Case ID: ny-super-ct_27/html/0568-01.html
Source: Caselaw Access Project
Author: {"author": "Moueia, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry D. Brookman et al. plaintiffs, vs. Benjamin F. Metcalf, defendant.
    1. During the pendency of an action upon a promissory note, against the maker, a promise hy the defendant, that if the plaintiffs will suspend bringing an action upon another note given hy him at the same time, he, the defendant, will abide the decision in the pending action, even if it amounted to a promise to pay, would not be sufficient to take the note out of the operation of the statute of limitations if then outlawed. The Code requires such a promise to be in writing, and signed by the party to be charged.
    2. But where the offer to abide by the decision of the action upon the first note was made and accepted before the statute of limitations had attached to the second note, the consideration of the two notes being the same, they being subject to the same defenses, and a suit being about to be commenced upon the second note, pending the first action, the defendant promised the plaintifis that if they would suspend it he would abide by the decision of the first; and they, in consequence of such offer, delayed bringing an action upon the second note until after the decision of the action upon the first note, and when the statute of limitations had attached to the former; Held that upon the doctrine ofe quitable estoppel, or estoppel in pais, the defendant ought not to be allowed set up the statute as a defense.
    3. It is not essential to an equitable estoppel that the party creating it should design to mislead. If his act was calculated to mislead, and actually has misled another, who acted upon it in good faith, it is enough for the purpose.
    4. In an action upon a lost note a tender of the bond of indemnity required by the statute, at the trial, and before verdict, is sufficient.
    (Before Mowell, Gabvist and McCuuir, JJ.)
    Heard February 4, 1867;
    decided April 1, 1867.
    On the 8th of Eovember, 1855, the defendant made two promissory notes, each for five hundred dollars, payable respectively in six and twelve months after date, to his own order.
    The complaint alleged that, through successive indorsements, the notes were transferred to the plaintiffs ; that they were not paid ; and that after both had matured, and on or about the 11th of February, 1857, the plaintiffs commenced an action upon the six months note. That the defendant put in an answer to the complaint in such action ; that the issue was tried by a referee, who dismissed the complaint, with costs. That the plaintiffs appealed from such judgment to the general term, where the judgment was reversed, and a new trial ordered. That the defendant thereupon appealed to the Court of Appeals, stipulating that if such order granting a new trial was affirmed, judgment absolute should be entered against him in favor of the plaintiffs. That the Court of Appeals, on the 18th day of July, 1865, affirmed such order ; and judgment absolute thereupon was entered against the defendant.
    The complaint further alleged, that while said appeal to the Court of Appeals was pending, and in the year 1860, the plaintiffs directed their attorney to commence an action upon the twelve months note, and so informed the defendant; “whereupon, the defendant requested the plaintiffs not to commence such action against him, and to forbear enforcing judgment, while the appeal in the other case was pending; and to induce the other plaintiffs so to forbear, he, the defendant, then and there, in consideration of the premises and of such forbearance, promised and agreed to and with the plaintiffs, that if they would desist from commencing such or any action thereon to recover the same until after the decision and judgment should be rendered’ upon the appeal as aforesaid, he would immedi-. ately upon such decision and judgment, if the same should be against him, pay the amount due for principal and interest upon said note, without any action thereon.” That thereupon the plaintiffs revoked the said order to their attorney, and did not commence any action upon said note.
    The complaint further alleged, that after the decision of the Court of Appeals, affirming said order, and rendering judgment absolute, as aforesaid, they demanded of the defendant payment of said twelve months note ; which was refused.
    The defendant denied that he requested the plaintiffs not to commence any action against him or to forbear enforcing judgment while the appeal in the other case was pending; and he alleged that the cause of action did not accrue within six years before the commencement thereof.
    The action was tried before Justice Jorras and a jury.
    Henry D. Brookman, one of the plaintiffs, testified that after the decision of the general term, he directed a suit to be commenced on the second note. About that time he met the defendant in Wall street, and told him he was going to sue him on the second note ; his reply was, that he did not want to have any further litigation in the matter ; and if Brookman would suspend it, he would abide by the decision of the first. He, the plaintiff, then went to his attorney, and he laid it all over. This conversation was about the time the defendant appealed to the Court of Appeals, and in the spring of 1860. The order to commence the suit upon the second note, and the subsequent countermand, were also testified to by the attorney.
    A motion was made to dismiss the complaint on the grounds: (1.) That the acknowledgement or promise relied on by the plaintiffs was not sufficient evidence of a new or continuing contract to take the case out of the statute of limitations, because the same was not in writing signed by the party to be charged thereby; and (2.) That the plaintiffs had not tendered the bond required by the statute in a suit upon a lost note, there having been evidence that the note in suit was lost. The motion was denied, and the defendant excepted.
    The defendant testified that he had no such conversation with the plaintiff as he, the plaintiff, had testified to.
    The plaintiffs tendered to the court a bond, as required by the statute in a suit upon a lost note ; which bond was approved by the court.
    The case was submitted to the jury, who found for the plaintiffs.
    The exceptions were ordered to be heard in the first instance at the general term, and judgment in the meantime to be suspended.
    
      8. P. Nash, for the plaintiffs.
    I. The undertaking sued upon was not “ a new or continuing contract, whereby to take the case out of the operation of” the statute of limitations, within the meaning of § 110 of the Code, and was valid, though not in writing. 1. The acknowledgment or promise contemplated by this section is one which is simply a renewal of the original promise, not an undertaking of a different character and on different terms, though based upon the original liability. 2. In the case at bar, the promise was in legal effect this: I dispute your right to recover at all on the two notes. You have a decision in your favor on the first, from which I am about appealing. If you will not sue on the second, I will agree not to dispute your right to recover upon it, if I am held liable on the first, and will pay as soon as such liability is adjudged. On such a promise the statute of limitations does not begin to run till the liability is finally adjudged. The fact that it has run on the original demand is no bar. This modified contract, which the creditor has taken in lieu of enforcing his original claim, is based on a new consideration, and is another contract in all its terms.
    II. All the cases which have been decided under the Code, have been cases where the new promise or acknowledgment was simply in recognition of the original debt, and where there was no colorable ground for starting a fresh liability from the date of the new promise. . If A buys goods in 1860, and in 1862 promises to pay for them, the plaintiff cannot date the liability from 1862, because a mere reiteration of promises leaves the cause of action where it was. Such was the case of Hope v. Bogart, (1 Hilt. 544;) Esselstyn v. Weeks, (2 Kern. 635 ;) and Wadsworth v. Thomas, (7 Barb. 445,) which merely held that promises barred before the Code took effect could not be revived by a verbal promise made afterwards. Van Alen v. Feltz, (32 Barb. 139,) went further and held that, though not barred when the Code took effect, the new promise must still be in writing. All these cases are upon the construction of section 73 of the Code, and do not touch the case at bar.
    III. The defendant is estopped from pleading the statute. By his own conduct he induced the plaintiffs not to sue, and should not now be permitted to take advantage of his own wrong. (See Gaylord v. Van Loan, 15 Wend. 308, 310; Brown v. Sprague, 5 Denio, 545.)
    
      
      Liv. K. Miller, for the defendant.
    I. The court erred in refusing to dismiss the complaint on both the grounds claimed, because,
    
      (a.) The statute is peremptory, that the bond must be given before the recovery can be.had. (3 R. S. 5th ed. 691, §§ 106-108. Desmond v. Rice, 1 Hilt. 530. Smith v. Young, 2 Barb. 545. Des Arts v. Leggett, 5 Duer, 156. 16 N. Y. Rep. 582.)
    (6.) The promise was not sufficient to take the case out of the statute, not being in writing. (Code, § 110. Wadsworth v. Thomas, 7 Barb. 445. Allen v. Feltz., 32 id. 139. Hope v. Bogart, 1 Hilt. 544. See als.o Esslestyn v. Weeks, 12 N. Y. Rep. 635; Wright v. Weeks, 25 id. 153, 157.)
    II. The Court of Appeals, in Winchell v. Hicks, (18 N. Y. Rep. 560,) hold, that in an action upon a debt otherwise barred by the statute, the action must be upon the new promise, not upon the original debt. How, in this case, if the action is upon the new promise, it fails.
    
      (a.) Because of the statute, not being in writing. (§ 110 Code.)
    
    
      (b.) Because it was not to be performed within a year, and is void under the statute of frauds. (3 R. S. 5th ed. 221.)
    (c.) Because the promise was not absolute and unequivocal, such as the cases require. (See Commercial Mutual Ins. Co. v. Brett, 44 Barb. 489.) It was contingent. If the Court of Appeals should decide against the defendant, then he would pay. It did not become an absolute promise until such decision was made, in 1865. Long before then the debt had become barred, and the promise of no effect.
    III. But this action is founded on the note; The contract is to pay the note. The promise and liability were to pay the note. The plaintiffs are owners of said note.
    Finally and conclusively, the plaintiffs, at the trial, tendered the bond required in an action on a lost note ; and,
    IV. The action on the note being barred by the statute, this judgment should be reversed, with costs.
   By the Court,

Moueia, J.

The promise of the defendant that if the plaintiffs would suspend bringing an action upon the second note, he would abide by the decision of the first action, if it amounted to a promise to pay, was not sufficient to take the note out of the operation of the statute of limitations. Such promise is now required to be in writing, (Code, § 110,) and signed by the party to be charged.

The offer, however, to abide by the decision of the action upon the first note, was made and accepted before the statute of limitations attached to the second note. The consideration of the two notes seems to have been the same, and they were subject to the same defenses. A suit was about being commenced upon the second note before the determination of the first action, probably with the view of saving the statute. The defendant, upon being informed of such intended suit, stated to the plaintiffs that he did not want any further litigation in the matter; and that, if they would suspend it, he would abide by the decision of the first. Influenced by such offer/ the plaintiffs delayed bringing an action upon the second note until after the decision of the action upon the first noté, and until after the statute of limitations had attached. These facts are found in the plaintiffs'" favor by the verdict, which is general upon all the issues.

It seems to me, upon the doctrine of equitable estoppel, or estoppel in pais, the defendant ought not to be allowed to disregard his engagement, and set the statute up as a defense.

The offer of the defendant was made with the intention of influencing the plaintiffs, in reference to their contemplated suit upon the second note. The plaintiffs, acting under such influence, suspended all proceedings, and continued passive until the decision of the first action. Ho one can doubt, and so the jury found, that the suspension of action upon the second note was in consequence of the promise of the defendant to abide by the first suit. It is not necessary, to an equitable estoppel, that the. party should design to mislead. If his act was calculated to mislead, and actually has misled another, who acted upon it in good faith, it is enough. (Manufacturers and Traders’ Bank v. Hazard, 30 N. Y. Rep. 226.)

Mr. Parsons states the rule thus : “ When a man has made a declaration or a representation, or caused, or, in some cases, not prevented, a false impression, or done some significant act, with intent that others should rely and act thereon, and upon which others have honestly relied and acted, he shall not he permitted to prove that the representation was false, or the act unauthorized or ineffectual, if any injury would occur to the innocent party, who had acted in full faith in its truth or validity.” (2 Pars, on Cont. 340.)

Instances of estoppels in pais are numerous. A maker of a promissory note, having represented to the holder that it was given for value received, cannot set up the defense of usury. Holmes v. Williams, 10 Paige, 326. Clark v. Sisson, 4 Duer, 408. Ferguson v. Hamilton, 35 Barb. 427.) In St. John v. Roberts, (31 N. Y. Rep. 441,) the indorsers of a promissory note, who had caused the note to be sold at public auction, were estopped from setting up a want of demand and protest.

In Gaylord v. Van Loan, (15 Wend. 308,) the defendant, upon being applied to for payment of certain demands, the person applying saying the demands must be sued unless they were renewed, answered, that he would not avail himself of the statute, and a suit need not be brought on that account; held, an estoppel. And in Brown v. Sprague, (5 Denio, 545,) in several ejectment suits, there was an agreement that all should abide the result of one, and proceedings be stayed in the others ; and it was held, that the defendant should abide by his engagement.

The effect of the defendant’s promise to abide by the decision of the first suit, was to postpone all action upon the second note until after the statute had attached. There was no negligence on the part of the plaintiffs ; they were about to proceed, to save the statute, when they were met by the defendant’s promise, and, in good faith, acted upon it. The case is stronger against the defendant than Gaylord v. Van Loan, (supra,) and he must be held to his engagement. ' The tender of the bond of indemnity at the trial, arid Before verdict, was sufficient. (2 R. S. 406, § 76. Des Arts v. Leggett, 5 Duer, 156.)

The exceptions must be overruled, and judgment ordered for the plaintiffs on the verdict.