Case ID: sc-eq_26/html/0112-01.html
Source: Caselaw Access Project
Author: {"author": "Johnston, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

W. Fortune, et al., adm'rs R. McCrary vs. John A. Hayes and others.
    
    Promissory note drawn by H. & C., dated May, 1820, and payable January 1, 1821: J. H. & G. 0. composed tbe Arm: In 1820, G. 0., being insolvent, assigned his interest in tbe firm for the benefit of bis creditors — tbe assets remaining in tbe bands of J. H.: in December, 1823, and January, 1824, payments made by J. H. were endorsed on tbe note as made by H. & Co.: -in October, 1825, J. H. died, and in February, 1829, and March, 1830, bis administratrix made payments on the note: On reference before the Commissioner, Pebruary, 1834, on bill for sottlement of tbe partnership accounts, the administratrix of J. H. produced a copy of tbe note with the credits endorsed : the Commissioner disallowed the balance due on tbe note as a charge against the firm, and the administratrix excepted to tbe report, claiming that it should be allowed: a dry balance of ovor $1,000 was found to bo due, on the partnership accounts, to the assignees of G. C., which was paid by tbe administratrix of J. H.: G. C. died in August, 1836, and this bill, filed October, 1836, was for payment of the balance of the noto out of tbe partnership effects, or out of the individual estate of either of tho partners: — Held, that the note was barred by the statute of limitations.
    
      Before Dahgan, Ch. at Barnwell, February, 1852.
    The circuit decree, is as follows:
    Dargan, Ch. James Harley and George W. Collins were partners in trade in Barnwell District, under the name and style of James Harley and Company. The business was conducted by Harley, at his own residence, and Collins also carried on business as a merchant on his separate account, in Savannah, Georgia. It does not appear when the partnership commenced, but it was in existence during the year 1820, when Harley, in behalf of the firm, executed a promissory note, of which the following is a copy, to the complainant, Ann McCrary,-adminis-tratix of Robert McCrary :
    “ On or before the first day of January next, I promise to pay' Ann McCrary, representative of the estate of Robert McCrary, deceased, or order, the sum of four hundred and sixteen dollars and 33-100, for value received. This 28th day of May, 1820.
    Signed, JAMES HARLEY & CO.”
    Since the date of this note the complainants have intermarried. James Harley died 23d of October, 1825. Administration of his estate was granted to Jane A. Harley and John A. Hayes, who took possession and administered jointly for a time. Subsequently, Jane A. Harley died, leaving the defendant, John A. Hayes, sole surviving administrator of James Harley.
    George W. Collins died August, 1836, and the defendant? JohnF. Peyton, is his administrator. On the 7th May, 1836, the complainants brought an action of assumpsit at law upon the said note, against George W. Collins, as surviving partner of James Harley & Co., which abated by the death of Collins. This occurred at the time already stated. Soon after the complainants commenced their suit in this Court. Their original bill was filed 24th October, 1836, against the representative of Harley and against the representative of Collins. The amended bill was filed 28th of September, 1838. The complainants alleging that the note was a debt of the firm of James Harley & Co., and that a balance is still unpaid, claim to have it satisfied and paid out of the partnership effects, if there be any, or out of the individual estate of either of the said partners. There are no assets of the partnership, and the estate of Collins is insolvent. It is not denied that the note was given by Harley, and that it was binding upon the firm, and if not upon the firm, it is of course upon Harley individually. The only question in the case is, whether the claim upon the note is barred by the statute of limitations, which has been pleaded by the defendants. A statement of some other facts will here be necessary. In the year 1820, Collin s became insolvent, being indebted to the Planters’ Bank of the State of Georgia, the Bank of the State of Georgia, and to Alexander Smets. He assigned all his interest in the partnership effects of James Harley &. Co., to his aforesaid creditors? Harley himself concurring and joining in the execution of the deed of assignment. The assignees afterwards filed a bill against Jane A. Harley and John A. Hayes, the representatives of James Harley, for an account of the partnership effects of James Harley & Co. The cause came to a hearing. The partnership assets, on the accounts being taken, were found to consist entirely of Harley’s indebtedness to it. A balance was found against him of $2,691 68. The firm owed Collins as a creditor $590 88, and as partner $1,050 40: in the aggregate, $1,641 28, for which a decree went against Harley’s estate, and which has since been paid by the administrators of Harley to the assignees of Collins. While this case was in progress, and the accounts were before the Commissioner on a reference, with a view to a final settlement between the representatives of the two parties, on the 14th of January, 1834, the administrators of Harley presented before the Commissioner a copy of the note to Ann McCrary, alleging that this was an outstanding debt of the firm, and claiming to have provision made for its payment, out of the assets of the firm, before a partition thereof. There was some evidence that the debt was contracted for Harley’s individual benefit. The Commissioner disallowed the claim thus set up by the administrators of Harley, and reported against it. This report is dated the 16th of January, 1837. The administrators of Harley took exceptions to the report, which were argued 19th of January, 1837.
    Among other exceptions, they excepted that the Commissioner had not allowed the note to the estate of McCrary as a charge upon the firm in the settlement. These facts were proved by ■the testimony of Mr. Angus Patterson, who spoke for the most part from the records of the Court then before him, which were also in evidence. This evidence has an important bearing upon the issue of the statute of limitations, in this way: They establish a most unequivocal acknowledgment on the part of the administrators of Harley, as late as the 19th of January, 1837, that the note in question was on an outstanding debt, and that the balance was still due. It does more than this. It establishes the authenticity of the credits endorsed upon the original note; for the copy presented by the administrators of Harley to the Commissioner, in the manner before stated, was a transcript of the note with all the credits endorsed. This was an admission that those credits were rightfully upon the note, and removed all grounds for suspicion, if any existed, that those credits were inscribed on the note (as has sometimes been done-) for the purpose of manufacturing testimony to take the case out of the statute. The evidence relieves the Court of all difficulties on that head. There can be no more emphatic admission of the obligations of a debt than a payment upon'it, and causing a credit for the payment to be endorsed as evidence upon the instrument, by which the debt is secured. The payment, if proved, without the endorsement of the receipt, would be sufficient. The endorsement of the credit only makes the evidence more explicit, and the facts more unmistakeable. A partial payment of a debt has always been considered as equivalent to a new promise to pay the balance. The evidence in this case, to relieve the debt from the bar of the statute, is as follows: The note was due on the 1st of January, 1821. On the 18th of December, 1823, payment by Harley & Co., and endorsed upon the note, $27 50; on the 1st of January, 1824, payment by James Harley & Co., $50 ; the 16th of February, 1829, payment by Jane Ann Harley, $ 100; the 17th of March, 1830, payment by Jane Ann Harley of $15 ; the 14th of January, 1834, the administrators of Harley, presented the claim as a subsisting debt against the firm of James Harley & Co., as has already been stated. On the 16th of January, 1837, the administrators took exceptions to the Commissioner’s report in the case of the assignees of Collins vs. the administrators of Harley, because this debt was not allowed as a subsisting debt of James Harley & Co.
    On the 24th of October, 1836, the original bill in this case was filed. On the 12th of September, 1838, the amended bill was filed, which has been pending ever since. It will thus be perceived, that there has been a series of acknowledgments of the existence of this debt from an early period after it was due, until, and even after, the suit was instituted. Each admission following the one which had preceded it, before the statutory period had run out, with the exception of a single instance. From the second payment by Harley, on the 1st of January, 1824, to the first by his administratrix, on the 16th of February, 1829, more than four years had expired, even adding the nine months during 'which there was a disability to sue on the part of the complainants. The debt was barred, if the administrators of Harley had chosen to avail themselves of that ground for refusing to pay the debt. The law is well settled, that if a debt be barred in the life time of the intestate, the administrator cannot revive it by a promise to pay. Such a promise will be binding neither upon himself nor. the estate; and if he pays a debt that is barred, it will be a devastavit to that extent: and he will be personally liable, or in other words, he would not be allowed credit, for the payment. But it was decided in the case of Reignevs. Desportes, Dud. 118, that where a debt was not barred in the life time of the testator, but the statutory period had run out after his death, a promise by the executor constituted a good cause of action, upon which the plaintiff might recover. Though it was necessary, where the promise was made by one who was not a party to the original contract, that the plaintiif should declare upon the promise as a new contract. An administrator may keep a debt of his intestate’s, not barred in his life time, beyond the reach of the statute, by promises from time to time; and a debt may thus continue in active force, unaffected by the statute, for an indefinite time. If the statutory period expires after the commencement of his administration, he may avail himself of the plea of the statute, or he may waive it at his own discretion.
    He may pay the debt, and he will be allowed credit for it in his accounts, or he may bind the estate by a promise to pay, or what is equivalent, an implied promise. It certainly requires a more explicit promise to pay, or clear recognition of a debt, to revive it after it has been barred, than before; but it would be a mistake to suppose, that when a debt is barred, that it would require an express promise to pay. There may be implications as strong and emphatic as verbal declarations to that effect. In Young vs. Monpoey, 2 Bail. 280, it is said, that when the statute has not run out, and there is a still subsisting debt, very slight acknowledgments will be sufficient to arrest the operation of the statute. But to revive a debt already barred, there must be a promise to pay express or implied. “I do not mean,” said the Judge who delivered the opinion of the Court, “ to he understood as laying down the rule broadly, that nothing short of a direct, express promise will revive a debt already barred; if there be an unequivocal admission that it is still due and unpaid, unaccompanied by any expression, declaration, or qualification, indicative of an intention not to pay, the state of facts on which the law implies a promise is then present, and the party is bound by it.” It would be utter nonsense to say, that a payment, on a note or other demand, was not an admission that so much was due, and did not create the presumption of a promise to pay the balance, when unaccompanied by any declaration to the contrary.
    When Jane Ann Harley, administratrix of James Harley, on the 16th of February, 1829, paid on the note $>100, the note being then barred, but having become so during her administration, and she having the power to revive it by a new promise, I construe the act as an unequivocal admisssion that the debt was still due and unpaid, and the strongest implication of a promise to pay the balance, the payment being accompanied by no protest or qualification.
    It is ordered that the plea of the statute of limitations be overruled, and that the complainants do recover the amount of the balance due upon their debt. It is further ordered, that it be referred to the Commissioner to inquire and report as to the amount due upon the said note.
    The defendant, John A. Hayes, appealed and moved this Court, to reverse the decree, on the grounds:
    1. Because the said note, set forth and mentioned in the bill, was barred by the statute of limitations, at the time of the filing of the said bill.
    2. Because on the case made by the pleading and evidence, the defendant, John A. Hayes, is not liable at all.
    3. Because the said complainant had a plain and adequate remedy at law.
    
      4. Because the said decree is, in other respects, contrary to evidence, law and equity.
    Bellinger, for appellant.
    BcmsJcett, contra.
   The opinion of the Court was delivered by

Johnston, Ch.

That a common note of hand, given in 1820, should be a subsisting and valid demand in 1852, thirty-two years after it became due, would be quite surprising, even if there were no statute to bar it. But that a statute, which expressly bars such a demand in four years, has failed to accomplish its purpose, in all the time which has elapsed in this case, cannot he credited, without very plenary proof of the fact. Such a thing is a bare legal possibility; but we have never known an instance of its actual existence.

■The note, in this instance, was given and accepted as the partnership note of Harley & Co., and no circumstance is suggested, which renders it probable, that the consideration of it was other than the the debt of the firm. The rule is, that partnership debts are payable out of the partnership assets; and the parties are liable, individually, only after these are exhausted.

The payments made on the note in the life time of Harley, were made and credited as partnership payments, and if these are deducted, it appears, that there were joint assets left, as late as 1836, more than sufficient to discharge the balance, without resorting to Harley’s particular estate. When I say this, I refer to the fact stated by the Chancellor, that a balance was found due to Collins, as partner, of $1,050 40. This means, abalance due him after deducting the partnership debt. This dry balance could not be allowed him, until all the joint debts were paid: and, if this debt had been taken with the account, as it should have been, if then subsisting, the $1,050 40 would have been more than sufficient to satify it. The only effect would have been to diminish the dry balance due to Collins.

What I .wish to observe, here, in relation to the statute of limitations, is this : — Upon the death of Harley, in 1825, the legal obligation to pay the note in question devolved on Collins, the surviving partner; and it was certainly barred before August, 1836, when Collins died. The remedy against the estate of Harley, in consequence of the insolvency of Collins, (which, however, was no ground in this case — because this demand could have been satisfied, as I have stated, out of the supposed dry balance of Collins,) was not a legal, but an equitable, remedy. But, I think, equity will never enforce an equitable demand, arising from and purely dependant upon, and in aid of, a legal demand, when that legal demand is barred and extinguished.

This single consideration is sufficient to dispose of the case.

But the payments made by Harley and his administratrix, Jane Harley, are relied on as acknowledgments of the debt as the debt of Harley and his estate.

Every payment made by Harley, in his life time, was credited expressly as a payment by the firm. In no way can these payments be regarded as admissions of the debt as Harley’s private debt; and the the utmost effect they could legitimately have produced, was to revive the debt, as against the firm, (and, consequentially only, as against the partners,) from their dates respectively. The last of these payments made by Harley, was in January, 1824. The bar,' counting from that date, was complete in January, 1828.

The payment of $ 100 made by Jane Harley, administratrix, the 16th of February, 1829, is we think no clear admission of the balance then remaining due on the note, as a balance legally due by her intestate. In the first place, she was in possession of the partnership assets, which it appears were, on the assignment of Collins, left in her intestate’s hands. The note presented to her, and on which she made the payment, was not the individual note of her intestate, but the note of the firm, whose assets she held, and on which she acted. The payment made by her, upon such a note, if it admitted a balance due, is most naturally construed as an admission that that balance was due by the firm — and not by her intestate. She might very safely admit such a balance due by the firm, knowing the sufficiency of its assets, without admitting, in the slightest degree, that there either was, or ever would arise, any obligation, on the part of her intestate’s estate, to pay it. The bar, dating from this payment, accrued to the firm (and, if necessary, to the estate of Harley,) in 1834.

But we very much question, upon the authority of a current of decisions made by the law Courts, and binding upon us,^whether the payment was, under the circumstances, a clear admission of a balance due; or whether it was competent for the administratrix, after the demand?was barred before the estate came to her hands, to bind the estate by any admissions upon the subject. If she became bound by the supposed admission — it must be by its being construed into a promise, — which, under the circumstances stated, would be binding only on herself, personally, and not on the estate, or her successor, now before the Court. The presentation of the demand in 1836, on the reference of the accounts of the firm, is no clear admission that the debt was still due, much less that it was due by Harley’s estate,. It was not presented by the holder of the note. We may infer that the note was not in the hands of Mrs. Harley, but was in the hands of Fortune : a copy of it, only, being presented.

It is most natural to suppose, that the copy, with the credits endorsed, was submitted with the view of getting credit, for the payments made on it, in the copartnership accounts: and so far as credit was claimed for the balance due on the note, such a claim might well be made, either with the pure intention of aiding Fortune, or from a cautious respect to any danger the estate of Harley might be in from his demand — without admitting that his estate was at all liable. The circumstances are too equivocal to infer from them an explicit admission of indebtedness, or a promise to pay.

The rejection of the -note, on that occasion, was a clear decision that no demand then existed against the firm: and consequently discharged Harley’s estate from all equitable liability for such demand.

On the whole, we are of opinion, that the statute of limitations should have been sustained, and the bill dismissed; and it is so ordered.

Dunkin and Wardlaw, CC., concurred.

Bill dismissed. 
      
      
        See Reigne vs. Desportes, Dud. 118; Young vs. Monpoey, 2 Bail. 278; Lomax vs. Spierin, Dud. 365; Horlbeck vs. Hunt, 1 McM. 197; Lawton vs. Bowman, 2 Strob. 190; Gowdy vs. Smith & Gillam, 6 Rich.