Swift v. Easley

• Decision Date: 08 December 1928
• Docket Number: 28,337
• Citation: 272 P. 170,127 Kan. 148
• Court: Kansas Supreme Court
• Parties: J. C. SWIFT, Appellant, v. H. R. CLAY and J. M. EASLEY, a Copartnership as Clay & Easley, Appellees

272 P. 170

127 Kan. 148

J. C. SWIFT, Appellant, v. H. R. CLAY and J. M. EASLEY, a Copartnership as Clay & Easley, Appellees

No. 28,337

Supreme Court of Kansas

December 8, 1928

Decided July, 1928.

Appeal from Shawnee district court, division No. 3;OTIS E. HUNGATE judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

BILLS AND NOTES--What Law Governs--Limitation of Actions.In an action between nonresidents of Kansas on a promissory note executed by defendants, who reside in Texas, and payable in Missouri, which is the domicile of the payee, and sued on in Kansas upon attachment and publication service, the cause of action arose from the failure to pay at the time and place specified in the note, and the governing statute of limitations is that of Missouri, and not that of Texas where the note was executed.

James E. Larimer and Eugene S. Quinton, both of Topeka, for the appellant.

Dennis Madden and C. B. Randall, both of Topeka, for the appellees.

OPINION

DAWSON, J:

This was an action on a promissory note executed in Texas, payable in Missouri, and sued on in Kansas upon attachment and publication service.The trial court held that a defense based on the Texas statute of limitations was good, and the plaintiff appeals.

The petition contained the usual recitals of a cause of action on a promissory note, including allegations concerning the residence of the plaintiff in Missouri, the residence of the defendant makers in Texas, and set up a copy of the note with its indorsements, viz.:

"FORT WORTH, TEXAS, November 7, 1919.

No. 7596.

$ 3,000.00.

"On May twelfth, 1920, after date, without grace, for value received, I, we, or either of us, promise to pay to the order of Guarantee Cattle Loan Company,

Three Thousand and 00/100 Dollars,

At the office of the Guarantee Cattle Loan Company, Kansas City Missouri, with interest at the rate of eight per cent per annum after maturity.The makers and endorsers of this note severally waive demand, notice and protest.

(Signed)

CLAY & EASLEY.

"Address: Comanche, Texas.

By H. R. CLAY

"Endorsements: Oct. 31, 1921, cr., $ 1,308.68.Demand, notice and protest waived.Payment guaranteed.--GUARANTY CATTLE LOAN COMPANY; J. C. SWIFT, President."

This action was begun April 21, 1926.

The principal defense was made by defendantJ. M. Easley, who pleaded that "by the laws of the state of Texas, where the cause of action arose, this cause of action could not be maintained because of the lapse of time."The Texas statute of limitations provides that an action on a debt evidenced in writing shall not be commenced or prosecuted at any time more than four years after the cause of action thereon has accrued.

Plaintiff's reply alleged the default of defendants at the place of payment under the terms of the note, and pleaded the Missouri statute of limitations which allows ten years in which to bring an action upon a written promise for the payment of money.

The Kansas statute pertinent to a cause of action which has arisen between nonresidents of this state reads:

"Where the cause of action has arisen in another state or country, between nonresidents of this state, and by the laws of the state or country where the cause of action arose an action cannot be maintained thereon by reason of lapse of time, no action can be maintained thereon in this state."(R. S. 60-310.)

In view of the foregoing, where did the cause of action arise between these litigants?"In Texas where the note was given," say defendants.But the giving of a note, which is the making of a contract, does not give rise to a cause of action.Surely every simple business transaction between men does not give provocation for a lawsuit.It was not the making, execution, and delivery of this note which gave rise to the cause of action; it was not the promise to pay, but the breaking of that promise--the default of the makers to pay the debt at the place and time they agreed to pay it--which gave rise to the cause of action.(Bruner v. Martin,76 Kan. 862, 866, 93 P. 165;Land Co. v. Bassett,85 Kan. 48, 51, 53,116 P. 475.)That breach of contract, that default of payment, was in Kansas City, Mo., and therefore the statute of limitations which governed the cause of action arising therefrom was the Missouri statute, so long as it was not out of accord with the law or public policy of the forum where the action was begun.(8 C. J. 86, 92.)

In Bruner v. Martin,76 Kan. 862, 93 P. 165, it was recognized that theretofore this question of law was an open one in this jurisdiction and that the authorities elsewhere were in conflict.But the rule announced in Bruner v. Martin was reiterated in Land Co. v. Bassett,85 Kan. 48, 51, 53, 116 P. 475; and in Shearer v. Insurance Co.,106 Kan. 574, 577, 189 P. 648, it was said:

"A cause of action upon a contract does not arise until there has been a breach (1 Enc. L. &P. 1008), and it arises where the breach takes place.(40 Cyc. 83.)The only breach of the contract alleged in the petition was the refusal to pay the amount due under it, and this occurred, presumptively at least, at the residence of the plaintiff, and not in Wyandotte county.The words 'where the cause of action arose' do not refer to the place where the transactions took place out of which the cause of action grew.That was settled for this jurisdiction in Bruner v. Martin,76 Kan. 862, 93 P. 165, where the reasons for the decision and the authorities bearing thereon are fully set forth."

Recent cases which accord with Bruner v. Martin in holding that a promissory note made in one state to be performed in another state is governed by the law of the place of performance, without regard to the place where it was written, dated, or signed,...