McQuesten v. Spalding

Rtigg, C. J. This is an action of contract begun on October 6, 1916, to recover upon a written instrument of the tenor following: “Nashua, N. H., February 19th, 1903. For value received I promise to pay to the order of Anna E. McQuesten twenty-five hundred dollars on demand with interest semi-annually. Chas. E. Spalding. $2,500 Ida L. Spalding.” Indorsement. “This is a preferred note to be paid regardless of any future proceedings in Bankruptcy on demand, or at the settlement of my mother’s (Mary A. Spalding) estate. Chas. E. Spalding.” The chief contention of the principal defendant is that the plaintiff’s action is barred by the statute of limitations. • There was evidence tending to show that the plaintiff lent to the defendant Charles E. Spalding, at his solicitation, $2,500, and received from him the instrument just quoted, that no payment of principal or interest had been made upon it and, no demand had ever been made upon the defendant for payment before the present action; that Mary A. Spalding, the mother of the defendant, died on February 28, 1916, and that her estate was ripe for settlement. If this testimony was believed, the plain [303] tiff was entitled to recover. It therefore was error to direct a verdict for the defendant. The fundamental rule in the interpretation of all written instruments is to ascertain the intent of the parties from all the language employed, attributing appropriate force to every word used. Effect must be given to that intent unless prevented by some positive rule of law. Applying that rule to the instrument here in suit, its meaning is not open to doubt. The entire instrument, including the indorsement, must be scrutinized in order to discover its true signification. While the main body of the instrument standing alone is a simple promissory note payable on demand, its nature in this regard is modified and supplemented by the subsequent writing. The indorsement signed by the defendant is an unequivocal statement to the effect that in addition to the principal sum being payable on demand, alternative promises of payment are made, one to pay on demand regardless of any future proceedings in bankruptcy, and the other to pay on the settlement of his mother’s estate. The promise taken in its entirety is to make payment at any one of three different times, (1) on demand, (2) on demand after proceedings in bankruptcy without being affected thereby, and (3) on the settlement of his mother’s estate. The selection of the time of payment is left wholly to the volition of the plaintiff in accordance with the particular promise upon which she elects to rely. While such an instrument is not a negotiable note, its validity as a contract is not open to doubt. The statute of limitations has not run against the plaintiff. Ordinarily the statute of limitations begins to run when the right of action accrues. But that principle has no application as a bar to the facts here disclosed, because^ although, if the plaintiff had chosen to exercise that option, she might have brought an action in 1903, yet she expressly chose not to exercise that option but to rely upon the other promise of the defendant to pay on the settlement of his mother’s estate. The debt was not due absolutely and unequivocally on demand. It was thus due only in the event that the plaintiff exercised that option. It was her right and privilege to exercise the option that it should become payable on the settlement of the estate of the defendant’s mother. There is nothing in1 the law which prevents the plaintiff [304] from relying upon that promise of the defendant. That promise did not mature and become operative until the happening of the event upon which it was conditioned, namely, the settlement of the mother’s estate. Manifestly with reference to that due date, the statute of limitations has not run. This conclusion is in harmony with the reasoning of Mahoney v. Fitzpatrick, 133 Mass. 151. It is supported by direct decisions in other jurisdictions. Harris v. Townshend, 101 Miss. 590. Blick v. Cockins, 131 Md. 625, 630, 631. Sullivan v. Ellis, 135 C. C. A. 366. The case of Brown v. Hitchcock, 69 Vt. 197, somewhat relied on by the defendant, appears to have turned on a question of pleading and not to be an authority contrary to the conclusion here reached. It is not necessary to determine the precise effect of the promise to pay upon demand as a preferred note regardless of future proceedings in bankruptcy. There is nothing to show that the defendant ever has been subjected to proceedings in bankruptcy. At most it was an attempt to lift in advance the bar that might arise through a discharge in bankruptcy by continuing its force arid validity as a binding obligation, or perhaps to create a preference for the debt if proved in bankruptcy proceedings. Without undertaking to determine the effect of such a promise, see Lerow v. Wilmarth, 7 Allen, 463, it is enough to say that there is nothing in its nature so illegal or contrary to public policy as to vitiate the entire instrument. Whatever’ its nature may be, its presence does not destroy the binding character of the contract here sought to be enforced. Exceptions sustained.