not run until a demand has been made. Where, moreover, an obligation is payable a certain time after demand the statute does not begin to run until demand has been made and the specified time thereafter has elapsed. 20

An instrument payable at sight unlike an instrument payable on demand could not be sued upon until the instrument had been exhibited to the obligor; 21 but the Uniform Negotiable Instruments Law has generally abolished this distinction so far as negotiable instruments are concerned by enacting that instruments payable at sight are demand paper. 22 The allowance of days of grace on negotiable paper also affected the running of the Statute of Limitations on negotiable instruments. Since the instrument was in legal effect not due until the last day of grace, the statutory period ran from that time. 23 Demand paper, however, was not entitled to grace and the Negotiable Instruments Law has now, where enacted, abolished grace for all kinds of instruments. On instruments payable at a fixed time or at a fixed period from date, the statute runs from the date of muturity.

§ 2041. Time within which a demand must be made.

In a Massachusetts decision 24 a problem in regard to contracts performable upon demand was well stated, and the diverse views indicated. "Where a demand must be made before bringing an action, it is plain that in a strict sense the cause of action does not accrue until after the demand. Whether the creditor's rights may be lost by delay in making a demand when no time is fixed for it, is a question which is answered differently in different jurisdictions. It has sometimes been held, or seemingly assumed, that, even if many years are permitted to elapse without a demand, the statute

20 Massie v. Byrd, 87 Ala. 672, 6 So. 145; Cooke v. Pomeroy, 65 Conn. 466, 32 Atl. 935; Little v. Blunt, 9 Pick. 488; Wenman v. Mohawk Ins. Co., 13 Wend. 267, 28 Am. Dec. 464. See also Clayton v. Gosling, 5 B. & C. 360.

21 Savage v. Aldren, 2 Stark. 232; Norton v. Ellam, 6 L. J. Exch. (N. S.) 121.

22 See supra, § 1139. Massachusetts and North Carolina have restored sight paper as a separate kind of legal obligation. Ibid.

23 Morris v. Richards, 45 L. T. (N. S.) 210.

24 Campbell v. Whoriskey, 170 Mass. 63, 65, 48 N. E. 1070, by Knowlton, J

will not begin to run until the demand is made. 25 Under this doctrine, carried to its extreme limit, a liability to a suit upon a claim might continue for an indefinitely long time. The extreme doctrine in the other direction is, that the 'cause of action accrues for the purpose of setting the statute in motion as soon as the creditor by his own act, and in spite of the debtor, can make the demand payable.' 26 In some of these cases the language of the contract was interpreted like that of a note payable on demand, which creates a liability to a suit without a previous demand. In some of the cases it is held that a demand must be made within a reasonable time, and that a reasonable time will not in any event extend beyond the statute period for bringing such an action.27 In New York, Alabama, and Tennessee, there are statutes regulating the subject. In Codman v. Rogers, 28 Mr. Justice Wilde said: 'A demand must be made within a reasonable time; otherwise the claim is considered stale, and no relief will be granted in a court of equity. What is to be considered a reasonable time for this purpose does not appear to be settled by any precise rule. It must depend on

25 Ibid. citing Holmes v. Kerrison, 2 Taunt. 323; Thorpe v. Booth, R. & M. 388; Thorpe v. Coombe, 8 Dowl. & Ry. 347; Girard Bank v. Bank of Penn. Township, 39 Penn. St. 92, 80 Am. Dec. 507.

See Thrall v. Mead, 40 Vt. 540. 26 Campbell v. Whoriskey, 170 Mass. 63, 66, 48 N. E. 1070, quoting from Palmer v. Palmer, 36 Mich. 487, 494, 24 Am. Rep. 605, and citing Ware v. Hewey, 57 Me. 391, 99 Am. Dec. 780; Sanford v. Lancaster, 81 Me. 434, 17 Atl. 402; Pittsburg & Connellsville Railroad v. Byers, 32 Pa. 22, 72 Am. Dec. 770; Morrison v. Mullin, 34 Pa. 12; Rhines v. Evans, 66 Pa. 192, 195, 5 Am. Rep. 364. The same principle was applied in People v. Magee (Cal. App.), 183 Pac. 289. A right of action against a receiver was held barred by the statutory period, though an action could not be brought against him until after leave had been obtained.

27 Campbell v. Whoriskey, 170 Mass. 63, 66, 48 N. E. 1070, citing High v.

County Commissioners, 92 Ind. 580, 588; Keithler v. Foster, 22 Ohio St. 27; Atchison, T. & S. F. R. Co. v. Burlingame Township, 36 Kans. 628, 14 Pac. 271, 59 Am. Rep. 578. Frequently a court has occasion to decide only that demand must be made within a reasonable time without fixing the precise limit of reasonableness. In the following cases it was held that a principal who has notice, or should have known that money has been collected by his agent, will be barred by the statute, though he has made no demand upon the agent, after the statutory period has elapsed from a reasonable time within which a demand should have been made. Jett v. Hempstead, 25 Ark. 462; Schofield v. Woolley, 98 Ga. 548, 25 S. E. 769, 58 Am. St. Rep. 315; Teasley v. Bradley, 110 Ga. 497, 35 S. E. 782, 78 Am. St. Rep. 113; Campbell v. Boggs, 48 Pa. 524; Riggan v. Riggan, 93 Va. 78, 24 S. E. 920.

28 10 Pick. 112, 120.

circumstance. If no cause for delay can be shown, it would seem reasonable to require the demand to be made within the time limited by the statute for bringing the action. There is the same reason for hastening the demand, that there is for hastening the commencement of the action; and in both cases the same presumptions arise from delay.' Although he was merely stating the doctrine of laches in a suit in equity, his language has been quoted and referred to in several of the cases above cited as stating the true principle applicable to actions at law." 29

“We are of the opinion that the true principle is that of the time when the demand must be made depends upon the construction to be put upon the contract in each case. If the contract requires a demand without language referring to the time when the demand is to be made, it is as if the words 'within a reasonable time' were found in it. What is a reasonable time is a question of law, to be determined in reference to the nature of the contract and the probable intention of the parties as indicated by it. Where there is nothing to indicate an expectation that a demand is to be made quickly, or that there is to be delay in making it, we are of opinion that the time limited for bringing such an action after the cause of action accrues should ordinarily be treated as the time within which a demand must be made.30 Such a rule seems fairly to apply the principles and analogies of the Statute of Limitations to the contract of the parties, and it is in accordance with the weight of authority."

§ 2042. Nature of contract frequently indicates intention. Not infrequently the nature of the contract will afford an indication of the intention. Thus the Pennsylvania Supreme Court has said: 31 "It is plain that where a subscription to

29 The court here says: "In Shaw v. Silloway, 145 Mass. 503, 14 N. E. 783, the decision was put upon the construction of the contract in reference to the time when a demand under it was to be made."

30 Campbell v. Whoriskey, 170 Mass. 63, 67, 48 N. E. 1070, citing Jameson

v. Jameson, 72 Mo. 640, and previous cases in this section. The principle was again applied in Whitney v. Cheshire Railroad, 210 Mass. 263, 96 N. E. 676. 31 In Cook v. Carpenter (No. 1) Lipper's Appeal, 212 Pa. 165, 169, 61 Atl. 799, 1 L. R. A. (N. S.) 900, 108 Am. St. Rep. 854, the court thus

stock is not presently payable in full, but by its terms is to be payable from time to time as called for by the company, there is no substantial basis for the existence of a [rule requiring demand to be made within the statutory period]. Until such call, there is no obligation on the stockholder to pay. It may never be made. If the enterprise is successful and profitable from the start, or the provision for capital has been larger than actual needs require, the duty of payment is only a reserve duty for possible contingencies, and until they happen, either by calls by the corporation on the subscriptions, or by the rights of creditors, there is no duty of the subscriber to pay, no right of action against him for non-payment, and no starting point for the Statute of Limitations."

§ 2043. Penal bonds.

If the terms of a bond were literally enforced there would be a right of action for the full penal sum of the bond as soon as the condition was first broken, and the Statute of Limitations would consequently then begin to run. The restriction in modern times of damages recoverable on a penal bond 32 does not logically alter the fact that the plaintiff's right, if the terms of the contract are followed, is based on a covenant to pay the

stated the general principles involved: "In Swearingen v. Sewickley Dairy Co., 198 Pa. 68, 47 Atl. 941, the law was thus stated. The general rules ars first, that on an obligation for the payment of money on demand the statute begins to run at once. Suit is a sufficient demand and must be brought within six years: Andress's Appeal, 99 Pa. 421; Milne's App., 99 Pa. 483; Boustead v. Cuyler, 116 Pa. 551, 8 Atl. 848. Secondly, where the contract is to pay on the future performance of a condition, or happening of an event, or at a certain time after demand, there a demand is necessary to a right of action, and the statute does not begin to run until demand is made; Smith v. Bell, 107 Pa. 352; Eichman v. Hersker, 170 Pa. 402, 33 Atl. 229; Taylor v. Witman, 3 Grant, 138. Whether there

is a third rule that if demand is necessary it must be made within six years from the contract, has been both affirmed and denied in our cases, which are much at variance on the question. It was asserted in Laforge v. Jayne, 9 Pa. 410, and expressly held in Pittsburg, etc., R. Co. v. Byers, 32 Pa. 22, 72 Am. Dec. 770; McCully v. Pittsburg, etc., R. Co., 32 Pa. 25; Pittsburg, etc., R. Co. v. Graham, 36 Pa. 77, and Franklin Savings Bank v. Bridges, 20 W. N. C. 43. On the other hand, it was denied generally in Taylor v. Witman, 3 Grant, 138, and expressly rejected in Girard Bank v. Bank of Penn. Twp., 39 Pa. 92, 80 Am. Dec. 507; Smith v. Bell, 107 Pa. 352, and other cases."

32 Supra, §§ 774, 775.

penalty of the bond upon a stated condition, and therefore, the statute might logically run from the first breach of condition, and this has indeed been so held.33 But the practical injustice of such a rule when applied to bonds to secure continuous performance is obvious. The bond might become barred before the time for the full performance which it was intended to secure had elapsed; or in order to prevent such a result the plaintiff might have sued on the first breach of condition and had judgment for the penalty of the bond with a limitation of his recovery; and judgment having once been rendered on the covenant to pay the penal sum even though slight damages were recoverable, no further action could be brought. To avoid such results a bond is now treated in effect like a covenant to perform the condition.34 And not only is an action maintainable for breach of a condition of the bond, in spite of a breach of another and separate condition before the statutory period,35 but also in spite of a prior breach of the same condition before the statutory period, where compliance with the condition involved a continuing performance. A fidelity bond is thus in effect a promise to pay to the extent of the penal sum of the bond the consequences of lack of fidelity, from time to time, whenever the person whose performance is secured may prove unfaithful. Therefore, a breach of the condition of such a bond more than a statutory period before an action is brought on the bond will not bar a plaintiff's right to recover for any breach within the statutory period.36

§ 2044. Computation of time.

In computing time under the Statute of Limitations the general rule of the common law is followed that fractions of a day are not regarded." By the "trend of modern authorities, whatever may have been the rule in earlier times, the day on which an act or event occurs is excluded in the determination

33 Brown v. Houdlette, 10 Maine, 399. 34 See supra, § 670.

35 Sanders v. Coward, 13 M. & W. 65; McKim v. Glover, 161 Mass. 418, 37 N. E. 443.

36 Deposit Bank v. Hearne, 104 Ky. 819, 48 S. W. 160. See supra, § 2026.

37 First Nat. Bank v. Ziegler, 24 Cal. App. 503, 141 Pac. 938; Seward v. Hayden, 150 Mass. 158, 22 N. E. 629, 5 L. R. A. 844, 15 Am. St. 183; Cornell v. Moulton, 3 Denio, 12; Perkins ». Jennings, 27 Wash. 145, 67 Pac. 590; and see cases in this section passim.