Trustees R. E. Bank v. Hartfield, 5 Ark. 551 (1844)

Trustees R. E. Bank vs. Hartfield et al.

Pike & Baldwin, for plaintiffs.

By the Court,

Sebastian, J.

This is an action of assumpsit on< promissory note, to which the statute of limitations was pleaded. The. plaintiff in the circuit court replied specially, a payment made by de­fendants within the three years preceding the institution of the suit.. To this there was a demurrer sustained, and whether the fact replied! is a good answer to the plea, and whether it is well pleaded, are the only questions arising in the cause.

The rale is well settled upon the construction of the statute, 21 Jac. that a promise to pay a debt barred by the statute, or a direct ac­knowledgment unaccompanied with a refusal to pay, will take the case without the operation of the act. There is a difference in the interpretation put upon the statute by the earlier decisions, and that which it has received at a later period under a better view of its object and policy. Formerly it was regarded as a mere protection against old and stale claims, unjustly put in suit, when the proofs of their satis­faction were lost by accident or time, so that a slight and vague ac­knowledgment that the debt subsisted, was considered as evidence of a new promise to pay, and avoided the operation of the statute. This construction, which, it has been said, virtually repealed the act, and certainly fell far short of its true spirit and design, has been gradually abandoned, and followed By a series of adjudications giving to the statute a more extended operation, and adopting a more liberal con­ception of its true character. In this the courts have concurred with the legislature in treating it as essentially a statute of peace. Before the passage of our statute of limitations, the law was well settled that a verbal promise or acknowledgment of a debt, even by one of several joint debtors or partners, would be a sufficient answer to the statute, the joint debt or duty being proved aliunde. This was the conse­quence of their joint contract, and the unity of interest, and as long as that continued, the promise or acknowledgment by one, was the act of all. Our act of limitations changed the law upon the subject by requiring the promise to be in writing, and confining the effect of it to the party making it, without prejudice to the other joint contrac­tors. By the 14th and 15th sections of the act, which makes the change in the law, it was intended simply to limit the effect of a pro­mise or acknowledgment by one joint debtor, and to alter the grade of evidence by which it is to be proven. This has settled the law as far as it goes,, and removed some of the difficulties, which have sur­rounded the subject. The fact, however, by a saving in the 15th section, preserves the effect of a payment unaltered and unimpaired, leaving it where it found it at the passage of the act. What, therefore, was the effect of a part payment of the debt or interest in defeating the operation of the statute at the time of its enactment? To avoid the operation of the statute there must be a promise to pay the debt either express or implied within three years prior to the commencement of the suitj and a promise may be inferred from an unequivocal, clear and unconditional acknowledgment of the existence of the debt at the time of the admission if unaccompanied with a refusal, or any declaration indicative of an intention to insist on the protection of the act. And such promise may, in like manner be inferred from a part payment of the debt within three years, either of principal or interest, a payment being of itself an unequivocal admission of the continued existence of the balance of the debt, and forming a new point from which the statute will begin to run. Bangs vs. Hall, 2 Pick. 368. Hunt vs. Bridgman, 2 Pick. 581. Sigourney vs. Drury, 14 Pick. 391.

So far as the liability of the debtor, upon his own promise, acknow­ledgment, or part payment is concerned, the law has been clearly settled; but in extending the principle to the case of joint contractors and partners, the question has been involved in some difficulty and controversy. This case does not involve, however, controverted point, how far the acts or admissions of one partner can affect the others after a dissolution of the partnership; nor how far a payment by one joint contractor may bind the others, after they are exonerated under the operation of the statute. The question here is to the effect of a payment before the statute has barred the debt, and which may be regarded as rather the continuation of the old liability than the crea­tion of a new one. That a part payment is such an acknowledgment, at least when made before the bar attaches, as will bind the other joint debtors, has never been seriously questioned. This principle was first distinctly recognized in Whitcomb vs. Whiting, 2 Douglass 152, and Woods vs. Braddick, 1 Taunt. 104; and although the authority of these cases, in their full extent, has been sometimes doubted, yet so far as they establish the doctrine laid down, remain unshaken. In the former case Lord Mansfield notices the distinction between a part payment and an ordinary verbal acknowledgment, and observed that payment by one is payment for all, and enures to the benefit of all. To this extent the doctrine of Whitcomb vs. Whiting was re­asserted in Brandram vs. Wharton, 1 Barn. & Ald. 463, and the court in that case consider the principle as still stronger, where the part payment or admission is made by a party liable, and against his own interest. To the same effect may be cited the case of Jackson vs. Fairbank, 2 H. Bl. 340. Atkins vs. Wodgold, 2 B. & Cress. In Puham vs. Raynal, 2 Bingham, 304, the very case was decided which we are now considering. It was the case of a surety who was held bound by the mere acknowledgment of the principal, and the distinction as to when the admission was máde, was not adverted to by the court. This case certainly carried the principle to the full extent, and even further than it is necessary to go in the case before us. And in the still later case of Benleigh vs. Scott, 8 Barn & Cress, 36, which was upon a joint and several promissory note. Baybey, J. said “that the part payment by one operated in point of legal effect, as a new promise by all and each of the promissors to pay according to the nature of the instrument.” In Wyatt vs. Horlson, 8 Bing., 309, which was also upon a joint and several note, which one had executed as surety, it was again decided. And this case, decided in 1832, since Lord Ten-­terdon’s act, which is similar to ours, is more applicable as it shows the reason why a part payment is excepted out of the terms of the act, and puts it upon the ground that payment of principal or interest, stands on a different footing from the making of promises, which are often rash or ill interpreted, while money is not usually paid without deliberation, and it is an unequivocal act, so little liable to miscon­struction, as not to be open to the objection of an ordinary acknow­ledgment.”

These authorities establish the doctrine firmly, and indicate clearly how the law was at the time our statute passed. They clearly show that a part payment of either principal or interest by one of several joint debtors will defeat the statute of limitations, particularly if the payment be made before the time has elapsed, which would complete the bar.

As to the objection which has been raised to the replication, that it is a departure from the declaration; we think it is not tenable. The matter is, as it is dearly settled, a good answer to the. statute of limitations, and rendered necessary to be replied to by the plea of the defendant. A departure in pleading is when a party quits or departs from the case or defence which he has first made. 1 Ch. Pl. 635; and a departure can never be in a matter which maintains and forti­fies the declaration or plea. Com. Dig. Pleader F. 11. Now here is no resting upon a ground different from, or inconsistent with, that oc­cupied in the declaration, but the replication sets up a matter affirming the cause of action upon the same grounds, and denying the matter alleged in the plea. When a new promise is relied upon as an an­swer to the satute of limitations, the declaration is founded upon the original cause of action, and the new promise is set forth in the repli­cation or adduced in evidence as a simple denial of the truth of the plea. Barrett vs. Barrett, 8 Greenleaf, 355. A part payment stands upon the footing of an acknowledgment or promise, to avoid the statute, and according to this rule may be replied or given in evidence. The plea alleges that the defendants did not undertake, &c., within three years next before the commencement of the suit; and a payment within that time either pleaded or proved in evidence, directly contradicts the plea. There can be no departure in a replication when it simply denies the plea. The effect of payment, whether regarded as a renewal or the continuation of the old contract, is still a denial of the plea. Doubtless it is more proper to introduce a part payment in evidence, under the general replication, without specially pleading it, and this would be necessary if such part payment stood alone upon the footing of a proof. This, however, is not the case. By our statute, and the law as established by judicial decisions up to that time, it amounted in legal effect to a promise. It was such by implication of law. We therefore cannot see why it may not be replied as a dis­tinct answer to the statute, with as much propriety as if it was given in evidence finder the usual replication. We aye therefore of opinion, that the matter contained in the replication was well pleaded, and sufficient to take the case without the operation of the statute. For that reason the judgment must be reversed, &c., and the court instruct­ed to overrule said demurrer, &c. Judgment reversed.