The opinion of the court was delivered by: HOLTZOFF
The principal question presented in this case is whether a waiver of the statute of limitations contained in a promissory note, or other written instrument, is enforceable, or is void as contrary to public policy. The case comes before the court on cross-motions for summary judgment.
The complaint consists of two counts. The first count sets forth a claim against the defendants as joint makers of a promissory note for $ 5,000. The note is dated June 28, 1935, and was due two years after date, i.e., June 28, 1937. This action was brought on February 17, 1953, -- almost sixteen years after maturity.
The defendants plead the statute of limitations. The plaintiff responds by relying on the following provision of the note:
'We hereby jointly and severally waive presentment, demand, protest and notice, and the statute of limitations.'
The plaintiff contends that the attempted waiver of the statute of limitations is invalid as contrary to public policy.
Admittedly, the defense of the statute of limitations may be waived after the cause of action arises, or perhaps even prior to that time, but subsequently to the execution of the instrument on which suit is brought. Whether such a waiver is valid if contained in the contract itself involves an entirely different principle. The question is one of novel impression in this jurisdiction.
The States are divided on this point, although the majority rule is that a waiver of the statute of limitations contained in the original instrument is contrary to public policy and, therefore, void and unenforceable.
Thus, the majority rule prevails in Massachusetts and New York. In National Bond & Investment Co. v. Flaiger, 322 Mass. 431, 434, 77 N.E.2d 772, 773, 1 A.L.R.2d 1442, Lummus, J., stated:
'In Williston, Contracts (Rev.Ed.1936) § 183, upon consideration of the authorities in many jurisdictions, it is laid down as the 'better view,' and the rule of a majority of jurisdictions, that an agreement contained in the original obligation never to set up the statute of limitations violates the public policy of the statute, and is invalid. We think that that rule represents the law of this Commonwealth, just as it does that of New York and many other States.'
This doctrine has also been adopted in Mississippi. Crane v. French, 38 Miss. 503, 532, contains an illuminating discussion of this subject:
'* * * it appears clearly to be an agreement in violation of public policy; that policy which requires suits to be brought in due season, and discourages stale demands, as calculated to promote litigation, and to prejudice the just rights of parties. This policy stands upon the same reason of the public good, as the laws in relation to usury. Suppose, then, an agreement made by the maker of a note that he would not set up the defence of usury. Would an action lie for a breach of that agreement, in case the party should make the defence in disregard of it? It appears not; and the reason is, that the right to make the defence is not only a private right to the individual, but it is founded on public policy, which is promoted by his making the defence, and contravened by his refusal to make it. The same principle is applicable to the policy of Statutes of Limitations; and with regard to all such matters of public policy, it would seem that no man can bind himself by estoppel not to assert a right which the law gives him on reasons of public policy.' (Emphasis original.)
'Statutes of limitation, exemption laws, the right of redemption from a mortgage, and all similar provisions are meant for the protection of the debtor as against the creditor. They are a part of the public policy of modern legislation. The wise man of old has well said, 'The borrower is servant to the lander,' and the debtor, when he applies to the creditor for favors, is always under a certain amount of moral duress. If the latter has the right to demand a waiver of statutory rights, he will almost certainly do it, and the former generally is in no position to protect himself. For this reason the law, in order to give ...