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A COMMENT ON MORAL CONSIDERATION
AND THE STATUTE OF LIMITATIONS
BY ALBERT KOCOUREK
There are not perhaps many fields of law that exhibit more divergency of decision, more contradiction of theory, and more anomaly than that branch of the law of limitations of action which deals with the interruption of the prescriptive bar.
The first general English statute of limitations of 1623, unlike modern statutes of limitation, made no provision for the interruption of the bar of the statute. At the early common law there was no limitation on actions.3 Unless otherwise extinguished, debts were perpetual and subject only to the presumption of payment after twenty years. When the first general English statute of limitations was adopted, the presumption theory gave way not only to the repose theory of statutes of limitation but also to a moral obligation theory—that even though the claim was barred of action, yet the debtor still owed his debt; at least he owed it morally. Without the aid or need of legislation, the courts declared that this moral obligation was sufficient consideration for a new promise to pay the debt.
There are two other supposed cases where, except as legislation has changed the rule, moral consideration is said to be sufficient for a new promise: the promise of a bankrupt after discharge, and the promise of an infant after majority to pay debts incurred in infancy. The doctrine of moral consideration is considerably more
1. 21 Jac. I c. 16. In early Roman law, causes of action were perpetual. The limitation idea was first introduced by the praetor's edict when new actions were created with the condition, intra annum iudicium dabo. The praetor also introduced certain exceptions to the old rule of the perpetual suability of actions. The first general formulation of a limitation of actions was in the longi temporis praescriptio. This rule was extended by Constantine, but personal actions were not affected. The first comprehensive statute of limitations was enacted in A. D. 424 by Theodosius II ; it was the foundation of the Justinian treatment of limitations. For a complete statement of the whole matter, see Savigny "System des heutigen römischen Rechts" V O$ 238 sq.
The general rule of limitation of actions in Roman law was thirty years. In Germanic law the general rule was one year and a day; but a year and a day for procedural reasons meant one year, six weeks, and three days. It was comparable to the annus utilis, a year in which only those days were counted when the courts sat: See Huebner "Hist. Ger. Pr. Law" (Prof. Francis S. Philbrick's tr.) 15.
2. 9 Geo. IV. c. 14 (Lord Tenterden's Act) widely adopted in America ; Ger. Civ. Code 00 195-225. 3. U. S. Bank v. Biddle 2 Pars. Eq. Cas. (Pa.) 31 (45).
anomalous even than would have been a survival of the short-lived doctrine of a naked promise supported by a writing. None of these instances, however, correctly considered is one of moral consideration. The generally accepted doctrine of moral consideration for revival of debts or for the creation of new ones is closely connected with the highly conflicting rules for determining whether the old debt survives (or is renewed) or whether a new debt is created. In this discussion, both problems will be considered together.
To approach these problems it will be convenient to set out the history of a debt from its inception to the stage of new promise. These stages are the following:
A: 1. The debt is created; 2. Default is made in payment; 3. A new promise is made to pay; 4. The statute runs from the maturity of the old debt; 5. An action is commenced within the limitation period after the promise.
Another variation is to insert the new promise after the bar of the statute. The steps then are:
B: 1. The debt is created; 2. Default is made in payment; 3. The statute runs on the debt; 4. A new promise is made to pay; 5. An action is commenced within the limitation period after the promise.
Another variation occurs when the new promise is of a different character than the old debt-an oral promise for a written promise, a written promise for an oral promise, a specialty for a parol agreement, and a parol agreement for a specialty.
Taking the second case (B) for juristic restatement of the legal relations we find:
B: 1. A duty to perform.
2. Destruction of the duty by default, for the purposes of assumpsit, or, in the alternative, breach of a protecting duty for purposes of the action of debt. In the assumpsit case, a new duty to pay damages is created automatically by the breach. In the debt case, a new duty likewise is created to pay damages for the breach of the accessory protecting duty to pay the debt in due time. The debt, however, in the latter case remains intact and may be specifically enforced together with damages for the accessory breach. In both cases (assumpsit and debt) the breach of duty creates also a power of action against the debtor.
4. Pillans v. Van Mierop (1765) 3 Burr. 1663; Williamson v. Lash (1775) Chitty on “Bills” (9th ed.) 75; Rann v. Hughes (1778) 7 T. R. 350.
5. Terry “The Common Law” (2nd ed. Tokyo 1906) p. 240.
3. The statute runs, not, as generally supposed, on the original debt, or on the duty to pay compensation, but on the power to sue for the duty broken-(1) in the assumpsit case, on the original debt; (2) in the debt case, on the accessory protecting duty to perform in due time. When the statute runs, a power is created in the debtor to bar any action commenced by the creditor, by pleading the statute.
4. A new promise is made. What new relation, if any, is created by the new promise ?
5. Power of suit is exercised within the limitation period after the new promise. This power of suit is based on what legal relation?
There are three current theories to answer the questions left unanswered:
1. The old claim theory. In many, if not the majority, of American jurisdictions this theory is the favorite one, at least where the new promise precedes the bar of the statute. According to this theory, the claim is still a valid legal claim for all purposes whether the remedy is gone or not.
But how does the new promise revive the old claim? What is the old claim revived? Is it the original duty to perform or is it the sanctional duty to pay damages for failure to perform? There is a tendency to slur over the distinction. It is perfectly clear in actions of assumpsit (which alone raise these questions) that the action is based on a breach of duty and is not for specific enforcement. If the original claim is destroyed by breach, it is physically and intellectually impossible to renew it or to revive it or to reinstate it. Nothing, therefore, is or can be revived by a new promise. What is left to the creditor, as we have seen, is a claim to damages, and a conditionally imperfect power of action. The debtor, if the statute has run, is armed with a power to nullify the creditor's action. What the creditor retains for legal purposes needs no revival. What is needed is to get rid of what the debtor has—the power to block the action. The old claim theory does not clearly account for what happens. There is no doubt the debtor's power is extinguished and that the statute begins running anew on the claim to damages from the time of the new promise.
But how does the new promise bring about this result? Under modern statutes which permit new promises to operate that way,
6. It is the latest English rule: Spencer v. Hemmerde (1922) 2 A. C. 507, 91 L. J. K. B. 941. Contra, Fettes v. Robertson (1921) 37 T. L. R. 518. See comment L. Q. R. (1923) XXXIX 146.
we perhaps need not trouble ourselves too much about consideration. The new promise is not, at any rate need not be, based on a moral consideration since there is a legal consideration, i. e., the duty to pay compensation, but can this legal duty be made the basis of revival of an already extinguished claim?
Perhaps it may be said that the old claim was not in fact extinguished but only reduced in juristic level; that is to say, to employ the barbarous language of jurisprudence, reduced from a zygnomic (or zeugmanomic) relation to a mesonomic relation, or in less accurate terms, from a perfect relation to an imperfect relation. That explanation is good enough until we seek to account for the sanctional claim to damages. What becomes of that claim? Do both claims coexist? If they do, it is apparent that the juristic situation is a very peculiar one. It permits in a single transaction at the same moment a claim to performance and a claim to damages for non-performance. There is a further peculiarity in this that when the claim to performance is destroyed by breach, it is followed by a new sanctional claim to damages coexisting alongside of an old sanctional claim to damages.
Then, again, there is a difficulty about consideration. It is a case of unipromissory agreement based on a previous and still existing duty. The creditor promises nothing; he may institute action immediately on the receipt of the new promise.
Whatever way we turn we find difficulties which cannot, so it would seem, be explained without departures from settled rules. Whether the supposed consideration be moral duty to pay the sanctioned (primary) claim or the legal duty to pay the sanctional claim (damages), it is a past consideration. Furthermore, that past duty is a detriment to the promisor, as the new promise is a present detriment to him.
2. The new promise theory. This theory is based on the view that the original claim is extinguished but that it remains as moral consideration sufficient to support a new promise. This theory likewise slurs over the fact that a legal obligation remains requiring the debtor to pay damages for breach of the original claim. The effect of the new promise, according to the present theory, is not to revive the old claim but to create a new cause of action. One of the byproducts of this theory is, it seems, that the new legal relation created by the new promise is instantly infringed. It comes into existence in a broken condition since the statute begins to run from the date of the new promise. That startling result of itself puts one on guard without the difficulty of trying to accept the moral con
sideration point of view. There is not even a moment of time for the debtor to avoid a breach of duty upon making a new promise. This seems on its face unnatural and not in consonance with the purpose of the promise.
In any event, the moral consideration theory is untenable.? It is unnecessary since there is a legal duty to pay damages for the breach of the old claim. And here, again, we have the question whether a debtor can make his own duty consideration for a new promise. In other words, can a debtor make one sanctional duty the consideration of a new sanctional duty where the creditor neither gives nor promises anything in return? However that may be, it is quite impossible to understand how a new sanctional duty can spring into existence without a breach of an earlier duty, i. e., of a sanctioned duty. We have seen that no such substrate appears. On somewhat different grounds, and in part on the same grounds, the new claim theory seems to be as irrational as the old claim theory. Are we therefore between the juristic devil and the legal deep sea ? Before we confess it, let us look about.
3. The waiver theory. According to this theory, the new promise operates not as a contract, but as an abandonment of the debtor's power to assert the statute.
The debtor no doubt even before action was brought against him had a power to bring forward the bar of the statute. It is a conditional power, conditioned on the creditor's suing.
The first question which presents itself is : Can a debtor waive a conditional power before the condition arises? Can there be a waiver in vacuo? It is difficult, if not impossible, to see how that may be done. It is not doubted that the debtor has a power, but can he give it up presently if it is subject to be exercised on a condition? The case is analogous to an attempted present sale of goods not in existence. Such a sale is impossible.
Of course, there may be a promise of waiver in the future, but such a promise requires consideration. What consideration does the debtor get by making such a promise? None. The debtor does not even get a moment's extension of time. The sanctional duty theretofore not perfectly enforcible now becomes fully enforcible. This theory so far offers nothing but difficulties.
7. Cf. the remarks of Lord Sumner in Spencer v. Hemmerde (1922) 2 A. C. 507 (524). In one jurisdiction a legal consideration appears to be on a lower level than a moral consideration: Emmons v. Overton 18 B. Mon. (Ky.) 643.
8. Hevling v. Hastings (1699) 1 Ld. Raym. 421.
9. Kellogg v. Dickinson 147 Mass. 432. 18 N. E. 223, 1 L. R. A. 346; Trask v. Weeks 81 Me. 325, 17 Atl. 162; Williston “Contracts" 0 183-4.