Case Name: The Ulster County Savings Institution, Appellant, v. Philip Deyo and Elizabeth E. Deyo, as Administrators, etc., of Solomon Deyo, Deceased, Respondents, Impleaded with The New Paltz Literary Association and Others, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1906-11-14
Citations: 116 A.D. 1
Docket Number: 
Parties: The Ulster County Savings Institution, Appellant, v. Philip Deyo and Elizabeth E. Deyo, as Administrators, etc., of Solomon Deyo, Deceased, Respondents, Impleaded with The New Paltz Literary Association and Others, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 116
Pages: 1–8

Head Matter:
The Ulster County Savings Institution, Appellant, v. Philip Deyo and Elizabeth E. Deyo, as Administrators, etc., of Solomon Deyo, Deceased, Respondents, Impleaded with The New Paltz Literary Association and Others, Defendants.
Third Department,
November 14, 1906.
Statute of Limitations — bond and mortgage —part payment—when payment of interest by treasurer of mortgagor not a personal payment by him as surety.
When a surety on a bond secured by a mortgage given by a literary corporation, who is also the secretary and treasurer of the corporation, makes payment of interest due with checks of a partnership of which he is a member, and takes receipts from the mortgagee, acknowledging the payment to have been made by the corporation, any claim against the surety for a deficiency on foreclosure is barred by the lapse of twenty years. Payments so made are ineffective to stop the running of the statute against the surety.
The burden is always on the one seeking to show payments taking the debt out of the statute to establish that the payments were made by the debtor for his own account and with reference to the particular debt.
The doctrine that the joint obligor or surety may be bound by acquiescence in a payment made by his co-obligor or principal is not, it seems, the law of this State.
Kellogg, J., dissented, with opinion.
Appeal by the plaintiff, The Ulster County Savings Institution, from portions of a'judgment of the Supreme Court in favor of cer« tain of the defendants, entered in the office of the clerk of the county of Ulster on the 3d day of. July, 1906, upon the decision of the court adjudging that the defendants, • the administrators of Solomon Deyo, are not liable for a deficiency upon the foreclosure of a mortgage sought to be foreclosed in the action!
The action is brought to foreclose á mortgage given by the Hew Paltz Literary Association, a domestic corporation, upon the 22d day of • September, 1871, for $3,000. Upon the bond secured by the mortgage several persons appear as .signers, one of whom was Solomon Deyo, defendants’ intestate. The defendants,, as such administrators, were sought to be made liable for any deficiency arising upon the sale of the mortgaged property. The defense was based upon the Statute of Limitations, which defense was sustained by. the- trial court, and from the judgment denying the plaintiff this relief sought this appeal has been taken. Further facts appear in the opinion.
F. E. W. Darrow [Howard Chipp of counsel], for the appellant.
J. N. Vanderlyn [John J. Linson of counsel], for the respondents.

Opinion:
Smith, J.:
More than twenty years had elapsed since tne accruing of the liability of Solomon Deyo, prior to the commencement of the action. The bar of the Statute of Limitations is sought to be avoided by certain payments of interest made by Solomon Deyo during the years from 1899 to 1903. The sole question for determination is as to the effect of these payments of interest as being such a renewal of the obligation as to prevent the running of the statute. Solomon Deyo was the secretary and treasurer of the corporation. From the real estate owned by the corporation the rents were collected . by Deyo. He paid all charges against. the property. It. appears' that he did not keep a separate account in the bank as treasurer of this corporation. When the semi-annual interest upon this mortgage was paid by him, it was invariably paid by a check upon the mercantile firm, of which he was a mem-. her, and was accompanied by a letter, • of which the following is a sample:
"New Paltz, Jany. 25, 1899.
" Jno. B. Alliger, Treasurer :
" Dear Sir.— Enclosed find check of S. Deyo & Son for Seventy-five Dollars, to pay interest on mortgage of the Hew Paltz Literary Association due Jany. 1.
" Please acknowledge and oblige,
Tours Truly,
" SOLOMON DEYO."
John B. Alliger, as the plaintiff's treasurer, returned to said Deyo a receipt in substantial form as follows :
" No. 1791/2. Kingston, N. Y., Jan. 26, 1899.
" Ulster County Savings Institution.
"Deceived from New Paltz Literary Association Seventy-five Dollars For interest due on'Bond and Mortgage to Jan. 1st, 1899.
" $75. JNO. B. ALLIGER,
" Treasurer."
Upon the witness stand Mr. Alliger swore that he did not know that Solomon Deyo was the treasurer of the institution, and that the receipt was given in form as a receipt from the Hew Paltz Literary Association according to a custom to receipt as from the mortgagor all. interest received upon mortgages held by the bank.
It does not appear in the case that he knew that Solomon Deyo was liable in any way for the debt. The triai court has found that Solomon Deyo paid no part of said bond and mortgage or interest except, as -treasurer of the New Paltz Literary Association, for wl.iicli he made payments of semi-annual interest, and that the plaintiff understood at the time of the receipt of said payments that the said payments were being made by the said New Paltz Literary Association, and that said payments were in fact made by said association. It is found, however, in answer to a request, that these payments were made by checks upon the mercantile firm of which Solomon Deyo was a member. As a conclusion of law th'e court finds that the Statute of Limitations is a complete bar to the liability of the estate of Solomon Deyo. These conclusions the appellant challenges as not warranted by the undisputed evidence ' in the case. In Littlefield v. Littlefield (91 N. Y. 203) one of three makers of a joint and several promissory note, who in fact signed as .surety, upon being applied to for payment, requested the payee to tell the principal that he must make a payment thereon and that he (the surety) said so. The payee made the statement to the principal as requested, who -promised to and did subsequently make a payment; this he reported to the surety, who in response stated that it was all right. In an action upon the note it. was held that these facts did not show an authority conferred Upon the principal to make a payment as the agent of the surety, so as to take the case as to the latter out .of the Statute of Limitations; also, that they failed to establish a ratification of the payment. In Matteson v. Palser (56 App. Div. 91) Mr. Justice O'Brien, in. writing for the .first department, says: "-The burden is always'on the party seeking to charge another to show that the payments necessary to take the debt out of the statute were made by the debtor for his own account and. with reference to that particular debt." In McMullen v. Rafferty (89 N. Y. 459), Earl, J., in writing for the court says': " But it is the settled law of this State that payments made by one joint contractor cannot save from the ¡Statute of Limitations a claim against another joint contractor, and that -payments made by the principal debtor cannot save from the statute a claim against the surety; and it makes no difference that the payments were made with the knowledge of -the other party liable for the same debt; To' make .payments effective against a party to save, a claim from the' statute they must have been made by hinq or for hita- by his 'authorized agent.. One joint contractor may make pay-. ments as agent for all the ^contractors, or the principal debtor may make payments for and in • the name of his surety as his agent, or payments may thus be made in the name of all the- joint contractors, or of the surety without previous authority, but be subsequently ratified,, and in all such cases the running, of the statute may be prevented. (The First National Bank of Utica v. Ballou, 49 N. Y. 155.) ' But in all cases to make the payments effective they must by previous authorization or subsequent ratification be the payments of the party sought to be affected £>y them," In Matter of Petrie (82 Hun, 62) the head note in part reads:, "To make payments effective against a party to save a claim from-the Statute of Limitatións they must have' been made by-him, or for him by his authorized agent; in all cases.they must be, by previous authorization Of subsequent ratification, the'payments of the party sought to be affected by them." In Blair v. Lynch (105 N. Y. 636) it is held that a payment such as will avert the Statute of Limitations as a bar must be a conscious and voluntary act on the part of the debtor, explainable only as a recognition and confession of the existing liability. In Lang v. Gage (65 N. H. 173) the head note reads: " The defendant signed a note as surety and the principals gave him a mortgage to' secure his liability. Afterwards he assigned the mortgage to a savings bank, of which he was an officer, to be held as security for this and other similar notes mentioned in it. The bank foreclosed and sold the property, and from time 4o time the defendant, as an officer of the bank, paid various sums on the note from the proceeds, some of the payments being made within six years before the commencement of the suit. Held, that payments so made were not evidence from which the jury could find a new promise by the defendant." In Dick v. Williams (130 Penn. St. 42) the rule is stated by Mr. Justice Williams as follows: " In an action against partners upon a note the .mere fact that one of the defendants, being indebted to his copartner, paid the amount of such indebtedness by his direction to the holder of the note, who applied the 'money as a credit thereon, making an indorsement to that effect in the presence of the defendant paying, will not of itself toll the bar of the statute as to such defendant."
If, then, the payment in order to avoid the statute must be such as constitutes a recognition of the debt and implies a promise to pay in full we must agree with the trial court that there is here found no such recognition by Solomon Deyo of a personal debt or implied promise to pay the same. While the payment was in fact from the funds of the mercantile firm of which he was a member, Solomon Deyo was the treasurer of the association, in ¡receipt of the income of the association, with a legal duty, as treasurer, to pay this interest. His payment was a distinct recognition of the liability of the association, and from it an implied promise could be found that the association would pay the balance of the liability. Hot a suggestion is found of a recognition of any personal liability or of any implied promise to remain personally bound as surety for the debt. The finding of the Special Term that these moneys were received and understood to be payments from the mortgagor is amply sup ported by the receipts given. At least there can be no pretense that they were supposed to be payments by a surety in recognition of his obligation as surety. The' doctrine that a joint obligor or surety may be 'bound by acquiescence in a payment made by his co-obligor or principal does not seem to be a part of the law of this State. Do stronger instance of .acquiescence can be found than the case of Littlefield v. Littlefield (supra), in which it was held that the party acquiescing was not bound. The' payments made by Solomon Deyo were not payments made/br him,, as seems to be . required under the authorities, to create such a recognition of. the debt as will avoid the bar of the statute. They were paid and received for the Dew Paltz Literary Association, and can only be effective to avoid the statute as to that association. We are of opinion, therefore, that the judgment below was right and must be affirmed.
All concurred, except Kellogg J., dissenting in opinion; Parker P. J., not voting..