Lamb v. Withrow

| Iowa | Jan 28, 1870

Cole, J.

— Our code of practice provides that “ when a pleading shows affirmatively that its cause of claim is barred by the statute of limitations, it may be assailed by demurrer.” ' Rev., § 2961. It is averred in the petition that the plaintiffs paid all of both notes.prior to December, 1858, and that the defendant has been a resident of Iowa continuously since February, 1857, — this action having been commenced in September 1,1865. Our statute of limitations provides that actions “founded on unwritten contracts” must be brought within five years; while those “ founded on written contracts ” must be brought within ten years.

The gist of this action is for money paid by the plaintiffs for the use of defendant. Their right to recover rests upon the fact that the notes which they have paid were the obligations of defendant as principal, and of themselves as sureties. The notes in this case do not show that essential fact. The plaintiffs must rely therefore upon parol proof for establishing this fact. When they have proved by parol the payment of the money in discharge or satisfaction of the notes, and then proved also by parol that the defendant was principal and they were his sureties, the law will imply a promise on the part of defendant to repay them the amount. Surely, in this view, the plaintiffs’ action is founded on an unwritten contract, and by the statute would be barred in five years.

But the plaintiffs claim that, having paid the notes for defendant as his sureties, they are entitled to be subrogated to the rights of the holder of the notes, before such payment, as against the defendant, and here again the right to such subrogation depends upon parol proof of the fact that they were the sureties of the defendant. This fact is not evidenced by the note, and hence their action, if it was for subrogation, would not be founded on a written contract, and like the former hypothesis would be barred in five years.

That, still further, the plaintiffs claim that their action is upon the notes themselves, which they show by their, averments are not extinguished as obligations so far as defendant is concerned, but are in full force and assigned to them. But here again it also appears from plaintiffs’ own averments that the notes are merged in judgments and are extinguished as obligations against every one, including the defendant, unless the fact, that the plaintiffs were sureties for the defendant, is shown to exist. Without proof of this fact the notes are merged and extinguished, even according to plaintiffs’ own averments. The cause of action then must be founded upon the parol proof of the plaintiffs’ suretyship for defendant, and not upon any written contract. For the only effect upon the action which could in any event be given to the notes would be to determine the measure of damages, the action being founded, after all, on the relation of principal and surety, of which no contract or proof in writing is claimed to exist. The spirit as well as the letter of the statute of limitations requires, that, in order to prevent the bar of five years from applying to the action, the essential facts establishing the liability of the defendant shall be shown by his written cont/racb.

It is said in 1 Leading Cases in Equity, 151, in the notes to Dering v. Earl of Winchelsea, 2 B. and P. 270, that “ it is well settled, that the remedy of a surety against the principal lies in assumpsit upon an implied promise to indemnify, or for money paid, laid out and expended, even when the obligation contracted with the creditor is under seal, and will consequently be barred by the statute of limitations unless prosecuted within six (five, by our statute) years from the time at which the cause of action accrues; and it seems to have been held in Fink v. Mahaffy, 8 Watts, 384" court="Pa." date_filed="1839-07-15" href="https://app.midpage.ai/document/fink-v-mahaffy-6312053?utm_source=webapp" opinion_id="6312053">8 Watts, 384, that the right to subrogation rises no higher than the demand to which it is an incident, and consequently cannot be enforced in equity after the statute has attached, and has been pleaded .successfully to a suit at law.” In accord with this, even when the statute has not beén pleaded at law, are the cases of Neilson et al. v. Fry, 16 Ohio St. 552, and Chipman v. Merritt et al., 20 Cal. 130" court="Cal." date_filed="1862-07-01" href="https://app.midpage.ai/document/chipman-v-morill--webster-5434945?utm_source=webapp" opinion_id="5434945">20 Cal. 130; while the case of Smith et al. v. Swain et al., 7 Richardson’s Eq. (N. C.) 112, is somewhat at variance with it.

We go no further in settling the rule than the case requires us to go, and only hold that where the relation of principal and surety does not appear from the note or obligation itself, or other written contract of the defendant, and the note has been merged in judgment, and that-satisfied of record, the right of action at law, by the surety against the principal, is barred, by our statute, in five years. • This is not an action in equity to cancel the entry of satisfaction, etc., and to subrogate the sureties to the rights of the creditor. Whether a different rule would apply in such case we need not determine.

Affirmed.