Swift v. Petersen

• Decision Date: 03 May 1949
• Docket Number: 47414.
• Citation: 37 N.W.2d 258,240 Iowa 715
• Parties: SWIFT v. PETERSEN.
• Court: Iowa Supreme Court

37 N.W.2d 258

240 Iowa 715

SWIFT v. PETERSEN.

No. 47414.

Supreme Court of Iowa

May 3, 1949

More & More, of Harlan, for appellant.

White & White, of Harlan, for appellee.

HAYS Justice.

This is a law action, tried to the court without a jury, on a promissory note in the amount of $1,350, dated Jan. 5, 1911, due Jan. 5 1912. To a defense of the Statute of Limitations, plaintiff alleges estoppel to so plead. The court found a promissory estoppel and entered judgment for the amount of the note. Defendant appeals.

Appellant predicates his appeal upon two propositions (1) Lack of evidence to sustain the court's findings, and (2) Assuming the statute to be tolled, by the alleged promise, this promise is now outlawed.

1. The second proposition is without merit as it is entirely inapplicable to the issues, raised by the pleadings, and the theory upon which both parties presented the matter to the trial Court. This proposition is based upon the assumption that the oral promise revived the debt under Section 614.11, Code 1946, I.C.A. Appellee does not contend that the debt is revived but asserts that the question of the Statute of Limitations cannot be urged as a defense. This doctrine is distinct from a statutory tolling of this defense. As stated in 34 Am.Jur., Limitation of Actions, Sect. 411, 'the doctrine of estoppel to rely on the defense of limitations is entirely independent of statutes providing for the suspension of the statute by an acknowledgment or a new promise'.

11. The first proposition raises both a legal and a factual question. Is the doctrine of 'promissory estoppel' recognized by this Court, and if so, do the facts established in the trial court bring it under the rule?

Promissory estoppel according to Restatement of the Law of Contracts Sect. 90 means that 'a promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action and forbearance is binding if injustice can be avoided only by enforcement of the promise.' Williston on Contracts, R.Ed. Vol. 1, Sec. 139, states: 'There would seem, however, compelling reasons of justice for enforcing promises, where injustice cannot otherwise be avoided, when they have led the promisee to incur any substantial detriment on the faith of them, not only when the promisor intended, but also when he should reasonably have expected, such detriment would be incurred, though he did not request it as an exchange for his promise.' 19 Am.Jur., Estoppel, Sec. 53, P. 659, states: 'according to the weight of authority one who, by promises or assurances that he will pay or that he will not take advantage of a statute of limitations or the like, induces another to forgo his rights and to delay suit until the expiration of the period of limitation is estopped from asserting the statute as a bar to the creditor's action.' See also, Fried v. Fisher, 328 Pa. 497, 196 A. 39, 115 A.L.R. 147; 31 C.J.S., Estoppel, § 80; Annotations, 115 A.L.R. 152; 130 A.L.R. 8.

While this question does not appear to have been heretofore before this court, a somewhat modified version of the doctrine appears in Holman v. Omaha & C. B. Ry. & B. Co., 117 Iowa 268, 90 N.W. 833, 62 L.R.A. 395, 94 Am.St.Rep. 293. There, plaintiff had been injured by defendant's cars and in negotiations for a settlement had been assured by the defendant that the statute of limitations would not be interposed, intending for plaintiff to rely thereon, which she did. When suit was commenced after the statute had run it was held defendant was estopped from asserting the same. At page 273 of 117 Iowa, at page 834 of 90 N.W. we said: 'We find no difficulty * * * in holding that although the defendant did not definitely promise to pay any sum by way of settlement, and the plaintiff did not promise to forbear suit for any specified period, nevertheless, if Dimmock, for the defendant, gave assurance that the statutory limitation would not be interposed, with the intention that plaintiff should rely on such assurance, and plaintiff, relying on such assurance, postponed the bringing of action until after the expiration of the statutory period, then the defendant estopped itself from interposing the statutory bar to this action, which was brought as soon as it became apparent that the negotiations * * * would be ineffectual'. Appellee cites this case as establishing the doctrine of promissory estoppel in Iowa, and while this case definitely announces the rule that estoppel need not be predicated upon a contract, our more recent expression on the question has limited the rule as there announced.

McKay v. McCarthy, 146 Iowa 546, 123 N.W. 755, 34 L.R.A., N.S., 911, involved an oral promise to pay, where suit was threatened for the fraudulent sale of stock, although there was no promise not to plead the statute of limitation, nor was fraud alleged in the making of the promise. In denying the plea of estoppel, we said, 146 Iowa at page 553, 123 N.W. at page 758, 'We are of opinion that statements calculated to dissuade a litigant from beginning an action and not designed to induce its postponement merely will not, in the absence of fraud, estop the party making them from availing himself of the plea of the statute of limitations. * * * If, in reliance * * * on his promise that he would see that the amount invested would be restored, plaintiff was induced not to institute suit, this furnishes no reason for setting aside a statute enacted in the interest of a beneficent public policy when he finally changes his mind.' In McCord v. Page County, 192 Iowa 357, at page 362, 184 N.W. 625, 627, said, 'The decided weight of authority is to the effect that the statute of limitations may be pleaded, unless waived by agreement, express or clearly to be implied, that this will not be done.' See also, Howe v. Sioux County, 180 Iowa 580, 163 N.W. 411; Welu v. City of Dubuque, 202 Iowa 201, 209 N.W. 439; Bundy v. Grinnell Canning Co., 215 Iowa 674, 244 N.W. 841; Olson v. Larson, 233 Iowa 1932, 8 N.W.2d 697; Smith v. Coutant, 232 Iowa 887, 6 N.W.2d 421.

Thus it appears that the doctrine of 'promissory estoppel', as defined herein, has been modified by this Court to the extent that a specific agreement, expressed or implied, must exist; or actual fraud in the making of the promise must appear before the rule will be adopted, and then only where the other elements of estoppel are present, although the promise need not be of a past or present fact but may be of some future conduct or situation.

Does the instant case come within this rule? The facts, in many respects are not in dispute. It...