Dean v. Iowa-Des Moines Nat. Bank & Trust Co.

• Decision Date: 12 March 1940
• Docket Number: 44217.
• Citation: 290 N.W. 664,227 Iowa 1239
• Parties: DEAN v. IOWA-DES MOINES NAT. BANK & TRUST CO.
• Court: Iowa Supreme Court

290 N.W. 664

227 Iowa 1239

DEAN v. IOWA-DES MOINES NAT. BANK & TRUST CO.

No. 44217.

Supreme Court of Iowa.

March 12, 1940

Appeal from District Court, Polk County; Russell Jordan, Judge.

A petition for rehearing having been granted as to Count I of plaintiff's petition, that part of the original opinion covering Count I is herewith withdrawn and this supplemental opinion inserted in lieu thereof. The rest of the opinion is as originally filed.

For original opinion, see 281 N.W. 714.

RICHARDS, J., HAMILTON, C. J., and SAGER and OLIVER, JJ dissenting.

Strock, Woods & Dyer, of Des Moines, for appellant.

McMartin Herrick & Langdon, of Des Moines, for appellee.

MITCHELL Justice.

In this law action commenced on August 31, 1937, plaintiff in separate counts declared upon four different written instruments, on each of which the Iowa National Bank was a party. To that bank the defendant bank is the successor, and the liability of defendant on these instruments is whatever would be the liability of the Iowa National Bank, according to the allegations in each county. This opinion takes into consideration these allegations, without further mentioning. Also, we will refer to the Negotiable Instruments Law as the N. I. L.

In Count One plaintiff alleged that on April 1, 1918, the Iowa National Bank, for a valuable consideration, issued to L. Harbach and Sons, as payee, a draft drawn on Corn Exchange National Bank, Chicago, Illinois, in the following words:

" Iowa National Bank 33-2

Des Moines, Iowa, April 1, 1918

No. 534554

Pay to the Order of L. Harbach and Sons $52.92 Fifty-two and 92/100 Dollars Corn Exchange National Bank, Chicago, Ill.

J. Burson, Cashier."

Further matters set out in this count were: negotiation off the draft for valuable consideration by the payee to plaintiff on August 10, 1937; presentment to drawee bank for payment on August 11, 1937; refusal of payment by drawee; due protesting and giving of notice of protest and dishonor to defendant as drawer, all on August 11, 1937, following dishonor; demand on defendant for payment on August 13, 1937; payment refused by defendant. A further allegation was that defendant has suffered no loss by virtue of any delay in presentment of said draft for payment. Plaintiff demanded judgment upon Count One for $52.92 with interest from August 11, 1937.

Defendant demurred on the ground that Count One shows that the cause of action is barred by Section 11007(6), Code 1935, for the reason that, before the action was begun, more than 10 years elapsed from and after a reasonable time for presentment of the draft to the drawee for payment, and likewise more than 10 years elapsed from and after a reasonable time for presentation of the draft to defendant; that plaintiff's cause of action on said draft accrued more than 10 years prior to the commencement of this action. This demurrer the trial court sustained. Plaintiff electing to not amend or plead over, judgment was rendered against him upon Count One. Having appealed, he assigns the ruling on the demurrer as the error relied on for reversal on Count One.

The statute of limitations on which alone the demurrer is predicated, is in these words:

" 11007. Period of. Actions may be brought within the times herein limited, respectively, after their causes accrue, and not afterwards, except when otherwise specially declared: * * *

6. Written contracts-* * * Those founded on written contracts, * * * within ten years."

It must be conceded that it is the general rule, that the plaintiff's cause of action has not accrued so as to start the statute of limitations running, unless all the facts exist so that plaintiff can allege a complete cause of action, but there is an exception controlling in the case at bar. Namely, if the only act necessary to perfect the plaintiff's cause of action is one to be performed by the plaintiff and he is under no restraint or disability in the performance of such act, he cannot indefinitely suspend the statute of limitations by delaying performance of that act.

Let us look at a few of our own decisions. Early in the history of this court in the case of Prescott v. Gonser, 34 Iowa 175, this court said:

" That the action of mandamus cannot be maintained until there has been a refusal to perform the official duty * * * is true, but to hold that a plaintiff, who has a right to demand performance at any time, may delay such demand indefinitely, would enable him to defeat the object and purpose of the statute. It is certainly not the policy of the law to permit a party, against whom the statute runs, to defeat its operation, by neglecting to do an act which devolves upon him, in order to perfect his remedy against another. If this were so, the party would have it in his own power to defeat the purpose of the statute in all cases of this character. He could neglect to claim that to which he is entitled, for even fifty years unaffected by the statute of limitations, thereby rendering it a dead letter. In such a construction of the statute we cannot concur. * * *

To allow him to suspend the operation of the statute of limitations by his own neglect to make demand, would be to permit him to take advantage of his own wrong."

In the case of Baker v. Johnson County, 33 Iowa 151, the plaintiff had an unliquidated claim against the county. The defendant's existing duty was to pay the claim after demand. Plaintiff's preliminary duty was to make the demand. The demand was not made until the statute had run. This court held that the statute of limitations was a good defense.

In the case of Great Western Telegraph Company v. Purdy, 83 Iowa 430, 50 N.W. 45, 46, stock subscriptions were to be paid " as the directors of the corporation should order." The court said: " It may be assumed that this balance did not become due, and no action to recover * * * could be maintained until such an order had been made. It rested with the corporation * * * to acquire the right to maintain an action. * * * Surely, the law will not permit a party, by his own inaction, to defeat the statute of limitations. * * * In our opinion, the action of the plaintiff is barred by the statute of limitations."

The plain language of the Purdy case makes it clear that it is not based on an existing duty, but is founded upon the proposition that a creditor may not, by his own neglect or inaction, postpone the running of the statute. In the rather recent case of Lovrien v. Oestrich, 214 Iowa 298, 242 N.W. 57, opinion by the late Justice Morling, this court said: " It was wholly within the power of the holder of the note to make demand and thereby determine the time of maturity. It was therefore incumbent upon him to make demand within reasonable time, and in such case demand must be made within the time prescribed by the statute of limitations for commencing suit. A creditor may not by his own act or neglect delay or postpone the running of the statute. The holder might have made demand on the date of the note, December 1, 1916, and thereby matured his cause of action in 30 days thereafter. The statute of limitations began to run at the end of 30 days from the date of the note, and action upon it was barred in 10 years thereafter, within the principle of Great Western Telegraph Co. v. Purdy, 83 Iowa 430, 433, 50 N.W. 45; Hodgson v. Keppel, , 232 N.W. 725; Citizens' Bank v. Taylor, 201 Iowa 499, 207 N.W. 570; Prescott v. Gonser, 34 Iowa 175, 179; Wilson v. Stipp, 194 Iowa 346, 350, 189 N.W. 665."

The general rule in this country is stated in 37 C.J. 933, as follows: " Where plaintiff's right of action depends upon some act to be performed by him preliminary to commencing suit, and he is under no restraint or disability in the performance of such act, he cannot suspend indefinitely the running of the statute of limitations by delaying the performance of the preliminary act; for it is not the policy of the law to put it within the power of a party to toll the statute of limitations; if the time for such performance is not definitely fixed, a reasonable time, but that only, will be allowed therefor, unless this would be contrary to the evident intention of the party creating the condition. The rule that, where the right of action depends upon a preliminary step to be taken by plaintiff, he cannot indefinitely delay the taking thereof, rests upon the principle that plaintiff has it in his power at all times to do the act which fixes his right of action."

The Nebraska court was confronted with the same question that is involved in the present case, Wrigley v. Farmers' & Merchants' State Bank, 76 Neb. 862, 108 N.W. 132.We quote: " The trial court found that the action was barred by the statute of limitations and the correctness of that conclusion is challenged, the contention of the appellant being that the cause of action against the appellee did not accrue until the draft was presented for payment in November, 1899. Counsel for appellant has presented an interesting discussion of the distinction between a draft drawn by one bank on another and a bank check drawn by a customer. We are inclined, however, to adopt the view of the counsel for appellee, that the distinction is not important to the inquiry. In Scroggin v. McClelland, 37 Neb 644, 56 N.W. 208, 22 L.R.A. 110, 40 Am.St.Rep. 520, it was held that the statute of limitations commences to run in favor of the drawer of a check at the latest after the lapse of a reasonable time for the presentment of the check. We see no reason for adopting a different rule in favor of the holder of a bank draft. * * * The reason for the rule is that it was the right of the creditor by his own act to make the demand payable. He might, by such act, have perfected his cause of action, and it would be both...