Rex v. Warner ( 1958 )

Schroeder, J.

(dissenting): In my opinion the judgment of the trial court should be affirmed on the ground that the debtor is estopped from asserting the statute of limitations for having induced the creditor to let the period go by in which suit could be brought and his inducements were of such character as to make it iniquitous to permit the statute to be asserted.

The transaction giving rise to the obligation for which suit was brought was not a commercial transaction in the ordinary sense of the word. While the relationship of employer-employee existed between Rex and Warner the allegations of the petition liberally construed allege more. Construed from its four corners the petition alleges a confidential relationship, one in which Warner became obligated in a fiduciary capacity. Howard C. Warner was specifically directed by the plaintiff to have Harrison, who acted as agent of plaintiff and defendants in the transaction, prepare a note and second mortgage for the sum of $5,000 following which Howard C. Warner then and there orally agreed to have said Harrison prepare said note and mortgage, and orally promised and agreed that he and his wife, the defendant, Anna Marie Warner, would execute said note and mortgage and return the same to said Harrison for the plaintiff. It was alleged that the defendant did not prior to leaving the plaintiff’s employ request said Harrison to prepare said instruments. The confidential relationship existing between the_ parties is indicated by plaintiff’s inaction as a direct result of further conversations, inducements, statements and promises made by Howard C. Warner.

While no Kansas case to which we have been cited is directly in point and our research has disclosed none, Railway Co. v. Fmtt, 73 Kan. 210, 85 Pac. 141, is somewhat analogous and indicative of the position taken by this court in the past where it was said concerning the assertion of the statute of limitations:

. . The ordinary rules of justice and fair dealing rebel at the suggestion . . (p. 218.)

The Oklahoma Supreme Court in Douglass v. Douglass, 199 Okla. 519, 188 P. 2d 221, has had the precise question here presented before it for consideration. There the relationship was between a father and a son. The Oklahoma court in a four to three decision upheld a petition challenged by demurrer on the ground that the debtor was estopped from pleading the statute of limitations.

Regarding the equitable doctrine of estoppel language appropriate to the case here is used in 34 Am. Jur., Limitation of Actions, §§ 411, 412 and 413, as follows:

“It is established by the overwhelming weight of authority that the equitable doctrine of estoppel in pais is applicable in a proper case to prevent a fraudulent or inequitable resort to the statute of limitations, and that a debtor may by his representations, promises, or conduct be estopped to assert the statute where the elements of estoppel are present. Concisely stated, parties may by their words or conduct estop themselves from pleading limitation. 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 new promise, and will not be applied except where it would be inequitable to refuse to apply it. In some instances, equity courts have acted by issuing an injunction to prevent a defendant from interposing the defense of the statute of limitations, on the ground that he was estopped to plead such a defense. A few courts have held that no cognizance can be taken in a law action of the equitable doctrine that a debtor may estop himself by acts and conduct to rely upon such a defense. Generally, however, the rule that the doctrine of estoppel in pais will be applied, to prevent a fraudulent or inequitable resort to the statute of limitations is stated without any distinction between actions at law and actions in equity. Clearly, where courts of law and courts of equity have been consolidated, the application of such doctrine to prevent a reliance upon the defense of the statute of limitations should not depend upon whether the action is at law or in equity . . (p. 323.)

“The general principles, elements, and requisites of estoppel in pais apply in cases where the doctrine is sought to be applied to prevent the setting up of the statute of limitations. While the cases in which an estoppel to defend upon the ground of the statute of limitations are confined generally to instances in which an element of deception is involved, actual fraud in the technical sense, bad faith, or an intent to mislead or deceive is not essential to create such an estoppel. It is sufficient for this purpose that the debtor made misrepresentations which mislead the creditor, who acted upon them in good faith, to the extent that he failed to commence action within the statutory period . . .” (p. 324.)

“Opinions of court sometimes contain broad language which indicates that any conduct of the defendant which induces inaction on the part of the plaintiff whereby suit is delayed beyond the limitation period will estop the defendant from relying upon the statute of limitations. It has been said that any agreement whereby the claimant is lulled into security and thereby delays action creates an estoppel, and bars the debtor from relying on the statute of limitations . . (Emphasis added.) (p.326.)

See, also, Speidel v. Henrici, 120 U. S. 377, 386, 387, 7 S. Ct. 610, 30 L. Ed. 718; Schram v. Burt, 111 F. 2d 557; Waugh v. Lennard, 69 Ariz. 214, 211 P. 2d 806; 130 A. L. R. 1; and 24 A. L. R. 2d 1404.

In my opinion plaintiff’s plea of estoppel was sufficient to justify the trial court in holding that on the face of the petition an assertion of the statute of limitations was invalid.

PARKER, C. J., concurs in the foregoing dissent.