Parchen v. Chessman
| Decision Date | 15 June 1914 |
| Docket Number | 3389. |
| Parties | PARCHEN v. CHESSMAN. |
| Court | Montana Supreme Court |
Appeal from District Court, Lewis and Clark County; Lew L. Callaway Judge.
Action by Henry M. Parchen against William A. Chessman. From a judgment for plaintiff, defendant appeals. Reversed, with directions.
John B Clayberg, of San Francisco, Cal., and R. Lee Word, of Helena for appellant.
Galen & Mettler, of Helena, for respondent.
On December 26, 1897, the defendant executed and delivered to the plaintiff the following promissory note:
"$9,663.50
Helena, Montana, December 26, 1897.
One year after date I promise to pay to Henry M. Parchen, or order, the sum of nine thousand six hundred and sixty-three and 50/100 dollars, for value received, together with interest thereon at the rate of ten per cent. per annum from date until paid; and further agree that in the event of a suit to enforce the collection of this note a reasonable counsel fee, to be fixed and determined by the court, shall be added to and form a part of the judgment as damages. All rights and benefits conferred by the statute of limitations are expressly waived; it being expressly agreed that suit may be maintained to enforce collection hereof at any time after maturity, the provisions of the statute of limitations notwithstanding. Wm. A. Chessman."
On November 26, 1902, a payment of $5,000 was made thereon, leaving a balance of $9,414.70. On March 11, 1911, plaintiff brought this action to recover this balance, with interest. The defendant answered, alleging several special defenses, viz.: (1) That plaintiff's cause of action is barred by the limitation of eight years prescribed by section 6445 of the Revised Codes. (2) That on December 26, 1893, the defendant, having become liable to the plaintiff in the sum of $12,821.28, executed and delivered to the plaintiff his promissory note therefor due one year after date, to bear interest at the rate of 10 per cent. per annum. That renewals of this note were thereafter made from time to time until December 26, 1897. That on that date he executed the note in suit for the balance then remaining due; payments having in the meantime been made. That this note was intended as a renewal pro tanto of the prior note. That it was intended by both plaintiff and defendant that it should be in the same form and of the same tenor as the original and prior renewal notes. That it was prepared by a scrivener who, by mistake, made use of a printed form containing the clause reciting the agreement that defendant expressly waives "all rights and benefits conferred by the statute of limitations," etc. That none of the prior renewal notes contained this clause. That it was not the understanding or agreement or intention of the plaintiff and defendant that the clause referred to should be included in the note, but that, on the contrary, it was the understanding and agreement that the note should be of the same form, tenor, and effect as all the former renewal notes, and should contain no other, further, or different obligations or promises. That defendant, believing that the note had been drawn in conformity with the understanding between himself and the plaintiff, and fully relying on the existence of such fact at the time of signing the note, signed the same when presented by the scrivener, without reading it. That, if he had been advised that the note contained the clause referred to, he would not have signed it. That immediately after it was signed it was delivered to the plaintiff, and has never since been in the possession of the defendant nor seen by him. That the defendant had no knowledge that the clause had been inserted therein until the plaintiff's complaint was served on him in this cause. That the preparation of the note was the personal act of the scrivener who, by his own mistake, included the said clause therein, without the knowledge or consent of either the plaintiff or the defendant, and contrary to their understanding and agreement, and that no demand was ever made by plaintiff upon the defendant that the said note should contain any agreement touching the statute of limitations. The prayer demanded that the note be reformed by striking therefrom the clause in question, and that plaintiff's cause of action be declared barred by the statute supra. (3) After a recital of substantially all the foregoing facts, it is further alleged that neither prior to the time of the execution of the note nor at that time, nor thereafter, did any consideration pass from the plaintiff to the defendant, nor was any received by the defendant, or by any person in his behalf, on account of which he agreed to incorporate in said note the clause referred to; that the minds of plaintiff and defendant never met so as to constitute said clause a contract between them; and that said clause was and is without consideration, and of no binding force and effect. Demand was made that the clause be held void, and that plaintiff's cause of action be declared barred by the statute. (4) It is further alleged that the clause in question is itself barred by the statute. To these several defenses, the plaintiff interposed general demurrers, which were sustained, and, defendant declining to plead further, the court rendered judgment for the plaintiff for the full amount of the balance due, together with costs, including an attorney's fee. Defendant has appealed.
1. The first contention made by counsel presents the question--a new one in this state--whether such an agreement as that embodied in the note in suit is void because against public policy. If this contention can be maintained, of course the agreement was not effective for any purpose, and, though the note was renewed by the payment made on November 26, 1902 (Rev. Codes, § 6472), the statute began to run again from that date, and the right to recover was fully barred when this action was commenced.
Can it be said that the agreement contravenes the public policy of this state? What is the public policy of a state, and what is contrary to it, are questions to be determined, not by the private convictions or notions of the persons who happen for the time to be exercising judicial functions, but by reference to the enactments of the lawmaking power, and, in the absence of them, to the decisions of the courts. And when the Legislature, exercising its constitutional powers, has spoken upon a particular subject, its utterance is the public policy of the state on that subject. MacGinniss v. Boston & Mont., etc., Co., 29 Mont. 428, 75 P. 89; Vidal v. Girard's Executors et al., 2 How. 127, 11 L.Ed. 205; United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 17 S.Ct. 540, 41 L.Ed. 1007. As to what is the policy of the law on the subject of the statute of limitations in this state in our opinion is clearly determined by legislative utterance. Section 6475 of the Revised Codes declares:
If this provision is to be assigned the meaning which its language clearly imports, the Legislature has left it entirely optional with the party against whom a cause of action is alleged to avail himself of the protection of the statute or to forbear it; in other words, it has provided solely for the benefit of one who occupied the position of a defendant, as well as that of the plaintiff when the necessity arises for him to make defense to a counterclaim interposed by the defendant--a defense which he may invoke if he chooses. If he omits to invoke it at the proper time and in the proper way, it does not avail him under any circumstances, even though it appears incidentally that the cause of action alleged against him is completely barred. Grogan v. Valley Trading Co., 30 Mont. 231, 76 P. 211; American Min. Co. v. Basin & Bay State Min. Co., 39 Mont. 476, 104 P. 525, 24 L. R. A. (N. S.) 305; Cullen v. Western, etc., Title Co., 47 Mont. 513, 134 P. 302. It is of no concern to the court or to the public that this is so, whether the omission is the result of oversight or of a prior agreement with the adversary party.
If this is the correct theory--and we are satisfied that it is--section 6181 of the Revised Codes is express authority for the proposition that a party may waive the benefit of the statute before or after the expiration of the prescribed limit, not only by either of the acts mentioned in section 6472, supra, but also by express agreement based upon a consideration, though made contemporaneously with, and as a part of, the principal agreement or obligation out of which the action has arisen. This section provides:
This provision does not prescribe the time when nor the mode by which the waiver may be made effective, nor does it impose any restriction or limitation upon the right of waiver. It must therefore be assumed that the party desiring to waive his right is free to do so in any way and at any time he chooses.
When we come to examine the decisions in other jurisdictions, we find them at variance with regard to the policy of the law upon the subject of waiver by contract. In Kentucky it is held that such a contract is against public policy and void. Moxley v. Ragan, 10 Bush (Ky.) 156, 19 Am. Rep. 61; Wright v. Gardner, 98 Ky. 454, 33 S.W. 622, 35 S.W 1116; Union C. Life Ins. Co. v. Spinks, ...
To continue reading
Request your trial