Taylor v. Foster

132 Mass. 30, 1882 Mass. LEXIS 14

• Court: Massachusetts Supreme Judicial Court
• Decided: January 4, 1882
• Status: Published

Opinion

Morton, J.

This is an action upon four promissory notes. As to three of them, the defence relied on is the statute of limitations. Atxthe trial by the court, without a jury, the following facts were found. The promissory notes declared on were made by the defendants on the days of their dates, and were not paid at maturity. In March 1875, the defendants failed in business. Being solicited to provide for the large debt of the plaintiff, they then, and also in the following June, assigned to the plaintiff certain dioses in action, the plaintiff and the defendants agreeing that all the money collected upon the choses in action should be.accepted by the plaintiff as far as such money went upon the defendants’ indebtedness to him upon the promissory notes declared on. There was then no indebtedness of the defendants to the plaintiff except upon these notes. There was no agreement or understanding, and no direction by the defendants, “ as to how any money received by the plaintiff through said assignments should be specifically applied.”

The rule that the partial payment of a debt takes it out of the operation of the statute of limitations is founded upon the theory that a payment of a part of a subsisting debt is an acknowledgment that the debt exists, from which the law implies a new promise to pay the balance. The part payment must be under such circumstances as reasonably and by fair implication leads to the inference that the debtor intended to renew his promise of payment. Pond v. Williams, 1 Gray, 630. Roscoe v. Hale, 7 Gray, 274. To give a partial payment this effect, it must appear that the payment was made on the debt sued on. But where the identity of the debt sued on with the debt on which the payment is made is established, such payment will take the whole debt out of the statute, whether it is represented by one note or by more than one note. For instance, suppose a debtor owing a man three thousand dollars, evidenced by three notes of one thousand dollars each, says to the creditor, I owe you this three thousand dollars, I cannot pay you the whole debt, but I now pay you fifteen hundred dollars on account of it. This is clearly an acknowledgment of the whole debt, and would take it out of the operation of the statute of limitations, although neither party should at any time make any specific application of the money paid to either of the promissory notes. Waters v. Tompkins, 2 C., M. & R. 723. Walker v. Butler, 6 El. & Bl. 506. Burn v. Boulton, 2 C. B. 476. There must be reasonable evidence that the debtor recognized and admitted the whole of the indebtedness to be due; but if he did so admit, and made a general payment on account of it, there is no reason for applying the admission and payment to either of the notes rather than to the others, but it would carry out the intentions of the parties to apply the acknowledgment and payment to each of the notes, that is, to the whole indebtedness.

A fair construction of the bill of exceptions brings the case at bar within this principle. After the defendants failed in business, the plaintiff presented and claimed payment of the debt represented by the notes in suit. No controversy existed as to the validity of the notes, or either of them. The defendants assigned to the plaintiff certain choses in action, the proceeds of which were to be applied, not to any particular note, but “ as far as such moneys went to the defendants’ indebtedness to him upon the promissory notes declared on.” There is no ground for applying the payment or limiting the acknowledgment to any one of the notes; it was clearly intended to be a partial payment upon the whole indebtedness, that being in the minds of the parties, and an acknowledgment that the balance thereof was due.

We are therefore of opinion that, upon the facts proved, the defence of the statute of limitations cannot prevail; and that the final finding and judgment of the Superior Court was the only finding and judgment which could be sustained in law. This view renders immaterial the several requests for rulings, and the rulings upon the subject of the rights of the parties as to appropriating the part payment made by the defendants, and we need not discuss them. Exceptions overruled.