Brown's Admr v. Osborne

Opinion of the Court by Judge Carroll — Affirming. Samuel Brown, appellant’s intestate, died in March 1908, and this suit was brought against his administrator on the following account, which we set out in full for the purpose of illustrating the alleged errors complained of in the trial of the case: Samuel Brown, deceased, in Account with Mrs. E. Osborne. Oct. 10, 1900. To cash borrowed.....>........... $6 00 Jan. 10, 1901. To cash borrowed............... 12i 00 Sept. 1, 1903. To 32 months board and washing from January. 1, 1901, to September 1, 1903, at $15 per month..............................480 00 Sept. 1, 1904. To 2 months’ board and washing July and August............................... 30 00 Sept. 1, 1904. To 2 months’ board and washing, July and August..................t............. 30 00 Sept. 1, 1905. To 2 months’ board and washing, July and August................................... 30 00 — 458 — Credits Nov. 10, 1902. By cash.............................150 00 Aug. 10, 1907. By 1 sow given to Mason......... 15 00 Aug. 15, 1907. By 1 cow given to Bessie........... 35 00 - 200 00 Balance due............................................$388 00 The answer controverted all the material averments of the petition, and further set up and relied on the five years’ statute of limitations as a bar to so much of the account as was due more than five years before the death of the intestate. The deceased was a bachelor and quite an old man when he died, and Mrs. Osborne was his niece. There was evidence showing that in 1901 Mrs. Osborne loaned him $12, that he boarded at her house during the time mentioned in the account, and that the charges made were reasonable. It was also shown that the Mason and Bessie mentioned in the account were children of Mrs. Osborne, and that when he gave to them the sow and cow it was for the purpose of getting credit by their value on his board, and that when he paid the $150 credited on his account he said he wanted it to go as part of what he owed for board, and that on several occasions he said he owed Mrs. Osborne for board and wanted her paid. Virtually no evidence was introduced in opposition to the claim. The court excluded from the consideration of the jury the item of $6, and instructed them, in substance: (1) That if they believed that Mrs. Osborne loaned the intestate $12 and furnished him board and lodging and did his washing under an agreement by which she was to be compensated therefor, they should find for her the amount of the money loaned and the reasonable value of the board and washing, not exceeding the amount claimed. (2) That — 459 — if they believed that ■ any part of Mrs. Osborne’s claim was barred by the statute of limitations, they should apply the payments made by the intestate on that part of the account which was barred. (3) That the plea of limitation was not available if the jury believed from the evidence that the intestate, within five years next after that portion of the account sued on that was due more than five years before his death, acknowledged to Mrs. Osborne or her agent his indebtedness. It is insisted by counsel for appellant: (1) That the instructions are erroneous; (2) that the evidence is not sufficient to. show a promise or agreement upon the part of the intestate to pay board; and (3) that the greater part of the account was barred by the statute of limitations, and the acknowledgments or payments by the intestate did not prevent the statute from running. The first instruction is criticised on account of the inaccurate use of a few words; but we do not think it possible that the jury could have been misled by these verbal errors, or that they prejudiced substantially or otherwise the rights of the appellee. Except for the credits upon the account, and the acknowledgments made by the deceased that he owed it, a considerable part of the account would be barred by the statute. And so two questions are presented: First, the effect of the payments; and second of the acknowledgments. When a person makes a payment upon an account, • a part of which is barred by limitation at the time the payment is made, and there is no direction made by him as to what items on the account the credit shall be applied to the extinguishment of, the law authorizes the application of it to the payment of the oldest items on the account, although these items, except for the payment, would be barred by the statute. This — 460 — the court in effect directed the jury to do. But the mere putting a credit on an open account or note, unless there is evidence showing that the amount represented by the credit was paid by the debtor on the note or account, will not be sufficient in itself to stop the statute from running. Hopkins v. Stout, 6 Bush 375; Frazer v. Frazer, 13 Bush 397. If the mere entry of a payment as a credit upon an open account or note would of itself have this effect, it would be an easy matter for the creditor, if he felt so disposed, to evade the plea of limitation and stop the statute from running against any note or account that was barred. But, when a payment is made by the debtor upon an open account like this one or a note before it is barred, and this fact is shown by competent evidence it will be a sufficient acknowledgment of the debt to stop the running of the statute up to that time, and the period of limitation will then be computed from the date of the payment. English v. Wathen, 9 Bush, 387; Rankin v. Anderson, 69 S. W., 705, 24 Ky. Law Rep., 647; Carr v. Robinson, 8 Bush, 269. Nor should any distinction be made between the effect of a payment upon an open account like this and a note. An open account is a debt, as well as a note; the -only distinction between the two being that one is a promise in writing signed by the debtor, while the other is not. An acknowledgment of the justice of an account will have the same effect as the acknowledgment of the justice of a note. Ditto v. Ditto, 4 Dana, 502; Trousdale v. Anderson, 9 Bush, 276. And so with reference to a promise to pay either a note or account. But we think it proper at this point to say that we do not mean to hold that a payment on an account consisting of more than one item or an account — 461 — containing a charge for more than one particular thing would stop the statute from running as to any part of the account that the debtor did not then know was in existence or that he did not have in mind when the payment was made. The account upon which a payment is made might consist of many items, made up of various things, some of which the debtor may recognize as just and others that he may not, and the mere fact of making a payment on such an account— nothing more being said or done — would not be an acknowledgment of the whole account or stop the statute from running as to the remainder of it not paid, in the absence of evidence that the account was before the debtor at the time the payment was made, or that he at the time knew what the account was for and the amount of it. But if the debtor at the time he makes the payment has before him the account, or knows what it is made up of and the amount of it, no matter how many items it may contain or wliat they are for, then his payment will be an acknowledgment of the justice of the entire account and have the effect of cutting off the time before the payment was made. In this case the account, except as to the item of $12 for money loaned, was all due for board. The debtor knew that he owed for board, and, when he made the payments accompanied by the statement that he wanted them to go on his board, the payments were an acknowledgment of so much of the account as was then due and unpaid, and saved from the operation of the statute the antecedent time, and served to create a new period from which it should run. It is true there is no evidence that he knew the exact amount of the account or the sum he was being charged for board, but he did know that he owed an account for board, and it was upon this account that — 462 — lie made the payments. Ah unqualified and unconditional payment made upon a debt is the very best evidence of its justice, and has the same effect as would an express acknowledgment that the debt was just or an express promise to pay. It is sufficient to sustain a new action if the debt is barred by*the statute at the time the payment is made, or to cut off the time before the payment is made, if the debt is not then barred. At the time the $150 was paid for board, no part of the account was barred by the statute, and the effect of the payment was to extinguish and satisfy (the oldest items on the account for board. The further effect of the payment was to acknowledge that the remainder of the account for board then existing was just, so that, when this credit of $150 was made, it created a new period from which the statute of limitations commenced to run. In other words, the five-year statute commenced to run from the date of the credit, and not from the date of the indebtedness as set out in the account. The payment cut off and excluded from the period of limitation the time that had elapsed when the new promise was made. Gilmore v. G-reen, 14 Bush, 772. On August 10, 1907, when the sow was given to Mason, and a credit of $15 obtained upon the board, this payment again created a new period from which the five-year statute commenced to run. And so with the payment made on August 15, 1907. Taking this view of the case, it is manifest that no part of the account was barred by the statute, as the two last payments were made within the five years next before the death of the intestate. It is not necessary that we should give controlling importance to the acknowledgments of the deceased of his indebtedness for board, or his promise to pay — 463 — board, as the best evidence of the indebtedness and his acknowledgments of liability therefor are the payments, admittedly made by him. If no payment had been made, there might be some question whether the acknowledgments were sufficient in view of the fact that they were not made directly to Mrs. Osborne or her agent. Trousdale v. Anderson, 9 Bush, 276; Hargis v. Sewell, 87 Ky. 63, 7 S. W. 557. But these acknowledgments were made at the time of the payments and as a part of the same transaction, and, therefore, they were competent to show for what purpose the payments were made. The evidence in our opinion was sufficient to support the petition that the intestate received from Mrs. .Osborne the services mentioned in her account, and that he agreed to pay her for them, and that the prices charged are reasonable. But, as to the item for $12 for money loaned, there is no evidence that the debtor intended to pay it, or that he acknowledged its justice, or that at the time he made the payment he knew of the existence of this item. Therefore to the extent of this item the judgment was erroneous. But this error is not sufficient to justify a reversal. Upon a return of the case the court will credit the judgment by $12. "Wherefore, the judgment of the lower court is affirmed.