Wanamaker & Brown v. Plank

Mr. Jüstioe Freeman

delivered the opinion of the court.

This suit was brought April 14, 1902, more than ten years after the maturity of the note in controversy, but within ten years of the time of the payment of $154.46 endorsed thereon May 6,1893. Appellee pleaded the Statute of Limitations, and as stated in appellant’s brief, the only question presented by the record is whether such payment tolled that statute, taking the case out of its operation and removing its bar to the action.

The contention of appellant is that the partial payment endorsed upon the note was made by Carroll in the capacity of agent for appellee, and that its legal effect was to create a new implied promise to pay the debt, which must be held to have arrested the running of the Statute of Lim. itations. It seems to be thought by both parties that the conclusion to be reached depends largely upon the answer to the question, whose agent was J. C. Carroll in making the payment to appellant and what was its legal effect ?

The trial court held that at the time of the payment endorsed on the note appellee had no knowledge that it was about to be made or that Carroll had received any money on the collateral note with which to make it; that in making such payment Carroll acted as trustee for appellant and other creditors and not in pursuance of any directions by the defendant; that he was not acting as agent for the defendant in making the payment and had no authority to make a new promise in behalf of the defendant to pay the balance of the note so as to arrest the statute.

So far as the evidence goes it tends to show that Carroll received the collateral and held it under an agreement that he was to act as trustee for the creditors. Apparently he had no express authority to collect it or disburse proceeds of collection. If the money he received was in part payment of the collateral note, which the evidence does not positively determine, Carroll’s action in receiving and disbursing it met the approval of the creditors as well as of appellee, and proves nothing as to his agency. His action in that respect is as compatible with agency for appellant and the other creditors as for appellee. It is true, as argued by appellant’s attorneys, that Carroll originally derived whatever authority he had as holder of the collateral note from the act of appellee; but it is equally true that appellant assented to Carroll’s exercise of the trust and acquiesced in his manner of performing it. After the collateral had been placed in Carroll’s hands, appellee neither had nor attempted to exercise any control over it. He had parted absolutely with so much of it as might be applied in payment of the debts it was deposited with Carroll to secure. Carroll stated in writing over his signature on the back of the note sued upon, that he held the collateral as in said note stated, viz., as “ collateral security.” Clearly it was for the creditors, not for appellee, that he held such security. The endorsement made by appellant’s attorney, and which is relied upon as taking" the note out of the statute, credits the payment as “ received from Mr. J. C. Carroll, trustee.” Should Carroll, however, be deemed to have acted as agent for appellee, such agency would be limited bjr its scope. This could not have extended beyond receiving and applying the proceeds of the collateral, if indeed he possessed even such authority and wras more than a mere holder of the security. It could not under the evidence be fairly considered as including authority to make a payment on appellant’s note which would carry with it an implication of a new promise. Placing the security in Carroll’s hands “ was not understood or intended to be a future promise or a future acknowledgment of a future liability and a future willingness to pay.” Brown v. Latham, 58 N. Hamp. 30-36. A promise made by the debtor to pay a debt arrests the running of the statute, and if a debtor makes a payment upon his outstanding note, the law implies therefrom a new promise to pay the note. It must, however, “ be remembered that this new promise can only be implied where the party designedly makes a payment upon the note.” Lowery v. Gear, 32 Ill. 383-386. No doubt such new promise will be implied by the law when made by an agent for the debtor by the latter’s authority and with his consent, but such authority cannot be implied. There must be an actual affirmative intention by the debtor to make a payment upon a note before a promise can be inferred. Lowery v. Gear, supra. We are aware of no principle of law which makes the holder of collateral secui’ity placed in his hands coincident with the making of a note thereby secured, an agent of the debtor with authority to bind him by a new promise to be implied from a •payment of which the actual debtor is ignorant, having no knowledge as to when it is made or in what amount or that it is to be made at all by the security holder. Such holder of collateral security, if it be conceded that he possesses any authority as agent of the debtor, cannot in the absence of express warrant be presumed to have authority to make acknowledgment of a debt barred by the Statute of Limitations, nor to enter into a new contract springing out of and supported by the original consideration. The bare authority to make the payment does not necessarily imply authority to bind a principal by a new promise to pay. Nor does it matter whether the payment is made before or after the bar of the statute is complete. The rule is the same in either case. Kallenbach v. Dickinson, 100 Ill. 427-446. The views above expressed find support in the following cases: Wolford v. Cook, 71 Minn. 77; Lang v. Gage, 65 N. H. 173; Brown v. Latham, 58 N. H. 30-35; Campbell v. Baldwin, 130 Mass. 199; Smith v. Ryan, 66 N. Y. 352-356. The case of Letson v. Kenyon, 31 Kan. 301-302, cited in behalf of appellant, seems to rest upon the phraseology of a statute of Kansas, and is not, we think, in point.

Appellant urges that the promise contained in the note to pay any deficiency is a controlling feature, but such promise to pay was as much subject to the limitation of the statute as any other part of the note.

Finding no material error, the judgment of the Superior Court must be affirmed. .

Affirmed.