Missouri Pacific Railway Company v. Continental National Bank

• Decision Date: 30 May 1908
• Parties: MISSOURI PACIFIC RAILWAY COMPANY v. CONTINENTAL NATIONAL BANK and NATIONAL BANK OF COMMERCE, Appellants
• Court: Missouri Supreme Court

111 S.W. 574

212 Mo. 505

MISSOURI PACIFIC RAILWAY COMPANY v. CONTINENTAL NATIONAL BANK and NATIONAL BANK OF COMMERCE, Appellants

Supreme Court of Missouri, First Division

May 30, 1908

Appeal from St. Louis City Circuit Court -- Hon. Warwick Hough Judge.

Affirmed.

S. N. & S. C. Taylor for appellants.

(1) The agreement by the bank to pay $ 24,406.50 when the Pacific Railroad had laid its tracks to Concordia; and to pay $ 24,406.50 when the tracks were laid to Lexington, was not in writing, and, therefore, was affected by the five-year Statute of Limitations. R. S. 1899, sec. 4273; State ex rel. v. Grigsby, 92 Mo. 419; Landis v. Saxton, 105 Mo. 486; Shelby County v. Bragg, 135 Mo. 295; Menefee v. Arnold, 51 Mo. 536; Reyburn v Casey, 29 Mo. 129; Moorman v. Sharp, 35 Mo 283; Curtis v. Sexton, 201 Mo. 230; Stark v. Zehnder, 204 Mo. 443. If, however, this court should hold that the written entry in the ledger of the bank constituted a contract in writing, then the ten-year Statute of Limitations would apply and bar recovery. (2) When an obligation to pay is complete, the cause of action has matured, and formal demand is unnecessary as a condition precedent to bringing suit, and the statute then begins to run. Clarke v. Sinks, 144 Mo. 453; Landis v. Saxton, 105 Mo. 490; State ex rel. v. Grigsby, 92 Mo. 419; State ex rel. v. Shires, 39 Mo.App. 567; Easton v. McAllister, 1 Mo. 662. (3) The election of one to perfect a demand must be exercised within a reasonable time. It cannot be extended beyond the period of the Statute of Limitations. Landis v. Saxton, 105 Mo. 490; Jameson v. Jameson, 72 Mo. 642; O'Fallon v. Kerr, 10 Mo. 554; Easton v. McAllister, 1 Mo. 662; Kraft v. Thomas, 123 Ind. 513; Railroad v. Township, 36 Kan. 628; Palmer v. Palmer, 36 Mich. 488. (4) If, for argument, we assume that a demand was necessary, before an action could have been maintained for the $ 5,406.50, still that would not stay the running of the statute, because where a demand is a condition precedent to a right to sue, such demand must be made within the period of limitation, else the action is barred. Landis v. Saxton, 105 Mo. 491; Easton v. McAllister, 1 Mo. 662; Kraft v. Thomas, 123 Ind. 513; Newsom v. Board of Education, 103 Ind. 526; High v. Board, 92 Ind. 580; Codman v. Rogers, 10 Pick. 112; Morrison v. Mullin, 34 Pa. St. 12; Railroad v. Burlingame, 36 Kan. 628; Palmer v. Palmer, 36 Mich. 488; Ball v. Railroad, 62 Iowa 753; Sanford v. Lancaster, 81 Me. 434; Wood on Limitations (3 Ed.), sec. 125. (5) The statute begins to run against "a promissory note payable on demand" the day of its date, and the action will be barred in ten years after its date. Jameson v. Jameson, 72 Mo. 642; O'Fallon v. Kerr, 10 Mo. 554; Easton v. McAllister, 1 Mo. 662; Palmer v. Palmer, 36 Mich. 487; Hall v. Litts, 21 Iowa 596; Ware v. Hewey, 57 Me. 391; Kraft v. Thomas, 123 Ind. 513. Turner v. Mining Co., 74 Wis. 358, holds: "The law is well settled that a promissory note payable on demand, whether with or without interest, is due forthwith, and an action thereon against the maker is barred by the Statute of Limitations if not brought within the time prescribed by statute after its date." Wheeler v. Warner, 47 N.Y. 519; Howland v. Edmonds, 24 N.Y. 307; Burnham v. Allen, 1 Gray 496; Sylvester v. Crapo, 14 Pick. 92; Taylor's Adm'rs v. Whitman's Adm'rs., 3 Grant's Cas. 138; Larason v. Lambert, 12 N. J. Law, 247; Curran v. Witter, 68 Wis. 16; Schriber v. Richmond, 73 Wis. 12; Mitchell v. Easton, 37 Minn. 335; Hill v. Henry, 17 Ohio 9; Caldwell v. Rodman, 5 Jones, L. 139; Wilks v. Robinson, 3 Rich. Law 182. (6) An action for money had and received is barred by the five years' limitation, and plaintiff's ignorance of his cause of action will not affect the running of the statute in the absence of concealment, etc. Shortridge v. Harding, 34 Mo.App. 354; Garrett v. Conklin, 52 Mo.App. 654; Bueckner v. Patterson, 16 Ky. 234; Webster v. Bible Soc., 50 Ohio St. 1; Douglas v. Corry, 46 Ohio St. 349. Where a debt is payable on demand, the statute begins to run immediately after the debt is incurred, for the courts generally hold that a debt payable on demand is due immediately, so that an action can be brought at any time without any other demand than the suit, and the statute begins to run at once. Collins v. Trotter, 81 Mo. 275; O'Neil v. Magner, 81 Cal. 631; Seward v. Hayden, 150 Mass. 158; Citizens' Savings Bank v. Vaughan, 115 Mich. 156; 7 Ency. Law & Pro., 848; Wood, Limitations of Actions (3 Ed.), sec. 124; 2 Dan. Nego. Instr. (5 Ed.), 1698; Fenno v. Gay, 146 Mass. 118; Hitching v. Edmonds, 132 Mass. 338; Cousins v. Partridge, 79 Cal. 224; Henry v. Roe, 83 Tex. 446; Swift v. Trotti, 52 Tex. 498; Bartholomew v. Seaman, 25 Hun 619; Erwin v. Brooks, 111 N.C. 358. (7) The statute does not run against technical, continuing express trusts, such as fall within the peculiar and exclusive jurisdiction of courts of equity. Every trust which admits of an action at law for its enforcement is subject to the statute. Keeton's Heirs v. Keeton's Admr., 20 Mo. 538; Johnson v. Smith's Admr., 27 Mo. 592; Hunter v. Hunter, 50 Mo. 450; Ricord's Adm'x v. Watkins, 56 Mo. 554; Landis v. Saxton, 105 Mo. 489; Shelby County v. Bragg, 135 Mo. 296; Dexter v. McDonald, 196 Mo. 389; Garrett v. Conklin, 52 Mo.App. 659; Zacharias v. Zacharias, 23 Pa. St. 452; Hostetter v. Hallinger, 117 Pa. St. 606; Railroad v. Bridges, 46 Am. Dec. 528; Hayward v. Gunn, 82 Ill. 385; Governor, Etc. v. Woodworth, 63 Ill. 254; People v. Ocheltree, 48 Ill.App. 220; Jewells v. Jewells' Est., 139 Mich. 586; Harlow v. Dehon, 111 Mass. 195; Farnam v. Brookes, 9 Pick. 243; Parks v. Satterthwaite, Admr., 132 Ind. 411; Butler v. DeBaum, 116 Wis. 326; Kennedy v. Baker, 59 Tex. 150; Wingate v. Wingate, 11 Tex. 434; Tinner v. Mebane, 10 Tex. 252; Hightower v. Hester, 4 Tex. Civ. App. 57; Mills v. Mills, 115 N.Y. 80; Dunn v. Dunn, 137 N.C. 533. (8) Statutes of limitation are favored in the law, and cannot be avoided, unless the party seeking to do so brings himself strictly within some exception. Shelby Co. v. Bragg, 135 Mo. 300; Rogers v. Brown, 61 Mo. 187; State ex rel. v. Willi, 46 Mo. 236; Garrett v. Conklin, 52 Mo.App. 654; Shortridge v. Harding, 34 Mo.App. 354; Wood v. Carpenter, 101 U.S. 141; Buckner v. Calcote, 28 Miss. 432; Nudd v. Hamblin, 8 Allen 130. (9) The error of the trial court consisted in holding that the transaction constituted a direct express trust, and, therefore, could not be affected by the Statute of Limitations. Call it, if you will, a direct express trust -- the name is not significant -- the undisputed facts must control, and such facts undeniably show that the transaction does not possess the characteristics of the "technical, continuing express trusts, such as fall within the peculiar and exclusive jurisdiction of courts of equity." The authorities we have cited at point 7 demonstrate the error of the trial court's conclusion.

H. G. Herbel and Brownrigg, O'Brien & Mason for respondent.

(1) There has been no change of theory on the part of plaintiff in this case, but if there had been, inasmuch as the original petition in the case was not preserved in the record by exception, appellants would not be entitled in this court to complain of any alleged change of theory on the part of the plaintiff in the trial court. (2) Against a bank deposit or an account or credit with a bank payable at the bank on demand and subject to draft or check, the Statute of Limitations does not run until after a demand by the customer of the bank for payment and the refusal thereof by the bank. Koelzer v. First Nat'l Bank of Whitewater (Wis.), 104 N.W. 838; 3 Am. and Eng. Ency. Law (2 Ed.), 838; Branch v. Dawson, 33 Minn. 400; Goodell v. Brandon Nat'l Bank, 63 Vt. 305; Girard Bank v. Bank of Penn Township, 39 Pa. St. 98; Bolles on Banks and Their Depositors, sec. 360; Morse on Banks and Banking (4 Ed.), secs. 186, 322; Landis v. Saxton, 105 Mo. 491; Newark on Bank Depositors, sec. 11. (3) Where money is held by one party in trust for another, and the trust arises, not by implication of law or as a result of mistake or fraud, but by virtue of an express agreement that the money is to be held and used by the trustee for a certain purpose for the benefit of the cestui que trust, the Statute of Limitations does not begin to run in favor of the trustee until there has been a repudiation of the trust clearly and unequivocally brought home to the knowledge of the cestui que trust. Zeidman v. Molasky, 118 Mo.App. 119; Prewitt v. Prewitt, 188 Mo. 675; Frank v. Morley, 106 Mich. 635; Walden v. Karr, 88 Ill. 49; Davis v. Davis, 86 Hun 400; Post v. Benchley, 48 Hun 83; Purdy v. Sistare, 2 Hun 126; Heil v. Heil, 184 Mo. 665; Hillman v. Allen, 145 Mo. 638; Foster v. Friede, 37 Mo. 36; Goodwin v. Goodwin, 69 Mo. 617; Ruby v. Barnett, 12 Mo. 3; Dillon's Admr. v. Bates, 39 Mo. 292; Fox v. Cash, 11 Pa. St. 207; Marshall's Estate, 138 Pa. St. 285; Pepper v. Robinson (Pa.), 32 W. N. C. 203; Jones' Executor v. Henderson, 149 Ind. 458; Stanley's Estate v. Pence, 160 Ind. 636; Jones v. Home Savings Bank, 118 Mich. 155; Seymour v. Freer, 8 Wall. (75 U.S.) 202; Perry on Trusts, sec. 283.

LAMM J. Valliant, P. J., absent.

OPINION

LAMM, J.

In 1897 plaintiff brought suit against the Continental National Bank to recover $ 5,406.50, with interest from the date of demand and refusal to pay, to-wit, July 2, 1894. Subsequently, said bank was absorbed by its co-defendant, the National Bank of Commerce, and the latter was made a party.

At the trial after the evidence was in, an amended petition was filed to conform to the legal effect of the facts proved. The answer was a general denial and a plea that the cause of action "did not accrue within five, nor within ten years,...