Palmer v. Palmer

• Decision Date: 06 June 1877
• Citation: 36 Mich. 487
• Court: Michigan Supreme Court
• Parties: Jonathan Palmer v. Frank J. Palmer

36 Mich. 487

Jonathan Palmer v. Frank J. Palmer

Supreme Court of Michigan

June 6, 1877

Submitted on Briefs April 18, 1877

Case made from Genesee Circuit.

Judgment reversed, Judgment entered for the defendant on the finding, with costs of both courts.

W Newton, for plaintiff, argued that there was no law to restrain or forbid a party from making contracts payable in in the future upon the happening of an event; and that a note or contract may be made payable when a certain event may occur in the future, however remote.--Sword v. Keith, 31 Mich. 247; Kimball v. Kimball, 16 Mich. 211; Jilson v. Gilbert, 7 Am. 100; Payne v Gardiner, 29 N. Y., 146. The note in suit is not a demand note, payable on demand, but a note that fixes a period of thirty days, after an actual demand, before it becomes due; and until the expiration of that time after demand in fact, no right of action accrued, no interest was borne, and no suit was maintainable.--2 Parsons on Notes & Bills, 644, and cases. It is like a note payable at a given period after notice, in which case notice must be given and then the additional period must elapse before the statute begins to run.--Clayton v. Gosling, 5 B. & C., 360; Norton v. Ellam, 2 M. & W., 461. Notes payable on demand are due immediately; but the rule is different where a note is payable a certain time after demand.--Cornell v. Moulton, 3 Denio 12; Norton v. Ellam, supra; Thompson v. Ketchum, 8 Johns. 190, 374. As between maker and payee, where the rights of endorsers are not involved, the question of diligence in presenting the paper and demanding payment does not arise. No such question exists here. No injury accrued to the maker; he was not liable to pay interest until thirty days after demand of payment, and there is nothing in the contract that bound the holder to present it at any particular time, or within any specified number of years.

A. C. Baldwin, for defendant.

The theory of defendant is, that as this note was without interest, a demand must be made in a reasonable time after the giving of the note, and if more than six years elapsed after the expiration of the thirty days, the statute would operate and would bar a recovery. Two old English cases are against this proposition. For the first, however (Holmes v. Kerrison, 2 Taunt. 323), no reasons are given; and it was in an inferior court, and the whole bench did not take part. The other (Thorpe v. Booth, R. & M., 388) was decided on the authority of the previous one, the court saying: "This is certainly a point of some doubt and difficulty." These cases ought not to be considered of very great authority.

Payne v. Gardiner, 29 N. Y., 146, is largely relied upon by plaintiff's counsel; but there is nothing in it particularly applicable to this case. It was considered at great length, and the opinion given by a divided court. As this case was properly decided for the plaintiff upon other grounds than the necessity of a demand, and three of the judges held no demand was necessary, the case has as great a bearing for us as for our adversaries.

Statutes of limitation are founded on sound policy, are statutes of repose, and are not to be evaded by construction.--Roberts v. Pillow, Hempst., 624; Philip v. Pope, 10 B. Mon., 163; Dickerson v. McCarney, 5 Geo. 486; McCarthy v. White, 21 Cal. 495; and should be regarded with favor by courts of justice, and should be so construed as to advance the policy they were designed to promote.--Gautier v. Franklin, 1 Tex. 732. The law presumes when the paper does not draw interest that a demand will be made in a reasonable time. Reference is also made to Stamford v. Tuttle, 4 Vt. 87; Collard's Admr. v. Tuttle, 4 Vt. 492; Jones v. Eisler, 3 Kans. 134; 39 Me. 492; Codman v. Rogers, 10 Pick. 119, as sustaining defendant's proposition.

What is to be considered a reasonable time for making demand in such cases does not appear to be settled by any precise rule; it must depend upon circumstances. If no cause for delay can be shown, it would seem reasonable to require demand to be made within the time limited by the statute for bringing the action. There is the same reason for hastening the demand that there is for hastening the commencement of the action; and in both cases the same presumptions arise from delay.

OPINION

Campbell, J.:

The only question in this case is, whether a certain promissory note, not negotiable, given by the defendant to plaintiff, was barred by the statute of limitations when suit was begun.

The note was in the following terms:

"$ 1,500. Atlas, Mich., Oct. 16, 1867.

"Thirty days after demand, I promise to pay Jonathan Palmer fifteen hundred dollars, value received, without defalcation. Frank J. Palmer."

No demand is found to have been made until May 22d, 1874, or six years and seven months after date. An attempt was made to show a previous demand by showing the transmission by mail of a letter from the cashier of a bank to whom the paper had been sent in July, 1873. This notice is not found to have reached defendant, and it contained nothing to indicate the identity or ownership of the note. The court below found against it.

Although some evidence is set forth in the finding, which seems to have been inserted at the request of counsel, and which may possibly have had some bearing upon the consideration of the note, yet no finding is based upon it. The only pertinent facts found at all are the making and non-payment of the note, and the demand made in 1874.

The court found that the suit was not barred. This conclusion was based on the theory that until demand made no action accrued; and that as the time limited by the statute runs from the time when action accrues, it did not begin to run until thirty days after May 22d, 1874, from which date interest was allowed.

Taking this note as it reads, and as it is established by the finding, being payable without interest, it is impossible to assume that it was intended to run for any considerable time. The fair inference is, that it was given for some debt or other consideration on which an immediate liability existed, which the maker of the note expected to be ready to meet on reasonable notice, which was fixed at thirty days. If the note had been negotiable, and endorsed over, any long delay to present it would unquestionably have released the endorser.

If the judgment is correct, it can only be so because, by the terms of the contract the holder had a right to postpone the maturity of the debt as long as he chose to do so. For if the debt did not become payable until fixed by demand, and the demand was optional with the creditor, no tender could be made which would bind him, and he could keep the debt alive in spite of the debtor, for an indefinite period. If there was any infirmity in the consideration, or any defect in the binding character of the obligation, he might retain it until all testimony was lost, and defeat the defense. This is the mischief which the statutes of limitation were intended to remedy. If this case is not within them, it is not because it ought not to be covered by them.

It is now well settled that a note payable on demand is payable at once and without demand, so that the statute runs from its delivery. And this rule has been applied where from the form of the contract it is manifest that immediate payment was not expected. Thus in Norton v. Ellam, 2 M. & W 461, the note...