CONTRACTUAL LIMITATION. By Olin Bryan. Read before Law Section, Aug. 18, 1914, Niagara Falls, N. Y. This subject was suggested by a case recently decided by the Court of Appeals of Maryland. Arold vs. Supreme Conclave, I. O. H. (decided June 26, 1914). It is not new, but its importance is sufficient reason for calling your attention to the decisions where the limitation in the contract was the defense. In the Arold case the member joined the Society in 1895. At that time there was no provision in the laws limiting the time within which suit could be maintained. The application contained, however, this provision, "to conform in all respects to the Laws, Rules and Usages of the Order now in force or which may hereafter be adopted." Two years later the Order adopted a by-law providing that "no action can be maintained unless brought within one year from the time right of action accrues," and further providing that "right of action accrues 60 days after filing satisfactory proofs of death." Arold (the member) died November, 1908, from a self-inflicted gun shot wound. He held a certificate of $1,000. In March, 1909, the Order settled under its suicide law, by paying the beneficiary $487.00, the amount due thereunder. Nearly four years later, in January, 1913, suit was instituted, notwithstanding settlement and released certificate, for the difference ($513 with interest) between the amount paid and the face of certificate. The defendant pleaded and relied only upon its limitation provision of the contract as above indicated and this defense was sustained. The plaintiff contended that the Statute of Maryland limiting the time when suit could be instituted to 12 years upon a sealed instru ment (the certificate was under seal) could not be restricted or lessened by the after enacted limitation provision of the contract sued on. To support the principle that a provision in the contract limiting the time within which suit can be maintained is sound and a valid defense, when pleaded, notwithstanding it may lessen the time prescribed in the statute of limitation of the different states (now upon the books of almost every state), the following cases are cited: In the leading case of Riddlesbarger v. Insurance Co., 7 Wall 389, Mr. Justice Field, speaking for the Court, said: "The objection to the condition is founded upon the notion that the limitation it prescribes contravenes the policy of the statute of limitation. This notion arises from a misconception of the statute and object of statutes of this character. They do not confer any right of action. They are enacted to restrict the period within which the right, otherwise unlimited, might be asserted. They are founded upon the general experience of mankind that claims which are valid are not usually allowed to remain neglected. The lapse of years without any attempt to enforce a demand creates, therefore, a presumption against its original validity or that it has ceased to subsist. This presumption is made by these statutes a positive bar, and they thus become statutes of repose protecting parties from the presecution of stale claims, when by loss of evidence from death of some witness and the imperfect recollection of others, or the destruction of documents, it might be impossible to establish the truth. The policy of these statutes is to encourage promptitude in the presecution of remedies. They prescribe what is supposed to be a reasonable period for this purpose, but there is nothing in their language or object which inhibits parties from stipulating for a shorter period within which to assert their respective claims. It is clearly for the interest of insurance companies that the extent of losses sustained by them should be speedily ascertained and it is equally for the interest of the assured that the loss should be speedily adjusted and paid. The contract of insurance is a voluntary one and the insurers have a right to designate the terms upon which they will be responsible for losses, and it is not an unreasonable term that, in case of a controversy upon a loss, resort shall be had by the assured to the proper tribunal while the transaction is recent and the proofs respecting it are accessible." In Smith v. Herd, 110 Ky. 56, 60 S. W. 841, the Court said: "We reach the question whether in such a contract (of insurance) a provision is valid which limits the time within which an action may be instituted to a period less than that fixed by the statute of limitations. The great weight of authority in this country seems to be in favor of the validity of such a provision, and the general doctrine has been so well stated by Mr. Justice Field in Riddlesbarger v. Insurance Co. (supra), that we quote his argument in full upon this branch of the case.' In Oakland Home Insurance Co. v. Allen, 40 Pac. 928, it was held that the petition failed to state a cause of action where it showed on its face that it was not brought within the limitation of the policy. In Kettnring v. Northwestern Masontic Aid Assn., 96 Fed. 177, District Judge Kohlsaat, in a hearing on demurrer to a plea of limitation contained in a life policy, says: "Where the declaration is upon the contract without averments explaining or accounting for the delay in the institution of the suit, I hold that the clause in question must be construed as it reads, in accordance with the plain meaning of its language." In Head v. Phoenix Ins. Co., 64 L. R. A. 79, 75 Pac. 475, Gill vs. Manhattan Life Ins. Co., 78 Ark. 32, 95 Pac. 89, it was held, that the period provided for in the contract runs against an infant beneficiary during infancy, whereas a statutory limitation would not commence to run until the infant reached majority. And in Harrison v. Hartford Fire Ins. Co., 67 Fed. 298. Guthrie v. Conn. Indemnity Assn., 101 Tenn. 643, 49 S. W. 829, Fey v. I. O. O. F. Mut. Life Ins. Soc. of Pa., 120 W. S. 358, it was held, that where in cases subject to the statute of limitations, action was brought before the expiration of the statutory period and unsuccessfully terminated on some ground not going into the merits of the case, that a "new action is permitted to be brought within a given time after the termination of the limitation," such a saving clause does not affect an action governed by a limitation specified in the contract. In Gill v. Manahttan Life Ins. Co., supra, the Court says: "An agreement in a contract of insurance limiting the time within which an action may be brought thereon to a period less than that prescribed by the statute of limitations will be en forced, (and) . . . the limitation... being a matter of contract, and not a matter of statute, it applies to an infant as effectually as to one who has attained majority." ... Terms may be incorporated in policy of insurance by reference and . . . and when so incorporated they will be enforced as part of the contract of insurance.” In Kissel v. Mutual Reserve Life Ins. Co., 131 Iowa 54, the Court uses language almost identical with that used in the Gill It says: case. 66 . . . In the absence of a statute to the contrary . parties to a life insurance contract may ignore the general statute of limitations and provide by agreement for the time within which an action must be brought to recover upon such contract. . . In addition to these, the following cases sustain the validity of a provision in a contract of insurance, limiting the time within which action may be brought. ARKANSAS Dwelling House Ins. Co. vs. Brodie, 52 Ark. 11, S. W. 196. CANADA Allen vs. Merchants Marine Ins. Co., 9 Can. L. T. 13. CONNECTICUT Chichester vs. N. H. Fire Ins. Co., 74 Conn. 510, 51 Atl. 545. GEORGIA Met. Life Ins. Co. vs. Caudle, 122 Ga. 608, 50 S. E. 337. Hartford Fire Ins. Co. vs. Amos, 98 Ga. 533, 25 S. E. 575. Hartford Fire Ins. Co. vs. Amos, 98 Ga. 533, 25 S. E. 575. ILLINOIS Richter vs. Ins. Co., 66 Ill. App. 606. Stephens vs. Phoenix Assur. Co., 85 Ill. App. 671. Ronan vs. Mich. Mutual Life Ins. Co., 96 Ill. App. 355. IOWA Matt. vs. Iowa Mut. Aid Ass'n, 46 N. W. 857, 81 Ia. 135. KANSAS State Ins. Co. vs. Stoffels, 48 Kans., 205, 29 Pac. 479. KENTUCKY Smith vs. British Amer. Ins. Co., 110 Ky. 56, 60 S. W. 841. MARYLAND In Earnshaw v. Sun Mutual Aid Society, 68 Md. 465, the Court of Appeals recognized the right of the parties to limit the time by contract within which action can be commenced, in this language: "This period of six months is not a limitation prescribed by statute, but fixed by contract." (Bottom page 475.) In Metropolitan Life Insurance Co. v. Dempsey, 72 Md. 288, the Court in passing upon the contract limitations requiring suit to be brought within six mmonths said, on page 295: "It is perfectly lawful for the defendant to stipulate that all litigation with respect to its liability should be commenced within a specified period, and it is entitled to the full benefit of its contract in this regard. In Home Friendly Society v. Robeson, 100 Md. 86, where the Court had before it six months' limitation as to the time when an |