the contract was violated. The fact that the contract relations between the parties were to continue for a year did not operate to extend the starting of the statute. When the wrongs were consummated which made it impossible for the grain company to continue business under the contract, the contractual relations were practically broken off and the statute of limitations then began to run.

Attention is called to McMullen v. Loan Association, 64 Kan. 298, 67 Pac. 892, 56 L. R. A. 924, 91 Am. St. Rep. 236, as an authority in favor of an implied exception. In that case a fiduciary relation existed between the parties, McMullen being in fact an agent. He had control of the business and funds of the association and his position made it easy for him to cover 'up the fraudulent conversion of the funds. It was his duty to speak and disclose the actual condition, but because of his fraudulent acts and concealment the association did not learn of the breach of trust and the wrongs done for a considerable time. The relation of trust and confidence placed that case in another class, wherein the general rule of equity applies, that the statute of limitations does not begin to run until the breach of trust or default in performance of duties is brought to the knowledge of the principal.

It follows from what has been said that the district court was in error in sustaining the petition of .the grain company.

Smith, Cunningham, Greene, Burch, Atkinson, JJ., concurring.