Middlebrooks v. Cabaniss , 193 Ga. 764 ( 1942 )

1. While a written acknowledgment of an existing liability is equivalent to a new promise to pay, and, like such a promise, will renew a right of action already barred by the statute of limitations, or create a new point of departure for the running of the statute, such an acknowledgement must meet two requirements: that it shall in legal effect have been made by the debtor to the creditor, and that it shall sufficiently identify the debt or afford a means of identification with reasonable certainty.

(a) Averments and proof that, within the period of a statute of limitations, a debtor, security on a promissory note, signed and delivered to the creditor bank checks containing the entries, "Payment on my and [the named principal's] note," or words to the same effect, and that this was the only note due to the creditor by the principal and security, constitute sufficient written acknowledgments of liability on the note to toll the statute and authorize a verdict for the creditor. Accordingly, the general demurrer to such an intervention of a creditor was properly overruled; and upon a verdict for the intervenor, sustaining the allegations of the petition, the court did not err on the general grounds in refusing a new trial.

2. Due notice by a party to the opposite party in a cause, to produce a material writing shown to have been previously executed and presumably in his possession, is a sufficient foundation for the introduction of secondary evidence as to the contents of the writing, upon a failure to produce the original. The court properly admitted secondary evidence after such a foundation.

3. Irrespective of the admissibility of testimony by the intervening creditor as to the transaction with the deceased debtor, in which he signed on the back of the note, without a seal, that she agreed to make the loan to "him," over the only objection that the testimony related to a transaction with a deceased person, no prejudice from such admission appears. This is true for the reason that the intervenor, seeking a judgment on the signature of the security, admitted by his own pleading that the person thus signing was in fact a security and not a principal, with the result that a six-year period of limitation would necessarily be given application; and since it appears that the sole issue on the trial related to whether such admitted six-year period of limitation had or had not been tolled by the alleged acknowledgments of the debt.

No. 14062. APRIL 15, 1942. The heirs at law of a decedent filed a petition for receivers of his estate, after the appointment of a temporary administrator. Receivers were appointed, who were succeeded by the present receiver. The payee of a note, as holder of the legal title, filed for the use of his wife, owner of the money loaned, an intervention for the recovery of the principal and interest. The note was dated and due more than six years before the filing of the intervention, was signed on its face by "W. C. Moon (L. S.)" with a recital in the note that it was under seal, and was signed by the decedent on the back, without any indication as to a seal. The petition as amended alleged that the decedent signed the note "as an accommodation indorser or surety;" and although more than six years had expired since the maturity of the note, the obligation was not barred by the statute of limitations, but was revived by written acknowledgments of an existing liability, equivalent to a new promise to pay the original obligation; and that these acknowledgments were made by checks of the decedent, given by him to the creditor, during stated periods that would toll the statute. These checks, it was alleged, contained notations thereon, which identified the note, "Payment on my and W. O. Moon note, or expressions of similar import and meaning;" but "said checks have been since lost or destroyed, and for that reason intervenor is unable to attach copies of same."

The present receiver and a creditor filed a general demurrer to the amended petition, on the ground that "the checks, the instruments of writing, were not directed to [the payee or] the holder of the note, and therefore were not sufficient to toll the statute." The receiver and creditor filed exceptions pendent lite to the overruling of their general demurrer on that ground. The case was tried on the sole controlling issue raised as to the tolling of the statute, and a verdict in favor of the creditor was rendered. In the bill of exceptions brought by the receiver and creditor they assign error on the refusal of a new trial and on their exceptions pendente lite.

A notice to produce was served on the present receiver, for the production of the alleged checks with entries thereon as stated. The receiver did not produce the checks. The intervenor introduced in evidence the receiver's report, made to the court about sixteen months before the trial, that he had searched for the checks, but had not been able to find them. Over objection by the receiver, the court admitted testimony by the owner of the note as to transactions between her and the deceased security, in which he had given to her checks on a certain bank, containing entries as described, and substantially in accordance with the averments of the amended petition.

The motion for new trial contains the general and two special grounds. The only exception to the admission of testimony as to the alleged checks and entries was limited to the grounds of objection that they were secondary evidence, and were admitted without the laying of a sufficient foundation, in that: after the death of the security there had been an administrator and other receivers; that no notice to produce had been served on any one except the present receiver; that there was no showing as to whether this receiver ever had the checks, or had made a recent search for them; and that he was not put on the stand to testify as to such possession, search, and loss of the checks.

The only other special ground is an exception to the admission of testimony by the owner of the note, that when she saw the decedent as to the execution of the note, "I agreed to make him a loan . . that is the note . . taken for that loan." The ground of objection was that the intervenor was "going into transactions had with a man since deceased, said evidence being prejudicial and hurtful to movants." The only remaining exception to the admission of this testimony is: that "it was submitted to the jury, and the jury was not instructed that the evidence was immaterial. The jury, not being instructed otherwise, had a right to assume [from] the fact that [decedent] arranged the loan that he became a principal on the note along with" the person who signed the note under seal on its face. This ground recites no objection to the testimony on the ground of irrelevancy; nor is it made to appear what, if anything, the judge charged as to the limitation of notes under seal being twenty years, rather than six years, for notes not under seal. There is no exception to the charge, and it is not brought up with the record. 1. "A new promise, in order to renew a right of action already barred, or to constitute a point from which the limitation shall commence running on a right of action not yet barred, shall be in writing, either in the party's own handwriting, or subscribed by him or some one authorized by him." Code, § 3-901. An acknowledgment in writing of the existing liability is equivalent to a new promise to pay. Harrell v.Davis, 108 Ga. 789 (2) (33 S.E. 852); Sammons v. Nabers,186 Ga. 161, 164 (197 S.E. 284); Code, § 3-903. Such a writing containing a promise or acknowledgment, in order to revive a liability or constitute a new point from which the limitation will commence to run, must in legal effect be made to the creditor (Carnes v. Bank of Jonesboro, 58 Ga. App. 193 (4),198 S.E. 338; 34 Am. Jur. 254, § 319); and must sufficiently identify the debt or afford the means by which it might be identified with reasonable certainty. Thus, even a definite promise or acknowledgment in writing, uncommunicated to the creditor (Abercrombie v. Butts, 72 Ga. 74, 76), or a communicated mere indefinite acknowledgment, which goes no further than to admit a general liability without identifying the debt or affording a means of identification, is insufficient.Slack v. Sexton, 113 Ga. 617 (38 S.E. 946); Gartrell v.Linn, 79 Ga. 700 (2), 703 (4 S.E. 918), and cit.; Bulloch v. Smith, 15 Ga. 395 (2), 398; Martin v. Broach, 6 Ga. 21 (4, 5), 30 (50 Am. D. 306); Walker v. Griggs, 32 Ga. 119,127.

(a) While the courts of other States have held, with some conflict of authority, that a notation merely on a check-book stub, to which a check was originally attached, is insufficient to show an acknowledgment of a debt barred by the statute, even though such a notation may afford a means of identifying the debt (Clunin v. First Federal Trust Co., 189 Cal. 248,207 P. 1009, 1011; Searles v. Gonzalez, 191 Cal. 426, 216 P. 1003, 28 A.L.R. 80, 84, and cit.), the rule is different where such an entry is made on the face of the check itself, which, when paid as here, must necessarily have been delivered by the debtor to the creditor, who as payee is a party to the check. First National Bank v. Gamble (Tex.Civ.App.), 132 S.W.2d 100; 125 A.L.R. 265, 267, and cit. Under these and the preceding rulings, where the amended intervention alleged that the debtor gave to the creditor checks payable to her, bearing the notation "Payment on my and W. C. Moon note" or expressions of the same import, and the creditor testified that the note in question was the only one owed by the debtor, and that the checks bore notations substantially as quoted, the court did not err in overruling a demurrer to the intervention on the ground that the acknowledgments were not made to the creditor, because they were contained in checks which were addressed to the bank on which they were drawn, and in refusing a new trial on the general grounds.

2. Where a party to a cause serves on the opposite party, who is presumably in possession of a once existing material writing, a notice to produce such writing, and the party served responds that the writing is lost, or fails to produce it at the trial, secondary evidence as to the contents of the original writing becomes admissible. Crawford v. Hodge, 81 Ga. 728, 730 (8 S.E. 208); Hines v. Johnston, 95 Ga. 629 (2), 643 (23 S.E. 470); Bell v. Chandler, 23 Ga. 356, 359; Atlantic CoastLine R. Co. v. Hill, 12 Ga. App. 392 (7), 397 (77 S.E. 316); Sims v. Scheussler, 2 Ga. App. 466 (2), 469 (58 S.E. 693); Code, §§ 38-214, 38-801 et seq. Accordingly, where the intervening creditor in a receivership proceeding, seeking to recover on a promissory note from the estate of a deceased security, served on the present receiver a notice to produce the alleged checks with entries as indicated in the preceding paragraph, and the receiver failed to produce the checks, and there was testimony as to their actual previous existence with such entries, the court did not err in admitting secondary evidence as to such notations. The present receiver of the assets of the deceased security being the proper custodian of the canceled checks, and presumably in possession thereof, the fact that before his appointment there had been an administrator and other receivers, and that no notice to produce had been served on his predecessors, would not operate to change the rule.

Judgment affirmed. All the Justices concur.