Court Opinion

ID: 3884342
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:14:48.318734+00
Date Added: 2024-06-11T07:45:48.852412
License: Public Domain

July 13, 1901. The opinion of the Court was delivered by
This action was commenced some time in May, 1899, by plaintiffs as administrators of the estate of W. Junius Hopper, deceased, to recover the balance claimed to be due upon two promissory notes, executed by the defendant and made payable to plaintiffs' intestate, for borrowed money. The first of these notes bears date 1st January, 1884, and is payable one day after date, and is for the sum of $500. The second note, for the sum of $550, bears date 1st January, 1885, and is payable one day after date. These two notes were written on the same piece of paper, and upon the back of said paper the following indorsement appears: "Received on the within notes $276.40. W.J. Hopper," which bears date 1st January, 1896. The other indorsement, which is not signed by any one, reads as follows: "Paid upon within notes, June 4th, 1896, $288.05."
The complaint is in the usual form, except that there is a special allegation: "That the defendant made the following payments, and none other on said notes," proceeding to state the two payments above credited, and alleging that by reason of such payments the defendant made and entered into a *Page 135 
new promise to pay the balance remaining due on said notes, and alleging that such balance amounted, on the 1st day of May, 1899, to the sum of $1,639.36, and demands judgment for that amount.
The defendant, by his answer, sets up three defenses. 1st. A general denial of all the allegations of the complaint. 2d. That plaintiffs' intestate, who was a brother of defendant, promised that if defendant would effect a sale of a tract of land, in which plaintiffs' intestate and his brother, the defendant, were interested, for the sum of $5,000, that said intestate would pay defendant the sum of $500; that defendant did effect such sale, and thereby the note which defendant had given to plaintiffs' intestate for the sum of $500 was extinguished and paid. 3d. That the action brought by plaintiffs on the notes above stated is barred by the statute of limitations — defendant denying that he had ever made, either directly or indirectly, the payments credited on said notes. The case being thus at issue, came on for trial before his Honor, Judge Hudson, sitting as special Judge under appointment from his excellency the governor, and a jury. The jury found a verdict in favor of the plaintiffs for the sum of $563.36, and the defendant appeals from the judgment entered thereon upon the several grounds set out in the record, which, together with the charge of the Circuit Judge, will be incorporated by the Reporter in his report of the case.
Before proceeding to consider the questions presented by the exceptions, it will be necessary to make a general statement of the case as developed by the testimony. There is no dispute as to the fact that defendant did execute the two notes upon which the plaintiffs' action is based, and the real controversy seems to be as to whether the action is barred by the statute of limitations, or whether the case has been taken out of the operation of the statute by the alleged payments indorsed on said notes. Both of these notes show on their face that the bar of the statute was complete before either of the credits were indorsed, and, therefore, such *Page 136 
credits, standing alone, would not be evidence sufficient to take the case out of the operation of the statute (Concklin v.Pearson, 1 Rich., 391). Still, if there was other testimony sufficient to satisfy the jury that these payments were made with the consent of the defendant on the notes in suit, that would be sufficient to take the case out of the operation of the statute. That was a question of fact, which the Circuit Judge distinctly left to the jury; and although there was a conflict of testimony, the verdict of the jury must be regraded by this Court as final. The facts of the transaction are somewhat complicated, but as we understand the testimony adduced by the plaintiffs, it would seem that plaintiffs' intestate borrowed some money from Little and gave him a note to secure the payment of the sum borrowed, and also left with him, as collateral security, the two notes of the defendant, which constitute the basis of the present action. It also seems that plaintiffs' intestate also borrowed another sum of money from Little and gave him a note therefor, upon which the defendant was surety. All of these notes were left with Mr. Wood, a banker, for collection, and that the understanding was that whatever amount was paid by defendant on the notes of plaintiffs' intestate, upon which he was surety, should be credited as a payment on the two notes of defendant upon which this action was based. Accordingly, Wood, the banker, testified that when the defendant paid him the $288.05, he credited the same by the direction of defendant upon the two notes now in suit as well as upon the $500 note upon which defendant was surety for plaintiffs' intestate, and that the entry of the credit for that sum on the two notes now in suit was made by him; "the notes and figures are in my handwriting, the balance is a stamp we use in the bank." As we have stated, there was other testimony on the part of the defendant in conflict with the foregoing, which, however, need not be specifically stated here, as this Court, in a case like this, has no jurisdiction to pass upon questions of fact.
The exceptions of appellant relating to the questions *Page 137 
raised by the plea of the statute of limitations, upon which the real controversy seems to turn, are based upon what we regard as a misconception of the doctrine of the application of payments. That doctrine may be thus stated: where one person is indebted to another upon two or more accounts, the debtor, when he makes a payment, may, at the time of making such payment, direct the application of the sum of money paid to whichever debt he pleases; but if he fails to give such direction at that time, then the creditor may, at any time thereafter, apply such payment to whichever debt he pleases, or may divide the amount of such payment, either equally or in any other proportion, between the several debts, as he may see fit to do. See Mayor of Alexandria v. Patten, 4 Cranch, 317, andField v. Holland, 6 Cranch, 8, as reported in 1 Am. Leading Cases, 268 and 271, prepared by Hare  Wallace, and the notes appended. The doctrines there laid down have been recognized and followed in this State — Heilbron v. Bissell, Bail. Eq., 430; Brice v. Hamilton, 12 S.C. 32, and Thatcher
v. Massey, 20 S.C. 542. The cases referred to in the elaborate notes to the cases of Mayor of Alexandria v.Patten, and Field v. Holland, as reported in 1 Am. Lead. Cases,supra, show that the great weight of authority, both in England and this country, is that a creditor may, unless the debtor otherwise directs, apply a payment to a note barred by the statute of limitations, and thus take such a case out of the operation of the statute. The only case mentioned to the contrary is that cited by appellant's counsel, Ayer v.Hawkins, 19 Vermont, 26-30, and that case may, and probably does, rest upon the civil law rule instead of the common law rule; which, latter, as said by Harper, Chan., inHeilbron v. Bissell, supra, is the rule which prevails in this State. The several exceptions of appellant which rest upon the idea that a payment made by a debtor upon a note, the action upon which is barred by the statute of limitations, will not have the effect of reviving the right of action upon the balance of the debt, cannot be sustained, under the authorities *Page 138 
above referred to, and these exceptions must, therefore, be overruled. This view is not only sustained by the weight of authority, but also by reason and upon principle. The doctrine is well settled, in this State, at least, that a debt secured by a note, upon which the right of action was barred by the statute of limitations, is not thereby extinguished or paid, but the debt still remains due; and if the person can, by resorting to any other means than an action upon the note, recover his money, he may do so; and this, because the debt is not regarded as paid, but as still due, though not enforcible by an ordinary action at law. See Wilson v.Kelly, 19 S.C. 160, which, though a case in which a question arose as to the effect of a discharge in bankruptcy, was decided upon the principle declared to be applicable to a case of a debt barred by the statute. In both cases the action is barred, but the debt is not extinguished, and, on the contrary, remains still due. If this be so, then it follows that, upon the same principle, a creditor who holds two notes against a debtor, one of which is barred by the statute and the other is note, when he receives a payment from his debtor, who gives no directions at the time as to the application of the money paid, may apply the same to the note which, though barred by the statute, still remains a valid debt, and thus revives a right of action for the balance really due. If the debtor gives no direction as to the applications of the money which he pays, and if the rule be as above stated, then the debtor must be regarded as having assented to whatever application the creditor chooses to make; and if he applies it to the note which is barred by the statute, the debtor must, in law, be assumed to have assented to such application; and if so, then, by the express terms of the statute, the right of action for the balance remaining unpaid is revived. So that the only remaining question is whether the defendant did assent to the credit of the amount which he paid on the $552 note, as surety for the plaintiffs' intestate, upon the notes upon which this action is based. That is a question of fact which was distinctly left to the jury, who have solved it in *Page 139 
favor of the plaintiffs; and their decision must be regarded here as final, unless there was some error, either in receiving incompetent testimony or in rejecting any competent testimony; and this we will proceed to consider.
The first and second exceptions being of a kindred character, may be considered together. They impute error in the reception of testimony to the fact that the credit on the note, first in date, was in the handwriting of the plaintiffs' intestate, and in allowing said note to be offered in evidence without further testimony as to the fact that such payment was made by defendant. It must be remembered that there was no contention on the part of plaintiffs that the payments indorsed upon the piece of paper upon which both of the notes were written, were made directly on such notes by the defendant, but the effort on the part of the plaintiffs was to show that there was an understanding between the parties, that whenever the defendant made a payment on the note for $552, to which the name of defendant appeared as surety for his brother, such payment should be credited on the notes in suit; and, therefore, the testimony objected to was competent, as a circumstances, tending to establish the contention on the part of the plaintiffs. For the fact that the defendant had paid money as surety for his brother, while it would give him a claim on his brother for the amount so paid, would not operate as a payment on the notes in suit, unless there was an understanding to that effect between the parties. While this testimony may not have been competent as direct proof of the credit, yet it was competent as a circumstances tending to show that there was such an understanding; and that it was not received as direct proof, is shown by the remark of the Circuit Judge, "that does not mean that the note or credit is proven." It is manifest, therefore, that this testimony was received, not as proof of the credit, but simply as a circumstances tending to show that there was such an understanding between the parties as that mentioned above, and as such was clearly competent. These exceptions are overruled. *Page 140 
The third exception seems to impute error to the Circuit Judge in receiving the testimony of A.N. Wood as to the fact that he had indorsed the last credit on the notes in suit. We are at a loss to conceive of any well founded objection to this testimony. The fact that Mr. Wood, as many other prudent and cautious witnesses are in the habit of doing, expressed himself in the way he did — "to the best of his recollection." "I think Mr. S.L. Hopper authorized me to put it (referring to the credit) on those two notes," "that is my impression, to the best of my knowledge,"c., certainly cannot render the testimony incompetent. At most it could only affect its weight with the jury; though we do not well see how it could even have that effect; for when asked, "Do you swear positively that Mr. Hopper told you to put it (referring to the credit) on those notes?" his answer was, "to the best of my knowledge, he did." If the jury believed this testimony, as they no doubt did, then there was testimony sufficient to show that the defendant authorized the credit to be placed upon the notes in suit; and if so, then the case was taken out of the operation of the statute. The third exception is overruled.
The fourth, fifth, sixth and seventh exceptions all referring to the testimony of the witness, Little, must likewise be overruled. This testimony was but a link in the chain of circumstances tending to sustain the contention of the plaintiffs that there was an understanding that any payments made by defendant upon the $552 note, on which he was surety of plaintiffs' intestate, should go as credits upon the notes in suit, and was, therefore, competent.
The eighth and ninth exceptions will be considered together, as they impute error in rejecting the testimony of defendant tending to show that he had paid other debts as surety for his brother. If the defendant had set up such alleged payments in his answer as a defense to this action, then we could see how the testimony was relevant. But not having done so, we are unable to perceive the relevancy of the testimony excluded to any issue *Page 141 
presented in this case. He did set up as a payment, his claim against his brother for compensation for his services in the sale of the land above referred to, and this, we presume, was allowed by the jury, for their verdict was for $563.36; whereas the amount claimed in the complaint, as a balance due on the two notes, was the sum of $1,639.36. These exceptions are overruled. The remaining exceptions have already been disposed by what is said above.
The judgment of this Court is, that the judgment of the Circuit Court be affirmed.