Case Name: ULSTER COUNTY SAVINGS INSTITUTION v. DEYO et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1906-11-14
Citations: 101 N.Y.S. 263
Docket Number: 
Parties: ULSTER COUNTY SAVINGS INSTITUTION v. DEYO et al.
Judges: 
Reporter: West's New York Supplement
Volume: 101
Pages: 263–268

Head Matter:
ULSTER COUNTY SAVINGS INSTITUTION v. DEYO et al.
(Supreme Court, Appellate Division, Third Department.
November 14, 1906.)
Limitation of Actions—Acknowledgment of Debt—Payment of Interest-Effect on Surety.
A treasurer of a corporation, who was surety on its note, made semiannual payments of interest on the note by sending checks of the firm of which he was a member, accompanied by letters signed individually, and reading, “Inclosed find check of” the firm, “to pay interest on mortgage of” the corporation. The receipts returned read, “Received from” the corporation, without mentioning the surety. The treasurer of the creditor corporation did not know that the person sending the money was the treasurer of the debtor corporation, nor that he was liable on the note. The receipts were according to the form and custom of the treasurer. Held to show a payment by the corporation rather than a payment constituting a recognition of the debt, and an implied promise to pay by the surety, necessary to toil the statute.
[Ed. Note.—For cases in point, see Gent. Dig. vol. 33, Limitation of Actions, §§ 623-630.]
Kellogg, J., dissenting.
Appeal from Special Term, Ulster County.
Action by the Ulster County Savings Institution against Philip Deyo and another, as personal representatives of Solomon Deyo, deceased. From a judgment in favor of defendants, plaintiff appeals. Affirmed.
The action Is brought to foreclose a mortgage given by the New 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.
Argued before PARKER, P. J., and SMITH, CHESTER, KELLOGG, and COCHRANE, JJ.
F. E. W. Barrow (Howard Chipp, of counsel), for appellant.
J. N. Vanderlyn (John J. Linson, of counsel), for respondents.

Opinion:
SMITH, J.
More than 20 years had elapsed since the 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 arid treasurer of the corporation. Erom 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 semiannual interest upon this mortgage was paid by him, it was invariably paid by a check upon the mercantile firm of which he was a member and was accompanied by a letter, of which the following is a sample:
"New Paltz, Jany. 25, 1899.
"Jno. B. Alliger, Treasurer—Dear Sir: Inclosed find check of S. Deyo &• Son for seventy-five dollars, to pay interest on mortgage of the New Paltz Literary Association due Jany. 1.
"Please acknowledge and oblige.
"Yours truly,
Solomon Deyo."
John B. Alliger, as the plaintiff's treasurer, returned to said Deyo a receipt in substantial form as follows:
"No. 179%. ' Kingston, N. Y., Jan. 26, 1899.
Ulster County Savings Institution.
"Received 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 New 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 Trial 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 which he made payments of semiannual interest, and that the plaintiff understood at the time of the receipt of said pay ments 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 the court finds that the statute of limitations is a complete bar to the liability of the estate of Solomon Deyo. These conclusions the appellants challenge as not warranted by the undisputed evidence in the case. In Littlefield v. Littlefield, 91 N. Y. 203, 43 Am. Rep. 663, 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 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. Falser, 56 App. Div. 97, 67 N. Y. Supp. 612, Judge 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 him, or for him by his authorized agent One joint contractor may make payments 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. 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 by them."
In the Matter of Petrie, 82 Hun, 62, 31 N. Y. Supp. 65, the headnote, in part, reads :
"To make payments effective against a party to save a claim from the statute of limitations, they must have been made by hint, or for him by his authorized agent. In all cases they must be, by previous authorization or subsequent ratification, the payments of the party sought to be affected by them."
In Blair v. Lynch, 105 N. Y. 636, 11 N. E. 947, it is held 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 recog nition and confession of the existing liability. In Lang v. Gage, 65 N. H. 173, 18 Atl. 795, the headnote 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 to 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 Pa. 42, 18 Atl. 615, 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 liabilty of the association, and from it an implied promise could be found that the association would pay the balance of the liability. Not 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 supported 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. No 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 for 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 New 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.
Judgment affirmed, with costs. All concur, except KELLOGG, J., dissenting in separate opinion; PARKER, P. J., not voting.