Bosler v. McShane

Epperson, C. Plaintiffs, as executors of the last will and testament of J. H. Bosler, deceased, obtained judgment in the court below upon a promissory note. The defense was that the note was barred by the statute of limitations. The defendant, when he executed the note, assigned 100 shares of stock of the South Omaha Land Company as collateral security to plaintiffs’ decedent, the payee. The original certificate was surrendered to the corporation, and in lieu thereof a new one issued to plaintiffs. The corporation paid to plaintiffs certain dividends upon the stock, which were indorsed upon the note. The note was barred unless the payment of the dividends tolled the statute. Section 22 of the code provides: “In any cause founded on contract, when any part of the principal or interest shall have been paid, or an acknowledgment of an existing liability, debt, or claim, or any promise to pay the same, shall have been made in writing, an action may be brought in such case within the period prescribed for the same, after such payment, acknowledgment or promise.” Defendant contends that such dividends do not constitute a payment upon the note such as will arrest the running of the statute, citing Moffitt v. Carr, 18 Neb. 403. It was there held: “Part payment, within the meaning of section 22 of the code of civil procedure, is a voluntary payment made by the debtor himself or by some one authorized by him to make such payment.” The payment controlling the disposition of the question in that case was money realized from the sale of real estate in Missouri pledged by trust deed, and sold under the provisions of the trust deed by legal proceedings which were held equivalent to a judicial foreclosure' in this state. The court held that the creditor therein obtained the payment through [88] the agency of the law, and that it was not a voluntary payment which would arrest the running of the statute. In Whitney, Clark & Co. v. Chambers, 17 Neb. 90, it was held: “The payment of a dividend by the assignee of an insolvent debtor is not such a part payment as will, under section 22 of the code, take the residue of the debt out of the statutory limitation, as against such debtor.” In the opinion by Com:, C. J., it was said: “Here the application of any portion of the property to the part payment of the notes and account sued on was not necessarily or probably in ihe mind of the defendant in error when he made the assignment for the benefit of his creditors. * * * And as it appears to me, the payments made by said assignee on the said notes and account were made as the agent of the law and of the said creditors rather than as the agent of the said assignor.” This rule was adhered to in Connor v. Becker, 62 Neb. 856. The cases above cited establish the rule that payments made by virtue of legal proceedings, or through the agency of the law, are not sufficient to stay the running of the statute. Going now a little deeper into the above cited cases, and similar decisions of the courts of sister states, we find that the reason for the rule is that to bind a debtor, even to the extent of continuing the existence of a cause of action against him, the payment upon his debt must have been made with his consent, or through an agency created by him; in other words, it should be voluntary on his part. In Whitney, Clark & Co. v. Chambers, supra, it was further said: “As I understand the reasoning of the cases upon the section of the statute under consideration, it amounts to about this, that a part payment in order to bar the statute must be equivalent to an acknowledgment of an existing liability or to a promise to pay the same.” And in Moffitt v. Carr, supra., it was said: “Such payment was not a voluntary one on the part of Carr, but one made in invitum and by operation of law, and that it did not arrest the running of the statute of limitations.” See, also, Kallenbach v. Dickinson, 100 Ill. 427; Hughes v. [89] Boone, 114 N. Car. 54; Harper v. Fairley, 53 N. Y. 442; Wolford v. Cook, 71 Minn. 77. In Adams v. Holden, 111 Ia. 54, cited by defendant, it was held: “Application of rents and profits of lands by a grantee in possession, nnder deeds operating as mortgages, to the payment of the debt secured, will not operate to take a suit by the grantor to recover the lands from the bar of the statute of limitations, no voluntary payment by the grantor having been made.” This case, we consider, had it been based on a statute similar to our own, would support defendant’s contention. However, under the provisions of our statute, section 22 of the code, and the decisions of this court, we are unable to adopt defendant’s view. In Sornberger v. Lee, 14 Neb. 193, it was held: “The receipt and indorsement on a promissory note by the holder of money realized from a collateral left with him by the maker for that purpose Avill remove the bar of the statute.” This case has been cited with approval by this court in the folloAving cases: Whitney, Clark & Co. v. Chambers, supra; Ashby v. Washburn & Co., 23 Neb. 571, and Moffitt v. Carr, supra. In the opinion in the last cited case Ave find the folloAving Avith reference to Sornberger v. Lee, supra: “We have, not the slightest doubt of the correctness of that holding; but the decision rests upon the correct principle that the debtor, by delivering to his creditor collateral notes, authorizing him to collect them and indorse the amount of the proceeds on the original note, thereby constituted the holder of the note his agent, and everything that the holder did in the premises was, in .effect, the act of the maker of the note. In other words, the transaction amounted to a voluntary payment on the note by the maker.” We are unable to detect any difference in principle betAveen the collection of a part of a collateral note and the collection of dividends on stock assigned as collateral. We do not understand the law to require the debtor to have actual knoAvledge of the exact time and the amount collected from collateral deposited with his [90] creditor, nor that he needs to positively acquiesce in the indorsement at the time it is made in order to stay the statute. If so, we would have to read into the statute words which are not there. “When any part of the principal or interest shall have been paid” the statute is tolled. This cannot be construed so as to permit a payment made by a volunteer, nor a payment made through the agency of legal proceedings, to have that effect. A partial payment tolls the limitation because of section 22, supra, by virtue of which such payment fastens upon the maker an implied renewal promise to pay the indebtedness or an acknowledgment of liability. In Ebersole v. Omaha National Bank, 71 Neb. 778, it was held: “A part payment operates to revive a contract debt, barred by the statute of limitations, of its own vigor and not as evidence of an acknowledgment or new promise.” The same effect must be given to a payment upon a debt, even though it was not barred at the time of payment. This rule excludes from consideration the idea, if any such exists, that to prevent the running of the statute the maker must have known of, or acquiesced in, the indorsement or payment when made. This being true, it necessarily follows that any payment made through the arrangement of the debtor, or such as is the natural and reasonable sequence of his own agreement, legal proceedings not being invoked, will stay the running of the statute. In the case "at bar, the certificate was assigned to the holder of the note. He, or'his legal representatives, collected dividends, as they had the legal right to do, and credited the amount thereof on the note. The maker of the note intended that they should do this. He could not have known the date of payment or the amount of the dividends when he assigned the stock, but he assigned it with an understanding that whenever dividends were paid they would be applied on the note. This was his contract, and, under the statute, was as effectual to stay the limitation as though he had collected the dividends and handed the amount thereof to the creditor. By the assignment of [91] the stock he, in effect, gave the officers of the corporation authority to pay the dividends to the holder of the certificate of stock — the payee. We cannot see .that the surrender of the certificate and the issuance of a new one in lieu thereof to the plaintiffs in any way changes the rights of the parties. The duty of the plaintiffs to restore the collateral security upon the payment of the debt applies to the stock assigned, whether it be evidenced by the new certificate or the old one. The surrender of the old certificate did not change the character of the assignment to the payee of the note. We recommend that the judgment of the district court be affirmed. Ames and Oldham, CC., concur. By the Court: For the reasons stated in the foregoing-opinion, the judgment of the district court is Affirmed.