Court Opinion

ID: 9731702
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:55:12.500181+00
Date Added: 2024-06-11T18:26:20.559128
License: Public Domain

Thompson, J.
(dissenting) — I am unable to agree with the conclusion reached by the majority. That an ordinary demand note is payable at once upon its execution so that the statute of limitations begins to run on that date is well settled. But I think the rule to be harsh and unrealistic, and that it should not be followed where there is a reasonable indication the parties did not intend it to apply.
It is not likely that in the great majority of cases the maker and payee of a demand note expect it will be paid at once, or that the holder will immediately commence a suit for its collection. Beason tells us that they had in mind that the maker would have some time in which to pay. Otherwise there would be small purpose in making the note. As the Maine Supreme Court put it: “It can hardly be supposed that this money was hired with the expectation on the part of anyone concerned that payment of the *373note was to be immediately demanded or made * * Yates v. Goodwin, 96 Maine 90, 94, 51 A. 804, 806.
The majority opinion gives great weight to Roberts v. Snow, 27 Neb. 425, 43 N.W. 241, 242, and other Nebraska eases. These seem to me to be unduly concerned with the fear that if the statute does not commence to run as of the date of the note it may never be matured; that is, that the holder would have it entirely at his option whether to make a demand or permit the instrument to run unmatured forever. But we ourselves have held that the demand must be made in a reasonable time. Lovrien v. Oestrich, 214 Iowa 298, 299, 242 N.W. 57. See also Yates v. Goodwin, supra, and Andrews v. Andrews, 170 Minn. 175, 183, 212 N.W. 408, 410, 411, 51 A. L. R. 542.
I prefer the holding exemplified by Shapleigh Hardware Co. v. Spiro, 141 Miss. 38, 106 So. 209, 210, 211, 44 A. L. R. 393, to the effect that if the note, although payable on demand, fairly shows that the parties intended that an actual demand be made, the statute does not commence to run from the date of the note. For a discussion of the rule that the intent of the parties must be sought, and when found, be held controlling, see Andrews v. Andrews, supra, pages 183, 184 of 170 Minn., page 411 of 212 N.W.
I have indicated my belief that we should not follow the hard and fast rule which commences the running of the statutory period with the date of the note, if there is something contained in it which fairly shows a contrary intent of the parties; and that our examination should be tempered by the assurance that ordinarily the immediate payment of the note, or suit upon it, was not in the contemplation of either the maker or the payee. I find these things in the note before us which seem to me to show an intent that an actual demand be made. The language of the note is “Demand after date * * (Italics supplied.) These words themselves, taken at their face value, indicate a demand must be made after the date of the note; that is what it says. I am aware there are authorities which hold such language does not change the rule; but I think it does throw some light upon the intent of the parties.
Again, the note provides for interest at four per cent; the statutory rate in Iowa is five. If it was not contemplated that the *374note would run for some time — that is, if the parties intended it should be due and payable on the date it was made — there seems no reason for inserting a provision for interest less than the percentage fixed by statute.
Finally there is the acceleration clause, which says: “A failure to pay any of said interest within 10 days after due causes the whole note to become due and collectible.” If the note was due and collectible on the day it was made, the just-quoted clause becomes entirely meaningless. Yet it is a part of the contract the parties made. We should determine their intent from what they said; not merely a part of what they said, but all of it. The acceleration clause is entirely compatible with an intent that the note should be due only upon demand actually made; it is entirely incompatible with the majority holding that it was due and collectible instantly upon its making and delivery.
I would reverse.