Court Opinion

ID: 6657237
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:58:46.095629+00
Date Added: 2024-06-11T15:59:59.972007
License: Public Domain

Sedgwick, C. J.,
concurring.
It seems to me that the former decisions of this court upon the question involved are not reconcilable. In Sornberger v. Lee, 14 Neb. 193, the law is stated to be: “The receipt and indorsement on a promissory note by tin1 holder of money realized from a collateral left with him by the make]’ for that purpose will remove the bar of the statute.” It will be noticed that this makes no distinction between negotiable and nonnegotiable collaterals; and in Moffitt v. Carr, 48 Neb. 403, the foregoing syllabus is quoted and appears to be approved. Moffitt v. Carr holds that money realized from the proceeds of a sale of land under a trust deed, given to secure the claim, is not such payment as will stop the running of the statute, and the opinion says: “We have not the slightest doubt of the correctness of that holding” (in Sornberger v. Lee). The reason given for the distinction between the two cases is that, in turning over the collaterals as security, the debtor makes the creditor his agent to collect the collaterals and apply them upon the principal debt, so that the action of the creditor in so doing is also the act of the maker of the note. The better rule undoubtedly is that the collection of the collateral securities and the application of the proceeds by the creditor upon his claim will not stop the running of the statute. After the debtor has transferred the collaterals he may pay the principal claim. The statute of limitations presumes that he has done so, and the fact that the creditor has collected the collaterals and applied the proceeds on the principal claim is no proof as against the debtor that the claim had not been paid in full after the collaterals were turned over to the creditor and before the payment was made on the collaterals. *97This is in accordance with the weight of authority. There are cases that hold the same principle as is held in Sornberger v. Lee, but the ground of the holding always is that, in transferring the collaterals, the debtor transfers the property itself, and the collection and application of the money on the collaterals is referred to the act of the debtor in transferring the collaterals and so made his art. These cases generally hold that the application of the money upon the principal claim must be within the time of the statute of limitations after the assignment of the collaterals; that is, payments made by the proceeds of the collaterals are considered as made, so far as the debtor is concerned, at the time the debtor consents to the application of such proceeds upon the principal claim, which he does by t¡he assignment of the collaterals for that purpose. If, therefore, sufficient time elapses for tin1 running of the statute from the assignment of the collaterals to the application of the proceeds thereof upon the principal claim, such application of the proceeds will not remove the bar of the statute. In the opinion of the court this rule Avill most nearly harmonize the decisions of this court. By assigning collaterals to secure the principal claim, the'debtor assigns the property itself represented by the collaterals, and, if the proceeds of such collaterals are applied upon the principal claim within the statute of limitations after such assignment, it avíII be a payment as of the time of the assignment of the collaterals, and will interrupt the running of the statute at that time, so that action may be maintained on the claim .within the statute of limitations after the assignment of the collaterals. This rule of laAv justifies the conclusion reached in the opinion.