Case Name: EDWIN R. LAWRENCE, Appellant, v. DWIGHT B. BAKER, Respondent
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1887-05
Citations: 51 N.Y. Sup. Ct. 582
Docket Number: 
Parties: EDWIN R. LAWRENCE, Appellant, v. DWIGHT B. BAKER, Respondent.
Judges: 
Reporter: Supreme Court Reports (Hun)
Volume: 51
Pages: 582–587

Head Matter:
EDWIN R. LAWRENCE, Appellant, v. DWIGHT B. BAKER, Respondent.
Statute of limitations — effect of the giving of his own note by the debtor for a part of the claim — when a payment of the note to an indorsee for value will not be treated as an admission of indebtedness.
Upon the trial of this action, commenced in September, 1884, to recover for lumber sold to, the defendant, the plaintiff proved a balance of eighteen dollars and seven cents due on May 1, 1876. and an additional balance of $162 due for other lumber sold on July 1, 1878. He also proved that on July 1, 1878, the defendant gave his note to him for $300, at three months, upon account of the lumber sold; that the plaintiff had the note discounted at a bank, the proceeds thereof being credited to and drawn out by him. The note was paid but whether at, before or after maturity was not shown.
Reid, that the action was barred by the statute of limitations. (Landon, J., dissenting.)
That even if it were assumed that the note was paid to the hank on the day it became due, October 4,1878, it would not remove the bar of the statute.
That as the defendant could not avoid paying the note, which had passed into the hands of a Iona fide holder for value, the payment could not be treated as an admission of his indebtedness to the plaintiff at that time. (Landon, J., dissenting.)
To what extent the giving of the note was an acknowledgment of the debt, considered.
MotioN for a new trial by tbe plaintiff upon exceptions taken on the trial at the Sullivan Circuit, and directed to be heard in the first instance at the General Term.
The plaintiff, by his complaint, for lumber sold to the defendant, claimed a balance of eighteen dollars and seven cents due May 1, 1876, also an additional balance of $162 for other lumber sold July 1, 1878. The action was commenced September 30, 1884. The answer was the statute of limitations. The plaintiff proved' the sales and balances as of the dates claimed. He also proved that on the 1st day of July, 1878, the defendant gave his note for $300, at three months, upon account of the lumber sold. The plaintiff had the note discounted at a bank, and the proceeds placed to his credit, which he subsequently drew out upon his check. This note was paid hy the defendant to the hank, but whether at, or before or after maturity was not shown. He also proved that he received from the defendant, at its date, the following letter:
“ Sueeern, N. Y., July 10, 1880.
“ Mr. E. R. Lawrence : • ,
“ Dear Sir. —Inclosed find check for $18.07 to balance account.
“ Yours truly,
“D. B. BAKER.”
There was no other evidence touching a check. The court, upon the close of the plaintiff’s case, granted the defendant’s motion for a nonsuit.
James J. Gurtis, for the appellant.
G-erret Z. Snider, for the respondent.

Opinion:
Learned, P. J.:
Tbe giving by a debtor of a note of a third person to apply on his debt is a payment under the statute of limitations (Smith v. Ryan, 66 N. Y., 352; Code Civ. Pro., § 395), because it is immaterial, so far as the effect of payment goes, whether the debtor pays in cash or in chattels, or in the obligation of another. In either case he parts with something of value and transfers it to the creditor to apply on the debt. But when he gives his own note he parts with nothing of value. He only makes a new promise in a new form. He makes a written acknowledgment or promise under the section above cited. (Kincaid v. Archibald, 13 N. Y., 189.)
Whether he makes any written acknowledgment or promise except to the extent of the note which he gives, seems to be doubtful. A man who makes a note promising to pay $300 does not thereby acknowledge that he owes, nor does he promise to pay $460. If there be any presumption, it is that the amount of the note is all that he owes. At any rate, the time when the acknowledgment or promise is actually delivered is the time when it takes effect, in respect to the statute of limitations, as a written promise or acknowledgment. (Kincaid v. Archibald, ut supra.) If, then, the giving of the $300 note was an acknowledgment or pi'omise under section 395, in respect to the alleged residue of the debt, it was such at delivery; and the statute of limitations began again to run from that time as to the alleged residue. As to the $300 the statute did not begin to run until maturity of the note, three months later. Assuming, then (which I doubt), that the giving of the $300 note was an acknowledgment or promise as to the alleged balance of $162, its effect was to make the statute of limitations run as to the $162 from July 1, 1878, the time of the giving of the note; while as to the note itself the statute would begin to run only from maturity, viz., October 4, 1878. The plaintiff at once had the note discounted at the bank. No direct proof is given of the payment of the note; but it may be inferred that it was paid by defendant at some time, whether before or after maturity is not shown. This action was commenced September 29, 1884. If, then, the defendant paid that note a week before it was payable, all the plaintiff's argument falls. And if the plaintiff tries to take a case oat of the statute of limitations on. the ground of a payment, he should show positively when that payment was made.
But even assuming that payment was made on the exact day of maturity, the plaintiff is no better off. The defendant could not avoid the payment. The note had passed into the hands of the bank and was evidently negotiable. The defendant had no alternative but to pay. He could not have defended on the ground that he owed plaintiff nothing. Now there is no mysterious virtue in a payment. It is held to avoid the statute of limitations, because, by making a partial payment the debtor admits the debt. The courts say: " Why did he make a partial payment if he did not owe the debt." (Harper v. Fairley, 53 N. Y., 412.) Now when the debtor is in such a position that he has to make the so-called payment, whether he owes the whole debt or not, then there is no longer any admission. This defendant was obliged to pay his note at the bank whether he owed plaintiff any balance or not; or even whether he had ever owed plaintiff an'ything. Therefore, the payment of the note was no admission by the defendant of any indebtedness to the plaintiff. The bank was not plaintiff's agent, but held the note in its own right. Defendant's money, when he paid, did not go to the plaintiff but to the bank. The payment was no admission of any facts except such as might have served as a defense to the note if the defendant had refused to pay. And that he did not owe the plaintiff would not have been such a fact. Therefore, he did not admit his indebtedness to the plaintiff by paying this note. Judgment should be granted for defendant on the nonsuit, with costs, and motion for new trial denied.