Shapleigh Hardware Co. v. Spiro

• Decision Date: 16 November 1925
• Docket Number: 25166
• Citation: 106 So. 209,141 Miss. 38
• Court: Mississippi Supreme Court
• Parties: SHAPLEIGH HARDWARE CO. v. SPIRO. [*]

106 So. 209

141 Miss. 38

SHAPLEIGH HARDWARE CO. v. SPIRO. ^[*]

No. 25166

Supreme Court of Mississippi

November 16, 1925

Division B

Suggestion Of Error Overruled December 14, 1925.

APPEAL from circuit court of Lauderdale county, HON. R. M BOURDEAUX, Judge.

Action by the Shapleigh Hardware Company against Jonas Spiro. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Reversed and remanded.

Neville & Stone, for appellant.

I. The sole question in this case is whether or not the six-year statute of limitations began to run at the date of the note sued on. If it did, then the case should be affirmed. We contend that the statute of limitations did not begin to run until demand was made on the makers of the note. If we are correct, then the case should be reversed.

We concede that the statute of limitations begins to run from the date of a note payable on demand, which contains no stipulation as to the payment of interest where the surrounding circumstances do not show that the parties contemplated that an actual demand would be made at some future date. Our contention is that the general rule does not apply to this case. Butts v. V. & M. Railroad Co., 63 Miss. 465. As stated above we concede this to be the general rule. A great many courts realizing that this general rule is in conflict with the express language of the makers of such a note and realizing the injustice of the general rule, have refused to extend it to cases where the note contains provisions which indicate that it was within the contemplation of the parties that an actual demand would be made at some future date. Brown v. Brown, 11 N.W. 64.

The provisions of the note sued on in this case, which to our minds clearly indicate that it was within the contemplation of the parties that a demand would be made before suit could be brought and that such demand would not be made immediately, are the clear indications that the date of the note and the maturity of the note were not the same. See Merritt v. Todd, 23 N.Y. 28, 80 A. D. 243; Yates v. Goodwin, 96 Me. 90, 51 A. 804. After stating the general rule to the effect that the statute of limitations begins on a demand not at its date, Judge FREEMAN in his note, 28 A. D. at 468, says: "But if the tenor of the instrument is such as to indicate a clear intention to that effect, no action will lie thereon until after an actual demand and refusal, and the statute of limitations does not begin to run until then." See also Daugherty v. Wheeler, 25 N.E. 543; Scovil v. Scovil, 45 Barbour 517.

II. Admissibility of parol testimony to prove the surroundings of the parties at the time of the execution of the note sued on. The purpose of the testimony offered in this case was not to add to, vary or contradict the legal effect of the terms of the note sued on. The purpose of the testimony was that the note might be interpreted in the light of the surroundings of the parties at the time of its execution. Atlinson v. Sinnott, 67 Miss. 510; 10 R. C. L., sec. 212, page 1019; 22 C. J., sec. 1530, page 1144; Cook v. Pomeroy, 32 A. 935; Daugherty v. Wheeler, 25 N.E. 542.

We do not ask this court to overrule the case of Butts v. V. & M. R. R. Co., supra, but we do most earnestly submit that the "strange and anomalous" doctrine announced in that case should not be applied to a case where the written instrument contains provisions which indicate that it was the intention of the parties that an actual demand should be made before the makers were in default, and that such demand would not be made immediately upon the execution of the note. The appellee is asking this court to extend this "strange and anomalous" and unjust rule.

The construction we contend for is in harmony with the construction of the parties, as shown by the facts in the case. The makers paid five installments of interest on the note, and no demand was made until after the insolvency of the Spiro Hardware Co. In conclusion see Clinch Valley Coal & Iron Co. v. Willing, 180 Pa. State, 165, 57 A. S. R. 627.

Jacobson & Brooks, for appellee.

The suit brought on this note was filed on March 29, 1921, seven years and two days after the date and execution of the note. Two questions are to be decided: (1) Whether or not the note is barred by the statute of limitations; that is, whether the note contemplated that a demand should have been made, and when said demand was made; and (2) whether or not parol evidence was admissible on the trial of the suit.

I. The note is payable on demand after date, with interest at the rate of six per cent per annum from date, payable semi-annually, and at the rate of six per cent per annum from maturity until paid. Notes payable "on demand" become due and payable from their date, in the absence of any statute to the contrary, and, consequently, the statute begins to run thereon from that date. 1 Woods on Limitations (4 Ed.), sec. 124, page 723; 2 Danl. on Neg. Ins., sec. 1215; Ang. on Lim., sec. 95; Butts v. V. & M. R. R. Co., 63 Miss. 465; 3 R. C. L., sec. 432, page 1211. We contend under these authorities that the note became due upon its date, March 27, 1914, and the statute of limitations began to run from that date; and, also, that the evidence of the provisions in said note as to payment of interest does not make the paper none the less payable on demand. 8 C. J., sec. 509, pages 404 and 405; Lee v. Bascom, 11 P. 74; DeRaismes, v. DeRaismes, 56 At. 170; Shuman v. Citizens State Bank of Rugby (N. D.), 147 N.W. 388; Feno v. Gay (Mass.), 15 N.E. 87; Sullivan v. Ellis, 209 F. 694; 2 Joyce, Defense to Commercial Paper (2 Ed.), sec. 1007; Turner v. Iron Chief Mining Co., 17 Am. St. Rep. 168; Wheeler v. Warner, 47 N.Y. 519, 7 Am. Rep. 478.

The note in question was sued upon, but is none the less a note payable on demand, because it had the words, "on demand after date," and also the words, "interest at the rate of six per cent per annum," and at the rate of "six per cent per annum from maturity until paid," and it is our contention that the rule laid down in the case of Butts v. V. & M. R. R. Co., 63 Miss. 463, supra, and the authorities cited is not contrary to the contentions in this case, and should govern in an action upon the note in question.

Counsel for appellant states he concedes this to be the general rule, but he argues that in this case the general rule is in conflict with the express language of the makers of the note in question. Let it be remembered, however, that this is a suit instituted by the payee of the note against one of the makers. It is not a suit against any indorser, but against appellee, Spiro, one of the makers of the note, and when we look into the authorities cited by counsel for appellant, we find that his authorities are not applicable. See Yates v. Goodwin, 96 Me. 90, 51 A. 804; 3 R. C. L., sec. 446, page 1223. The general rule applicable to a case of this kind is that the note in question was due on the date of its execution, and, therefore, the statute of limitations began to run from March 27, 1914; and at the time the suit was brought, March 29, 1921, more than six years had elapsed; therefore, the statute of limitations applied.

II. Parol evidence was not admissibie to vary, add to, or contradict the legal effect of the written instrument sued on. All the testimony attempted to be introduced was inadmissible, for the reason that it violates the rule prohibiting parol testimony to be introduced to vary, contradict, add to, or change the plain terms of a written instrument. 1 Joyce on Defenses to Commercial Paper (2 Ed.), sec. 516, page 705; Cocke v. Blackbourn, 58 Miss. 539; Baum v. Lynn, 72 Miss. 932; Thompson v. Bryant, 75 Miss. 12; Howard v. Tomicich, 81 Miss. 703; Hightower v. Henry, 85 Miss. 476; English v. N. O. & N. E. R. R. Co., 100 Miss. 575; N. O. & N. E. R. R. Co. v. Lott, 118 Miss. 57; O'Keefe et al. v. McLemore, 125 Miss. 394; McPherson et al. v. Richards et al., 134 Miss. 282.

It is our contention that the testimony which was attempted to be introduced changed the time of payment from that expressed in writing in the note sued upon, and was a vain attempt to vary, and change the terms in the written instrument, which is prohibited by law, and the trial court did not err in excluding all of said evidence. The note sued upon is unambiguous. It is a demand note, and the legal effect thereof is, that it became due upon the execution thereof, and the maturity of same ran from the date of the note. Therefore, the court did not err in sustaining the objections of the appellee to the introduction of the depositions.

Argued orally by Geo. B. Neville, for appellant, and Gabe Jacobson, for appellee.

OPINION

ANDERSON, J.

Appellant, Shapleigh Hardware Company, brought this action in the circuit court of Lauderdale county against appellee, Jonas Spiro, on a promissory note for ten thousand dollars with interest, signed by appellee and others, executed March 27, 1914, and due "on demand after date." There was a trial, and at the conclusion of appellant's evidence, on motion of appellee, the evidence was excluded and a verdict directed in appellee's favor, from which judgment appellant prosecutes this appeal.

The action was brought at the September, 1921, term of the court and was begun more than six years after the date of the note sued on. Appellee pleaded, and the trial court held, that the note was barred by the statute of limitations of six years, and therefore appellant was not entitled to recover. The holding of the trial court was based on the theory that the note, being payable on demand, matured at once, and the statute of limitations, therefore, was set in motion from its date; that the statute began to run from its date, and not from the date demand for...