Exeter Bank v. Sullivan

6 N.H. 124

Opinion

Richardson, C. J.

delivered the opinion of the court.

Footnotes

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This corporation has shown great indulgence to the makers of these notes ; — an indulgence, which can hardly be reconciled with any true banking principles ; which could scarcely be deemed safe in any case and under any circumstances, either to the bank or the surety, and' which is not unlikely to have been injurious even to the principal himself. For too much indulgence to its debtors, on the part of a bank, is, not unfrequently, like too much indulgence by a parent to a child, pregnant with mischief to them to whom it is accorded. And in a case like this, where, after the lapse of twenty years — long after the principal became embarrassed in his circumstances, — and after his death, a surety is called upon to pay, he seems to us to have a right to demand of a court of justice the full benefit of any legal principle, of which he is entitled to avail himself as a defence.

It is now twenty-five years since the notes, on which this action is founded, were given ; and the statute of limitations is clearly a bar to the suit, unless the circumstances, on which the plaintiffs rely for the purpose, are, in law, sufficient to take the case out of the operation off the statute. It is said, on behalf of the plaintiffs, that the admissions and proposals made by the defendant, in the year 1823, are sufficient to take the case out of the statute, and we shall proceed, in the first place, to examine the effect of those proposals and admissions.

It is not to be doubted, that what the defendant then said amounted to an admission, that the debt was then due, nor that it would have been competent for a jury to infer a promise to pay, from that admission, if there had been nothing, in the circumstances attending the admission, to rebut such an inference. But the admission of a debt does not take a case out of the statute. It is only evidence from which a jury may infer a promise that will take a case out of the statute. 2 N. H. Rep. 425, Stanton v. Stanton.

It is well settler], that no promise is to be raised by implication, in these cases, against the express declarations of the party, at the time, nor beyond what he offers. However distinctly he may admit the debt to be justly due, yet if he declares at the time, that he never will pay, the admission and declaration taken together afford no evidence of a promise to pay. So when he admits the debt to be due and offers to pay a part, the admission, and offer, taken together, arc not evidence of a promise to pay any thing more than what is offered. 4 N. H. Rep. 315, Atwood v. Coburn; 6 Bingham, 349, Fearn v. Lewis; 2 Moore & Payne, 581, Gould v. Shirley; 4 Greenleaf, 41 and 413; 3 ditto, 97.

We entertain no doubt, that, in settling the question, whether the declarations and offers of the defendant take the case out of the statute, they must be taken altogether. For it would be contrary to reason and sound sense to seize upon a detached part of what was said, and infer, from that, a promise to pay, when the declarations and offers, taken altogether, afforded no ground for such an inference.

in this case, the defendant, at the time he made the offers and proposals on which the plaintiffs rely, began by declaring bis total inability to pay the debt. He then made certain proposals, which were rejected. Now' - it seems to us, to be absurd to hold that, after a party has declared his total inability to pay, a promise to pay, may be inferred from offers which the other party has wholly rejected. And in the ease of Smith v. March, decided in this court, at January term, 1831, in this county, where the defendant had admitted the debt, and expressed a strong desire to pay, and offered to pay a part, but said, at the same time, he was wholly unable to pay all the debt, it was held that the admission and offer were not evidence that could be submitted to a jury to prove a promise that would take the case out of the statute. That case was settled alter a full consideration of the question and nothing has since occurred to us, that has led us to doubt that the decision in that case was correct. And if it be law, it settles the question we are now considering.

It has been further argued, that the case is taken out of the statute by the payments which Peabody, a co-surety with the defendant, made, within six years before the commencement of this action.

It is not known, that the question, which arises on this point in the case, has ever been settled in this state. It is therefore to be decided, rather upon sound legal principles, than by authorities.

We are satisfied, that the statute of limitations was intended to be a statute of repose. It is a wise and a beneficial law, having a tendency to produce adjustments of affairs between parties, while they remain fresh in their recollection and before time, in its lapse, has thrown darkness and obscurity upon them. It is neither unjust nor discreditable to take advantage of the statute — especially in the case of a surety.

In no form of action, except assumpsit, can a case be taken out of the statute by any acknowledgement, or payment, in part, of the debt. 4 N. H. Rep. 336; 3 Bingham, 638.

And jt t,as 5eeQ very justly questioned, whether as-sumpsit ought to have been made an exception. 3 Bingham, 329.

It is, however, well settled, that an acknowledgement of a subsisting debt, which the party is liable and willing to pay, does, in general, amount to evidence of a promise which may take an action of assumpsit out of the statute. And a payment in part is, in general, considered as amounting to such an acknowledgement.

Whether such an acknowledgment, by one defendant is enough to take a case out of the statute with respect to another, is a very different question, and has been differently decided by different courts.

Some have held the opinion, that an acknowledgement of the debt, by one, may take a case out of the statute, with respect to another. Douglas, 652, Whitcomb v. Whiting; 2 Starkie Ev. 896; 3 Pick. 291, White v. Hale; 6 Johns. 267, Smith v. Ludlou; 2 H. Bl. 340, Jackson v. Fairbanks; 1 Taunt. 104; 15 Johns. 3; 2 Pick. 581; 2 Bing. 306: 2 Saunders, 63, note 6.

Bat this principle, which w as first laid down by Lord Mansfield, has since been questioned in England : the foundation on which it rests, has been examined in the supreme court of the United States, and been found to be altogether unsatisfactory : and it has been exploded in Kentucky and Pennsylvania. 1 Peter’s S. C. R. 363; 1 B. & Alds. 467.

Those who hold, that an acknowledgement or a partial payment of the debt, by one, may take a case out of the statute as to all the joint debtors, found their opinion on the ground, that the bar, created by the statute, rests entirely upon the presumption, that the debt has been paid and that such an acknowledgement or payment re-mores the presumption and revives the original promise. And they conclude, and, if this be a correct view' of the subject, very justly conclude, that in this, as in other cases, an acknowledgement by one of many, who are jointly concerned is evidence against all, sufficient to remove the presumption of payment. This is the expía-nation given by Best, C. J. in Perham v. Raynal, 2 Bingham, 306, And this is the explanation given by Lord Mansfield, Douglas, 652. He says “ an acknowledgement by one, is an admission by all, and the law raises the promise to pay, when the debt is admitted to be due.”

It is not known, that any other explanation has ever been attempted. 8 Mass. Rep. 134.

But, if this be the true construction of the statute of limitations, it is clear that many cases, which have been overruled as not law, in latter times, are founded on true principles. For, if an admission of the debt takes a case out of the statute,it ought to do so, even if he, who makes the admission, declares at the time, that he will never pay. It is wholly immaterial what his intentions may be.

He admits the debt, and this removes the presumption of payment.

Those, who hold the opinion, that an acknowledgement of the debt, by one, does not take a case out of the statute as to another joint promisor, rest their opinion on the ground, that an acknowledgement of the debt does not, in any case, take a cause out of the statute, and, that it is only evidence of a promise which may revive the debt, but not the original promise.

The principle, that an acknowledgement of the debt is only evidence of a new promise, has often been recognized by this court. 2 N. H. Rep. 425; 5 ditto, 154,— has been adopted by the supreme court of the United States, 1 Peter’s S. C. R. 351 — by the supreme court of Massachusetts, 8 Pick, 206 — by the supreme court of New York, 15 Johns. 511 — and by the supreme court of Pennsylvania, 5 Binney, 573.

It seems to be now' becoming the general opinion, that an acknowledgement of the debt, that will warrant the finding of a new promise, must be an unqualified and direct admission of‘a present existing debt, which the par ty is liable and willing to pay. If the debt be admitted, but the debtor at the same time refuses to pay, no promise can be raised by implication. The acknowledgement or new promise i# not deemed to be a continuance of the original promise, but a new contract, supported by the original consideration, or evidence of such a contract.

This view of the operation of an acknowledgement of the debt, is believed to be conformable to the general current of the English, as well as of the American, decisions, and has been explained and enforced, by Mr. Justice Story, in a most able and satisfactory manner. 1 Peter’s S. C. Rep. 351.

If then, the admission of a debt does not, of itself, take the case out of the statute, but is only evidenef of a promise which may have that effect, the principle, that an acknowledgement by one joint debtor will take a case out of the statute as to another, falls to the ground. There is nothing left to support it. For, although one joint debtor may admit the fact of the existence of the debt, which admission will be evidence of that fact against another joint debtor, still it by no means follows, that, by such admission, he can raise a new promise, that will bind another joint debtor. It is not pretended that one can make a new contract, in such a case, that will bind the other.

The admission may prove against all, that there is a just debt, that has not been paid. But it can go no further. This is not enough. Before a new promise can arise, it must appear, not only that there is a subsisting debt, but that there is such a debt, which the party, to be charged, is willing to pay. The admission of a debt by one, does not furnish any ground to presume that another is willing to pay. If an acknowledgement of the existence of the debt by one, can furnish a ground to presume a promise by another, in his absence, it may do it in cases where the other, if present, would refuse to pay. Indeed it may do it in a case wheie the other has- actually paid the debt. In the case of Cambridge v. Hobart, 10, Pick. 232, a distinction is made between an admission made by a sole debtor and one made by one oí several debtors. And where one of two makers of a note, many years after the note was given, said he presumed that it was not paid, it was held that this was not enough to take the case out of the statute as to himself, because, under the circumstances, it had very little tendency to rebut the presumption of payment arising from lapse of time. This distinction seems, to us, to show that the old rule can rarely be safely applied in any case.

When there is only one debtor, he must know whether the debt is paid or not. But where there are several debtors, there may be payment by one without the knowledge of the rest.

if one joint debtor admits that he owes the debt, and says nothing to the contrary, it may be inferred, from his silence, that he is willing to pay. But his silence can furnish no ground to presume that another, who is absent, is willing to pay.

If one debtor promises to pay when able, does this take the case out of the statute as to another who is able to pay ? It is as clear an admission of the debt, as can be made. But if it take a case out of the statute as to the other, it may do it, in cases where he who makes the admission does not take the case out of the statute with respect to himself.

We are, on the whole, of opinion that a payment, by one joint debtor, does not take a case out of the statute as to another ; that the rule which has given that effect to such a payment, cannot be sustained upon principle ; nor can it be reconciled with the decisions which have been made, in this state, in relation to the statute of limitations. The verdict, in this case, must, therefore, he set aside.

Parker, Justice, having been of counsel, did not sit in the cause..