#### C. H. NANCE v. J. A. and J. H. HULIN, Trading as Hulin Brothers.

(Filed 8 December, 1926.)

Bills and Notes — Negotiable Instruments — Endorsers—Mortgages—Partial Payment — Limitation oí Actions — Statutes.

Where a chattel mortgage on crops secures the payment of the maker’s note and the mortgagee endorses the note, C. S., 441, 3044, and mortgages to another, the bar of the three-years’ statute of limitations which has otherwise run will not be repelled by payments on the note from the sale of the crop, as against the endorser, or without evidence of his intent to make the payment and thus impliedly at least acknowledge the debt; and his having attended the mortgage sale of the crop and become a purchaser, is not sufficient.

Appeal by defendants from *Yount, Special Judge,*at April Term, 1926, of Montsomery. New trial.

On 10 January, 1922, Fradger Little executed bis promissory note to tbe defendants for $489.36, payable 1 November, 1922, and on 10 August, 1922, tbe defendants duly endorsed tbe note to tbe plaintiff. Tbe note was secured by a chattel mortgage (wbicb also was assigned to tbe plaintiff) on Little’s interest in certain crops. On 28 July, 1923, tbe plaintiff credited on tbe note $89.30 and $8.25, eacb sum having been received from tbe sale of property embraced in tbe mortgage. Tbe plaintiff testified that J. A. Hulin, one of tbe defendants, attended tbe sale and bought corn at tbe price of $89.30 and potatoes at $8.25. These are tbe only payments that have been made on tbe note. The summons was issued on 16 December, 1925.

*Brittain, Brittain & Brittain for defendants.*

Adams, J.

Tbe liability of tbe defendants was that of endorsers' and as against them tbe plaintiff’s cause of action was barred by tbe three-year statute of limitations. C. S., 441, 3044; *Houser v. Fayssoux,*168 N. C., 1; *Bank v. Wilson, ibid.,*557; *Dillard v. Mercantile Co.,*190 N. C., 225. Tbe statute of limitations began to run at tbe maturity of tbe note — 1 November, 1922. *Triplett v. Foster,*115 N. C., 335. Tbe action was brought on 16 December, 1925, and is barred unless tbe alleged payments arrested tbe running of tbe statute. Tbe trial judge instructed tbe jury that if tbe two payments were credited on tbe note “by virtue of sales of goods embraced in tbe chattel mortgage assigned to tbe plaintiff as security with tbe knowledge and consent of tbe defendants tbe credits would stop tbe running of tbe statute and it would run anew from that date.” C. S., 416.

This instruction, we think, is subject to exception. In *Battle v. Battle,*116 N. C., 161, it is said that tbe effect of a partial payment is not *666of statutory origin, but is an exception conceded by tbe courts, and tbat sucb effect is allowed only when tbe payment is made under such circumstances as will warrant tbe clear inference tbat tbe debtor recognizes tbe debt and bis obligation to pay tbe remainder due. It is necessary tbat tbe payment be voluntary, tbat it be sucb as to imply in law tbat tbe debtor acknowledges tbe debt and distinctly promises to pay it; but a payment made under circumstances wbicb repel sucb implied promise will not stop tbe running of tbe statute. *Hewlett v. Schenck,*82 N. C., 234; *Supply Co. v. Dowd,*146 N. C., 191; *Kilpatrick v. Kilpatrick,*187 N. C., 520. In *Bank v. King,*164 N. C., 303, tbe defendants executed tbeir note to tbe plaintiff, a bank, and authorized tbe casbier to sell certain collateral securities and to apply tbe proceeds to tbe payment of tbe note. On tbe theory tbat the debtors bad appointed tbe casbier tbeir agent to sell tbe securities and to apply tbe proceeds, and bad agreed to remain liable to tbe bolder of tbe note for any deficiency, it was held tbat sucb sale and payment repelled tbe bar of tbe statute. Tbe facts are distinguishable from those in tbe present appeal. It is true tbat tbe plaintiff seized tbe mortgaged property, or a part of it, at tbe suggestion of tbe defendants and requested J. A. Hulin to attend tbe sale and “protect bis interest by bidding on tbe crops”; but Hulin’s purchase of tbe corn and potatoes did not necessarily imply an acknowledgment of bis liability or bis voluntary payment as an endorser, and tbe mere entry of tbe two payments as credits on tbe note “with tbe knowledge and consent of tbe defendants” would not of itself arrest tbe running of tbe statute. With or without tbe consent of tbe defendants, it was tbe duty of tbe endorsee to credit tbe payments. Tbe element of tbe intent of tbe parties seems not to have been considered. Tbe error complained of entitles tbe defendants to a New trial.