#### George Jones, plaintiff and appellant, *vs.*The Merchants’ Bank of Albany, defendants and respondents.

1. Statutes of limitation affect only the remedy, not the right, and except as defenses in actions against the person, only create a presumption of payment of a money demand, and may be rebutted like any other evidence thereof.

2. *So held*in an action for the conversion of stocks pledged to secure a loan, begun more than six years after such loan became due, wherein it was admitted that it had not been paid in fact.

(Before Robertson, Ch. J., and Barbour and Jones, JJ.)

Heard June 6, 1866;

decided April 1,1867.

Appeal from a judgment .entered upon the report of a referee. The action was brought to recover the possession of certain shares of stock, or the value thereof. The defend*222ants in their answer alleged, that the shares of stock and certificates thereof mentioned and described in the complaint, were duly deposited with and pledged to the defendants as collateral security for a certain loan of money, ($1915.04) duly made by the defendants to the plaintiff, and at his request, on or about the 4th day of February, 1854. For which loan the plaintiff executed and delivered his certain promissory note, bearing date on that day, whereby he promised to pay to the order of (John Sill) the cashier of the defendants, the sum of $1915.04 on demand, which loan of money and the note given upon the same, remained wholly due and unpaid. And that by reason of the premises the defendants claimed and insisted that such shares of stock were the property of the defendants, and they are entitled to the possession of the same.

The defendants also alleged on information and belief, therein, that since the delivery of such note, and the lending of such money, the plaintiff had at sundry times, and within six years then past, paid the defendants divers sums of money as interest thereupon, and that such note remained a valid evidence of debt against said plaintiff, in favor of the defendants.

On the trial the defendants admitted their incorporation and the demand of said stock which had been stated in the complaint.

The following facts were admitted by the parties to the action, and on such admission no witnesses were called : That on the 20th day of December, 1861, the defendants had in their possession five certificates of shares of the capital stock of the New York Daily and Weekly Times newspaper establishment, which said personal property was of the value of $12,000. That before the commencement of this action the plaintiff duly demanded from the defendants the shares of said stock, which the defendants refused to deliver up to the plaintiff. Also that those shares of stock, and certificates of the same, were, in February, 1854, deposited with the defendants, as collateral security for a loan of money by the defendants to the *223plaintiff, for the payment of which the plaintiff executed and delivered the promissory note described in the answer.

That the amount of that note, for which such shares of said stock were deposited as collateral security, had not been paid. That at the time of the demand by the plaintiff of the . defendants for such stock, and at the time of the commencement of this action, more than six years had elapsed since a cause of action accrued upon the said promissory note. The defendants did not claim on said trial any payments made on such note or any new promise in writing made by the plaintiff to pay the same, whereby the same could be taken from the operation of the statute. The defendants were admitted to be a corporation.

On these facts and admissions the plaintiff rested his case, claiming judgment against the defendants, as asked for in his complaint. The defendants, by their counsel, moved that the' complaint of the plaintiff be dismissed. On hearing counsel for the respective parties, the referee gave judgment dismissing the complaint of the plaintiff with costs, and assessing the value of the property.

The complaint in this action was served January 27, 1862.

*Edwards Pierrepont, for*the' appellant.

I, The deposit of stock is a simple pledge in which the *“legal title”*and *“ general property”*remain in the pledgor. ( *Wilson*v. *Little,*2 *Comst.*443. *Cortelyou*v. *Lansing,*2 *Cai. Cas.*200. *Barrow*v. *Paxton,*5 *John.*258. *McLean*v. *Walker,*10 *id.*471. *Brownell*v. *Hawkins,*4 *Barb.*491. *Hasbrouck*v. *Vandervoort, 4 Sandf.*74. *Lewis*v. *Graham,*4 *Abb.*106.)

II. Non-payment of the loan worked no change of title, and no forfeiture of the thing pledged, and no title whatever enured to the pledgor. *(Stearns*v. *Marsh, 4 Denio,*227. *Garlick v. James,*12 *John.*146. *Wheeler*v. *Newbould,*16 *N.Y. Rep.*392. 2 *John. Ch.*62-100. 4 *Barb.*491. *Brown*v. *Ward,*3 *Duer,*660. *Dykers*v. *Allen,*7 *Hill,*497. *Castello*v. *City Bank,*1 *N. Y. Leg. Obs.*25.)

*224III. The pledge is but the incident of the debt secured, and ceases to be a pledge the moment the debt is extinguished. *(Jackson*v. *Willard,*4 *John.*41. *Jackson*v. *Blodgett, 5 Cowen,*202.)

IV. It matters not how; the debt becomes extinguished; whether by payment, by release, or by statute of limitations ; “the legal title” and “general property” remaining in the pledgor, he can forthwith, on demand, take his property the moment the *law*pronounces the *debt*■ *extinct. (Schroeppel*v. *Corning,*2 *Seld.*107.) In that case the court held that “ *trover*may be immediately maintained ” for the property pledged.

V. The statute of limitations is a most salutary statute, and has been so regarded in every civilized country. The statute of usury, which was applied in the case of *Schroeppel*v. *Corning,*(2 *Seld.*107,) is far more severe than the statute of limitations. After a lapse of time the law presumes the debt *paid.*There is no such presumption in the usury act.

VI. If it had appeared on the trial of this action that the debt for which the pledge was made had been paid by the father of Jones., there can be no doubt that the plaintiff would have been entitled to *recover;*or if it had appeared that Jones actually received in cash a loan from the defendants of $20,000 ten days before the action, and had agreed to pay 7^V per. annum, he would have recovered in this action, without the payment of a dollar. (2 *Seld.*107.)

VII. The debt *had been*paid—so the law decides. So the statute decrees. It was not the business of the referee to reconcile conflicting equities. His duty was to pronounce »the *law.*

VIII. Whenever courts override the law in pursuit of doubtful equities, their decisions always work mischief. It was the duty of the defendants to have enforced their claim, if they had had one, *according to law.*They did not do so, and the stock pledged to secure some $1900 is now worth $12,000, which the defendants by this decision keep from the plaintiff *illegally.*The defendants are without equity and without law.

*225IX. The *title*to this pledged stock, it is conceded, remains in the plaintiff. The defendants have never taken any steps to divest the plaintiff of his title, and *they never can do so.*The debt is as dead as payment, release, the statute of usury or the statute of limitations can make it. Replevin or trover by the real owner will lie, as in the case of *Schroeppel*v. Corning, (2 *Seld.*107.)

*J. W. Whiting,*for the respondents.

I. This suit is founded upon an utter misapprehension of the nature of the statute of limitations. Unless the expiration of six years from the time of contracting the debt is something more than a mere statutory bar, founded on public policy, and the statute of limitations not only affects the remedy by action, but annihilates all other rights connected with the transaction, including the debt itself, and a pledgor who continues to hold property under an original lawful pledge can be made a wrongdoer by a mere demand and refusal to deliver it to the pledgor after six years have expired, this action is at once misconceived, and a reproach to judicial proceedings. None of these propositions are true. The statute makes the expiration of six years a mere statutory bar, founded on motives of public policy. It does not even impair the obligation of the contract. A new promise sustains an action upon the original contract. It relates exclusively to remedies by *action.*It does not affect other rights, e. *g.*of execution after the statute has commenced to run, or of statutory lien. It depends on the option or volition of the debtor. It is only available in judicial proceedings by answer. It constitutes of itself nothing original or affirmative. It is a mere defense—a shield, not a sword. All other rights, except the right of bringing an action for the debt, as such, stand unaffected. (2 *Parsons on Cont.*379, *and cases cited.*7 *Paige,*465. 2 *Kern.*140. *Story on Bailm.*§ 362.) The doctrine that securities pledged to pay a debt wholly undischarged, can be made to be the subject of an action of tort, as for a conversion against the pledgor, is simply monstrous.

*226II, Not only obvious principle, but the current of authority, is uniform against the maintenance of such an action, with but a single exception. *(Jackson*v. *Sackett,*7 *Wend.*94.) That case is not *quatuor pedibus*with this. In it a deed had been executed more than twenty years before, with a defeasance from the grantee that the deed was held as security for the payment of an unsealed note. The defense was payment in fact, and that the statute of limitations had run against the note. The court held that the fact of the lapse of time might go to the jury with other evidence of proof of payment. Judge Sutherland utters a doctrine incidentally, at page 99, which Chancellor Walworth, in *Heyer*v. *Pruyn,*(7 *Paige,*465,) repudiates and condemns, *(p.*470 ;) and he states with great force and distinctness, the true principle governing such cases.

.III. Admitting that by lapse of time the right to bring an action on the note is lost, and that a sale of the pledge will not be permitted, the. interest of the pledgee in the pledge is not affected, and the debt, even if no remedy exists for its collection, is a good consideration to sustain the respondents’ title to it. The property of the pledgor in the pledge is nothing more than a legal right to reclaim the thing pledged, upon payment of the debt. (2 *Story on Bailm.*287. *Wilson*v. *Little,*2 *Comst.*443.) The pledgor has a special property in- the pledge, with right of possession until his debt is satisfied. His interest only extends to the amount of his debt, and, upon that being paid, his interest ceases. *(Story on Bailm.*303. *Brownell*v. *Hawkins,*4 *Barb.*491.) At any time before sale the pledgor may redeem the pledge; but against that right the statute of limitations will run, and the lapse of time will be held to furnish evidence of an agreement that the pledge shall be retained by the pledgee in satisfaction of the debt. *(Roberts*v. *Sykes,*30 *Barb.*173.) The right to redeem will be denied, after a long lapse of time, as having been extinguished. *(Story on Bailm.,*§§ 346 362.) Although, by reason of- the statute, the right of action on the note may be lost, the lien is not lost.

*227Robertson, Oh. J.

The statement, in the complaint, of the mode in which the stock claimed by the plaintiff came into the hands of the defendants, with all its attendant circumstances, may be disregarded. The only question was the legal title to the possession of the stock, and that depended upon the payment of the debt for which it was pledged. It is admitted, in the case before us, that, in fact, it has not been paid; but it is claimed that a recovery for it being barred by the statute of limitations, the right of the defendants to hold such stock is gone. Such statute, however, is, in terms, a mere bar to an action. Seeking to enforce *in personam*a demand affects only the remedy, not the right, since the original demand remains to form the consideration of a new promise, which constitutes an admission of the continuance of the debt, or can be enforced in countries not having the same statute of limitations. *(Ruggles*v. Keeler, 3 *John.*263.) They do not operate by presumption of payment only, but as positive bars, and, therefore, their effect cannot be extended by implication. ( *Waltermire*v. Westover, 14 *N. Y. Rep.*16.) Thus a limitation of the time of bringing an action, on a *judgment,*does not restrict the time of issuing an execution on it during its existence as a lien. *(Id.)*A new promise is a waiver of it in case of contracts, by rebutting the presumption of payment involved in it, *(Sluby*v. *Champlin,*4 *John.*461,) although such rebuttal is not admissible in case of torts. *(Oothout*v. *Thompson,*20 *John.*277.) In equity, such statute was held not to interfere with the right of enforcing a lien on lands for a debt more than six years old. *(Heyer*v. *Pruyn,*7 *Paige,*465.) Even the statute creating, expressly, a presumption of payment of any debt, after the expiration of twenty years from the time it accrued, (2 *R. S.*301, § 48,) was held not to be available in an action for specific performance of a contract to convey land, *(Morey*v. *The Farmers’ Loan and Trust Co.,*14 *N. Y. Rep.*302,) or of ejectment against a defendant in possession under such a contract. *(Lawrence*v. *Ball, Id.*477.)

There existed, at common law, a period whose lapse should *228be presumptive evidence of the extinguishment of a stale money demand of any kind. *(Miller*v. *Smith,*16 *Wend.*425. *Oswald*v. *Legh,*1 *T. R.*270.) It, of course, could be overcome by proof, not only of circumstances excusing the lapse of time, *(Newman*v. *Newman,*1 *Stark, N. P. C.*101; *Oswald*v. *Legh, ubi supra,)*and in that way subjected to the same exceptions as the statute of limitations, but, also, of those repelling its effect as evidence of payment. *(Jackson*v. *Sackett,*7 *Wend.*94, *and cases last cited, supra.)*On the other hand, a much less period of time, with corroborating evidence of payment, was sufficient to establish it. *(Jackson*v. *Pratt,*10 *John.*381. *Clark*v. *Hopkins,*7 *id.*556. *Bander*v. *Snyder,*5 *Barb.*63.) The reason for adopting such period is not known, *(Viner’s Abr. Length of Time, pl.*5, 6; *Carpenter*v. *Tucker,*1 *Ch. R. 78 ; Geoffry*v. *Thorn, Id.*88; 10 *Car. II;)*but the earliest reported case in which it was applied was one of law. *(Shellitoe*v. *Horsefall, Clayt.*102, 8 *Car. I.)*But it has been since recognized in every court. *(Oswald*v. *Legh, ubi supra.)*And the statute of presumption, before mentioned, (2 *R. S.*301, § 48,) may have heeu passed to fix the period, so as to prevent the lapse of any less time from becoming presumptive evidence of payment. *(In-graham*v. *Baldwin,*9 *N. Y. Rep.*45.)

Presumptions of payment have, it is true, been applied, by analogy, to statutes of limitation, but merely as evidence of it, particularly in courts of equity. *(Kane*v. *Bloodgood, 7 John. Ch.*90. *Souner*v. *DeMeyer,*2 *Paige,*574. *Moore*v. *Cable,*1 *John. Ch.*385. *Demarest*v. *Wynkoop,*3 *id.*129, *Slee*v. *Manhattan Co.,*1 *Paige,*48. *Parker*v. *Ash,*1 *Vern.*256. *Deloraine*v. *Brown,*3 *Bro. C. C.*646, *per Lord Thurlow.)*And such courts required the *payment,*of which such lapse of time was to be set up, in .the pleadings. *(Livingston*v. *Livingston,*4 *John. Ch.*289.)

There may be no good reason why the time adopted by statutes of limitation to prevent actions, after them' being brought, being adopted in other actions and proceedings besides those at law against the person, subject to being repelled as pre*229sumptive evidence only by other facts. *(Jaclcson*v. *Sackett,*7 *Wend.*94.) The doctrine laid down in the case last cited was impugned by Chancellor Walworth, in *Heyer*v. *Pruyn, (ubi supra,)*but upon the ground that, as he understood it, it held the lapse of time to be a presumption *in law,*and not merely *evidence,*whereas the court distinctly repudiated the former doctrine.

Such statute of limitations, as that now set up, is, therefore, in this case, mere presumptive evidence of payment, and as the case admits that the debt has not, in fact, been paid, the plaintiff cannot recover; although he might possibly have an action to redeem for ten years after the debt became due. *(Roberts*v. *Sykes,*30 *Barb.*173. *Code of Procedure,*§ 97.)

The judgment should be affirmed, with costs.