Philips v. Peters

By the Court, Wright, J. In the argument at bar, the defendant’s counsel confined himself to the discussion of a single proposition, viz: That the referee erred in deciding that the promise made to Morrison was available to the plaintiff. This is, perhaps, the only question in the case. Whether an absolute promise had been shown was a question exclusively for the referee, and he has found against the defendant. We cannot say that the finding of this fact was erroneous. The referee finds, as facts proved, that on the 28th September, 1842, one McLean made his promissory note, payable to the order of the defendant, three months after date, at the Gatskill Bank; that the defendant was the first indorser on the note, and that it was duly protested for non-payment, at maturity; that the note was the property of the plaintiff at the time of the commencement of this action, and that more than six years had elapsed since it became due and payable; that in the summer of 1845 (and whilst one Jesse Anthony was the sole owner of the note) the defendant promised James Morrison, jun., that he would pay the note to Anthony ; that Morrison, at the time of the promise, was neither the agenT or attorney for the purpose, or in any manner authorized by Anthony to confer or talk with the defendant in relation to the note, or the payment thereof; and that subsequently to the promise by the defendant to Morrison, Anthony transferred the note to the plaintiff. The counsel for — 356 — the plaintiff supposes that the case shows that the promises were made to Morrison, the partner of Anthony, in the course of business transactions of the defendant with the firm of Anthony &. Morrison; and that on one occasion, in the summer of 1845, the debt was unequivocally acknowledged in the presence of Anthony, the owner of the note ; that this circumstance, and the partnership relation seem to have escaped the attention of the referee when considering the question of Morrison’s authority. But the case does not show these facts. In 1845, when Morrison first conversed with the defendant in relation to the note, he had ceased to be the partner of Anthony, and distribution had been made of the assets of the firm. The first conversation was when Morrison presented a check against the defendant, which had belonged to the firm of Anthony & Morrison, but was then the sole property of Morrison, it having fallen to him, as he testifies, upon the dissolution of the firm. The conversation in \kiepresence of Anthony was in 1850, after the statute had attached, and not in 1845, and if any thing, was not an absolute, but a conditional promise. It was, that he would pay Anthony as soon as he could get it, or that Anthony should not lose it. The referee was therefore right in his finding, from the evidence, that any absolute promise made to Morrison to pay Anthony, was in the summer of 1845, and at no other time ; and that at the time of such promise, Morrison was neither the agent or attorney of the holder of the note. In 1845, Morrison was not the partner of Anthony, nor were any promises made in the course of business transactions of the defendant with the firm of Anthony & Morrison; nor was there any acknowledgment of the debt in the presence of Anthony. What was said in the presence of Anthony in 1850, scarcely amounted to an acknowledgment or promise, and the referee might well have considered that it did not, but if it did, it was a conditional one. Both the evidence and finding render the proposition clear that the promise relied on to take the case out of the operation of the statute, and to sustain the report of the referee was made not to the creditor himself, or his agent, but to a stranger. If a promise or acknowledgment be equally — 357 — operative and effective whether made to a stranger, or to the creditor himself, or his agent, then the report should be sustained, otherwise not. Were the doctrine a new one that the promise or acknowledgment which revives a debt barred by the statute of limitations, may be made to a stranger as well as to the party, I should doubt its soundness. It hinges upon the principle that as the new promise does not, as in the case of a promise to pay a debt discharged under the insolvent act, create a new liability upon a new contract, but merely removes the presumption of payment which the statute of limitations raises, it is immaterial to whom the promise is made. In case of a debt barred by the statute of limitations, if the new promise creates a new contract, and the liability of the debtor is on the new and not on the old contract, the old debt being resorted to only to furnish a consideration 'for the new promise, it would be entirely clear that a promise made not to the creditor, or to his agent, but to a stranger, without authority to contract, would be unavailable. If the effect of the statute were to extinguish the legal duty to pay, operating on the debt itself and not on the remedy, though a new duty may be created, it must be by a transaction between the parties, having all the legal characteristics of an original contract—an agreement and concurrence of mind between the parties in interest, and a legal consideration. The moral duty to pay after the extinguishment of the legal may supply that essential element of a contract—the consideration ; but the new contract which creates a new cause of action must be made between the debtor and creditor personally, or by persons duly authorized by them. As in all other cases, to give validity to the agreement, the minds of the parties should meet, and when the promise of a party be made to a stranger or one without authority, it is in legal, effect a mere declaration of intention, since it is wanting in a most essential element of a valid agreement. But in case of a debt barred by the statute, if the remedy only be taken away, the original demand remaining in existence, if the statute merely raises a "presumption of payment which may bo repelled cither by an express promise or an acknowledgment of a subsisting liability and a willingness — 358 — ;to pay; and the action is to be maintained, if at all, on the - original contract, then it is apparent that it is quite immaterial whether the new promise or acknowledgment be made to the creditor or to a third person. The latter is the view that has been uniformly taken by the courts of this state. That the effect of the statute of limitations is only to take away the remedy, which may be restored by the new promise, and not to bar the original demand; that the remedy is continued or revived by the new promise, which rebuts the presumption of payment raised by the statute; and that the old demand, and not the new promise is to be the foundation of the action, has been uniformly adjudged or conceded in a long line of cases in this state, even against the views so" luminously discussed and sustained by Mr. Justice Story in Bell v. Morrison, (1 Peters, 374,) and has only been recently questioned in the dicta of the judges of the court of appeals in Van Keuren v. Parmelee, (2 Comst. 523,) and in Shoemaker v. Benedict, (1 Kern. 176.) In these latter cases, however, the question was not directly involved; and all that they decide is that a promise or acknowledgment, or payments made and indorsed on a note by one of the joint makers, do not affect the defence of the statute of limitations as to the others. (Depuy v. Swart, 3 Wend. 135. Dean v. Hewit, 5 id. 257. Soulden v. Van Rensselaer, 9 id. 293. Stafford v. Bacon, 1 Hill, 537. Bigelow v. Grannis, 2 id. 120. Watkins v. Stevens, 4 Barb. 168. Carshore v. Huyck, 6 id. 583. McCrea v. Purmort, 16 Wend. 477. Wait v. Morris, 6 id. 394. Sands v. Gelston, 15 John. 511. Allen v. Webster, 15 Wend. 284.) “A demand,” says Mr. Justice Marcy in Dean v. Hewit, (5 Wend. 237,) “ the remedy for the recovery of which is continued or revived by a new promise, is precisely the same after the remedy has been continued or revived, as it was before the statute had or could have attached.” In Soulden v. Van Rennselaer, (9 Wend. 297,) Nelson, J., says that “the statute of limitations only operates upon the remedy, by affording a presumption of payment, and hence the acknowledgment of the existence of the debt revives the debt, by removing the presumption ; and upon this ground it is ob — 359 — viously unimportant to whom the acknowledgment is made, and so are the authorities.” In McCrea v. Purmort, (16 Wend. 477,) Cowen, J., says, “ The admission of a debt is available to take it out of the statute of limitations, whether that admission be express or tacit, whether made to the party or a stranger; and it may be implied from the conduct of the party.” In Watkins v. Stevens, (4 Barb. 168,) Paige, J., says, “ In the case of debts barred by the statute of limitations, as the original debt remains, and only the remedy is taken away, and as an acknowledgment is sufficient to revive or restore the remedy, and remove the bar, and as no new contract is necessary to enable the creditor to collect his original demand, the promise or acknowledgment is equally operative and effective whether made to a stranger or to the creditor himself, or his agent. The moment the presumption of payment is repelled, which arise after a lapse of six years, the original debt is recoverable by an action founded directly upon it.” In Carshore v. Huyck, (6 Barb. 583.) Harris, J., says, “The objection that the promise relied upon was made to a third person, and not to the plaintiff, cannot avail the defendant. It has been held that as the new promise does not create a new liability upon a new contract, but merely removes the presumption of payment which the statute of limitations raises, it is immaterial to whom the promise is made.” The doctrine that the operation of the statute is to extinguish the original debt, and that a new contract founded on an adequate consideration is necessary to maintain an action after the statute has run, is perhaps, in reason and principle, better sustainable than the doctrine firmly established in this state, that the statute only affects the remedy, raising presumption of payment from the lapse of time, which presumption may be repelled, the remedy restored, and the bar removed by a new promise or acknowledgment. But it is not the province of this court to unsettle the latter doctrine. When the consequences flowing from unsettling principles established by a long current of adjudications, are so extensive and wide-spread, and it may be disastrous, our plain duty is to be governed by the rule of stare decisis, leaving to the court of last resort to — 360 — change the law. This that court has not yet done, certainly not in the cases of Van Keuren v. Parmelee or Shoemaker v. Benedict. In those cases the action was upon the original demand, and it was not pretended that there could not be a recovery against the joint debtor making the promise or indorsing the payment; which could not be if the doctrine that the demand is extinguished had prevailed. If the statute extinguishes the original debt, and a new contract creating a new liability is necessary, there can be no cause of action upon the extinct debt, and the action, if sustainable at all, should necessarily be upon the new contract, not only in substance but in form. In this ease the referee found that in 1845, (some two and a half years after the right of action accrued on the note) and whilst the note was the property of Anthony, the defendant acknowledged the indebtedness, and promised to pay the note to Anthony; that this acknowledgment or promise was not made to Anthony, or his agent, or to any person authorized to act for him, but to a third person, who had previously been the partner of An-' thony, but at the time of the promise was in no way connected with him, nor had he any authority to demand or request payment, Finding as a question of fact that an absolute promise had been made within six years prior to the commencement of the action, though not to the agent of the holder of the note, he decided, as a matter of law, that the debt was not barred, nor had the statute of limitations attached, and reported in favor of the plaintiff. This decision was in conformity to an unbroken chain of authority, not only in this state but in England, and some of our sister states. (See cases cited above, also, Oliver v. Gray, 1 Harris. & Gill, 204; Peters v. Brown, 4 Esp. 46; Whitney v. Bigelow, 4 Pick. 110; St. John v. Garrow, 4 Porter, 223; Fearn v. Lewis, 6 Bing. 149.) [Albany General Term, May 7, 1855. The judgment entered on the report of the referee should be affirmed. Harris, Watson and Wright, Justices.]