Page County v. Fidelity & Deposit Co. of Maryland
| Decision Date | 13 December 1927 |
| Docket Number | 38265 |
| Citation | 216 N.W. 957,205 Iowa 798 |
| Parties | PAGE COUNTY, Appellee, v. FIDELITY & DEPOSIT COMPANY OF MARYLAND, Appellant |
| Court | Iowa Supreme Court |
PETITION FOR REHEARING WITHDRAWN MARCH 13, 1928.
Appeal from Page District Court.--EARL PETERS, Judge.
This is an action against the surety upon a bond given pursuant to Sections 7405 and 7406, Code of 1924. The principal in the bond was the Farmers Savings Bank of Braddyville. Pursuant to the provisions of the statute, this bank became entitled to receive deposits from the county treasurer of the plaintiff county. The defendant pleaded as its sole defense a provision of the bond which limited the time for the bringing of action, and the failure of the plaintiff to bring such action within such period of limitation. The trial court awarded judgment upon the bond, and the defendant has appealed.
Affirmed.
Stipp Perry, Bannister & Starzinger, for appellant.
Paul L Millhone, for appellee.
EVANS, C. J. DE GRAFF, ALBERT, MORLING, and WAGNER, JJ., concur.
I.
The bond sued on contained the following provision:
"Fifth: That no suit, action or proceedings shall be brought or instigated against the 'surety' upon or by reason of any default of the 'principal' until after the expiration of sixty days after such default, or in no event after the expiration of ninety (90) days after such default."
The plaintiff having failed to bring its action within the period hereby stipulated, it is contended that the action is barred by the limitation of the contract.
The right of parties to a contract to stipulate for a reasonable limitation of time for the bringing of action thereon has been frequently recognized in many jurisdictions, including our own. The right thus recognized originated at common law, and antedates statutes of limitation. In recognizing such right of contract, the courts have usually imposed a condition that it must be reasonable in its time limitation. Our own cases on the subject are the following: Stout v. City Fire Ins. Co., 12 Iowa 371; Carter v. Humboldt Fire Ins. Co., 12 Iowa 287; Moore v. State Ins. Co., 72 Iowa 414, 34 N.W. 183; Farmer's Co-op. Cream. Co. v. Iowa State Ins. Co., 112 Iowa 608, 84 N.W. 904; Bartlett & Kling v. Illinois Sur. Co., 142 Iowa 538, 548, 119 N.W. 729; Matheson v. Iowa State Trav. Men's Assn., 180 Iowa 1019, 164 N.W. 194.
It is the first contention of the appellee that Section 8986 of the Code of 1924 is controlling herein, and that such section forbids the contractual limitation herein contended for. Such section is as follows:
On the other hand, the appellant contends that the right to contract for such limitation is implied by the provisions of Section 12768, Code of 1924, which is as follows:
"Such company or corporation may be released from its liability as such surety on any bond on the same terms and conditions, and in the same manner, as is by law prescribed for the release of natural persons as such sureties; it being the intent of this chapter to enable companies created, incorporated, or chartered for such purposes to become surety on bonds required by law, subject to all the rights and liabilities of natural persons."
We think that neither section is available for the purpose to which it is cited. The ground of decision by the trial court is not indicated in the record.
It is further insisted by the appellee that the provision...
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Page Cnty. v. Fid. & Deposit Co. of Md.
...205 Iowa 798216 N.W. 957PAGE COUNTYv.FIDELITY & DEPOSIT CO. OF MARYLAND.No. 38265.Supreme Court of Iowa.Dec. 13, 1927 ... Appeal from ct Court, Page County; Earl Peters, Judge.This is an action against the surety upon a bond given pursuant to sections ... ...