Case ID: ny_29/html/0146-01.html
Source: Caselaw Access Project
Author: {"author": "Mullin, J. Wright, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Benjamin C. Payne, Executor, &c. v. William Gardiner, impleaded with Oliver Slate, Jr.
    In May 1848, P delivered to the firm of S. G. &. H. $1,000, which they received and credited to him on their books, and delivered,to him a paper signed by them, acknowledging the receipt of the money, and stating that the same was to P's credit on their books at' six per cent interest. Held, that the transaction was a deposit and not a loan; and that the rights and liabilities of the parties were precisely the same as if the money had been in a bank; and hence there was no right of action against the depositories until actual demand was made; and that the statute of limitations began to run from the same time, and not before.
    But that if the transaction was to be treated as a loan, then the paper signed by S. G. &. H. was in effect a promissory note on interest, and payable on demand; and the statute of limitations would not begin to run in favor of any of the parties to it, until such demand was made,
    On the 9th May, 1848, William H. Payne, the plaintiff's testator delivered to the firm of Slate, Gardiner & Howell, whose place of business was in the city of New York, $1,000; which they received and credited to him" on their books, and delivered to Payne a paper signed by them in the words following:
    “New York, 2th 1848.
    “ Eeceived from Capt. William H. Payne, one thousand dollars, which is to his credit on our books, at six per cent, interest." $1,000. Slate, Gardiner & Howell.”
    This firm was composed of Oliver Slate, jr., William Gardiner and Silas S. Howell.
    The testator was a sailor, residing (when at home) at Sag Harbor, but, during the first year after the deposit of the money as aforesaid, was at sea.
    On or about the 1st January, 1850, the aforesaid copartnership was dissolved, by Silas S. Howell retiring therefrom and assigning his interest in the partnership effects to his copartners—they on their part assuming to pay all the debts of said firm, and to indemnify him agaipst liability thereon.
    
      A new firm was 'thereupon formed, composed of said Slate, Gardiner and James H. Lyles;, and this firm opened a new account with plaintiff, on the same books kept by the old firm, in which they gave said Payne credit for the §1,000. The name of such new firm was “ Slate, Gardiner & Co.” This copartnership continued till on or about the 1st January, 1853, when it was dissolved—the, defendant, Gardiner, retiring therefrom, having assigned his interest in the partnership property to his partners, and they on their part agreeing to pay all the debts of said firm and to indemnify him against liability thereon. A new firm was thereupon organized, composed of said Slate and Lyles, under the name of “ Slate & Co.,” which opened a new account with said testator for said $1,000, in which they credited him with that sum and thereafter charged him with interest paid thereon.
    On the 27th June, 1850, Slate, Gardiner & Co., paid said testator $120—being the interest on thé $1,000 for two years. The interest was thereafter paid, on drafts drawn by the testator as follows: One on Slate, Gardiner & Co., for $60, bearing date the 22cl May, 1852, and the residue on drafts drawn on Slate & Company, being seven in number; the first bearing date the 10th May, 1853, and the last the 15th May, 1859, and each of said drafts being for the sum of $60. No interest has been paid on said money since 1859.
    This action was commenced on the 27th November, 1861, to recover the amount deposited and interest thereon since 1859. Howell died before the commencement of the action.
    The defendants .answered separately. Slate, without denying any of the allegations in the complaint, sets up as a defense the transfer of the deposit from one firm to another as above set forth, with the assent of the testator, and the payment of interest up to 1859 and not after. Gardiner sets up the same matters, and as a second defense the statute of limitations.
    
      On the trial the plaintiff was examined as a witness, and denied that he knew or had heard of the several - changes in the partnerships above mentioned, or any or either of them, until after the commencement of the action, and that he drew the drafts on the several firms accidentally merely. He did not know of the death of Howell.
    The counsel of Gardiner moved for a non-suit, on the ground that the action as to him was barred by the statute of limitations. The motion was denied, and the counsel excepted.
    There was a verdict for the plaintiff for $1,177.16.
    The counsel for the defendant Gardiner then moved for a new trial, on the judge’s minutes, which was denied. He then appealed from the judgment, and from the order denying said motion to the general term in the second district, and that court affirmed both the judgment and order.
    
      James C. Carter, for the appellant.
    I. No time having been specified for the payment of the loan made to Slate, Gardiner & Howell, it was payable immediately, and an action accrued thereon forthwith, without any demand. It is believed that the authorities on this point are unanimous, (Capp v. Lancaster, Cro. Eliz., 548; Rumball v. Ball, 10 Mod. 38; Norton v. Ellam, 2 Mees. & W., 461; Waters v. Earl of Thanet, 2 Q. B. (2 Ad. & Ellis, N. S.) 757; Presbery v. Williams, 15 Mass. 193; Little v. Blunt, 9 Pick. 48; Newman v. Ketelle, 13 Pick, 488; Peaslee v. Breed, 10 N. H. 489; Perry v. Griffith, 1 Harr. & Gill. 439; Ruff v. Bull, 7 Harr. & J. 14; Larason v. Lambert, 7 Halsted, 247; Hill v. Henry, 17 Ohio, 9; Lafarge v. Jayne, 9 Barr, 410; Wenman v. Mohawk Ins. Co. 13 Wend. 267; Howland v. Edmonds, 24 N. Y. 307.)
    1. The circumstance that the note, or other obligation is payable by its terms with interest, does not affegt the rule. 
      (Norton v. Ellam, 2 Mees. & W. 461; Wenman v. Mohawk Ins. Co. 13 Wend. 267.)
    2. If, in the case of a promissory note payable “on demand with interest,” no demand is necessary before suit against the maker, a fortiori, a simple indebtedness, evidenced by a receipt to the effect that it is payable with interest, but mentioning nothing about demand, requires no demand as a necessary preliminary to a suit.
    3. In one of thé best considered of the cases above cited, the same reasons were urged, as here, to maintain the view that a demand was necessary to render the cause of action ripe, but were rejected by the court as unsound. (Norton v. Ellam, ubi supra.)
    
    4. The effect of the decision of the court below is to make a demand a condition precedent to the maturity as against the maker of a note payable on demand with interest. This view is distinctly repudiated by all the authorities, and especially by the case of Howland v. Edmonds, in this court, (23 How. Pr. Rep. 152:—24 N. Y. R. 307), which is supposed by the learned judge below to afford some support to his decision. This last case, holds what no one will deny, that parties may so frame their obligations as to make a prior demand essential to the foundation of an action; but this opinion is coupled with the approval of the authorities which hold that in cases like the present such demand is not a condition precedent.
    5. The distinction which Mr. Justice Brown fails to see between the question in the present case, and that in Downes v. The Phoenix Bank, (6 Hill, 297); the judges who decided the latter case, saw and made the ground of their ’decision.
    II. The learned judge in the court below, while holding that a demand before suit was essential in the present instance, concedes that his decision is in direct conflict with the rule hitherto established; but he claims that this rule was changed, and his own decision- justified, by the judgment of this court ill Merritt v. Todd, (23 N. Y. 28.) It is submitted that this is an entire misconception of the question raised,- and of the intended effect of the decision in Merritt v. Todd.
    
    1. He who maintains that a rule of law established for centuries in all courts and places, and fortified by a long' line of harmonious judgments, has been overthrown by a new decision may fairly be required to show—1st, That the identical point arose directly, and was passed upon in the new decision; or -2d. That if the very point was not directly before the court, the judges who pronounced the latter judgment agreed that it was indirectly involved, were aware of the authorities establishing a contrary doctrine, and intended to overrule them.
    
    
      (a.) But it is not pretended that the same point was directly raised in Merritt v. Todd. That action was against the endorser of a promissory note. To sustain it, proof of a demand upon the maker, refusal and notice to the endorser was, as everybody knows, essential. The sole question raised was whether the demand and notice actually proved were made and given in due time, two years.and upwards having elapsed since the date of the note when the demand was made. The demand was held to have been made in due time. But this, certainly, is not the same question as whether any demand would have been necessary as a con ■ dition precedent to an action against the maker.
    
    
      (p.) Nor is the second requirement above mentioned any better supplied. That the learned judge in this court who gave the prevailing opinion in Merritt v. Todd, did not suppose the doctrine, which it is now claimed he then overthrew, to have been indirectly involved, is entirely clear. He cites and discusses with characteristic fullness and distinctness the authorities he intends to overrule or disregard; but he does not even allude to the long established and familiar rule—that sums of money, whether due on notes or otherwise,- payable on demand, with or without interest, may be sued for as against the debtor at once and without demand—nor to the authorities establishing such rule. Had he for a moment supposed that he -was overruling these authorities, so numerous, explicit and. undisputed, he certainly would have made them the subject of comment.
    (c.) Still further. The learned judge who dissented from the prevailing opinion in Merritt v. Todd, labored to show that the doctrine announced in it was an unjustifiable departure from previous decisions, and he cites and discusses very fully such decisions as he supposes to be thus overruled. He, however, makes no allusion to the doctrine we are now maintaining, or the authorities we have cited in support of it, as being in any manner impeached by the conclusion to which the majority of the court had arrived. Had he supposed that there was any intention on the part of the majority to disturb this long established rule, is it not certain that he would have strengthened his opposition by an array of some or all of the numerous authorities cited under our first point, especially when the whole foundation of his argument was an appeal to the maxim stare decisis9
    
    
      (d.) Mr. Justice Brown, sitting in an inferior tribunal, discovers a doctrine in the decision of an appellate court wMch the friends of that decision never claimed for it— which its enemies never imputed to it—and upon the strength of this discovery overrules a long line of authorities never before questioned. Is this a sound method of judicial interpretation?
    2. But the-learned judge in the court below thinks that the doctrine announced by him is a necessary consequence of the doctrine in Merritt v. Todd. “It would,” says he, “be contradictory and‘absurd to say that such anotéis due and payable immediately and'without any demand, for the purpose of maintaining an action against the maker, but in order to charge the endorser it is not due and payable until an actual demand is made of payment from the maker.”
    
      
      (a.) As already intimated, this contradiction and absurdity did not occur either to the judges who favored or those who resisted the conclusion reached in Merritt v. Todd.
    
    
      (b.) The rule, laid down in Merritt v. Todd, that notes on demand are continuing securities, and do not become overdue by the mere lapse of time, has always been accepted in the English courts; and yet, as we have seen, the rule that notes payable on demand, with or without interest, may be sued as to the maker instantly and without demand, was never shaken there. This contradiction and absurdity seem never to have occurred to bench or bar in that country. (Brooks v. Mitchell, 9 M. & W. 15; Barough v. White, 4 B. & C. 325; Norton v. Ellam, ubi supra.)
    
    (c.) And there is no such absurdity or contradiction. As the nature of the undertakings of the maker and endorser of a note are essentially different, so different considerations govern as to the time when it is proper to enforce their respective liabilities. The undertaking of. the maker is absolute to pay his own debt. That of the endorser is strictly conditional, involving as a condition precedent the failure of the maker to discharge his obligation on an express demand made therefor: To charge an endorser, demand and notice are always essential,.even in the case of time notes. To charge the maker a demand is not, in general, at all requisite. The rule adopted by Merritt v. Todd, and the rule always held as to when an action can be brought against the maker of a demand note, can stand together with perfect consistency.
    
      (d.) The prevailing opinion in Merritt v. Todd contains an express caveat against any attempt to apply the doctrine to any case different from the one then before the court. It is there observed that the question when a note is overdue so as to permit the maker to set up an equitable defense as against the holder, is very different from the one actually decided. The same observation would doubtless have been made as to the question when the note should be deemed due so as to permit an action against the maker, had that question and the authorities bearing upon it been made the subject of discussion. (Opinion of Comstock, J., p. 35.)
    3. On the former argument of the appeal in this court, it was urged for the respondent, that unless the effect he claimed for the decision in Merritt v. Todd was allowed to it, an action might accrue against the maker of a note on demand before it was ripe against the endorser, and might even be barfed as against the maker before the endorser was charged, which was alleged to be an anomaly. But this is no anomaly whatever. On the contrary, this very thing may frequently occur under the rules of the law merchant in the case of notes on time. The lapse of a day usually occurs after the action is ripe against the maker before the endorser is charged, and in the case of several endorsers, periods of months, and even years may intervene between the accruing of an action against one and its maturity against another. (Story on Prom. Notes, § 257, et seq.)
    
    
      (a.) Suppose a note on time made by a person domiciled in South Carolina, and endorsed by another domiciled in New York, and falling due in July, 1861. The cause of action would be ripe against the maker on its maturity, but the endorser could not even yet be charged. (Story on Prom. Notes, 261, 262.)
    (5.) But the position taken by the respondent has not the merit of removing this alleged anomaly, even in the case of demand notes. Suppose the payee of such a note demand payment of the maker to-day. All will agree that the cause of action is then ripe and the statute begins to run. Suppose next month he éndors'es it to another. His endorsee may still, on the doctrine of Merritt v. Todd (which we do not seek to impeach) hold the note for six years, and then make a new demand of the maker and charge the endorser. (Berry v. Robinson, 9 John. 121; Leavitt v. Putnam, 1 Sand. 199.)
    
      IÜ. If the question were an original one, to be decided upon grounds of principle, the long-established rule could be shown to be founded on the strongest reasons.
    1. It seems to have been assumed in some cases rather hastily, that the intention of parties in eases like the present, is that the debt should remain for some length of time. Such is undoubtedly the expectation of the debtor in most instances, and frequently of both parties; but the expectations of even both parties, still less of one only, must not be confounded with their intentions. The intention in just such cases as the present unquestionably is to enable the lender to call for his money at any instant he pleases, and the borrower to" pay it at any instant he pleases. The expectation is, that the occasion for either party to exercise his privilege will not speedily arise.
    2. A case like the present has been styled on the part of the respondent “a productive investment of money for some period of time,” and he argues that to allow the lender to sue for it immediately would be a breach of the understanding. But how does his rule remove this difficulty? Could not the lender make the demand instantly, and then immediately sue?
    3. Upon the respondent’s rule, the debt does not become due until the creditor makes a demand. It follows there fore, that until that time the debtor cannot pay or tender This would render thé present loan, and all cases like it, debts over which the debtor had no power, in fact, endless loans, were it the pleasure of the creditor to make them such. A tender of money before it is due is ineffectual for any purpose. How does such a consequence harmonize with the intentions of the parties?
    
    4. It may be answered to this—^it is the only answer that can be made—that such demands would be considered to be due immediately so as to authorize payment or tender by the debtor, and yet not so due so as to justify suit by the creditor. But those who seek to change rules of law for no other purpose than to remove anomalies, must not simply substitute one, and that a greater anomaly for another. Besides, bn this notion, what becomes of the idea of a “productive investment.of money for some period of time ? ”
    IV. All legal conveniences are far better served by the old rule than by the one sought to be substituted for it.
    1. The only practical mischief that can be alleged against the old ruléis, that in some cases an action might be brought without a demand, when, had' a demand been made, the debt would have been paid. At the worst, this is but a matter of a trivial amount of costs; for the debt can be paid immediately upon the bringing of an action, The removal of this trifling mischief is the utmost which can be accomplished by the change of the rule.
    2. But the new evils which would be introduced, by a change of the rule are by no means fanciful or trivial.
    (a.) The impossibility or difficulty of mating a proper • demand would often be a serious impediment in the way of a creditor, and would frequently hinder, or wholly defeat him. It is the wise disposition of the law, where the simple relation of debtor and creditor exists, to remove all unnecessary obstacles from the path to the legal relief.
    (5:) But, what is still more important, when a demand is made necessary as a preliminary to a suit, the mating of such a demand becomes an issuable point, and the entire fortunes of the suit may turn upon the question whether any demand, or a proper demand, has been made. A just claim may thus be defeated for the-want, or loss of proof, or by the perjury of witnesses, upon a point wholly aside from the merits. If there is anything which the law ought to abhor, it is the introduction of useless issues.
    (c.) The rules of courts of equity may be referred to here. They never permit the circumstance that a plaintiff1 has not first demanded the relief he seeks, to deprive him of the-relief to which he is entitled.- They may for this reason deprive him of costs, or even charge him with the costs of his adversary. (Bruce v. Tilson, 25 N. Y. R. 194.)
    Y. The reasonable doctrine upon this subject, most subservient to convenience, most in harmony with the intentions of the parties, and the one supported by the best authorities, is. submitted to be this: Promissory notes, whether payable on time or on demand, may be sued, as against the maker, without any demand, When they are due. Notes on time are due for this purpose at the expiration of the time for which they are drawn; and notes on demand are due immediately. In order to charge an endorser, proof of demand upon the maker, refusal and notice, is always essential; and this demand must be made upon the maturity of the note. So far there is no distinction between notes on demand and those on time. But when the question arises when a note matures so as to require the demand necessary to charge the endorser, a distinction is to be made. In the case of a note on time, the period is, of course, fixed and definite, and there is no choice; but in the case of a note on demand, the period of maturity is deemed to occur continually; or, in other words, such a note is a continuing security, and does not become overdue. by the effluxion of time. It does not follow, because, such a note is due to-day so as to permit steps to charge the endorser, that it may not be deemed to fall due to-morrow also for the same purpose, and that without being overdue. This is the meaning and extent of the case of Merritt v. Todd.
    
    1. There is another most important considération. As to some points, it is of prime consequence , that the law should be rightly settled; as. to others, it is of less importance how the law should be settled, than that it should be settled somehow. In the former cases, therefore, it is justifiable sometimes to disturb the existing law, if another and better rule can be established. In the latter, however, and the present is 'one of*these, there is very seldom a sufficient apology for re-agitating questions which, have been long in repose. The mischiefs of change very far outweigh any advantages which reform can promise.
    VI. Another question in the case is whether, after the dissolution of a copartnership, a payment of interest on the indebtedness of the firm, by one or more copartners who continue the business, will prevent the running of the statute of limitations as to the retiring partner. We suppose the law is settled that it will not.
    1. It was settled in Van Keuren v. Parmelee, (2 Coms. 523), that after the dissolution of a firm, an acknowledgment or promise to pay, made by one copartner, will not revive a debt against the firm which has been barred by the statute of limitations.
    
      (a.) The opinion in this case contained a review of all the authorities, and expressly overrules the case of Patterson v. Choate, (7 Wend. 441); and Johnson v. Beardslee, (15 John. 3), which held a contrary doctrine.
    2. The decision in Van Keuren v. Parmelee, is conclusive in this ¿ose, unless the effect of it is avoided by one or both of these two circumstances, namely: 1st. That in the present case there was a payment of interest, instead of a verbal acknowledgment and promise to pay. 2d. That the payments of interest in the present case, or some of them, were made before the action had become barred. Both these points were the express subjects of argument and decision in this court, in Shoemaker v. Benedict (1 Ker. 176); and it was there finally resolved, that neither had the effect of arresting the operation of the statute. The court, by its full adoption, in the case last cited, of the opinion of Judge Allen, in Dunham v. Dodge (10 Barb. 566), against the dissenting opinion of Mr. Justice Denio, have completely removed from the region of discussion every question which arises on the present appeal, in respect to the operation or non-operation of the statute of limitations.
    
      3. It is everywhere conceded that the case of joint debtors, and the case of copartners after dissolution, is in all respects the same. • In both cases the cause of action arises on the new promise growing out of the payment or acknowledgment; and such new payment or acknowledgment must be shown affirmatively to have been made by the party sought to be charged, or by some agent of his thereto authorized. In the case of copartners after dissolution, no such authority for one partner to act for the other exists any more than in the case of simple joint debtors. (See cases above cited; also the Opinion of Denio, J., in Shoemaker v. Benedict, 1 Ker. 190; Winchell v. Hicks, 18 N. Y. R. 558.)
    VII. It was argued in the court below by the respondent’s counsel, that the provision in the agreement of dissolution between the appellant and the other members of the firm of Slate, Gardiner & Co., by which Slate and Lyles were to pay the debts of the firm, made them the appellant’s agents; and that the subsequent payments of interest on the claim now in suit were made by Slate and Lyles as such agents, and were, therefore, in judgment of law, payments by him. But there is nothing of substance in this view.
    1. This provision was the usual agreement for indemnity, which a retiring partner takes when he leaves with the remaining partners the means wherewith to pay the firm debts. To gather from an instrument like this an authority to keep these very debts alive by new promises to pay them, would be an utter perversion. If it contains anything in the nature of a request or authority, it is to pay the principal, not the interest.
    2. The intention and effect of this provision was to make the debts of the firm, as between Gardiner, who retired, and Slate and Lyles, who remained, the debts of the latter. They were to pay them, and were to pay them not only because they were jointly liable with him to do so, but because by virtue of the agreement in question they had become, as between themselves and him, solely liable to pay them. When, therefore, Slate & Co. paid interest, they paid it in no sense as the agents of Gardiner, but on their own account, and as being the sole debtors.. The very nature and terms of the engagement are utterly inconsistent with the notion of their acting as Gardiner’s agents. It certainly is not very probable that Gardiner after having taken a stipulation that Slate & Co. should assume the debts as their own, would forthwith, and in the same breath, proceed to pay them, or make provision for paying them himself.
    4. Had Payne, before receiving the payments of interest from Slate & Co., called upon Gardiner and demanded payment of him, and Gardiner had acknowledged the debt as his own, and told Payne to go to Slate & Co. for payment, the case would have contained something of the element upon which the cases of Winchell v. Wicks (18 N. Y. 558), and Munroe v. Potter (22 How. Pr. Rep. 49), turned.
    5. The covenant in question does not purport to confer any authority upon, or make any request of Slate and Lyles. * If such were its nature, it would have been in the power of .Gardiner to revoke it. It is plain, however, that no such power of revocation can be gathered from it. The sole purpose of it is to give Gardiner a claim on Slate and Lyles for reimbursement in case he should at any time be compelled to pay. Was this the nature or the design of the requests to pay upon which the two cases above cited turned ?
    6. It being clear that this covenant constitutes no relation of "principal and agent, but is a mere matter of contract between Gardiner on the one hand and Slate and Lyles on the other, Payne can neither be bound by, nor claim any benefit from anything contained in it. He is not a party to it. It is res inter alios acta.
    
    7. This is certain, that if this covenant makes any subsequent payments of interest by Slate and Lyles the payments of Gardiner, so as to deprive Mm of the benefit of the statute, a retiring partner, or any joint debtor, can never take a covenant for indemnity from his co-debtors without forever putting it out of Ms power to plead the statute of limitations if Ms co-debtors choose to prevent Mm.
    
      Geo. G. Reynolds, for the respondent:
    I. The statute never commenced to-run against tMs claim till June, 1861, when the demand was made. This allega tian of the complaint is not denied, and there is no proof of any demand other than that so admitted. The annual payments of interest raise no presumption of a demand. They perfectly accord with what seems, from the receipt "given at the time of the loan, to have been the intention of the parties, to wit: that the loan should continue for an indefinite period, drawing interest. Starting then with the fact that no demand was made previous to June, 1861, what set the statute running before that time?
    1. This is a stronger case for the plaintiff than that of a note expressed to be payable on demand. "It is simply a loan or deposit of $1,000 by Capt. Payne, for an indefinite time, he to be credited upon the books of Slate, Gardiner & Howell with the amount, and to be allowed interest on the same, while it, or any part thereof, remained in their hands; and either party being at liberty to put an end to the arrangement at option, he by calling for the money, or they by paying it. TMs is the plain contract, as evidenced by the receipt. And it is not distinguishable from the case of a deposit made at a bank. In both cases, the obvious understandmg is that the amount is to be returned when called for, whether by check or otherwise is immaterial; in both cases credit is given on book; here a loose receipt is given instead of a bank book, the same tMng in principle; and the successive instalments of interest had been drawn by orders signed by Payne. In short, Payne made the firm of Slate, Gardiner & Co. his bankers, and they were not in default without a previous demand. (Downes v. The Phoenix Bank, &c. 6 Hill, 297, Grant on Banking, p. 2.) If the ordinary course of dealing with a bank shows the understanding to be that the amount.shall remain till the customer calls for its re-payment, the receipt in this case, the circumstances of the parties, (Payne being in the whaling business, and departing for a long voyage immediately after the deposit,) and their subsequent course of dealing in relation to the matter as conclusively show the same understanding. The fact that interest is payable on a deposit, certainly does not render an actual demand less incumbent on the depositor. If a bank or individual compensates the depositor by interest, there is the greater reason for giving protection against the costs of an unexpected suit.
    2. The receipt containing a stipulation for the payment of interest plainly shows that the parties contemplated “a productive investment of the sum for some period of time.” It is stronger in that direction than if it had been written payable on demand, with interest; and yet if those words which, by the decisions of the courts, usually signify without demand, had been used in connection with the stipulation for interest, an actual demand would have been necessary to put the makers in default. (Merritt v. Todd, 23 N. Y. 28.) The question there was as against the indorser; but if the note was not mature without a demand, so as to require steps to charge the indorser, it could not have been mature, so as to set the statute running, as against the maker. The reasoning of the prevailing opinion makes no such distinction. The true reasoning of the case upon analysis, and that which underlies the opinion of the court, seems to be this: the indorser becomes a surety to the principal contract; (“if that be the meaning of the principal parties, the indorser must be deemed to lend his name to the contract with the same intention,” p. 35); and this condition is annexed to his suretyship, to wit.: he must have notice of the default of his principal within the time fixed by the law-merchant. , The way, then, to determine when notice shall be given him is to find when the maker is in default, when the note becomes due, and if at any time the maker is exposed to a suit, at that time the indorser is entitled to notice. He is not only entitled to. notice, upon the failure of the maker to pay on demand, but he is entitled to have that demand made as soon as the note is due. So that it is not accurate to .say that the principle claimed by the plaintiff in this case is the logical result of the decision in Merritt v. Todd; it is rather the ground of that decision. The court meant to decide that there was no default of the maker till demand, and said so; therefore the indorser cannot be discharged before a demand is made. . It will not do to say that the statute may be running against the maker, before the holder chooses to bring the note to maturity by a demand, so as to fix the indorser; because, if we admit such a position, we should be led into this absurd result; the note might be barred by statute as against the maker, and then the holder, by a demand on the “maker, (who is already discharged), might charge the indorser; that is to say, the note might be barred by statute before it was dishonored—in fact, before its maturity; and the indorser, being compelled to pay for the maker (his principal), might turn round and sue him, and thus he be made to pay, after the claim was outlawed as to himself. The defendant’s counsel, on the former argument, cited two cases as being directly in point, viz.: Wenman v. Mohawk Ins. Co. (13 W. 267); Norton v. Ellam, (2 Mees, and W. 461). In the first case no notice whatever is taken of the distinction between a note drawing interest and one not on interest; nor was such distinction noticed in this State till some time since that decision. (The same may be said of the Massachusetts cases.) Besides, the plaintiff in that case had judgment, and the case, so far as it may be considered an authority against us, is overruled, as well as the case of Sice v. Cunningham, (1 Cow. 397), which is said in the dissenting opinion in Merritt v. Todd, (pp. 37, 39), to be directly on the point then decided. In the case of Norton v. Ellam, the direct point here raised seems to have been decided. The plaintiff’s counsel, in that case, relied upon the same reasoning which prevailed in this spurt in Merritt v. Todd; but the court, in a very short opinion, simply disregarded the argument. But no cases are cited showing that the English courts have ever held in accordance with the decision of this court, in regard to the liability of an indorser of a note payable on demand with interest; and the case of Norton v. Ellam is therefore no authority against the argument which we derive from Merritt v. Todd. (See 23 N. Y. p. 40.) It was argued by defendant’s counsel before, that if an actual demand was requisite in this case, “it would follow that the maker could not make a tender until the holder should think fit to make the demand.” This is sufficiently answered by the following remark, found on the same page of the defendant’s points, in regard to Howland v. Edmonds, (24 N. Y. 307): “ This last case holds what no one will deny, that parties may so frame them obligations as to make a prior demand essential to the foundation of an action.” And it need only be added that it is perfectly competent for parties “so to frame their obligations” that either party may exercise his option as to the time of payment, the one by demand and the other by a tender, We think it follows, then, that the defendants would have been liable on this claim, any time within six years from June, 1861, without regard to the effects of .the payments of interest.
    II. Payments made by partners after dissolution, and before a debt was barred, prevent the operation of the statute. For ■ certain purposes, (including the payment of obligations), the partnership continues, (Collyer on Part, § 546 and note; Robbins v. Fuller, 24, N. Y. R. 570.) Such payment made by one, is not simply (as in the case of mere joint contractors)Tor the benefit of the rest, but is a payment by the firm, and has its full effect upon all the members. The member paying acts as agent for the rest, and his payment therefore, keeps the debt alive as to the balance unpaid. Van Keuren v. Parmelee, (2 Com. 523,) simply decides, that after dissolution, a promise made by one of the partners does not revive a debt already barred by the statute. The subsequent cases in the court of appeals Shoemaker v. Benedict, (1 Ker. 176); Reed v. McNaughton (referred to in the next case), and Winchell v. Hicks, (18 N. Y. R. 558), are all cases of joint and several contractors merely. The reasoning of those cases is, that mere joinder of contract does not create a mutual agency, authorizing one to act for another. (See 18 N. Y. R. 560.) That is not true of partners, as to the joayment or settlement of existing obligations, though, when ‘the debt has been barred by statute, it cannot be revived, except by incurring a new obligation, which one partner cannot do for the firm, aftei dissolution. (Brewster v. Hardeman, Dudley, 138, Georgia; Steel v. Jennings, 1 McMullen, 297, S. C.; Bell v. Morrison, 1 Peters, 351.) The case in Dudley is precisely in point. The head note is, “According to precedent and authority, the admission of a debt by one partner, ■ after dissolution, but before the statute has interposed its bar, will be binding upon the other partners, so far as to con stitute a new promise from which the statute shall commence running.” (See Burr v. Williams, 20 Ark. 171, to the same effect.) And the distinction we claim is expressly recognized by Judge Story in Bell v. Morrison, Story, J. p. 371, 373, 4. In our case, Slate.being a member of each firm, the payments may be considered as made by him.
    III. We think the agreements, especially the one taken by Gardiner from his copartners, who composed the succeeding firm, and their payments of interest, in accordance with that agreement, would alone- be decisive of the case. This point was much relied on below, but is not adverted to in the opinion delivered at general term, apparently because the first point was considered as settling the controversy. This liability had been transferred to the books of Slate, Gardiner & Co. (the second firm), from the books of the old firm. They had paid interest and taken receipts in their own name, and Gardiner, in retiring with his sev enty-four thousand dollars and over, leaving this account on the books, and at that time a confessedly valid claim against him, puts his successors under an express obligation to pay all debts of the firm,, this of course inóluded. The defendant Gardinér, in his answer, says; each of the two last firms assumed this debt; it was therefore one of the debts covered by the agreement. The payments' made by the last firm, in -pursuance of such obligation taken by Gardiner, were therefore made under his authority, and by his direction, and affected him as though made by himself. (Winchell v. Hicks, 18 N. Y. R. 558.) Our case is much stronger than the above, where sureties (joint makers of a note) were held liable on the ground that they had referred the holder to the principal for payment, and he had paid interest accordingly. All that one of them said was, “ you must get it out of Bowman.” “ Under such circumstances the act of Bowman in making the last payment was his act, enured to his benefit and attached to him all its consequences.” (P. 563.) See also Munroe v. Potter, (22 How. Pr. R. 49). That was a case arising under the code. The surety directly requested the principal to pay, and it was held that the payment bound the surety. This principle has been carried still further in N. H., where it was held that “ where a partial payment was made upon a promissory note by the surety, in the presence of the principal, who well knew and understood the fact, but said nothing in relation thereto, such payment afforded sufficient ground on which to found an inference of a new promise as to the principal.” (Whipple v. Stevens, 2 Foster, 219.) In our case we have the strongest form of request, and Gardiner not only puts Ms successors under an obligation to pay, but leaves Ms name up to show that he was there personally, or by authority, to close up the affairs of Ms firm, and attend to the payment of his debts. It evidently makes no difference upon whom the drafts were drawn, or to whom the receipts were given; Payne had a right and was bound to take the money from any one offering to pay. It was argued before that as Slate & Co. had agreed with the defendant Gardiner to pay this debt, making it their own, as between them and Gardiner, they were not Ms agents in maMng the payments. It was not necessary they should be. Winchell v. Hicks and Munroe v. Potter were both cases of sureties being held by a payment made by the principal who was bound as between themselves to make the payment on his own account. It was sought below to distinguish this case from that cited by us, on the ground that here was no special request to make any particular payment; that it was at most a general request to pay. the debt, and paying interest, from time to time, was not witMn the authority. But the general authority covered the whole ground. The parties were not restricted to any specified time or mode. It was evidently contemplated by all parties that the debt should stand as it had, interest being paid annually, and the principal not expected to be immediately called for. It had so stood as a claim against the second'firm, of which Gardiner was a member, under a like agreement; and it is plain that the contemplation of the parties was that the new (last) firm should take care of it in the same way, they agreeing not to let the claim come upon Gardiner. This liability on defendant Gardiner’s part is attended with no hardship. He took a guaranty against it, and if that fails, it merely leaves him liable, as he was before. The plaintiff has never discharged him, nor received any consideration for doing so; and if the defendant did not choose to have what the court calls a “ continuing security” out against him, he had only to pay it, and look to those responsible to him.
   Mullin, J.

If the transaction between the plaintiff’s testator and Slate, Gardiner & Howell is to be deemed a mere loan of money, there being no time designated for payment, it became presently due, and the statute of limitations began to run from the date of the receipt, and the action is barred, unless the payment by the firms of Slate, Gardiner & Co. and Slate & Co. operated to revive the debt, and thus prevent the running of the statute.

If, however, the transaction was not a loan, but a deposit of the money by the testator "with Slate, Gardiner & Howell, to be repaid only upon demand, then the action is not barred, and the judgment should be- affirmed.

The distinction between a loan and a deposit of money to be used by the depository is not a broad one, but sufficiently so to have enabled courts and elementary writers on the law to establish rules for both species of contract.

By a loan of money is meant the delivery by one party,who is called the lender, to, and the receipt by the other party, who is called the borrower, of a given sum of money, upon an agreement, express or implied, to repay the sum loaned with or without interest. A loan is usually made at the request and for the" benefit of the borrower, and differs from the commodatum of the civil law in this, that in the latter the specific thing loaned was to be returned; whereas, by the other, the thing loaned may be consumed, and the depositary discharged himself by returning another thing of the same value, or its equivalent in money.

A deposit is commonly defined to be a naked bailment of goods to be kept without recompense, and to be returned when the bailor shall require it. (Story on Bailments, 3, § 4)

A deposit of money with a .bank or private person is not, therefore, the deposit of the civil law, nor is it what in that law was designated by the term miltuum, which was a loan of property for consumption' and to be'returned in kind, and without interest or compensation for the use, but it is what Pothier calls an irregular deposit, which differed from a mutuum in this, that the latter has principally in view the benefit of the receiver, the former the benefit of the bailor. (Story on Bailments, 61.)

In cases of mutuum the party borrowing was not held to pay interest hpon the money lent; but in cases of irregular deposit, interest was due by the depositary, both ex nudo joacto and ex mora. This distinction between the two classes of deposit, as to interest, is not recognized by our law. The depository being liable in each for interest, in the event of a breach of duty.

A deposit of money with a bank or private person is what is known in the civil law as a mutuum or irregular deposit—the distinction between the two kinds of deposit not being recognized by the common law.

When money is borrowed, and no time of payment is fixed by the contract of loan, the debt, as already stated, is instantly due, and an action may be brought without demand — the bringing of the action being a sufficient demand to entitle the lender to recover. (Chitty on Contracts, 734; Norton v. Ellam, 2 M. & W. 461.)

Even if the debt is by the terms of the agreement to be paid on demand, yet no special demand is necessary; the money being due without it.

In the cases of deposits, however, a demand was by the civil law, and is now by our law absolutely essential to a right of action, unless there was a wrongful conversion or some loss by gross negligence on the part of the depositary. (Story on Bailments, 82.)

In case of a mutuum or irregular deposit, a demand was necessary to perfect the liability of the depositary. It is said by Pothier (See his work on Contracts, by Evans, 2 Yol. 126): “ When a man deposits money in the hands of another to be kept for his use, the possession of the custodian ought to be deemed the possession of the owner until an application and refusal, or other denial of the right; for, until then, there is nothing adverse, and I conceive that upon principle no action should be allowed in these cases without a previous demand—consequently, that no limitation should be computed further back than such demand.”

In Story on Bailments (p. 66 § 88), it is said that “ in the ordinary cases of deposits of money with banking corporations or bankers, the transaction amounts to a mere loan ormutuum, or irregular deposit, and the bank is to restore not the same money but an equivalent sum whenever it is demanded.”

In Downes v. Phœnix Bank of Charlestown, (6 Hill, 297), the plaintiff sued to recover money deposited with the defendant, a foreign corporation, and on the trial, after proof of the deposit was made, the defendant’s counsel moved for a nonsuit on the ground that the plaintiff was bound to prove a demand before suit brought. The motion was denied, and there was a verdict for the plaintiff. A new trial was granted by the supreme court, on the ground that an action did not lie until after demand made. Justice Bronson, after remarking that the deposit of money with a banker is not strictly a deposit nor bailment'of any kind, but is a mutuum or irregular deposit, and that it is substantially a loan to the bank, says: “still the commonly received opinion is that the banker cannot be sued for the money until after the customer has drawn for it or in some other way required its repayment, * * * and if such be the nature of the contract the banker is not in default, and no action will lie until payment has been demanded.” In a subsequent part of his opinion, he says that the bringing of an action is not in such a case a sufficient demand, but that an actual demand must be made.

The reason assigned by the learned judge, why a special demand should be made in such a case, is “that no one could desire to receive money in deposit for an indefinite period with a right in the depositor to sue the next moment and without any prior intimation that he wished to recall the loan.” This presents the whole argument. The injustice of the opposite rule is so apparent that it needs but to be stated in order to be rejected. ,

The question recurs, was the transaction between the plaintiff’s testator and Slate, Gardiner & Howell, a loan, or was it a deposit? The paper which was given by the firm to the testator is not conclusive on that subject, and we must resort to the circumstances attending the transaction in order to arrive at the intention of the parties. For in the construction of this contract, as of all others, the intention of the parties must control.

The testator was a sailor, and having earned $1,000 for which he had no present use, applied as it would seem, to Slate, Gardiner & Howell, who were engaged in the oil and whaling business, and thereby acquainted with the people of Sag Harbor, of which Howell, one of the firm, and the testator were natives, to receive the money on deposit, paying for the use of the same six per cent interest. This was not am ordinary loan of money. Sucha loan is usually made at the request of and for the benefit of the borrower. If any voucher is given, it is a note by which the borrower promisés to pay the money on demand, or at some future day. In this case the money was received by the firm at the request of and for the benefit primarily of the testator, and the Voucher given contains a mere admission of the receipt of the money without any promise to repay it. If the money had been left with a bank, instead of Slate, Gardiner & Howell, it would have been credited on the books of the bank to the testator; and if any voucher had been given it would have been a certificate that the $1,000 had been deposited by the testator to his credit. If then, the transaction with the bank would have been a deposit entitling the bank to a demand of the money before an action could be brought, can any reason be assigned why a deposit with an individual should be deemed a mere loan which could be sued for without a demand? The civil law admitted of no such distinction, and there is no decision at common law which sanctions it, that I have been able to find.

There was undoubtedly a loan by the testator to the firm, of the $1,000, but it was just such a loan as every depositor in a bank makes with the bank, and the rights and liabilities of the parties must be, upon principle, as I insist they are upon authority, identical.

Questions as to the rights and remedies. of depositors have generally, if not altogether, arisen in actions by and against banks; but it is every day’s practice for persons having surplus funds to deposit them with merchants, lawyers and other business men, and they are received as often as matters of favor to the person depositing as with a view to the advantage of the person receiving; and I apprehend that such persons believe that before they can be sued for the money a demand must be made of the deposit. Such a rule not only gives effect to the intention of the parties, but it is essentially just. „

Why should, a demand be held necessary in the case of a deposit in a bank, and unnecessary in case of a deposit with a private person? In both cases, the depositary is not an ordinary borrower; that is to say, they do not solicit the deposit for their own benefit exclusively. In both they hold themselves out as willing to receive deposits, and to pay interest, perhaps, thereon. The same considerations which render proper a demand before suit, in the case of the one, are equally operative in the case of the other.

A distinction exists between a mere loan and a deposit. They are governed by different rules; and, in the absence of any legislative prohibition or of any rule of public policy, parties should be permitted to take upon them selves the obligations of either form, of contract which they deem proper, and the law should give effect to their intentions when ascertained..

I entertain no doubt but that the transaction in question was a deposit, and that the rights and liabilities of the parties are precisely the same as if the money had been in a bank; and hence, there was no right of action against the depositories until actual demand made; and the statute of limitations began to run from the same time. If such is the law, then the demand in question was not barred, and the judgment should be affirmed.

If, however, I am wrong in considering the transaction as a deposit, and it is to be treated as a loan, I am nevertheless- of the opinion that the action is not barred.

If it is a loan, then the paper given by Slate, Gardiner & Howell, to the testafor, is in effect a promissory note on interest, and payable on demand.

Such a note was held in Merritt v. Todd (23 N. Y. 28), to be a continuing security, and was not dishonored until after actual demand. If it is a continuing security, and a demand is necessary to fix the time when the money specified therein becomes due, it must follow that the statute of limitations does not begin to run in favor of any of the parties to it. until such demand is made. That statute commences to run against an action only from the time a right of action accrues; and within the doctrine of Merritt v. Todd there is no right of action until demand. It-is said this case of Merritt v. Todd does not apply to this case, because .there the action was against an endorser, and the decision in that case must be confined to the endorser, and does not and cannot apply to the maker. It is impossible to restrict the language of the chief judge in that case to the case of an endorser. He sets out, in his opinion, by remarking that it was left uncertain when a note payable on demand with interest matured; that in England such a note was held to be a continuing security, and that the holder might make demand at any time, and until such demand the endorser was not discharged; while in this it was held to be necessary to make a demand within a reasonable time, or the endorser would be discharged. The question as to when such a note became due was frequently as important in the case of the maker as of the endorser. The former was entitled to avail himself of any defense he might have against the payee, if the holder obtained it after maturity. Judge Comstock expressly refers to the importance of the question to both makers and endorsers of such paper, and lays down a rule which he thinks is best calculatedto remove uncertainty, and which will enable all persons dealing in such paper to ascertain their rights and liabilities in respect to it. The learned judge expresses himself thus emphatically upon this point: “ But whatever may be .the rule when the security is not on interest, we think that a note payable on demand with interest is a continuing security from which none of the parties are discharged, until it is dishonored by an actual presentment and refusal to pay. The loan or forbearance of money may be for a definite oían indefinite time. If the parties declare in the written instrument, which is the only evidence of their agreement, that the money shall be paid on call with interest in the meantime, a productive investment of the sum. for some period of time is plainly intended. What then is that period? The only answer which can be given is, that it is indefinite or indeterminate, and ascertainable only by an actual call for the money.”

It seems to me impossible' to say that the reasoning of the learned judge does not apply as well to the maker of such paper as to the endorser; and if it does, then the conclusion is irresistible that there is no liability on such a note of any party until actual demand.

JSTo question is made by counsel, nor was there any raised on the trial,.as to whether the firm of Slate, Gardiner & Howell was discharged by the transfer of the deposit to the firm of Slate, Gardiner & Co., or whether that firm was discharged by a like transfer to Slate & Co. I have not, therefore, examined that question; nor did I deem it necessary to inquire whether the payment of interest by those last-named firms prevented the running of the statute of limitations.

I am of the opinion that the judgment and order appealed from should be affirmed, with costs.

Ingraham, J., also read an opinion in favor of affirmance.

Denio, Ch. J., concurred; holding that the payment of interest prevented the statute from running.' But he agreed with Weight, J., that no demand was necessary.

Johnson, Davies and Hogeboom, JJ., were for affirmance.

Wright, J.

(dissenting.) One of the defences interposed by Gardiner, was the statute of limitations; and the single question now is, whether the claim of the plaintiff, as against him, was barred by that statute.

The transaction was a loan of money, no time being specified for its payment. The lender took from the borrowers a writing acknowledging the receipt of the money, and that it had been placed to his credit on their books at six per cent interest. The debt which constitutes the plaintiff’s cause of action, arose instantly on the loan. Did an action accrue thereon forthwith without any demand, or was an actual demand necessary before bringing an action? Could the plaintiff have sustained an action for borrowed money at once, and without demanding payment, or was a demand indispensable to his right of action? If the debt was payable immediately, and a demand unnecessary, the right of action was perfect on the 9th of May, 1848, and the statute of limitations began to run from that date. On this view, the action was barred as against the appellant, Gardiner, unless there was evidence of a new promise on his part. On the other hand, if a preliminary demand was necessary to the maintenance of the action, it was not barred. * There was no actual demand of payment of the debt' until June, 1861, and as the cause of action must accrue before the statute of limitation can begin to run, six years must elapse after the making of the demand, before the statute bar will attach.

I think it clear on principle and authority that in a case like the present a demand is not a condition precedent to the right of action. It was simply a case of money lent, payable with interest, and creating a present debt, and requiring no demand as a necessary preliminary to a suit. The debt arose instantly on the loan, and the stipulation for interest did not change the legal nature of the transaction. When money is lent, the law will imply a promise by the borrower to repay it. A debt is created due and payable immediately, without any demand. It is not denied that the parties may stipulate as to when the debt shall become due, or in respect to any other collateral thing, but in the absence of any agreement, it is due presently, there is an immediate liability to pay, and no obligation in law to make any" demand of payment. An action accrues immediately after an express or implied promise to pay money on. demand, and whether it be a simple indebtedness evidenced by a receipt to the effect that it is payable with interest, or a note in terms payable on demand, this result follows. On this point there is entire unanimity of authority. (Wilkinson on Lim. 45; Powell v. Pease, reported in Wilk. on Lim. 110; Kimball v. Ball, 10 Mod. R. 38; Norton v. Ellam, 2 Meeson and Welsby, 461; Waters v. Thanet, 7 Dowl. P. C. 251; Little v. Blunt, 9 Pickering R. 48; Newman v. Kettelle, 13 Pickering, 488; Ruff v. Ball, 7 Har. and J. 14; Larason v. Lambert, 7 Halsted, 247; Lafarge v. Jayne, 9 Barr. 410; Wenman v. The Mohawk Ins. Co. 13 Wend. 267; Howland v. Edmonds, 24 N. Y. 307.) The circumstance that the note or other obligations is payable by its terms with interest, as has been before said, does not affect the rule. (Norton v. Ellam, 2 M. and W., supra. Wenman v. Mohawk Ins. Co., supra.)

It was supposed by the supreme court that the decision of this court in Merritt v. Todd, (23 N. Y. R. 28,) wrought a change in the before well established rule that when there is a debt in presentí, and not a debt arising upon the performance of a certain condition, but one plainly precedent to the demand, then no demand- before suit against the debtor is essential, even though the promise in terms is to pay on demand. This, I apprehend, is a misconception of the intended effect of that decision. That action was against the endorser of a note payable on demand with' interest, and the question was 'when the note was to be deemed due, so as to require the presentment, demand and notice necessary to charge the endorser. The case decides (and this is all) that the endorser of such a note remains liable until an actual demand, it being a continuing seem rity, and the holder is not chargeable with neglect for omiting to make such demand within any particular time. This was the doctrine of the English courts, (Brooks v. Mitchell, 9 Meeson and Welsby, 15; Barough v. White, 4 Barn. and Cress. 325), while there were, on the contrary, American cases holding that the endorser was discharged unless the demand was made with due diligence in the general terms of the commercial law. To charge an endorser, payment must be demanded of the maker at the maturity of the note, The period of maturity of a term note is of course fixed and definite. The only principle established in Merritt v. Todd was, that in the case of a note payable on demand the period of maturity is to. be deemed to occur' continually, or, in other words, such a note is a continuing security, and does not become overdue by the effluxion of time. But it does not follow, -because such a note is due to-day so as to permit steps to charge the endorser, that it may not be deemed to fall due to-morrow also for the same purpose, and that without being overdue.

It cannot with truth be said that the question in Merritt v. Todd, and that in this case are at all identical, or have any necessary connection with each other. To charge an endorser, an actual demand is always necessary, and the sole question decided in the former case was, that the demand (two years and upwards having elapsed after the date of the note) had been made in due time. In this case ^conceding that the rights and liabilities of the parties are to be determined the same as if the receipt contained the words payable on demand?), the question is, whether a demand was necessary to render the cause of action perfect as against the debtor. . In other words, whether a note or other obligation expressed to be payable on demand, may not be sued, as against the maker, at once, and without any preliminary demand? The undertaking of an endorser is strictly conditional, involving as a condition precedent, the failure of the maker to discharge his obligation on an express demand made therefor. The undertaking of the maker is absolute to pay his own debt, and to charge him, a demand is not in general, at all requisite. The liability of an endorser depends upon the performance of a condition precedent, viz: an actual demand of payment from the maker; and no action lies without the performance of the condition. But the right of action is complete against the maker of a note on terms payable on demand, immediately after giving it. No preliminary demand is essential to the establishment of a cause of action founded on a promise to pay a sum of money, notwithstanding the terms of the contract. It was clearly not intended to decide in Merritt v. Todd, that when the promise is in terms to pay money on demand, an actual demand before suit brought is necessary; for this would have been to override and disregard an unbroken current of authority, to which no allusion was made. It would have been, in effect, to hold a prior demand essentia] to the foundation of an action against the maker of a note payable on demand; a view repudiated by this court in the subsequent case of Howland v. Edmonds (24 N.Y. 107.)

In the case, therefore, of a pronaisory note payable on demand with interest, the statute of limitations begins to run from the date of the note. So, also, in a case like the present, where the indebtedness arises on a loan of money, though there be a stipulation for interest, the statute begins to run from the time of lending.- A cause of action accrues upon the loan the moment when made. There is an immediate liability to pay; and the plaintiff in this case might at once have brought suit against his debtors without any demand. This suit was commenced against the defendant’s. as survivors of the firm of Slate, Gardiner & Howell, more than thirteen years after the cause of action accrued, and of course, the statute has attached, unless prevented by a new promise, express or implied.

With respect to the defendant Slate, there was, perhaps, a sufficient acknowledgment of the existence of the debt, and a recognition of liability as late as May, 1859. It is, however, of no consequence as regards him, as he did not interpose the defense of the statute, and has not appealed. But how is it as to the appellant Gardiner ? There is no proof of any express promise by him to pay the debt, nor after May, 1852, or for more than nine years before the commencement of the action, any acknowledgment by him of its existence, with an admission or recognition of an existing liability to pay it, from which a new promise might be inferred. As the law stood in this'state before the decisions in Van Keuren v. Parmelee, (2 Comst. R. 523), and Shoemaker v. Benedict (1 Kernan, 176), a verbal acknowledgment and promise to pay an indebtedness of a firm, or payment of interest on such indebtedness by one partner, after the dissolution of the co-partnership, would revive the debt against the firm, and prevent the running of the statute of limitations as against the retiring partner. But the law is now to be deemed settled by those cases, that neither a verbal acknowledgment and promise to pay q firm debt, or the payment of interest on the debt by one partner after dissolution, whether the debt had or had not become barred at the time of such recognition and promise, will have the effect to revive the debt against the firm, and continue the joint liability of all for six years from the time of such acknowledgment or payment. It is conceded in Shoemaker v. Benedict, and in Winchell v. Hicks (18 N. Y. Rep. 558), that the case óf joint debtors and that of co-partners, after dissolution, is in all respects the same. The cause of action, in both cases, arises on the new. promise growing out of the payment or acknowledgment; and such new payment or acknowledgment must be shown affirmatively to have been made by the party sought to be charged, or by some agent of his thereto authorized. In the case of co-partners, after dissolution, no such authority for one partner to act for the other exists any more than in the case of simple joint debtors. (Van Keuren v. Parmelee, supra; Shoemaker v. Benedict, supra; Winchell v. Hicks, supra.) If, therefore, the payment of interest on the debt after'May, 1852, by Slate & Co., is to be deemed a payment made by Slate as a member of the firm of Slate, Gardiner & Howell, it did not affect the defense of the statute of limitations as to his partner Gardiner. After dissolution of the latter firm in respect to creditors, Slate and Gardiner were joint debtors, and nothing more. If the payment of interest, or any part of the principal by a joint maker of a promissory note would not have the effect to rescue the debt from the force of the statute as to another joint maker (and it has been settled that it would not), the fact of the payment of interest by Slate would not have that effect. Payment of .principal or interest is only evidence of a new promise, or from which one maybe implied. The party making the promise or acknowledgment must be the one to be charged, or it must be made by a person duly authorized by him. Joint debtors are not agents for this purpose; nor is there any such agency of co-partners gfter dissolution.

But it is claimed that there was a direct recognition of the debt by Gardiner, or that the payments of interest by Slate & Co., after May, 1852, were made under his authority and by his direction and affected him as though made by himself. I do not understand that Gardiner, by any act or declaration whatever on his part, after 1852, recognized the debt as an existing liability of the firm of Slate, Gar-diner & Howell, or of Slate, Gardiner & Co., or admitted his liability to pay it as a member of either firm. Indeed, there was nothing to show knowledge by him that the debt was outstanding after January, 1853, until apprised of the fact by the plaintiff’s demand of payment in June, 1861. But it is said that on the dissolution of the firm of Slate, Gardiner & Co., in 1852, Gardiner put Slate and Lyles under an express, obligation to pay all the debts of the firm (the plaintiff’s debt included), and that the payments of interest by Slate & Co. in pursuance of such obligation taken by Gardiner were therefore made under his authority and affected him as though made by himself. The obligation referred to is expressed in the agreement dissolving the firm. The provision was the usual covenant for indemnity which a retiring partner takes who leaves with the remaining partners the means wherewith to pay the firm debts, " The position that this covenant was in the nature of a reguest or authority to Slate & Co. to make payments of interest on the plaintiff’s debt, is an utter perversion of it. It does npt purport to confer any authority upon, or make any request of Slate & Lyles. Conceding that the debt of the plaintiff was a debt of the firm of Slate, Gardiner & Co., the fact that Slate & Lyles stipulated to pay it, and save Gardiner harmless, caniiot be tortured into a request by Gardiner to pay it, or any part thereof, for him. The nature and terms of the engagement is utterly inconsistent with the notion of their acting as Gardiner’s agent, either in paying the principal or interest of the debt. Slate & Co. agreed with Gardiner to pay the debts of Slate, Gardiner & Co., and make them their own; and as between them and Gardiner they were not thereby constituted his agents for making the payments. Slate & Co. were to pay the debts, not only .because they were jointly liable with Gardiner to do so, but because, as between themselves and him, they had become solely liable to pay them. Paying principal or interest of the debts was a payment on their own account, but as being the sole debtors. The conclusion would be an absurd one that Gardiner, after having taken a stipulation that Slate & Co. should assume the debts as their own, would forthwith and in the same breath, proceed to pay them, or make provision for paying them himself. The plaintiff’s counsel seems to entertain the vague notion that the plaintiff’s debt being included in those of Slate, Gardiner & Co., at the retirement of Gardiner from the firm, in 1852, and the latter having obligated the remaining partners to pay the firm debts, such agreement was equivalent to a request to pay them; and any payments subsequently made by Slate & Co., of principal or interest, were by his authority. Suppose, however, the agreement in question were to be construed as a request to pay the firm debts, including that of the plaintiff, how is the payment of interest afterwards, by Slate & Co., any acknowledgment or recognition by Gar diner of the debt as his own? Slate & Co. paid the plaintiff’s draft on them for the interest due on the 9 th May, 1859, but what evidence is that of Gardiner’s recognition of a subsisting liability as against him, or from which a new promise might be implied? Undoubtedly if Slate & Co. were in any sense Ms agents to make the payment, the acknowledgment that the debt was then in existence, and his liability to pay it, would be regarded as made by him. But-there can be no pretence of any agency created by the agreement of dissolution of the firm df Slate, Gardiner & Co.,'to keep the firm debts alive by new promises to pay them. The payments of interest, then, by Slate and Co., were no evidence whatever of an acknowledgment by Gar-diner of the debt as subsisting against him. The case of Winchell v. Hicks (18 N. Y. R. 558) affords no countenance to the position of the plaintiff’s counsel. That action was upon a joint and several note, made by a principal and three sureties, and the'single question was, whether there had been a verbal recognition of liability by two of the sureties, so as to arrest the running of the statute of limitations. * Five years after the making of the note (the principal having paid the interest annually for three years), the holder called upon Tanner and Hicks, separately, for payment, demanding principal and interest, but being willing to forego the payment of the principal if the interest should be paid. Tanner requested him to see Bowman,' the principal, and urge him to pay the interest; and said as long as he could keep the note along by Bowman paying the interest he made a good bargain, and if he had eventually to pay the principal it would not be very hard, he should not feel very bad, and would not be much the loser, as he had a good deal of .business with him. The holder also saw Hicks, and said to him,, as he did to Tanner, that he wanted the interest on. the note; and Hicks replied in substance, He must get it out of Bowman.” The holder informed Bowman of what they said, and he paid the interest. This was held to be an acknowledgment of the debt and a sufficient recognition of liability, by Tanner and Hicks, to bind them. The present case would, have assimilated somewhat to that of Winchell v. Hicks, had Payne, before receiving the payments of interest from Slate- & Co., called upon Gardiner and demanded' payment of him, and the latter had acknowledged the debt as his own, and told Payne to go to Slate & Co.- for payment. .As the case now stands, there was no recognition of liability by Gardiner after January, 1853, and if the covenant in question can be tortured into any request or direction to pay Slate & Co., it was to pay the principal of the plaintiff’s debt forthwith. If this were otherwise, a retiring partner, or a joint debtor, could never take a covenant of indemnity from his co-debtors without putting it out of his power to plead the statute of limitations if his go-debtors chose to prevent him.

Upon the whole, I am of the opinion that the action was barred as against the defendant Gardiner; and that the refusal to dismiss the complaint, as against him, was error.

The judgment of the supreme court should be reversed, and a new trial granted, with costs to abide the event.

Selden, J., concurred in the views of Weight, J.

Judgment affirmed.