Court Opinion

ID: 6485135
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:08:26.305949+00
Date Added: 2024-06-11T15:54:18.483390
License: Public Domain

DISSENTING OPINION OF
QUARLES, J.
Being unable to agree with tbe reasoning and conclusion of my associates, it is my duty to set forth the reasons which prevent me from so doing. The majority opinion is based upon the idea that one of two joint obligors is the agent of the other for the purpose of all things connected with the obligation common to both, and may, expressly or impliedly make a new contract binding both, renewing or continuing the old obligation; that part payment of one, even though made without the knowledge, consent, or express authorization of the other, is an acknowledgment of the debt, and that from this acknowledgment the law implies a promise on the part of both, to pay the balance of the debt. Much discussion has been had in regard to the cause of action in such cases, but the settled rule is that in assumpsit upon an obligation- upon which an action has not been brought within the statutory period, but upon which the bar has been removed or suspended by a new promise, that the action must be upon the new promise. This new promise is either express, as where the debtor makes a new promise to pay; or it is implied, as where the debtor by unequivocal acknowledgment admits the existence of the debt, and his liability therefor, in which case the law implies a promise on his part to pay. Part payment is universally held to be such an acknowledgment as to justify the implication of a new promise, unless it is made under such circumstances as repel the presumption. The English statute adopted early in the seventeenth century (James I, c. 16) limiting the time within which certain personal actions could be brought, was, at first, interpreted and enforced by the English courts in accord with its letter and intent. Later the statute grew into disfavor, and the *148English courts seized upon every possible pretext to take cases out of the statute and thereby avoid the operation of the statute. Such was the condition in England at the time of the decision in Whitcomb v. Whiting. That decision resulted in so much fraud and hardship, that long prior to the adoption of the English common law in Hawaii, Parliament was forced to enact legislation abolishing the rule announced by Lord Mansfield in that case. It has for many years, both prior and subsequent to January 1, 1893, been the settled policy of our courts to give force and effect to the statute, and to regard it as a statute of repose perforce of which a cause of action was destroyed, unless brought within the prescribed time, or unless there has been a new promise within the prescribed time which will support the action. In Bell v. Morrison, 1 Pet. 351, this policy is well stated, and the American rule which gives force and effect to the statute of limitations, and frowns upon evasions of it on technical grounds, is well illustrated. The decision in Whitcomb v. Whiting was condemned, its reasoning shown fallacious, and a rule contrary thereto was announced in the last named case by the Supreme Court of the United States. The court there said, referring to the decision of Lord Mansfield in Whitcomb v. Whiting: “This is the whole reasoning reported in the ease, and is certainly not very satisfactory. Tt assumes, that one party, who has authority to discharge, has, necessarily, also authority to charge the others; that a virtual agency exists in each joint debtor to pay for the whole; and that a virtual agency exists, by analogy, to charge the whole. Now this very position constitutes the matter in controversy. It is true, that a payment by one does inure for the benefit of the whole; but this arises not so much from any virtual agency for the whole, as by operation of law; for the payment extinguishes the debt. If such payment were made, after a positive refusal or prohibition of the other joint debtors, it would still operate as an extinguishment of the debt, and the creditor could no longer sue them. In truth, he who pays-a joint debt, *149pays to discharge himself; and so far from binding the others conclusively by his act, as virtually theirs also, he cannot recover’ over against them, in contribution, without such payment has been rightfully made, and ought to charge them. When the statute has run against a joint debt, the reasonable presumption is, that it is no longer a subsisting debt; and therefore, there is no ground on which to raise a virtual agency to pay that which is not admitted to exist. But if this were not so, still there is a great difference between creating a virtual agency, which is for the benefit of all, and one which is onerous and prejudicial to all; the one is-not a natural or necessary consequence from the other. A person may well authorize the payment of a debt for which he is now liable; and yet refuse to authorize a charge, where there at present exists no legal liability to pay. Yet, if the principle of Lord Mansfield be correct, the acknowledgment of one joint debtor will bind all the rest, even though they should have utterly denied the debt, at the time when such acknowledgment was made.” As early as 1865, the supreme court of Hawaii, in Pusiau v. Bixman> 2 Haw. 730, said: “The tendency of modern legislation, we believe, in all commercial states, is rather to shorten than to extend the limit as to time, within which actions of any kind may be maintained, with a view to further the speedy settlement of controversies, to give additional facility to transactions affecting the possession and transfer of property, and to promote that repose which is the chief object of all such legislation.” That case was an action upon a merchant’s account, and the court held that the statute of six years applied, although merchants’ accounts were not named in the statute. The court also heldffhat payments by an assignee to. whom the debtor had made a deed of conveyance of his property for the purpose of paying his debts, did not remove the bar of the statute, nor take the case out of its operation. The principle, and reasoning of that case, are contrary to the rule announced in the majority opinion, in my view of the same. In Ahlo v. Tai *150Lung, 9 Haw. 272, the same question arose. The debtor had made an assignment for the benefit of bis creditors, expressly authorizing tbe sale of bis property and the payment of tbe proceeds to bis creditors, yet tbe payments made by sucb assignee were beld not to be payments by bim, although tbe grounds for bolding that tbe relation of principal and agent eixsted are far stronger than in tbe case of co-obligors or joint contractors, and no new promise was implied. Tbe court quoted with approval from a number of cases, directly in line with my view of tbe proper rule to be applied, among others that of Campbell v. Baldwin, 130 Mass. 200, as follows: “Tbe ground upon which a part-payment is beld to take a. case out of tbe statute is that sucb payment is a voluntary admission by tbe debtor that tbe debt is then due, which raises a new promise by implication to pay it or tbe balance. To have this effect it m!ust be sucb an acknowledgment as reasonably leads to tbe inference that tbe debtor intended to renew bis promise of payment.. In the case at bar tbe plaintiff executed a mortgage in which be gave to tbe mortgagee a power to sell tbe estate and to appropriate tbe proceeds to tbe payment of tbe mortgage debt: But this cannot fairly be construed as an authority to tbe mortgagee to make a new promise on behalf of tbe mortgagor to pay the debt, so as to avoid tbe statute of limitations.” Among other cases cited in Ahlo v. Tai Lung, supra, appears that of Stoddard v. Doane, 7 Gray 387, where tbe debtor in a schedule accompanying bis assignment mentioned bis creditors, and bis assignee in accordance with tbe authority given bim, made payments, and it was beld that be was not tbe agent of tbe assignor, quoting as follows: “To have this effect (of a new promise) it is manifest that tbe payment must be mjade by tbe debtor, or by bis order, or by an agent fully authorized for tbe purpose. If is an act óf bis mind, from which tbe implied promise to pay tbe residue of tbe debt arises. We are of opinion that a payment by an assignee in insolvency is not a payment by tbe insolvent or his order, within tbe *151meaning of this rule. The assignee is bound by law to pay the dividend which has been declared, he is the debtor to that amount. The original debtor cannot delay or prevent such payment, if he would. It is not a personal or voluntary act of the insolvent.” The settled policy of this court and of the United States Supreme Court, and other courts, to give force and effect to the statute of limitations, in line with what has been the settled policy of the courts of England, at different times, without evasion, is well illustrated in the decision in Harris v. Clark, 18 Haw. 569, wherein this court cites Moore v. Bank of Columbia, 6 Pet. 86, 92; Wetzell v. Bussard, 11 Wheat. 309; Shepherd v. Thompson, 122 U. S. 231; and quotes with approval from Bell v. Morrison, supra, where it was held that if there was no express new promise to pay, but one is to be implied from an acknowledgment, the acknowledgment ought to contain an unqualified and direct admission of a previous, subsisting debt, which the party is willing to pay. This last decision of this court cited is out of joint with the decision and reasoning in Whitcomb v. Whiting. In my opinion there is more reason for holding that the assignee, under such circumstances, is the agent of the assignor, than to hold that defendant McManus was the agent of Schurmann, under the facts of the case at bar. How can it be reasonably said that payments by McManus, made without the knowledge or consent of Schurmann, were “voluntary payments” made by Schurmann ? or that it was an act of his mind ? or his assent to such payments ? The rule announced in Whitcomb v. Whiting was based upon a mere fiction of law, ignored the real relation existing between joint obligors, and presumed knowledge and assent on the part of all for the acts of another, whether known or unknown. This is contrary to the settled policy in this jurisdiction, both prior and subsequent to January 1, 1893, in my opinion. I am also of the opinion that good reasons for not evading the statute, in this jurisdiction are set forth and shown in the decisions in Cowhick v. Shingle, 5 Wyo. 87, in *152Stubblefield v. McAuliff, 20 Wash. 442, and in many other American authorities.
The opinion of the majority rests solely upon the theory that by section 1 of the Revised Laws which became operative January 1, 1893, the rule laid down in Whitcomb v. Whiting was adopted. I cannot take that view. The statute makes certain exceptions, those relating to settled policies, as well as precedents, in this jurisdiction. Even in the United States, where the laws of England were inherited, the common law in its entirety, was not adopted. “The common law of England is not to be taken in all respects to be that of America. Our ancestors brought with them from the mother coiintry its general principles, and claimied it as their birthright; but they brought with them and adopted only that portion which was applicable to their needs and suitable to their situation and circumstances.” (6 Am. & Eng. Enc. of Law 286, and numerous decisions cited in note 3.) Analogous questions have been decided in this jurisdiction. Keeping in mind the settled policy of giving force and effect to the statute of limitations in this jurisdiction and throughout the United States; that pretexts for its evasion are not tolerated; that unless an action is commenced within the statutory period for its limitation, there must be a new promise, express or implied, by the debtor, to which his mind has assented, something voluntarily and consciously done by him evincing an intent to recognize and pay the obligation, and we are assisted in determining whether the legislature in adopting section 1 of the Revised Laws intended to overturn this settled policy, by rulings of this court, and its predecessors, upon other questions involving the principle.
In Henrique v. Paris, 10 Haw. 408, speaking' of certain principles of the common law, and in passing upon their adoption, or nonadoption by said statute, the court said: “There is not now and here the necessity that there was in England in the middle ages for laws against champerty and maintenance to prevent stirring up of suits for purposes” of oppression, nor *153any reason why a landlord should not convey his estate without the consent (attornment) of his tenant. Freedom, rather than restraint of alienation is required under present conditions. The reasons for this rule having ceased, the rule itself should also cease.” To the same effect are the decisions in Mossman v. Hawaiian Government, 10 Haw. 421, and in Van Gieson v. Magoon, 20 Haw. 146.
In Rooke v. Queen’s Hospital, 12 Haw. 375, the court, at pp. 319, 380, to my mind, gives good reasons why it should now be held that the rule laid down in Whitcomb v. Whiting was not adopted, in that the said rule is contrary to our settled policy, out of joint with the times, and not supported by our precedents. The court there, inter alia, said: “In England, the country of their origin, rules of property and of construction such as are likely to be involved in cases of this kind, even though they may have grown up under conditions that no longer exist, are adhered to with great rigidity, rules of construction often being given almost the fixity of rules of law. But in the Hnited States the tendency is to reject what are ■considered rules of property in England if out of joint with the timies, and to suffer rules of construction to yield readily to the manifest intention of the testator. * * * Hawaiian legislation, -judicial decisions and national usage prior to the taking effect of the statute (Sec. 1. R. L.) in question, January 1, 1893, undoubtedly followed the American tendency towards ■flexibility and adaptability to present and local conditions, rather than the English example of rigidity. See for example, Thurston v. Allen, 8 Haw. 392. There exists even greater reasons for departure from or failure to adopt English technical rules and precedents here than in the Hnited States. And since ■the enactment of that statute (Sec. 1, R. L.) the previous rejection of certain material parts of a system has been regarded as amounting to a rejection of other parts.”
In Branca v. Makuakane, 13 Haw. 499, at page 500, is lound the following: “The question is whether the technical *154rule of the common law which usually required the use of the word 'heirs/ and allowed no substitute therefor, however clear-the intention might be, to carry an estate in fee simple, should be allowed to override the manifest intention of the parties.. * * * That rule was a relic of the feudal system and grew up-under conditions that no longer exist in England and never-existed in these islands as it did in England. It is now regarded as purely technical, and its chief effect seems to be to-defeat the intention of the parties. Accordingly it has been modified or repealed by statute in England, the home of its-origin, and in nearly all of the States and Territories of the United States.” Judge the rule announced in Whitcomb v. Whiting by the same standard, and it might well be said of it,, that it is technical, that its chief effect is to defeat the object,, purpose and operation of our statute of limitations; and, that it was repealed in England, the home of its birth, more than, half a century ago; and, it has been repudiated in nearly all of the States and Territories of the United States.
Section 1 of the Revised Laws was construed in Dole v. Gear, 14 Haw. 554. This court, at page 561, said: “One of the exceptions named' in the statute is that the common law shall not apply when it is 'otherwise expressly provided by the Hawaiian * * * laws.’ We have just held that the statute that confers jurisdiction 'according to the usage and practice of courts of equity’ does not require such usage and practice to be ascertained by reference to decisions at any particular period-of time in the past or in England to the exclusion of the United States. Is not this, therefore, a case in which it is 'otherwise expressly provided by Hawaiian Laws’ within the meaning of the exception named in the statute adopting the common, law? There is much reason to believe that it is. But, assuming that it is not, still we are not bound by the old English, rule for the following reasons. The common law consists of principles and not of set rules. It therefore admits of different applications under, different conditions. Moreover by the *155terms of our statute it is to be ascertained by American as well as English decisions. In Morgan v. King, 30 Barb. 9, the court, in construing a somewhat similar statute, said (at p. 13) : ‘The adoption of the common law, in the most general terms, by the government of any country, would not necessarily require or admit of an unqualified application of all its rules, without regard to local circumstances, however well settled and generally received those rules might be. Its rules are modified upon its own principles, not in violation of them’ and (at p. 14) ‘when it is said that we have in this country adopted the common law of England, it is not meant that we have adopted any mere formal rules, or any written code, or the mere verbiage in which the common law is expressed. It is aptly termed the unwritten law of England; and we have adopted it as a constantly improving science, rather than as an art; as a system of legal logic, rather than as a code of rules. In short, in adopting the common law, we have adopted its fundamental principles and modes of reasoning, and the substance of its rules as illustrated by the reasons on which they are based, rather than by the mere words in which they are expressed/ See also Bouvier, Tit. Com. Law. In Sayward v. Carlson, 1 Wash. St. 29, in construing a similar statute the court said (at p. 40) : ‘But we do not subscribe to the next proposition, that resort can be had only to the decisions of English courts, or to those of American courts which have followed them, to ascertain what the common law of England is or was, unless the English decisions commend themselves to reason, or have been so long and generally followed that to depart from them would tend to unsettle what has, by ‘immemorial and universal usage,’ been understood to be settled. The common law grew with society, not ahead of it. As society became more complex, and new demands were made upon'the law by reason of new circumstances, the courts originally, in England, out of the storehouse of reason and good sense, declared the ‘common law.’ But since courts have had an existence in America they *156have never hesitated to take upon themselves the responsibility of saying what is the common law, notwithstanding' current English decisions, especially upon questions involving new conditions. Therefore, we have the ‘common law’ as declared by the highest courts of this, that and the other state, and by the courts' of the United Statesj sometimes varying in éach. And we understand, by §1 of the code, that where there are no governing provisions of the written laws, the courts of the late territory, and of this state, are, in all'matters coming before them, to endeavor to administer justice according to the promptings of reason and common sense, which are the cardinal' principles of the common law; but not that the decisions of the English courts are to be taken blindly and without inquiry as to' their reasoning or application to the circumstances.’ ” This court then proceeds to show that whén conditions change that the rules of the common law must give way by modification or abrogation.
In my opinion, the decision in Cross v. Allen, 141 U. S: 528, should not be followed, for the reason that it is at variance with “our national usage” and not adapted to our circumstances. Moreover, what is said in that decision in regard to Lord Mansfield’s rule, is obiter dictum, being unnecessary to a decision of the case. That was a suit in equity to foreclose a mortgage given by Gross and wife upon property, some of which belonged to the husband, and some to the wife. Suit was brought after the statutory period had elapsed, the wife had died,' and it was sought to remove the bar by certain payments' made. The wife was not personally bound, not having signed the note. The court held that the mortgage was a mere incident to the debt, and subsisted as long as the debt did, which is, evidently, the correct rule. The case was evidently decided under the'Oregon statute, quoted in the opinion, where it is expressly provided that the statute runs only from the date of the last payment, and the United States Supreme Court must have given to the said statute the same interpretation given to it by the Supreme *157Court of Oregon in Partlow v. Singer, 2 Ore. 808, and other Oregon cases.
There is nothing in the record showing that the defendant Schurmann, plaintiff in error, ever acknowledged the existence of the debt, voluntarily made any payment thereon, or promised to pay same, within four years next preceding the commencement of this action. In my opinion the judgment, sought to be reviewed, should he reversed.