Hayes v. Clinkscales , 9 S.C. 441 ( 1878 )

The opinion of the Court was delivered by

McIver, A. J.

This action, which was commenced on the 7th of March, 1874, was brought to recover a sum of money originally secured by an ordinary promissory note, which was payable on the 22d of November, 1859. The defense relied upon was the Statute of Limitations, to meet which the plaintiff relied upon new promises. While it does not very clearly appear whether the action was brought upon these new promises as well as upon the original note, the language of the “case” as presented here being, “This action was brought on a promissory note and alleged new promises,” and then sets out a copy of the note, we shall assume that the complaint set out several causes of action- — the note and the new promises — inasmuch as no question has been raised here upon that point and none seems to have been raised below. The new promises were verbal, were all conditional, and all of them were made after the action on the note would have been barred by the Statute of Limitations, the earliest promise being some time in December, 1868. The complaint alleged performance of the condition upon which these promises were made on the 3d of March, 1874. The defendant contended that, as these new promises were not in writing, they were not sufficient to take the case out of the operation of the Statute of Limitations under the provisions of Section 133 of the Code of Procedure, because those made in March and September, 1870, were made after the adoption of the Code, and those made in 1868 and 1869, though made prior to the Code, were conditional, and therefore no right of action could accrue upon them until the condition was performed, which did not take place until after the adoption of the Code, inasmuch as, by the terms of that statute, its provisions were applicable to all cases, except where the action had already been commenced or where the right of action had already accrued, (Section 96 of the Code) ; and that as it was apparent that the action had not been commenced at the time of the adoption of the Code, and as the plaintiff’s right of action had not then accrued, the condition not having then been performed, this case could not be brought within either of the exceptions provided for in Section 96 of the Code. This conclusion the Referee, to whom the issues in the action were referred for trial, adopted, and his conclusion was confirmed by the Circuit Judge.

It will be observed that before any of the new promises were made the action on the note was barred, because the Statute of Limitations having been suspended for a period of precisely five years by the fifth Section of the Act of 1861, commonly called the Stay Law, (Harllee & Pressly vs. Ward, 15 Rich., 231,) the practical effect in cases like the present is to add just five years to the period fixed by the Statute of Limitations prior to the Code, and as this note became payable on the 22d of November, 1859, any action on it would have been barred on the 22d of November, 1868. The new promises being all made after that time, they could not, as the law then stood, have the effect of reviving or renewing the original ■contract embodied in the note, but must of themselves constitute new causes of action; for while the earlier eases may possibly have left this matter in some doubt, there is no doubt but that the more recent adjudications in this State have established the rule as above stated. — See Smith vs. Caldwell, 15 Rich., 365, and the cases therein cited. And this, we may be permitted to add, in strict conformity to the terms of the statute, which declares that the action shall be commenced within the time limited “ and not after.” Hence the propriety of the rule that if action is brought after the expiration of that time, it should be not upon the original contract but upon the new promise, as a new and substantive contract.

The next inquiry is, whether the provisions of the Code, as cited above, can affect this case? As a matter of convenience, let us confine our inquiries to the promise made, to Mr. Whitner in October, 1869, that being the one principally discussed in the Referee’s report. When this promise was made, though the plaintiff’s right of action upon the note was forever gone, and incapable of being revived, yet, the debt not having been paid, it constituted a valid consideration to support a new contract; for though the legal obligation was gone, the moral obligation remained, and that was a sufficient consideration to support the new promise. — Reigue vs. Executors of Desportes, Dud., 122; Lomax vs. Robertson, Dud., 366; Sims vs. Radcliffe, 3 Rich., 290; Gowdy vs. Gillam, 6 Rich., 29.

This promise, then, to Whitner was an entirely new contract, based upon a sufficient consideration, which the defendant became liable to perform according to its terms. If the condition upon which the promise was made never happened, of course he would never be liable to fulfill his promise. When, however, the condition did happen, he forthwith became liable to fulfill his promise, and if he failed or refused so to do the plaintiff could bring his action. It is important to a proper understanding of this case to keep in mind -what has been stated — that this promise constituted an entirely new contract, independent of the original note, except in so far as it furnished a valid consideration, and that such contract must be regarded as any other seperate and independent contract. Looking at it in this light, the practical question presented by this case is, whether the provisions of the Code can be allowed to import other elements into this contract, or, rather, whether additional formalities can be required, as essential to its validity, which were not required at the time the contracting parties entered into it. In other words, as the law stood when the plaintiff and the defendant entered into this contract, it was not necessary to its validity that it should be in writing. Is it competent, then, for the Legislature, by any subsequent legislation, to deprive such a contract of its validity by declaring that unless it is in writing it shall not be enforced? Tie ba.re statement of the question, when reduced to this form, would seem to afford a sufficient answer. The fact that the contract was upon a condition to be performed in the future cannot alter the result. The question with which we are concerned, and to which we must confine our attention, is as to the validity of the contract when made. Its breach is altogether another question.

One of the legal incidents which flow from every contract, and which inheres in it from the moment it is made, is that upon a breach of it an action accrues. This is an essential element of every contract, and if the Legislature, by any mode of legislation, undertakes, subsequent to the making of the contract, to deprive a party of this right, such legislation is null and void as impairing the obligation of the contract. — State vs. Carew, 13 Rich., 498; Wood vs. Wood, 14 Rich., 148.

Suppose A borrows a sum of money from B and executes to him a bond, conditioned to return the same whenever B does some act in the future, for example, as in this case; whenever B releases A from a liability which he has assumed as his surety, would any one contend that an Act of the Legislature passed after the execution of the bond, but prior' to the performance of the condition, declaring that such a bond should not be valid, or, to use the language of the Code, should not be sufficient evidence of such a contract unless it was executed in the presence of two subscribing witnesses, could apply to such bond? Why not? Because it would be importing additional requisites into the contract which were not necessary at the time it was made. So here, in October, 1869, when this promise was made, or when this contract was entered into, it was quite as valid and complete in a verbal form as if reduced to writing with all possible solemnities, and the Legislature has no power, by an Act passed 1st March, 1870, to declare such a contract invalid or incapable of being enforced unless it is reduced to writing. It may, however, admit of a question whether the Legislature has ever undertaken to do so. And as it is the duty of a Court, in construing Acts of the Legislature, to put such a construction upon them, if possible, as will avoid giving them retroactive operation (18 Rich., 277,) or bringing them into conflict with any constitutional provision, let us examine the provisions of the Code which are relied upon in order to see if such results can be avoided. The important inquiry is, what is the proper construction to be placed upon the words “right of action,” as used in Section 96 of the Code? Do they mean the right to bring the action or do they mean the primary right, which is the foundation upon which the cause of action rests ? The Referee and the Circuit Judge must necessarily have construed them to mean the former, for their whole decision rests upon the argument that the provisions of the Code requiring the promise (which is relied upon to take the case out of the operation of the Statute of Limitations to be in writing) applies to the case, because the right of action, that is the right to bring the action, had not accrued at the time of the adoption of the Code, inasmuch as the action could not have been commenced until after the performance of the condition, and that having happened after the adoption of the Code the case could not be brought within the excepting words of Section 96 of the Code. But, as we have seen, this construction not only gives the Code a retroactive operation, but brings it in conflict with the constitutional provisions designed to prevent any legislation which would impair the obligation of contracts. We must, therefore, seek for some other construction.

Pomeroy, in his very valuable work on Remedies and Remedial Rights by the civil action, according to the Reformed American Procedure, inquiring into the true meaning of the words “ cause of action,” after telling us in Section 452, page 486, that “ the American Courts of the present day seem to avoid the announcement of any general principle or the giving of any general definitions,” proceeds in Section 519, pages 554-5, to say: “Every action is based upon some primary right held by the plaintiff and upon a duty resting upon the defendant corresponding to such right. By means of a wrongful act or omission of the defendant this primary right and this duty are invaded and broken, and there immediately arises from the breach a new remedial right of the plaintiff and a new remedial duty of the defendant. Finally, such remedial right and duty are consummated and satisfied by the remedy which is obtained through means of the action and which is its object. Now, it is very plain that, using the words according to their natural import and according to their technical legal import, the ‘cause of action’ is what gives rise to the remedial right or the right of remedy, which is evidently the same as the term ‘right of action’ frequently used by Judges and text writers. This remedial right, or right of action, does not arise from the wrongful act or omission of the defendant — the delict — alone, nor from the plaintiff’s primary right and the defendant’s corresponding primary duty alone, but from these two elements taken together. The ‘cause of action,’ therefore, must always consist of two factors — (1) the plaintiff’s primary right and the defendant’s corresponding primary duty, whatever be the subject to which they relate, person, character, property or contract; and (2) the delict or wrongful act or omission of the defendant, by which the primary right and duty have been violated.”

If the words “right of action,” as used in Section 96 of the Code, be given a secondary signification, as is not only allowable but proper, in order to avoid a conflict with any constitutional provision, and be construed to mean the primary right, which constitutes one of the foundations of the cause of action, and not the remedial right which flows from such primary right held by the plaintiff and the breach of the primary duty resting upon the defendant, which would seem to be their technical legal import, then the statute would not conflict with any constitutional provision and would not be liable to the charge of being retrospective legislation. The primary right which accrued to the plaintiff upon the making of the promise in 1869 would be left unimpaired and unaffected by any subsequent legislation; for, in this sense, the right of action had accrued prior to the adoption of the Code, and therefore the case comes within the exception mentioned in Section 96, and it was not necessary that the promise should be in writing.

The position taken, that the action not having been brought within four years after the making of the promise in 1869 is barred by the Statute of Limitations, cannot be sustained. The promise being conditional, no action could have been commenced upon it until after the condition was performed, and therefore the statute could not commence to run until that time; for in such a case it would be necessary to allege and prove the performance of the condition. — Brown vs. Joyner, 1 Rich., 210 ; Bangs vs. Hall, 2 Pick., 368 ; Wetzell vs. Bussard, 11 Wheat., 309.

The judgment of the Circuit Court must be set aside and a new trial had.

Motion granted.

Willard, C. J., and Haskell, A. J., concurred.