Johnston v. Keefer

Citation48 Idaho 42,280 P. 324
Decision Date15 July 1929
Docket Number5156
PartiesP. B. JOHNSTON, Appellant, v. JOSEPH KEEFER, Respondent
CourtUnited States State Supreme Court of Idaho

STATUTE OF LIMITATIONS-AGREEMENT TO REPURCHASE-ACCRUAL OF ACTION-DEMAND-REASONABLE TIME FOR MAKING-BURDEN OF PROOF.

1. As regards running of statute of limitations, cause of action upon liability, such as one to recover purchase price of stock, ordinarily accrues only upon demand made to person upon whom liability rests, requiring him to perform his obligation.

2. If an act on part of creditor, such as demand or notice, be necessary as condition precedent to his cause of action demand must be made within reasonable time as regards running of limitations, theory being that one in whose favor such liability exists cannot defeat purpose of statute of limitations by unreasonable delay in making of demand reasonable time being period fixed by statute of limitations.

3. Statute of limitations as reasonable time within which to make demand begins to run from time of making of demand or after lapse of reasonable time.

4. When no time is fixed for making of demand, it will be presumed to have been made in reasonable time or at expiration of period within which statute would have run upon claim if it had been due from its date, and statute of limitations is then set in motion.

5. Where oral agreement was made on March 1, 1919, to purchase stock, action commenced in August, 1926, to recover purchase price was timely as being brought within four-year period as allowed by statute of limitations (C. S., sec. 6610), since applying a four-year period as reasonable time within which to demand performance of the contract, in view that delay in making request for repurchase of the stock was contemplated such period expired March 1, 1923, immediately after which statute would begin to run against the action, requiring it to be instituted by March 1, 1927.

6. Where delay in making demand is contemplated by parties and where speedy demand would manifestly violate intent of rule or where there are peculiar circumstances affecting question, rule requiring that demand be made within reasonable time after which statute would begin to run against action does not apply.

7. What is reasonable time for making demand must depend upon facts of each case as regards running of limitations.

8. Statute of limitations is an affirmative defense, which imposes the burden upon one asserting it of proving every element necessary to establish it.

APPEAL from the District Court of the Eleventh Judicial District, for Twin Falls County. Hon. Hugh A. Baker, Judge.

Action to recover purchase price of stock. Judgment for defendant. Reversed.

Judgment reversed. Costs to appellant. Petition for rehearing denied.

Walters, Parry & Thoman, J. R. Keenan, W. L. Dunn and E. R. Dampier, for Appellant.

Where an indefinite delay in making demand for performance is contemplated by the terms of the contract, the period of the statute of limitations will not be held to be the measure of the time in which demand should be made. (Vickrey v. Maier, 164 Cal. 384, 129 P. 273; Cochran v. Cochran, 133 Wash. 415, 233 P. 918; 37 C. J. 966, sec. 344; Bills v. Silver King Min. Co., 106 Cal. 9, 21, 39 P. 43; Fallon v. Fallon, 110 Minn. 213, 136 Am. St. 464, 124 N.W. 994, 32 L. R. A., N. S., 486; Longhofer v. Herbel, 83 Kan. 278, 111 P. 483.)

In this case there are peculiar circumstances making a reasonable time for plaintiff's demand a longer period than that established by the statute of limitations. (Flickinger v. Heck, 187 Cal. 111, 200 P. 1045; Fergus v. Venice Inv. Co., 36 Cal.App. 425, 172 P. 396; Ocean Shore R. Co. v. Spring Valley Water Co., 60 Cal.App. 43, 212 P. 215.)

Bothwell & Chapman, for Respondent.

Where a demand is necessary to perfect a right of action, and the contract is silent with reference to the time within which such demand must be made, and the time of such demand is within the control of the plaintiff, that demand must be made within a reasonable time, and such reasonable time will not, in any event, extend beyond the statutory period fixed for the bringing of such action. (Jenkins v. Marsh, 22 Cal.App. 8, 132 P. 1051; Guffey v. Gulf Production Co., 17 F. (2d.) 926, 930; Purcell Bank & Trust Co. v. Byars, 66 Okla. 70, 167 P. 216; State v. Oklahoma City, 67 Okla. 18, 168 P. 227.)

BUDGE, C. J. Givens, T. Bailey Lee, Wm. E. Lee and Varian, JJ., concur.

OPINION

BUDGE, C. J.

On March 1, 1919, appellant made an oral agreement with respondent to purchase from the latter certain shares of stock of the Twin Falls National Bank and Rogerson Hotel Company, on the promise of respondent that the stock would be repurchased by him at any time desired by appellant. In pursuance of this agreement appellant purchased a number of shares of the capital stock of each of the companies named, and in payment therefor delivered to respondent a promissory note payable in six months. On or about September 24, 1919, and under the same agreement, appellant purchased an additional number of shares of the same companies and made payment therefor to respondent. From the record it appears that the two companies mentioned were in process of organization, or had been recently organized, at the time of the purchase of the stock by appellant, and that respondent was desirous of having a man of appellant's standing in the companies in order to have the benefit of his influence and advice, and until the bank, especially, was on a firm basis. Appellant began to be apprehensive and dissatisfied with his purchase about the year 1922, or 1923. At a stockholders' meeting in 1924 or 1925 appellant asked respondent to take back the stock as he had agreed to, but was put off by respondent, who requested that he "hold it a little while; it is going to be good," etc. Other requests that the stock be repurchased were made by appellant and were met with continued assurances of respondent that the stock would "be good," and that he would still fulfil his agreement, until in February, 1926, when appellant tendered the stock to respondent and asked for the return of the purchase price, to which demand respondent refused to accede.

The above recital constitutes in substance the evidence introduced by appellant in an action commenced by him in August, 1926, for the recovery of the purchase price of the stock referred to. We shall proceed directly to the point of whether the trial court erred in granting respondent's motion for nonsuit and entering judgment thereon, on the ground of the running of the statute of limitations against appellant's cause of action, being of the opinion that the court was within a proper exercise of its discretion in allowing an amendment to respondent's answer so as to raise the issue of the statute of limitations, and that it did not err in refusing appellant's request for a continuance thereafter.

A cause of action upon a liability such as herein sought to be attached ordinarily accrues only upon a demand made to the person upon whom the liability rests, requiring him to perform his obligation; or, differently stated, where no time is specified for the doing of an act, other than the payment of money, it is the rule of law that a demand for performance is necessary in order to put the promisor in default. (9 Am. & Eng. Ency. of Law, 200, 201; 37 C. J., p. 958; 17 R. C. L., pp. 757, 758; 25 Cyc. 1210; Hill v. Haskin, 42 Cal. 159.)

It has come to be a quite general rule that if an act on the part of the creditor, such as a demand or notice, be necessary as a condition precedent to his cause of action, such demand must be made within a reasonable time, the theory being that one in whose favor such a liability exists cannot defeat the purpose of the statute by an unreasonable delay in the making of the demand, and that a reasonable time within which to make demand is, by analogy, the period which is fixed by the statute of limitations. (Jenkins v. Marsh, 22 Cal.App. 8, 132 P. 1051; Vickrey v. Maier, 164 Cal. 384, 389, 129 P. 273; 37 C. J., p. 954, sec. 325; 17 R. C. L., p. 757.) The statute begins to run from the time of making demand, or after the lapse of such "reasonable time." (17 R. C. L., p. 756, sec. 122; 16 Cal. Jur., p. 493; Williams v. Bergin, 116 Cal. 56, 47 P. 877; Re Gardner, 228 Pa. 282, 77 A. 509, 29 L. R. A., N. S., 685.) It has been held that when no time is fixed for the making of a demand, it will be presumed to have been made in a reasonable time, or at the expiration of the period within which the statute would have run upon a claim if it had been due from its date, and the statute is then set in motion. (25 Cyc. 1207, 1208; 1 Wood on Limitations, 4th ed., p. 617; Keithler v. Foster, 22 Ohio St. 27; 17 R. C. L., p. 757; Emerson v. North American Transp. & T. Co., 303 Ill. 282, 23 A. L. R. 1, 6, 135 N.E. 497; Thompson v. Whitaker Iron Co., 41 W.Va. 574, 23 S.E. 795; Smith v. Smith, 91 Mich. 7, 51 N.W. 694; Massie v. Byrd, 87 Ala. 672, 6 So. 145; Daugherty v. Wheeler, 125 Ind. 421, 25 N.E. 542.)

If it were accepted as the rule absolute that a "reasonable time" for...

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