Majority
p. 775OAKS v. TAYLOR. (Supreme Court, Appellate Division, Third Department. May 4, 1898.) Argued before PARKER, P. J., and LANDON, HERRICK, MER-WIN, and PUTNAM, JJ.
Headnote
Limitations—Accrual of Cause of Action.Under Code Civ. Proe. § 410, providing that “where a right exists, but a demand is necessary to entitle a person to maintain an action, the time within which the action must be commenced must be computed from the time when the right to make the demand is complete,” the statute will not begin to run against the right of one who has bought property under a contract with the vendor to repurchase at any time the vendee should desire him to do so, on the date of the contract, bat the vendee will be given a reasonable time in which to exercise his option after he desires the vendor to repurchase the property.
Appeal from trial term, Albany county.
Action by Charles J. Oaks against Nicholas B. Taylor. From a judgment of nonsuit, plaintiff appeals.
Reversed.
Tiie action was to recover $20,000, and interest thereon, upon the following contract:
“In consideration of the sum of twenty thousand dollars in U. S. currency, paid to me by Charles J. Oaks, I, N. B. Taylor, of the city of Albany, have sold, transferred, and delivered to the said Charles J. Oaks two hundred shares of the stock of the Taylor Brewing and Malting Company of Albany. The sale of this stock is subject to the following conditions and restrictions; that is to say: Should the said Charles J. Oaks, his heirs or executors, wish or desire me at any time to buy and take back the before-mentioned two hundred shares of the stock ■of the Taylor Brewing and Malting Company, I hereby promise and bind myself, my executors and administrators, to do so, paying the said Charles J. Oaks, his heirs or executors, therefor twenty thousand dollars in U. S. currency, together with legal interest. Should a dividend or dividends have been paid on the said stock, interest is to be computed and paid from date of last dividend to ■date of purchase by me of said stock.
“Albany, N. Y., November 22, 1887. N. B. Taylor.”
The defendant had a few days before delivered the certificates of stock to the plaintiff. The plaintiff paid him therefor upon the receipt of the above contract. July 1, 1891, the plaintiff having exercised his option that the defendant should “buy and take back” the stock, and pay him the $20,000 therefor, made demand of him to that effect. The defendant refused. After some subsequent correspondence and interviews upon the matter between the parties, and a formal tender by the plaintiff to the defendant of the certificates of stock, and demand of payment from him, and the defendant’s refusal, this action was commenced April 19, 1895. The answer, besides a general denial and other defenses, sets up the statute of limitations. The trial court held that the cause of action accrued upon the date of the contract, and therefore was barred by the six-years statute of limitations.
Charles E. Patterson, for appellant.
E. Countryman, for respondent. .
We think the statute of limitations did not begin to run from November 22, 1887, the date of the contract. Section 410, Code Civ. Proe., provides: “Where a right exists, but a demand is necessary to entitle a person to maintain an action, the time within which the action must be commenced, must be computed from the time when the right to make the demand is com
p. 776
píete.” It is conceded that the case does not fall within any of the exceptions to the above section. The defendant’s argument rests upon the assumption that, since the plaintiff had the right to exercise his option at any time, therefore his right to make tiie demand was complete the instant the contract was made. But we think a distinction exists between the plaintiff’s right to exercise his option and the actual exercise of it; that the-contract contemplates that he should have at least a reasonable time in which to exercise it; that until he should wish or desire the defendant to buy and take back the stock, his right of action did not arise or exist, and hence the condition precedent to the necessity for a- demand did not exist. It would not be reasonable to hold that the right to make the demand was complete before the condition making it necessary had occurred. The case is different from a promissory note payable upon demand, for there the promise of the maker to pay is absolute, and the right-to make the demand of the maker is complete the instant the note is made, Mills v. Davis, 113 N. Y. 243 , 21 N. E. 68 . Here the promise to buy back and pay is not absolute, but conditioned upon the plaintiff’s wish or desire, which may never exist. In the case of the indorser upon the same promissory note a right of action does not exist against him until actual-demand of the maker, and the statute of limitations does not begin to run until then. Shutts v. Fingar, 100 N. Y. 539 , 3 N. E. 588 . That is, his liability is not absolute, but conditional, and the condition may never exist. Thus the case of the indorser somewhat resembles the case before us. See Bunn v. Lett, 65 Hun, 43 , 19 N. Y. Supp. 728 ; King v. Mackellar, 109 N. Y. 215 , 16 N. E. 201 .
We need not decide whether the statute of limitations did not begin to run until July 1, 1891, the date upon which plaintiff made demand of the defendant that he buy and take back the stock. The trial court properly held, upon the request of the plaintiff, that the plaintiff had a reasonable time in which to exercise his option; but also held that that right had no application to the question of the statute of limitations. We think the latter holding was error. Whether the plaintiff delayed making the demand after his election within a reasonable time to exercise his option matured, or delayed for an unreasonable time to exercise his option, are questions not before us.
The judgment should be reversed, and new trial granted, costs to abide the event. All concur. .
Cases cited
- Mills v. Davis 113 N. Y. 243 p. 776
- Shutts v. Fingar 100 N. Y. 539 p. 776
- King v. Mackellar 109 N. Y. 215 p. 776