Court Opinion

ID: 9796638
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:01:22.998471+00
Date Added: 2024-06-11T08:50:51.562527
License: Public Domain

Davis, J.,
dissenting:
I respectfully dissent from the majority opinion and would affirm the decision of the Court of Appeals for the reasons stated in that opinion. “A part payment speaks for itself, and, when a part payment is made in a contract case, the provisions of K.S.A. 60-520 come into play, having the effect of tolling the statute of limitations.” Hustead v. Bendix Corp., 233 Kan. 870, Syl. ¶ 4, 666 P.2d 1175 (1983). No longer in Kansas will a “payment speak for itself’ in a contract case. According to the majority opinion, part payment by a debtor means what the debtor says at the time payment is made and ultimately will mean what a trial court says it means based upon parol evidence.
K.S.A. 60-520 provides the two methods by which one may revive a debt based on contract: first, by partial payment, and second, by acknowledgment or promise. In my opinion, this new principle adopted by the majority opinion would render the partial payment provisions of K.S.A. 60-520(a) meaningless.
The majority opinion distinguishes Hustead on the facts, noting that the opinion differs greatly from the present case factually and did not rely on K.S.A. 60-520(a) as to its holding and, further, did not involve a part payment conditionally made. While all this is true, Hustead, upon remand, was providing direction to the lower court and was responding to the defendants’ argument that the payment was not of a character required to be a partial payment under the statute. We stated in Hustead that part payments are not to be held to the same standards as written acknowledgments and promises. The only requirement to toll the limitation period is that the payment be made on the contract. 233 Kan. at 877.
The provisions of K.S.A. 60-520(a) expressly provide that “when any part of the principal or interest shall have been paid,” the *94entire debt is revived. The statute provides no means to differentiate between interest and principal, and where a “distinct and unequivocal payment on any part of the debt” is made, the entire debt becomes due. K.S.A. 60-520 as well as earlier legislation in this area sought to avoid parol evidence in the control of revival of debts by its requirement that both acknowledgments and promises be made in writing to have any effect. A partial payment also needs little parol evidence to prove its existence and can normally be shown, as in the present case, by a check or other negotiable instrument. The majority opinion, however, invites parol evidence from the debtor in order to determine whether partial payment revived the whole debt or just a portion of the debt.
The majority looks to Huntingdon Finance Corp. v. Newton Artesian, 442 Pa. Super. 406, 659 P.2d 1052 (1995), concluding that a valid public policy exists to encourage debtors to malee payment on obligations that are due, but the collection of which is barred by limitation. I would submit that the logic of the Huntingdon decision and the premise of that opinion is not sound. While the majority concludes and Huntingdon agrees, that abolishing the power of debtors to qualify their payments would result in no reasonable debtor malting any payment whatsoever on ancient debts, their conclusion is built on the presumption that the debtors have such thorough knowledge of the law as to understand the effect of a partial payment. If the debtors were so well schooled, certainly they would also understand the importance and effect of obtaining a release or effecting a novation prior to the malting of a partial payment.
While it may seem more equitable and fair to permit a debtor to avoid interest that in some cases can greatly exceed the principal, this is not necessarily the case. Interest is a product of the time value of money and risks taken by the lender. To allow a debtor to avoid paying years of interest and just pay the principal amount on the debt, is to severely deprive the creditor of the time value of his or her money. This is compounded by the fact that it results in a windfall to the debtor, who is permitted to hold the creditor’s money for several years only to have to return the exact dollar amount.
*95Finally, neither K.S.A. 60-520(a) nor any of the Kansas cases cited in the majority opinion provide authority for separation of principal and interest. The original agreement between the parties certainly did not contemplate a separation of interest and principal. Yet, under the majority opinion, the debtor is able to modify the original agreement, unilaterally, by qualifying his or her payment and expressing an intent which is again contrary to the original agreement. Why permit unilateral modification by the debtor of a debt created through the agreement of debtor and creditor? It is enough that the debtor remains in control because the entire debt is uncollectible. The debtor may work out with the creditor a partial payment with a release signed or novation. The debt was created by contract; let it be amended by contract. Hustead follows K.S.A. 60-520(a) and maintains the sanctity of the contract by not allowing the debtor to unilaterally amend the original agreement of the parties.
For the above reasons, I would affirm the Court of Appeals and reverse the district court.
Six, J., joins in the foregoing dissent.