Case Name: JOHN H. HILL v. J. W. HASKIN
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1871-10
Citations: 42 Cal. 159
Docket Number: No. 2,594
Parties: JOHN H. HILL v. J. W. HASKIN.
Judges: 
Reporter: California Reports
Volume: 42
Pages: 159–165

Head Matter:
[No. 2,594.]
JOHN H. HILL v. J. W. HASKIN.
Advances on Joint "Venture—When Statute of Limitations Commences Running.—In an action by Hill, to recover one half his advances made under a contract between him and Haskin, whereby they agreed to buy and sell on joint account certain mining stock, Hill to advance all the money and Haskin to repay one half with interest, and Hill to hold all the stock purchased as security for his advances, but without specifying any time within which the repayment was to be made: held, that an offer to account and a demand for repayment by Hill were conditions precedent to his right to maintain the action, and that the Statute of Limitations would not commence running against him until such offer and demand.
Appeal from the District Court of the Fifteenth Judieial District, City and County of San Francisco.
The facts are stated in the opinions.
Chas. H. Sawyer and G. W. Gordon, for Appellant.
It is an undoubted rule of law that the cause of action arises as soon as the party plaintiff has a right to apply to the proper tribunals for relief. In other words, the breach of contract by the defendant is requisite to quicken into life a correlative right of action in the plaintiff. But in' the case at bar no such breach can be charged against defendant. He cannot be said to have been in default for not paying, when he had no notice of a liability existing against him from the only party cognizant of the fact. (1 Chitty on Pl. 330; Chitty on Con. 800; Hartland v. Jukes et al., 1 Hurlstone & Coltman Ex. 667; Sinkler v. Indiana Co., 3 Penn., P. & W. 149; Baker v. Joseph, 16 Cal. 173.)
A fair test of the accuracy of our position would be to suppose the suit at bar inverted—that defendant had sued as plaintiff, on precisely the same contract and the same facts, except that he, on the 27th day of May, 1865, for the first time had demanded from the present plaintiff an accounting, and offered performance. Would opposing counsel then be found on that side contending for a Statute of Limitations? It seems inequitable, illogical, and opposed to legal principles, that either party should be able successfully to elude liability, under the pretense that the other was not vigilant, when by his own conduct he has disarmed suspicion and constructively approved of the course of procedure.
H. F. Crane and Wm. S. Wells, for Respondent.
The obligation of defendant to repay arises clearly upon this written contract, as he there promises to pay money to plaintiff upon a certain contingency, to wit, in case plaintiff makes certain purchases of stock, and pays for the same, defendant is then' to repay to plaintiff one half of the advances, and no other time of payment is specified. Upon the purchase and advance by plaintiff there immediately arose an obligation on defendant to repay to plaintiff one half his advance, and no demand was necessary, especially where the defendant had full knowledge and was consenting to the transaction. (Thompson v. Ketchim, 8 Johns. 148; Parsons on Con. 552; 5 Barn. & Adolph. 911; Chitty on Con. 733; Aden v. Rightmire, 20 Johns. 365; Nelson v. Bostwick, 5 Hill, 37; 22 Wend. 125.) In Stover v. Flock, 30 N. Y. 64, a case similar to this, the Court held that the statute commenced running from the time the advance was made. The plaintiff’s theory would permit a demand of this "character to run fpr an indefinite period of time, and then he could revive the same by a demand. A doctrine which leads to such preposterous conclusions cannot be within the terms or spirit of the Statute of Limitations.

Opinion:
By the Court, Crockett, J.:
In 1863 the plaintiff and defendant entered into a partnership venture, for the purchase and sale, from time to time, on joint account, of the stock of a specified mining company. The contract was that , the plaintiff was to advance all the money necessary for the purchases, and the defendant was to repay to the plaintiff one half of such advances, with interest at a stipulated rate; but no time was specified within which repayment was to be made. It was further provided that the plaintiff was to hold all the stock purchased, as a security for his advances, and that, if requested by the plaintiff, the defendant would deposit additional security against loss from a depreciation of the stock. The action is brought to recover one half the amount advanced by the plaintiff for the purchase of the stock, and the complaint avers that in December, 1863, and January, 1864, the several purchases of stock were made by the plaintiff, with the knowledge and consent of the defendant, and that the stock proved to be utterly worthless, and the sum invested in its purchase has consequently become a total loss. The complaint further avers that the plaintiff', before suit was brought, offered to account with the defendant concerning said stocks, and demanded payment of the amount due from the defendant.
The defense relied upon is the Statute of Limitations, the action having been commenced in 1868, more than four years after the date of the last advance of money by the plaintiff.
On the trial it appeared that in May, 1865, the plaintiff for the first time offered to account with the defendant concerning said stocks, and demanded payment of the balance due. Having proved the other allegations of the complaint the plaintiff rested, and the defendant moved for a nonsuit, which was granted, on the ground that the plaintiff's demand was barfed by the statute. From this judgment, and from an order denying his motion for a new trial, the plaintiff has appealed.
It is clear that if the plaintiff could have maintained an action against the defendant for his share of the advances immediately after they were made, without a previous offer to account concerning the stocks and a demand of payment, the action is barred by the statute. The only question, therefore, is whether a previous offer to account and a prior demand of payment were conditions precedent to his right to maintain the action, and I think they were. There appears to have been no limitation in the contract as to the quantity or price of the stock to be purchased, or of the time within which it was to be purchased. The plaintiff was at liberty to purchase any quantity of the stock, at any price, and at any time his judgment dictated, until the contract was put an end to by the action of one or both of the parties, and the plaintiff was entitled, to the custody of all the stock, as a security for his advances. He also had authority to sell the stock on their joint account. Until informed by the plaintiff of the result of these transactions, or, at least, until the plaintiff offered to account concerning them, and informed the defendant of the balance due, the latter was in no default. The complaint, it is true, avers that the defendant had actual notice of the purchases which were made; but he could not have known, until informed by the plaintiff, that he had made no other purchases, nor that he had made no sales of the stock already purchased. For aught that he could know, until informed to the contrary by the plaintiff, the latter may have sold the stocks within an hour after they were purchased, at a large advance, in which event the plaintiff would have been indebted to the defendant. The transactions being -wholly within the knowledge of the plaintiff, the defendant had a right, under the contract, to be informed of them and of all that the plaintiff had done, before he could be put in default. He had no means of knowing, except on information from the plaintiff, what sums were advanced, or at what times, or what sales were made, or at what times or prices. It was, therefore, incumbent on the plaintiff, before demanding payment of the defendant, to offer him this information, and to offer to account concerning his transactions in the stock. Until this was done, the defendant was not liable to an action for his share of the advances. The defendant, it is true, might have obtained this information on application to the plaintiff, but neither the contract nor the law imposed this duty on him, and he was not in default for omitting to do it.
In my opinion the action was not barred, and the judgment ought to be reversed and the cause remanded for a new trial; and it is so ordered.