Gragg v. Barnes

The opinion of the court was delivered by Horton, C. J.: In the original action of Barnes v. Gragg, to recover $1,941.23 and interest upon the note of April 17, [309] 1876, attached as “Exhibit B” to the petition filed in this case, it was decided that at the time of the execution of the note, the arrangement' and understanding between the bank and Zack Gragg was that the note of October 1,1875, for $1,822.50, was turned over to Zack Gragg — who was the surety on the note — solely for the purpose of enabling him to attempt to collect from John Gragg — the principal on the note — or from property which it was supposed could be reached as his, the amount of the note, or as much as he could; that he, Zack Gragg, was to commence suit against John Gragg for that purpose, turn the amount collected over to the bank to be credited on the note of October 1,1875, and assign to it the judgment, if any, obtained against John Gragg, and be entitled to receive from the bauk the note of April 17, 1876; and that this note was taken and held by the bank solely as security that Zack Gragg would faithfully perform his part of the agreement. (28 Kas. 51.) The present action was commenced December 7,1880, upon the first note, dated October 1, 1875, and the petition alleged concerning the note dated April 17, 1876, that at the time it was executed it was agreed between Zack Gragg and the bank that said Gragg should institute and cany on legal proceedings for the purpose of subjecting the property of John Gragg, the principal on that note, to the payment of the same, and that Zack Gragg should return the note dated October 1, 1875, to the bank, and deliver and pay over to the bank all that he could collect upon the note. The petition further alleged, in addition to the usual allegations in an action upon a promissory note, that on April 17,1876, Zack Gragg executed the note of that date “whereby he then, in writing, acknowledged an existing liability upon his part” upon the indebtedness for which, the note of October 1, 1876, was given. The evidence in the case establishes that Zack Gragg pei’formed his part of the agreement entered into at the time of the execution of the note of April 17, 1875. J. B. Johnson was employed by the bank to bring the suit of Zack Gragg v. John Gragg, and the evidence is conclusive that Zack Gragg [310] did not collect anything from John Gragg upon the judgment in the case, or from the property which it was supposed at the time the action was commenced might be reached. In regard to the non-return of said note of October 1, 1875, nothing need be said, as the matter is disjoosed of in Barnes v. Gragg, 28 Kas. 51, 59. At the commencement of this action more than five years had elapsed after the note sued on had become due. To take the case out of the statute of limitations, it is claimed that the note executed April 17, 1876, was ¡first, an acknowledgment of the existing liability of the note of October 1, 1875; and second, that the note of April 17, 1876, was literally a promise in writing to pay the note of October 1, 1875. It seems to be conceded that the note of April 17, 1876, was given for no other purpose than to secure the performance of the oral agreement between Zack Gragg and the bank, heretofore stated; but notwithstanding this, it is claimed by the counsel of the defendant in error, plaintiff below, that the effect of the execution of the note of April 17, 1876, was to acknowledge the note of October 1, 1875, as an existing liability. We do not so regard it. The second note, dated April 17, 1876, does not refer to the first note, and can in no way be connected with it, excepting by oral evidence. It does not purport on its face to be an acknowledgment of a prior indebtedness, and it does not purport anywhere to be a promise to pay anything except what is stated therein. In our opinion, the statute of limitations relied upon by the plaintiff in error, defendant below, is fatal to any recovery, and "there is nothing whatever in the record to take the case out of the statute. We do not think that the indebtedness embraced in the original note was revived by the execution of the second note, nor do we deem the second note to be a promise to pay the first note. In the case of Hanson v. Towle, 19 Kas. 273, it was held that to prevent the running of the statute of limitations upon an indebtedness, there must be an unqualified and direct admission of a present subsisting debt on which the party is [311] liable. This part of the opinion has never been changed or modified, and is the law of the state to-day. (Elder v. Dyer, 26 Kas. 604.) In the latter case, the letter of Elder contained the express statement, “ I do not want to be held longer on ■that nóte.” In construing the- entire'language of the letter, this court held that it was equivalent to saying: “I am now held on the note, but I do not wish to be held any longer than it will be necessary for you to obtain a new surety on the debt.” “No set phrase or particular form of language is required in the acknowledgment of an existing liability; anything that will indicate that the party making the acknowledgment admits that he is still liable on the claim; that he is still bound for its satisfaction; and that he is still held for its liquidation and payment, is sufficient to revive the debt or claim.” (Elder v. Dyer, supra.) In this case, there is nothing in the note of April 17, 1876, which indicates that Zack Gragg was liable on the. original note of October 1, 1875, or that he was still bound for its satisfaction or payment. The difficulty under which the plaintiff below labors grows out of a'misunderstanding concerning the execution of the note of April 17,1876. Prior to the trial of the case of Barnes v. Gragg in the district court of Jefferson county to recover upon this note of April 17, 1876, the bank and plaintiff below insisted that the note was taken in payment for the principal and interest of the joint note of October 1, 1875. On the other hand, Zack Gragg claimed that the note was executed solely as security for the faithful performance of the agreement between him and the bank heretofore stated. In the action brought upon the first note, the claim of Zack Gragg was sustained. Plaintiff below seems to have relied upon his understanding of the contract between the bank and Gragg until the statute had run against the note of October 1, 1875; but after judgment in the first case of Barnes v. Gragg, this action was instituted, and as the note of October 1,1875, was then barred, unless taken out of the statute by some action on the part of Gragg, it seems to have been imagined that Gragg could be held liable upon the original note of October 1, 1875, upon the theory that the note of April 17,1876, was [312] an acknowledgment or promise in writing of the former note. This theory has.no support. Our conclusion therefore is, that the judgment of the district court must be reversed, and the cause remanded for a new trial. All the Justices concurring.