Cantonwine v. Fehling, s. 4848

• Decision Date: 24 July 1978
• Docket Number: Nos. 4848,4849,s. 4848
• Citation: 582 P.2d 592
• Parties: 24 UCC Rep.Serv. 904 Carl H. CANTONWINE and Juanita M. Cantonwine, husband and wife, Appellants (Defendants below), v. Winnibel FEHLING, a/k/a Winnibelle Fehling, a/k/a Winniebelle Fehling, Appellee(Plaintiff below). Winnibel FEHLING, a/k/a Winnibelle Fehling, a/k/a Winniebelle Fehling, Appellant (Plaintiff below), v. Carl H. CANTONWINE and Juanita M. Cantonwine, husband and wife, Appellees(Defendants below).
• Court: Wyoming Supreme Court

Page 592

582 P.2d 592

24 UCC Rep.Serv. 904

Carl H. CANTONWINE and Juanita M. Cantonwine, husband and wife, Appellants (Defendants below), v. Winnibel FEHLING, a/k/a Winnibelle Fehling, a/k/a Winniebelle Fehling, Appellee(Plaintiff below).

Winnibel FEHLING, a/k/a Winnibelle Fehling, a/k/a Winniebelle Fehling, Appellant (Plaintiff below), v. Carl H. CANTONWINE and Juanita M. Cantonwine, husband and wife, Appellees(Defendants below).

Nos. 4848, 4849.

Supreme Court of Wyoming.

July 24, 1978.

Timothy S. Tarver, of Burgess & Davis, Sheridan, for Carl H. Cantonwine and Juanita M. Cantonwine.

Rex O. Arney, of Redle, Yonkee & Arney, Sheridan, for Winnibel Fehling.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

ROSE, Justice.

These appeals arise from a suit initiated by Winnibel Fehling (hereinafter the plaintiff) to collect $15,000.00 she claimed was due on certain promissory notes executed by Carl H. and Juanita M. Cantonwine (hereinafter the defendants) to the plaintiff and her husband. The trial court entered a summary judgment in favor of the plaintiff with respect to one-half of her claim, and a summary judgment in favor of the defendants with respect to the remainder of the claim. In addition, the trial court denied defendants' motion to dismiss, finding that the Wyoming and not the Colorado statute of limitations applied to the cause of action. We will affirm in all respects.

On April 25, 1965, and March 9, 1966, respectively, the plaintiff's husband issued checks, drawn on a bank account held jointly with the plaintiff, to the defendants in the amounts of $5,000.00 and $10,000.00. On October 14, 1966, the plaintiff's husband forwarded a letter ¹ to the defendants, in which he enclosed five $3,000.00 promissory notes ² for the defendants' signatures. At all times relevant herein, the plaintiff and her husband were residents of the State of Colorado, while the defendants were residents of the State of Wyoming. The promissory notes, which were demand instruments dated October 1, 1966, at Salida, Colorado, were executed by the defendants in Wyoming and returned to the plaintiff's husband. The notes indicated they were payable at Salida, Colorado, with interest at six percent per annum, payable when the notes were paid. On October 20, 1966, the plaintiff's husband executed his Last Will and Testament, which provided, in ARTICLE EIGHT, that his executors were to forgive

"any indebtedness which the said CARL CANTONWINE, and/or his wife may owe me at the time of my death and to fully cancel and satisfy said indebtedness."

Subsequent to the death of plaintiff's husband, in 1968, the five promissory notes were assigned to the plaintiff by John M. Boyle and the plaintiff, acting as executor and executrix of the plaintiff's husband's estate. The notes had been included in their entirety as a part of the gross estate of plaintiff's husband for inheritance tax purposes. In 1973, plaintiff demanded payment of the notes from the defendants. Upon receiving a refusal to make payment, the plaintiff filed suit in the United States District Court for the District of Wyoming. This federal action was subsequently dismissed for lack of jurisdiction. Fehling v. Cantonwine, U.S.D.C.Wyo., 379 F.Supp. 1250, aff'd, 10 Cir., 522 F.2d 604. Thereafter on December 16, 1975, this action was commenced in Wyoming.

On appeal, we are confronted with the following issues:

1. Whether the action was barred by the applicable statute of limitations;

2. Whether there was an issue of material fact with respect to consideration for the notes; and

3. Whether the interest of the plaintiff's husband in the notes was effectively renounced.

STATUTE OF LIMITATIONS

We are here concerned with two potentially applicable statutes of limitation. In Wyoming, a civil action on a contract or promise in writing must be brought within ten years after the cause of action accrues. Section 1-16, W.S.1957 (§ 1-3-105(a)(i), W.S.1977). The Colorado statute of limitations for actions on contractual debts is six years. Section 13-80-110, C.R.S.1973. The defendants contend that the Colorado statute applies thus barring the present action, which was brought just over nine years after the date of the promissory notes by virtue of § 1-25, W.S.1957 (§ 1-3-117, W.S.1977). This provision Wyoming's "borrowing statute" provides:

"If by the laws of the state or county Where the cause of action arose the action is barred, it is also barred in this state." (Emphasis supplied)

As indicated by the emphasized portion of § 1-25, supra, the threshold inquiry pertains to where the cause of action on these notes arose. If the cause of action arose in Wyoming, then § 1-25, supra, does not apply and the action was timely commenced under the Wyoming ten-year statute of limitation. Defendants contend, however, that the cause of action arises in the state in this case, Colorado where the notes are payable and where the defendants are subject to service of process, citing Bliler v. Boswell, 9 Wyo. 57, 59 P. 798, reh. den., 9 Wyo. 57, 61 P. 867. While Bliler contains some useful principles of law which we will apply herein the case is not dispositive of these appeals, given the distinction in factual circumstances. In Bliler, both the maker and payee of promissory notes payable in Colorado on a future date were residents of Colorado and continued to reside there until the maturity of the notes. While the notes were executed and dated in Wyoming, this court determined that the cause of action arose in Colorado, given the peculiar facts of the case. As stated in the opinion denying the petition for rehearing:

" . . . Under those circumstances, and upon those facts, we held that the cause of action arose in Colorado, and it was not intended that our decision should go further than that. . . . " 61 P. at 867.

Another distinguishing circumstance exists, which was not emphasized in Bliler. In Bliler, the notes in question were time instruments, as opposed to the demand notes we have here. This distinction will become critical to our disposition of this issue.

Before addressing ourselves to the specific problems concerning actions on promissory notes, it is important to echo several general principles relative to the accrual of causes of action. As observed in Bliler v. Boswell, supra, at 59 P. 803:

" . . . A 'cause of action' is defined as matter for which an action may be brought. It is said to accrue to any person when that person first comes to a right to bring an action. A cause of action implies that there is some person in existence who can bring suit, and also a person who can lawfully be sued. Again, when a wrong has been committed, or a breach of duty has occurred, the cause of action has accrued, although the claimant may be ignorant of it. A cause of action does not accrue until the existence of such a state of things as will enable a person having the proper relations to the property or persons concerned to bring an action. 1 Bouv. Law Dict. (Rawle's Revision) p. 295. The statute of limitations is never held to have commenced to run upon a note until it has become due, and the duty has devolved upon the party liable to make payment. . . . " The concept was extensively discussed in Bruner v. Martin, 76 Kan. 862, 93 P. 165, 166, as follows:

" . . . The phrase 'cause of action' has often been defined. It cannot exist without the concurrence of a right, a duty, and a default; or, stated differently, an obligation must exist upon one party in favor of the other, the performance of which is refused. Bouvier defines it as a right to bring an action. To the same effect see Bucklin v. Ford, 5 Barb. (N.Y.) 393; Myer v. Van Collem, 28 Barb. (N.Y.) 230; Lewis v. Hyams, 26 Nev. 68, 63 P. 126, 64 P. 817, 99 Am.St.Rep. 677. 'Cause of action is the right to prosecute an action with effect.' Douglas v. Forrest, 4 Bing. 686. In Veeder v. Baker, 83 N.Y. 156, is defined as follows: 'It may be said to be composed of the right of the plaintiff and the obligation, duty, or wrong of the defendant; and these combined, it is sufficiently accurate to say, constitute the cause of action.' Pomeroy in his Code Remedies, § 453, uses the following language: 'Every judicial action must therefore involve the following elements: A primary right possessed by the plaintiff, and a corresponding primary duty devolving upon the defendant; a delict or wrong done by the defendant which consisted in a breach of such primary right and duty; a remedial right in favor of the plaintiff, and a remedial duty resting on the defendant springing from this delict, and finally the remedy or relief itself. Every action, however complicated, or however simple, must contain these essential elements. Of these elements, the primary right and duty and the delict or wrong combined constitute the cause of action in the legal sense of the term, and as it is used in the Codes of the several states. They are the legal cause or foundation whence the right of action springs.' . . .

"It would be difficult to find a better or more apt statement of where and when a cause of action arises than is found in the following extract from the opinion in Durham v. Spence, L.R. 6 Exch. 46: 'Now the cause of action must have reference to some time as well as to some place. Does then the consideration of the time when the cause of action arises give us any assistance in determining the place where it arises? I think it does. The cause of action arises when that is not done which ought to have been done, or that is done which ought not to have been done. But The time when the cause of action arises determines also the place where it arises; for when that occurs which is the cause of action, the place where it occurs is the place where the cause of action arises.' . . . " (Emphasis supplied)

In Bruner as was true in Bliler v. Boswell and most of the other cases we have discovered the court was concerned with an instrument Which matured...