Opinion
No. 20413
Decided December 14, 1927.
Contracts — Agreement to repay loan upon sale of certain property — Implication to repay within reasonable time, without sale, precluded, when.
The implication that an agreement to repay upon the sale of certain property is an agreement to repay within a reasonable time, without the sale of the property, does not obtain where the facts and circumstances relative to the entering into such agreement preclude the existence of any such intention on the part of the contracting parties at such time.
ERROR to the Court of Appeals of Warren county.
The plaintiff in error here, Edith K. Link, was plaintiff in the trial court. The several causes of action are for money loaned or advanced by the plaintiff to the defendant's decedent during the years 1910, 1911, 1912, 1914, 1915, and 1917, and all are based upon an alleged contract between the plaintiff and the defendant's decedent to repay upon the sale of decedent's certain real property.
The evidence discloses that the plaintiff and the defendant's decedent were sisters, and tends to show that an agreement was made between the plaintiff and the defendant's decedent whereby plaintiff would, and did, loan to the decedent certain sums of money, to be repaid when a sale of such property would be made.
The evidence further discloses that the decedent died on November 6, 1922, and that her certain real property was not sold until sold by her administrator on October 6, 1925, after which date a claim for the amounts sued upon was made to the administrator and disallowed. Evidence was offered by the defendant tending to show that a reasonable time within which to sell the property referred to was from three to six months.
At the close of all the evidence, the court held that the agreement was an agreement to pay within a reasonable time, that the various causes of action had accrued at such period or periods as to be barred by the statute of limitations, and directed the jury to return a verdict for the defendant. Judgment was entered for the defendant, and error prosecuted to the Court of Appeals, where the judgment of the court of common pleas was affirmed. Error is prosecuted here.
Mr. Joseph T. Harrison, and Mr. Robert W. Brown, for plaintiff in error.
Messrs. Eltzroth, Maple Maple, for defendant in error.
The courts below seem to have determined that where a borrower capable of binding himself by contract, borrows money of another, capable of binding himself by contract, and the debtor agrees to repay upon the sale of certain property, and the lender agrees to await repayment until the sale of such property, the obligation to repay matures within a reasonable time, as a matter of law, in all cases, regardless of the failure of the owner of such property to make sale within such time, and, in deciding the instant case, the courts below cited as authority for their judgment the case of Lewis v. Tipton, 10 Ohio St. 88, 75 Am. Dec., 498, the case of Wright v. Hull, 83 Ohio St. 385, 94 N.E. 813, and various cases from other jurisdictions.
We are of opinion, however, that the courts below failed to apply to the instant case the theory upon which all such cases are based. All such cases are, and necessarily must be, bottomed upon the theory, whether they say so or not, that the contract as expressed carried an implied provision that, if the event, upon the happening of which the cause of action would accrue, should not occur within a reasonable time, the action would accrue within a reasonable time without the happening of the event. It is only by a construction of the contract according to the intention of the parties at the date of its execution that it was to mature within a reasonable time, and from such intention determining that such provision was implied in the contract, that any departure from the expressed terms of the contract can be justified, or that the court so holding can avoid placing itself in the position of making a contract for the parties which they, in fact, did not make or intend to make for themselves.
Where, therefore, the facts and circumstances at the time of the execution of the contract are such as to preclude any implication that the full terms of the contract were not expressed, there is no room for a court to find that, notwithstanding the expressed agreement, the parties intended to make a proviso thereto and therefore such proviso will be implied. In the instant case the evidence tends to show that the agreement and the various transactions with reference thereto were in the nature of a family affair; that the agreement was entered into, and the sums of money were loaned or advanced, and the transfer and retransfer of the property were made for the purpose of relieving the defendant's decedent from the financial burdens incident to her ownership of the property; that, while the plaintiff expected the sums loaned and advanced to be repaid some day, she knew that the decedent was without means or expectation of means to repay, except out of the proceeds of a sale of the property; that the major purpose of both of the parties to the transaction was to aid and benefit the decedent; and, that that purpose should not be defeated by the maturity of the obligation at a time when the decedent would not have the means to repay, it was agreed that the obligation would not mature until the happening of the event which would enable the decedent to repay.
The parties having contracted with reference to a lawful subject, in a lawful manner, for the accomplishment of a lawful purpose, under circumstances which tend to preclude the inference that they intended the terms of the contract to be other than expressed by them, it is not within the province of a court to imply in such contract terms or conditions which would defeat the manifest purpose and intention of the contracting parties. Therefore the courts below were in error in implying as a matter of law a term in the contract inconsistent with the moving, major purpose of the parties thereto.
Judgment reversed.
MARSHALL, C.J., ALLEN, KINKADE and MATTHIAS, JJ., concur.
I cannot concur in this judgment of reversal. When the right is lodged in the debtor to pay the indebtedness "when his property is sold," it is "a right which he must exercise reasonably and with a just regard to the rights of others." It creates a legal liability upon the part of the debtor, and the debt must be paid within a reasonable time. Lewis v. Tipton, 10 Ohio St. 88-92, 75 Am. Dec., 498.
In Wright v. Hull, 83 Ohio St. 385, 94 N.E. 813, payment was to be made from the "first receipts from the sale of the lands," etc. On page 398 ( 94 N.E. 813) the judge delivering the opinion announces the legal principle that in such cases the sale of the property must be made in a reasonable time, and cites a number of cases in its support. If, after a long lapse of years, a sale never occurs, the query naturally arises when, if ever, does the cause of action accrue? When does the statute of limitations begin to run? Surely not upon the mere convenience of the property owner, nor upon his own determination of the price he should receive. Under that principle, the owner might never find it convenient to sell, or obtain the price which in his judgment he ought to receive. When, therefore, the payment of his debt is dependent upon a right of sale lodged solely in the debtor, natural justice requires that this right be exercised within a reasonable time. While here the contract was made for the benefit of the decedent, who was at the time without "means to repay except out of the proceeds of the sale of the property," still the decedent had ample and more than reasonable time to make a sale before her death in 1922. In this, as in all cases of similar character, there was an implied intention to give a reasonable time to pay this debt and to effect a sale of the property for that purpose.
The lower courts both bottomed their decision on Lewis v. Tipton and Wright v. Hull, supra, and cases therein cited. I think the lower courts should be affirmed on authority of those cases.
DAY, J., concurs in the dissenting opinion.