Case ID: nys_30/html/0780-01.html
Source: Caselaw Access Project
Author: {"author": "HAIGHT, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(81 Hun, 294.)
    BREWSTER v. BATES et al.
    (Supreme Court, General Term, Fifth Department.
    October 17, 1894.)
    .1. Contract—Interpretation—Loan.
    Defendants signed a writing, which recited that they had received of plaintiff a certain sum of money “to operate with in buying and selling crude oil for .him; and we are to pay said [plaintiff] the principal and proceeds over and above cost and trouble of buying and selling, use of tanks, etc.” Held, that the transaction was a loan.
    
      2. Same—Evidence—Understanding of Parties.
    In interpreting a contract, a subsequent contract between the parties, respecting the same matter, is admissible to show how the parties understood the first contract
    3. Statute of Limitations—Absence of Joint Debtor.
    Where one of two joint debtors absents himself from the state, the statute is suspended as to him, but runs as to the other.
    Appeal from circuit court, Steuben county.
    Action by Gilbert B. Brewster against William- R. Bates, impleaded, etc. 'From a judgment entered on a verdict directed by the court in favor of plaintiff, defendant Bates appeals. Affirmed.
    Argued before DWIGHT, P. J., and HAIGHT, LEWIS, and BRADLEY, JJ.
    D. M. Darrin, for appellant.
    Horace D. Baldwin, for respondent.
   HAIGHT, J.

The appellant and one Lemon D. Coburn were copartners engaged in the business of buying and selling crude oil. On the 2áth day of July, 1866, they made and executed the following instrument, and delivered the same to the plaintiff:

“2,541.36. Received of Gilbert Brewster twenty-five hundred and forty-one dollars and thirty-six cents, to operate with in buying and selling crude oil for him; and we are to pay said Brewster the principal and proceeds over and above the cost and trouble of buying and selling, use of tanks, &c.
“[Signed] Coburn and Bates.”

It appears from the evidence that the money received from the plaintiff was commingled with other moneys which the defendants were using in the oil business, amounting to the sum of between $7,000 and $8,000; that shortly thereafter the defendants purchased a quantity of oil in tank, paying about $5 per barrel therefor; that subsequently the oil decreased in value, and they were compelled to sell it for less than a dollar per barrel; that thereafter, and in February, they paid the plaintiff the sum of $300. It further appears that the defendant Bates about that time removed to the state of Michigan, where he has since resided; that in 1872 he visited this state, and had a conversation with his former copartner, Coburn, and the plaintiff; that he thereupon drew the following paper, which was executed by Coburn and the plaintiff, and delivered the same to the nlaintiff:

“Addison, Steuben County, N. Y., March 4, 1872.
“I, Lemon D. Coburn, of Addison, Steuben county, N. Y., hereby agree to pay Gilbert B. Brewster, of the same place, the sum of 81,500, for value received. It is understood between the parties in interest that this amount, when paid, is to reimburse said Gilbert B. Brewster in full for the sum of 82,541 advanced to Coburn and Bates. It is also understood that said sum is to be paid in land in Michigan, to be located in the name of said Brewster by William R. Bates of Bast Saginaw, Michigan. Said land to be accepted from time to time as located, and amount of value of each piece of land so accepted from time to time to be indorsed upon this agreement in satisfaction thereof. It is understood and agreed that the obligation for 82,541, signed by Coburn and Bates, shall hold good until this agreement is accomplished, or that if a portion of this agreement is accomplished, or, in other words, if this agreement is partially accomplished, said obligation shall hold good proportionately to the amount paid as above. It is further agreed that this agreement shall be carried out within two years from the date of this paper.”

It further appears that Bates was asked to sign this paper, but ■declined to do so for the reason that he was employed in the government land office in Michigan, and did not want it to be known that he had located government land in his own name. No land was located and transferred to the plaintiff under this agreement, .and nothing has been paid thereon. We think the transaction described was in effect a loan by the plaintiff to the defendants Co-burn and Bates of the sum $2,541.36. It is true they received it “to operate with in buying and selling crude oil for him,” but they agreed to repay to him the principal and any proceeds over and .above the cost and trouble of buying and selling. His use, therefore, for the loan of the money, -was to be the profits from the business, and to this extent he became interested, and his right to recover the use for his money depended upon the success of .the investment; but, as to the principal, the agreement was to repay to him, and this promise was not made dependent upon their success in the ■speculation. It appears that the defendants so understood and treated the contract, for they commingled the money received from the plaintiff with that received from other sources; and when they purchased oil they purchased it in their own names, and never reported that any particular quantity had been purchased on the ¡account of the plaintiff. And again, in 1872, when the second agreement was executed, it was expressly stipulated that their obligation for the $2,541 loaned to them should hold good until their agreement to pay $1,500 in lands to be located in Michigan should be accomplished, thus recognizing their liability for the principal. It is true that this agreement was not signed by the defendant Bates, but he drew it, and therefore knew of its contents. It was intended as a compromise of the claim that they owed the plaintiff. He himself was to make the payments by the locating of the lands, which the plaintiff was to accept in satisfaction for the $1,500 which had then been agreed upon as the amount that should be paid. We must therefore consider him as assenting to the arrangement there entered into, and to his then recognizing his liability to the plaintiff for the principal loaned as still continuing. We think this agreement was properly received in evidence. It tends to show how the defendants understood and construed the first agreement entered into by them. The right of the plaintiff to recover depends .upon the first agreement.- The second Avas but an- attempt to compromise. The fact that the plaintiff consented that a verdict might be directed for the sum mentioned in the second contract does the ■defendant no harm, for it is less than the sum that the plaintiff would have been entitled to under the first contract.

Upon the trial the complaint was dismissed as to the defendant Coburn, upon the ground that the statute of limitations had run, so far as the claim against him was concerned. It is now contended that the statute of limitations had also run as to the defend.ant Bates, because the defendants Avere jointly liable for the plaintiff’s claim. The question is thus presented as to whether, in case of parties jointly liable, the statute of limitations will run against the claim where one remains in the state, and the other has removed from, and continues to reside out of the state. In the case of Brown v. Delafield, 1 Denio, 445, it was held that in assumpsit against several defendants it was no answer to a plea of the statute of limitations that one of them, within six years from the accruing of the cause of .action, departed from the state, and continued absent until the commencement of the suit; that all the persons liable upon a joint contract must depart from the state, in order to arrest the running of the statute against the demand. But in Denny v. Smith, 18 N. Y. 507, this doctrine was overruled; and it was held that the absence of one joint debtor from the state suspends the running of the statute of limitations against him, although his codebtor has remained within the state. And in Merritt v. Scott, 3 Hun, 657-659, Davis, P. J., in delivering the opinion of the court, says:

“After much judicial conflict, it is the settled law of this state, as to joint ■debtors, that, in respect to the defense of the statute of limitations, each stands upon his own bottom, and it therefore does not follow that because one of such debtors cannot interpose the statute as a defense the other may •not”

It is claimed, however, that section 457 of the Code has changed the practice, and that the rule declared in Brown v. Delafield should be again adopted, but we do not so understand its provisions. The three preceding sections pertain to actions against two or more persons severally liable upon a written instrument. The section then provides:

“The last three sections do not affect a defence or other objection to a defendant growing out of the failure to join in the action two or more persons jointly liable; and as regards the other parties to the action, persons jointly liable are regarded as one party, for every purpose contemplated by those sections.”

The revisers appear to have regarded this section as superfluous, but in view of the express repeal of the Laws of 1832, c. 276, and subsequent amendatory acts, by which the plaintiff was allowed to sue in one action the various parties to a bill of exchange or promissory note, déemed it best to insert it. See revisers’ note. It is thus obvious that it was not inserted for the purpose of effecting the change contended for by the appellant. The judgment appealed from should be affirmed. All concur.