Stein v. Hamman

Max Stein was indebted to J. H. P. Davis Company, bankers, in the sum of $46,229.00 due upon certain overdrafts with that company, which overdrafts as such were barred by the statutes of limitations. He delivered to the company a certain promissory note executed by C. H. Brown payable to himself in the sum of $235.00, upon which there was a credit, and at the time endorsed on the Brown note and signed such endorsement, the following: "As collateral to secure my overdrafts to J. H. P. Davis Company." The company sued Stein upon the endorsement as a new promise, and the plea of limitation interposed by the defendant raises the question certified to us whether or not the endorsement when considered with the parol evidence identifying the overdrafts referred to was sufficient acknowledgment to support an implied promise of defendant to pay the debt.

The trial court held that it was and the Court of Civil Appeals wrote an opinion affirming that judgment and later certified the question to the Supreme Court.

We have examined the opinion written by Justice Lane and are of the opinion it announces a correct conclusion based upon proper reasoning.

It is well settled that a statement in writing signed by the party sought to be charged which clearly acknowledges the existence of a debt against him carries with it an implied promise to pay the same.

Counsel for appellant has urged, both in his brief and in oral argument at the submission, that the transaction is no more than a pledge of the Brown note and that being in legal effect only a pledge, it is no more than a payment and therefore will not support an implied promise to pay, and cites authorities to support the general proposition thus urged.

It is true a mere pledge within itself can not meet the requirements of the statute for precisely the same reason that a mere payment will not renew the debt, but to hold with appellant in this case is to confuse the principles underlying the question. It must be conceded that mere payment or pledge, as such, will not arrest the statute, but if there be a writing duly signed accompanying the payment or pledge which meets the requirement of the statute as to renewal a different question arises. A payment accompanied by the written acknowledgment and promise to pay required by law will defeat the plea against the original promise, and likewise a sufficient writing accompanying a pledge will have the same effect. It is well settled that a mortgage given to secure a barred debt removes the bar or rather renews the debt; (Gray v. Powell [Tex. Civ. App.] 282 S.W. 631 [writ of error refused]) and this upon the ground that the mortgage recognizes the existence of the debt and expressly or impliedly promises payment. A pledge is no different in this respect (the only difference being as to the matter of possession), and where the pledge is accompanied by a sufficient writing, the statute of renewal has been met. Now, the writing signed by appellant expressly recognizes his indebtedness to the bank for his overdrafts. The existence of the indebtedness being thus recognized, in the absence of anything to the contrary in the writing, the law implies a promise to pay the same precisely as a written mortgage to secure a debt carries with it such implication. In truth it can make no difference where the writing occurs if it meets the requirements of the statute and is sufficiently specific as to the debt renewed. Such writing may be given for the express purpose or it may be contained in a letter, deed or other instrument whatsoever. There is no reason why a written transfer of collateral, if otherwise sufficient, should not meet the requirements of the statute. This is not a mere casual writing, but one which identifies (or uses language from which identification may be had) the debts secured and is in our opinion sufficient to support the judgment of the trial court as tentatively affirmed by the Court of Civil Appeals.

We therefore recommend that the question certified be answered in the affirmative.

The opinion of the Commission of Appeals answering the certified question is adopted and ordered certified.

C. M. Cureton, Chief Justice.

ON MOTION FOR REHEARING. A motion of appellant in the Supreme Court for rehearing was referred by it to the Commission of Appeals, Section B, for their opinion thereon, and was overruled by the court on Nov. 1, 1928, in accordance with their recommendation as contained in the opinion following: