Case ID: ad_63/html/0054-01.html
Source: Caselaw Access Project
Author: {"author": "Ingraham, J.: McLaughlin, J. (dissenting):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Norman Y. Brintnall, Respondent, v. Samuel M. Rice, Appellant.
    
      Statute of Limitations — a promise to see that a creditor ‘ ‘ will be at no loss ” held to take the case out of the statute.
    
    One Brintnall. executed bis 'promissory not.e for the accommodation of one Rice, who had the note discounted by one Lyons, depositing a quantity of whisky owned by him with Lyons as collateral security. This note was renewed by a similar note, Brintnall depositing with Lyons a number of barrels of whisky ■ownecl by him as additional security for the note. August 36, 1891, after the renewal note became due, Brintnall paid $500 to Lyons in order to secure the return to him of the whisky which he had deposited with Lyons as additional security for the renewal note. Brintnall then sought to obtain payment of the §500 from Rice, and on December 21, 1892, Rice wrote Brintnall a letter stating “ notwithstanding that you have done some very foolish talking, entirely uncalled for, I will see that you will be at no loss in the Lyons transaction.’’ October 4, 1898,' Brintnall brought an action against Rice to recover the §500;
    
      Held, that the letter of December 21, 1892, must be considered as an express promise on the part of Rice to pay the sum of §500 to Brintnall, and that it took the case out of the Statute of Limitations,.
    Van Bbunt, P. J., and McLaughlin, J,, dissented.
    Appeal by the defendant, Samuel M. Rice, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 3d day of May, 1900, upon the decision of the court rendered after a trial at the New York Trial Term, a jury having been waived.
    
      E. A. Alexander, for the appellant.
    
      Albert W. Venino, for the respondent.
   Ingraham, J.:

The defendant, being the owner of 100 barrels of whisky and desiring to obtain a loan of money, requested the plaintiff to execute a promissory note which would enable the defendant to obtain the loan upon depositing the whisky as collateral security, from one John Lyons, a liquor dealer doing business in Boston. The plaintiff executed his promissory note to the order of the defendant and delivered the same to him, who delivered it to Lyons and obtained the loan. The defendant gave the plaintiff a receipt for the note, which recited that it was received in payment. of 100 barrels of Brintnall pure rye whisky; and annexed to the receipt was a clause If Brintnall so desires he can return the 100 bbls. and I will take care' of the note.”

Upon the evidence and the finding of the trial judge it must be assumed upon this appeal that the transaction was simply an arrangement by which the plaintiff gave to the defendant his accommodation note to enable the defendant to obtain a loan of money with the whisky as security. This note when due seems to have been taken up by another note given by the plaintiff to the defendant, which was also discounted by Lyons, who retained the same 100 barrels of whisky as collateral security, but when the second note was delivered to Lyons there was added 25 barrels of other, whisky belonging to the plaintiff to be held as .additional security. When this second note was given the defendant gave to the plaintiff another receipt, which receipted for the note for $2,500, and also stated that the additional whisky deposited as collateral security for the payment of the note was to be returned to the plaintiff when the note was paid. The receipt then contained the following: “ The part of agreement of September 15th, 1890, wherein I agreed to pay the note and allow Brintnall to ret.. the 100 bbls. of pure rye whiskey is still in force and a part of this agreement to the amount of $2,344.38, with interest paid and to be paid.”

When the second note became due in May it was not paid. The plaintiff never received the proceeds of either of the notes, and after the second one became due the plaintiff paid $500 to Lyons in order to have returned to him the twenty-five barrels of' whisky which he had deposited with Lyons as additional security for the note given for the defendant’s accommodation. And it is to recover this $500 that this action is brought.

This $500 was paid by the plaintiff on August 26, 1891; and upon these facts it would seem clear that the defendant was at that time indebted to the plaintiff in that sum. The principal defense was the Statute of Limitations, and in order to take the case out of the statute certain letters that passed between the plaintiff and the defendant' were. received in evidence. The action was commenced on the 4th of October, 1898, and the statute has- run unless the plaintiff can produce an acknowledgment of the indebtedness or a promise to pay the debt within six years of the commencement of the action;

Considering the relation which the plaintiff bore to this transaction ; that he advanced his note to enable the defendant to borrow money of Lyons; that when that note had become due and was not ' paid, he had given a new note; and to insure the discount of the new note he had advanced twenty-five barrels of his own whisky to be held as additional collateral; that when the second note became due and the defendant had not paid it, he had been compelled to pay to Lyons $500 to obtain possession of his property, which $500 was credited on account of the note, which by the agreement between the plaintiff and the defendant, the defendant was to pay; that the plaintiff had been constantly endeavoring to obtain the payment of this $500, and had refused to have anything further to do with the transaction until it was paid, the letter written by the defendant dated December 21, 1892, must be considered an express promise to pay this sum. He there says: “ Notwithstanding that you have done some very foolish talking, entirely uncalled for, I will see that you will be at no loss in the Lyons transaction.”

It was said in Shaw v. Lambert (14 App. Div. 267): “ There must be, however, an acknowledgment of a debt of a promise to pay a debt; and in dealing with each particular case what has to be ascertained is the intention of the writer of the instrument, upon which is based the acknowledgment of the existing liability or the new promise to pay the debt. Was it his intention to acknowledge that an obligation or debt existed, or was it his intention to promise to pay a demand made upon him ? The writing must show that it was the intention of the writer to either acknowledge the debt or promise to pay it.” The defendant was bound to pay the noté held by Lyons, and upon his default the plaintiff had paid $500 on account thereof. The plaintiff then endeavored to obtain from the defendant the repayment of this $500, and when the defendant wrote, I will see that you will be at no loss in the Lyons transaction,” it could only have related to a repayment to the plaintiff of the money that he had paid to Lyons.on account of the note, which,, as between the plaintiff and the defendant, the defendant was bound to pay and which payment was essential in order to prevent the-plaintiff from sustaining loss.

In the case of Connecticut Trust Company v. Wead (58 App. Div. 493) we applied the same principle, but held that in that case-the letter of the defendant was not a promise to pay. There is no-uncertainty as to the rule. The only question is whether the writing relied on to take the case out of the Statute of Limitations is sufficient for that purpose. To be sufficient it must acknowledge the existence of the liability or contain a promise to pay. In this case it seems to me that there was contained in this letter such a promise to pay the $500. The promise in this case was not conditional as it was in the case of Tebo v. Robinson (100 N. Y. 27), and I cannot see that that case has anything to do with this question. The question is as to what «was intended by the defendant when he wrote this letter of December 21, 1892, and it seems to me that he certainly intended to promise to pay to' the plaintiff the amount that he had been compelled to pay on the Lyons transaction which was necessary to prevent him from sustaining loss.

The judgment appealed from should be affirmed, with costs. .

O’Brien and Hatch, J.J., concurred; Van Brunt, P. J., and McLaughlin, J., dissented.

McLaughlin, J. (dissenting):

The canse of action, if there is one, arose on the 26th of August, 1891, the time when the plaintiff paid out $500 to secure the return of his collateral. . The action was not commenced until the 4th of October, 1898, and, as conceded in the prevailing opinion, the Statute of Limitations had then run against the claim, unless “ the plaintiff can produce an acknowledgment of the indebtedness, or a promise to pay the debt within six years of the commencement of the action.”

There is nothing in the record, so far as I have been able to discover, in writing by which the defendant recognizes the claim set up in the complaint as binding upon him, or in' which he promises to pay the same. Unless there be such writing, then, of course, the Statute of Limitations is a complete defense, and, it having been pleaded, the judgment must be reversed. Á writing to take a case out of the statute must show that it was the intention of the person by whom it was signed, not only to acknowledge the validity of the debt, but it must contain a distinct and unequivocal promise to pay the same. (Fletcher v. Daniels, 52 App. Div. 67; Shaw v. Lambert, 14 id. 267.) Here there is no such writing. The facts in brief are as follows: John Lyons held 100 barrels of Golden Harvest whisky and 25 barrels of Small Grain whisky as collateral security for the payment of a note made by the plaintiff, payable to the order of the defendant four months from date, for the sum of $2,323.61, upon which, before maturity, the plaintiff paid $500 to secure the return to him of 25 barrels of the whisky. About a year after this payment Lyons delivered to the plaintiff a statement of account, by which he charged the plaintiff with the principal of the original note and gave him credit for the $500 paid, and also for 2,309.72 gallons of whisky at 40 cents — $923.88 — leaving a "balance of $1,076.28. From this statement it appears that the plaintiff was given credit by Lyons for the amount which had been paid, and also for a portion of the remaining collateral. All that the correspondence between the parties shows is an effort to arrange for a sale of the balance of the collateral for the mutual benefit of all, to the end that Lyons might receive the amount of the loan and the plaintiff, if possible, be made good for the payment of the $500 before mentioned. Nowhere in the correspondence is there an acknowledgment on the part of the defendant that the amount due is for him to pay, nor is there any promise on his part to pay any-' thing to the plaintiff. It is true that in the letter bearing date the 26th of August, 1892,-he wrote the plaintiff: “I did agree to take care of your first note, which I carried out. I did not agree to take ■care of it for life. * * * I don’t think there will be any loss, so there is no use crying before you are hurt. J ust as soon as I can get to Boston I am coming and will arrange to have a set-to with you.” On October 4, 1892, the plaintiff wrote the defendant.: “Tours of yesterday, at hand. This is all satisfactory only you don’t say anything about the $500 paid by me to Lyons,” to which the defendant replied : I have yours of yesterday. It appears to me the $500 you speak of was advanced on the 25 Small Grain, ’88 although I have no statement before me, but I recollect that Lyons advanced 40c on the Golden Harvest So if you will accept draft on the basis of 40c for the 25 bbls. it will be all right when I settle the matter with Mr. L.” On the following day the plaintiff wrote the defendant, as follows: “Yours received. As I wrote, I will not pay for 25 bbls. of the harvest unless I get the $500.00, with interest allowed. All other matters connected with the1 transaction can be settled when you come on, and unless it is so arranged, I expect Lyons will commence a suit of some kind, but I think he will find there are two sides to this business, and on the whole, if you have got whiskey enough to pay in full all the expenses, I should think it would be best for you to devote time enough in some shape to arrange it at once.” To this the defendant replied : I have yours of yesterday. I have laid out the tax money on this whiskey, and have done all I can to keep matters, nice and smooth. If you don’t care to be out of pocket a tew dollars until I arrange settlement with Lyons for you, well and good. I don’t see now how there can be any ultimate loss; you can facilitate matters by taking 25 bbls. and paying for them now what they are worth, but on the basis of 40c. You can use the whiskey advantageously. If you don’t want to do even that much, all right. I cannot see.how you run any further risk in taking 25 bbls. and paying for them. It would bring about matters to a close. It’s for you to say whether you want to do that much or not.” These letters, it will be noticed,, do not contain any acknowledgment by the defendant of his liability to pay the $500. Hot only that, but when the matter is called to his attention, they show an intention on his part, at least, not to assume the liability for the payment. On December 21, 1892, the defendant wrote the plaintiff, and it is upon this- letter that it is claimed a promise was made sufficient to take the case out of the statute — Owing to the financial excitement here I could not get away, but am liable to be over most any day; between how and Hew Year the very first day I can go. notwithstanding that you have done some very foolish talking, entirely uncalled for, I will see that you will be at no loss in the Lyons transaction.” When this letter is read in connection with the other letters, it is perfectly clear that there was no-intention on the part of the writer to acknowledge that he was. legally obligated to pay this debt, nor was there any promise on his part to personally pay it. All that he said was that he would see that plaintiff was at no loss^—that is, he would induce Lyon to pay. Each particular case, of course, must be determined by the facts presented, and when such facts are presented the real question always-is, did the party intend to acknowledge that ■ there was a demand, against him and that it was his intention to pay it ? As I read this, record the defendant did neither. For that reason I am unable tocen cur in the prevailing opinion.

I think the judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Van Brunt, P. J., concurred.

Judgment affirmed, with costs..