Sanford v. Luce

• Decision Date: 17 November 1953
• Docket Number: No. 48377,48377
• Citation: 60 N.W.2d 885,245 Iowa 74
• Parties: SANFORD v. LUCE.
• Court: Iowa Supreme Court

Page 885

60 N.W.2d 885

245 Iowa 74

SANFORD v. LUCE.

No. 48377.

Supreme Court of Iowa.

Nov. 17, 1953.

Brown & Nordenson, Sioux City, for appellant.

Hanna & O'Brien, Sioux City, for appellee.

SMITH, Justice.

The petition (filed June 24, 1952) alleged an oral agreement under which defendant would reimburse plaintiff upon completion of certain construction work upon her apartment building. He testified that she agreed to pay him 'when she got the apartments on a paying basis * * * when she was financially able and the apartments was paying off.'

At another point he testified that before he undertook the work but after he had advanced her some money he asked her: 'You already owe me a little back money * * *. You're not going to be able to pay for this. Just how are you going to take care of this?' To which he says she answered: 'With the income off of this' (meaning from the apartment); also that she said she was going to remodel some of the apartments and would be able to 'reimburse you on it and pay you for it.'

Plaintiff and defendant were at that time husband and wife but living apart under a decree of separate maintenance (entered October 12, 1946) that had awarded her the apartment building in question (at 1620 South Rustin St.), plaintiff retaining another one--the Floyd Apartments at 1630 South Rustin St. He says each was collecting the rental and paying the bills 'for their own respective properties.'

The division of property under the separate maintenance decree was based on a stipulation (made a part of the decree) which provided that Mrs. Sanford (now defendant Luce) 'should receive no alimony, either temporary or permanent, in this action or in any subsequent action brought by her arising out of the marriage' and 'no support money except the property settlement herein provided.' The later divorce decree provided for no support money or alimony.

When plaintiff rested in the present action defendant moved for a directed verdict urging various grounds. The court overruled it, adding: 'But I have a serious problem * * * when it comes to instructing * * * as to whether the right to sue has accrued.'

Thereupon defendant's attorney amended the motion so as to present the contention that there was no proof the right to sue had accrued as there was no showing defendant's apartment house was on a paying basis. The court sustained the motion on that ground and later overruled plaintiff's motion to set the verdict aside. Plaintiff appeals.

I. The trial court's ruling is based on a supposed fatal variance between plaintiff's pleading and proof as to the time the cause of action accrued. Plaintiff pleaded an oral agreement stating what he was to do and what defendant was to pay and that the construction was completed in September, 1947. These allegations were sufficient to fix the time of completion of the work as the time for payment. That followed in absence of any different time being fixed in the agreement. See Restatement Law of Contracts, Vol. I, § 270, Comment a, page 393.

But plaintiff went further and added that it was agreed 'defendant would reimburse plaintiff in full for monies advanced, materials furnished and for construction of said apartment upon completion thereof.' This was probably surplusage. But in any event, under the pleading, plaintiff's cause of action accrued 'upon completion' of plaintiff's performance of his part of the agreement.

The word 'upon' is elastic in meaning. It may mean 'as soon as,' 'at the time of,' 'in case of' or even, 'after,' depending on the context. Rolfs v. Mullins, 180 Iowa 472, 475, 163 N.W. 232. It use has been said to make mutual covenants dependent. Courtright v. Deeds, 37 Iowa 503, 508. See 67 C.J.S. On, Upon, Denoting Time, p. 495.

We think its use in plaintiff's petition was to indicate the dependency of payment by defendant upon prior performance by plaintiff. In that sense it was a somewhat elastic allegation of due date of performance to be liberally construed according to context.

II. Plaintiff testified in various ways as to what defendant promised regarding payment: 'When she got the apartments on a paying basis,' 'when she was financially able,' 'with the income off' the apartments. He says, when he asked her when she was going to be able to pay, 'she informed me that her financial fix was not so that she could at the present time, at the times that I would ask her.'

These various statements were practically equivalent to an agreement to pay when she was able.

Defendant cites the Annotation in 94 A.L.R. 721 (also 12 Am.Jur., Contracts, § 303) which state that 'in a majority of cases in which the question has arisen, and in Canada, it is held that a promise to pay when the promisor 'is able' is not an absolute but a conditional promise to pay; and that therefore the promisee, in order that he may recover on such a promise, must allege and prove ability of the promisor to pay the defendant.'

A numerical count of the cases cited by the annotator sustains his statement. But a count of the jurisdictions represented shows a quite even division. We shall continue to use the terms 'majority' and 'minority' however as a convenience.

The case reported in connection with the annotation, Mock v. Trustees of First Baptist Church, 252 Ky. 243, 67 S.W.2d 9, 11, 94 A.L.R. 716, holds with the 'minority view' and is comparatively late (1934). The opinion says: 'The authorities are to the effect that a promise to pay when the promisor is financially able to do so is to be construed to mean that payment is to be made within a reasonable time. * * * So, too, in the absence of circumstances showing it to be perpetual, a forbearance to sue for an indefinite time is regarded as calling for a reasonable period. Williston on Contracts, § 38.'

This case clearly places Kentucky among the states holding to the 'minority view' though the annotator lists it with the 'majority.' It is of course the latest pronouncement cited in the annotation.

The cleavage between the two views is caused by conflicting opinions as to the importance to be attached to an agreed due date based on the happening of an uncertain contingency, i. e., one not certain to occur. Those holding the 'majority view' treat it as a valid condition precedent to accrual of the cause of action. The 'minority view' holds that 'ability to pay' or any equivalent provision is 'too uncertain and indefinite to constitute a condition.' See First Cong. Soc. v. Miller, 15 N.H. 520, as cited in the Annotation, supra, 94 A.L.R. at page 725.

The logic of the first would lead to the inevitable conclusion that if the event never happens the cause of action never accrues. By requiring the promise to prove the happening of a contingency within the peculiar knowledge, if not even within the control, of the promisor, it creates uncertainty as to whether there really has been a binding promise to pay.

It was said by Justice Swayne in a case where the condition precedent was 'as soon as the crop can be sold or the money raised from any other source': 'The stipulation secured to the defendants a reasonable amount of time within which to procure in one mode or the other the means necessary to meet the liability. Upon the occurrence of either of the events named or the lapse of such time, the debt became due. It could not have been the intention * * * that if the crop were destroyed, or from any other cause could never be sold, and the defendants could not procure the money from any other source, the debt could never be paid. Such a result would be a mockery of justice.' Nunez v. Dautel, 19 Wall. 560, 563, 22 L.Ed. 161.

The 'minority' rule would not endanger the integrity of the entire contract but would construe the condition as 'merely an arrangement that the maker (promisor) is not to pay immediately and may delay payment until a reasonable time has elapsed'. See Dille v. Longwell, 188 Iowa 606, 611, 176 N.W. 619, 620. Button v. Higgins, 5 Colo.App. 167, 38 p. 390,...