Fox v. Zimmermann

LyoN, J.

¥e think the finding of the jury is supported by the testimony. Such finding and the admission, both of which are set out in the above statement of the case, establish the proposition that when the taxes accrued for each year from 1868 to 1879, inclusive, the defendant Fried-erich had in his hands the rents he collected to an amount sufficient to pay the taxes of such year. Of course he committed a gross fraud on the plaintiff when, in each of the years 1873, 1877, and 1878, he neglected to pay such taxes therewith, but allowed the land to be returned and sold and afterwards conveyed to his wife for nonpayment of taxes. If he purchased the certificates of sale in his own right, it amounted to a payment of the taxes and a redemption of the certificates from the tax sale. If he purchased them for his wife, the result is the same, for he had knowledge of the fraud he had committed and was committing on the plaintiff when he made the purchase. Notice to or knowledge of the agent in such case is notice to or knowledge of the principal. It was so held in Wilcox v. Bates, 26 Wis. 465 . See, also, Story, Ag. §§ 140, 140a; 1 Am. & Eng. Ency. of Law, 419, and numerous cases cited in note 2.

The findings of the circuit court are too long to insert here. It is sufficient to state, in addition to what is said of them in the above statement of the case, that the judgment for defendants rests chiefly on the findings that Mrs. Zim-mermcmn, through her husband and agent, purchased the tax certificates upon which her tax deeds issued with her own separate means, and had no notice or knowledge; at *418 the time, of the fraud committed by her agent upon the plaintiff. But we have seen that she had constructive notice of the fraud, and that is just as fatal to her title under the tax deeds as actual notice would have been.. She is in no better position than her agent would have been in had the tax deeds been executed to him instead of her.

Furthermore there is a total failure of proof that she had any separate estate. Had she been the owner of a separate estate in her own right, the fact might easily have been proved. She did not testify on the trial, and the testimony of her husband satisfactorily shows that she had no such estate. He testified that, because of some trouble he was theretofore having with some one, he conveyed afi his property to his wife; that she kept all the money; that when he wanted any she gave it to him, and gave him the money with which he purchased the tax certificates. This is substantially all the proof there is on the subject. The court should have found that Mrs. Zimmermann had no separate estate, and that her husband purchased the certificates with his own money, and took the tax deeds thereon for his own use and benefit, although in the name of his wife; also that such tax deeds were void by reason of the fraud of Friederieh in not paying the taxes with the money in his hands which he. had received for the rent of the land, as it was his duty to do.

All the limitation statutes pleaded, save sec. 4222, R. S., and all which the court found were applicable to the case, relate exclusively to actions in which the validity or regularity of tax sales,' etc., is involved. This is not such a case. No question is made here of the validity or regularity of the tax proceedings, but the tax deeds are attacked for fraud only, just as they might have been were they conveyances-by private parties. It was held in McMahon v. McMahon, 26 Wis. 614 , that such conveyances are not within any of those special limitation acts.

*419 Sec. 4222, R. S., contains a limitation of six years after the cause of action has accrued in an action for relief on the ground of fraud, with a certain exception therein named, and provides that “ the cause of action in such case is not deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.” The question was raised in the argument whether this case is ruled by that section, or by the preceding section, which prescribes a limitation of ten years. It is not necessary to determine the question. We assume, for the purposes of this appeal, that it is governed by sec. 4222, which is most favorable to the defendants. There is no proof that plaintiff had any actual notice, six years before she commenced this action, that her land had been conveyed or sold for nonpayment of taxes. Mere constructive notice is not sufficient to put the statute in motion. It was so held in the case last cited.

By the Oourt.— The judgment of the circuit court is reversed, and the cause will be remanded for a new trial.