Broadway Bank & Trust Co. v. Longley

• Decision Date: 25 April 1933
• Citation: Broadway Bank & Trust Co. v. Longley, 116 Conn. 557, 165 A. 800 (Conn. 1933)
• Parties: BROADWAY BANK & TRUST CO. v. LONGLEY et al.
• Court: Connecticut Supreme Court

165 A. 800

116 Conn. 557

BROADWAY BANK & TRUST CO. v. LONGLEY et al.

Supreme Court of Errors of Connecticut.

April 25, 1933

Appeal from Superior Court, New Haven County; Frederick M. Peasley Judge.

Action by the Broadway Bank & Trust Company, as payee on a note against Frank D. Longley and another, guarantors of such note.Judgment for plaintiff, and named defendant appeals.

Henry H. Hunt, of Hartford, for appellant.

Frank S. Bishop, of New Haven, for appellee.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

MALTBIE, Chief Justice.

On December 3, 1923, C. S. Longley signed and delivered to the plaintiff a note for $1,900, payable on demand to himself at the plaintiff bank.On the back of the note appeared the following: " For value received the undersigned hereby jointly and severally guarantee payment of the within note waiving demand of payment, notice of nonpayment and notice of protest thereon."This was signed by C. S. Longley, Josephine F. Longley, his wife, Frank D. Longley, and Charles D. Babb.C. S. Longley and Babb were discharged in bankruptcy before demand was made on the defendants for payment of the note.This action, brought against Josephine F. Longley and Frank D. Longley, sought a recovery based upon the writing on the back of the note.When it was given, it was understood that C. S. Longley would make payments on it from time to time and also that he was to pay interest.On March 10, 1924, Frank D. Longley wrote the plaintiff asking the amount of the indebtedness on the note in question, " on which I am endorser," and the method of payment.The plaintiff in reply described the note, and stated that the interest had been paid to that time.From and after the date of this correspondence C. S. Longley from time to time paid the interest due on the note to January 1, 1930; the trial court has found that Frank D. Longley knew that interest was being charged and paid on it; and this finding is not attacked.In 1927 C. S. Longley made a payment of $25 upon the principal.On April 24, 1930, the plaintiff made demand upon the defendant for payment, and the trial court has found that, in view of all the circumstances, this demand was made within a reasonable time.It was stipulated between the plaintiff and the defendantJosephine F. Longley that judgment should be entered against the latter, and the court after hearing gave judgment against both the defendants for the balance due upon the note with interest and costs.Frank D. Longley has appealed, and we shall hereafter speak of him as the defendant.

The defendant claims that any liability on his part is barred by the statute of limitations.The statute provides that an action upon such an obligation as that embodied in this note and in the writing upon the back of it must be brought within six years after the right of action accrued.General Statutes, § 6005.The right of action upon the note accrued at once upon its execution and delivery.House v. Peacock,84 Conn. 54, 55, 78 A. 723;Higinbotham v. Manchester,113 Conn. 62, 72, 154 A. 242, 79 A.L.R. 85.The provision in the Negotiable Instruments Act, General Statutes, § 4388, that, when a note is payable on demand, presentment for payment must be made within a reasonable time, does not change the date of the maturity of the note, but fixes the time within which presentment must be made in order to charge an indorser.Hampton v. Miller,78 Conn. 267, 271, 61 A. 952.Any cause of action against the maker of the note, in the absence of circumstances tolling the statute, was therefore barred after six years from its execution and delivery.Trustees of Old Alms-House Farm v. Smith,52 Conn. 434, 436;Curtis v. Smith,75 Conn. 429, 432, 53 A. 902.If we regard the writing upon the back of the note as a guaranty, a cause of action accrued upon it as soon as the note was executed and delivered.Bernd v. Lynes.71 Conn. 733, 43 A. 189.If we regard that writing as an indorsement, the signers, by waiving demand, notice of nonpayment, and protest became immediately liable upon it, and an action could he brought against them at any time after the execution and delivery of the note.Whichever view we might take of the writing, any cause of action upon it would be barred after the expiration of six years, unless the running of the statute was tolled by other circumstances.

We held in Bound v. Lathrop,4 Conn. 336, 10 Am.Dec. 147, following the English common-law rule, that a part payment by a joint contractor, including one of the makers of a joint note, would toll the statute as to the other contractor.In Austin v. Bostwick,9 Conn. 496, 502, 25 Am.Dec. 42, Bissell v. Adams.35 Conn. 299, 302, andBeardsley v. Hall,36 Conn. 270, 275, 4 Am.Rep. 74, we applied the rule as regards an acknowledgement or part payment of a debt by one copartner made before the statute had run against the obligation in question.In Coit v. Tracy,8 Conn. 268, 276, 20 Am.Dec. 110, Id., 9 Conn. 1, while we recognized the rule, we declined to apply it as regards two partners where the acknowledgment of the debt by one was made some years after the dissolution of the partnership and the interest of the partner making the acknowledgment was adverse to that of his former associate.In two cases- Clark v. Sigourney, 17 Conn. 511, andCaldwell v. Sigourney,19 Conn. 37-we had before us a note which ran as follows: " I, Thomas Lloyd, as principal, and Charles Sigourney, as surety, promise to pay," etc., and which was signed by both Lloyd and Sigourney as makers; and we held that a promise made by Lloyd sufficient to toll the statute of limitations as to his liability upon the note would also toll it as regards Sigourney, speaking of them as " joint makers" of the note, as we did later in Bissell v. Adams, supra.

The rule that a part payment by one joint debtor will toll the running of the statute as regards the other, which was at one time the common law of England, has been changed by statute there and in a number of jurisdictions in this country in which it was early adopted; it has never been accepted in some of our states; in others, where once recognized, it has been repudiated by judicial decisions; and, in others, it has been limited in its scope or followed with reluctance as a rule established by early decisions.There can be no doubt that the rule does not represent the opinion prevailing to-day and that it is opposed by the great weight of authority.Note, 71 A.L.R. 375;37 C.J.pp. 1131, 1163.The principle upon which it proceeds, that out of the community of interest represented by the joint obligation arises an agency on the part of each obliger to toll the statute as to the other by part payment or acknowledgment of the debt, clearly has little or no foundation in the actual intent of the parties or in the nature of their relationship.Bell v. Morrison, 1 Pet. 351, 367, 7 L.Ed. 174;Kallenbach v. Dickinson,100 Ill. 427, 435, 39 Am.Rep. 47;Walters v. Kraft,23 S.C. 578, 582, 55 Am.Rep. 44;Mayberry v. Willoughby,5 Neb. 368, 374, 25 Am.Rep. 491;Exeter Bank v. Sullivan, 6 N. H. 124.The rule is undoubtedly capable of working great hardship; one joint obliger, lulled into a sense of security by the running of the statute against the debt, may suddenly be confronted with an obligation which he had reason to believe had been barred many years before, but which he finds has been kept alive by an acknowledgment or part payment made by his codebtor, perhaps even without his knowledge.If the exigencies of this case required, we should feel compelled to consider carefully whether the rule announced in our earlier cases should, in the light of these considerations, now be followed.

In this casewe are really asked to extend the rule beyond the scope we have heretofore given to it, so as to give to payments made by a principal debtor the effect of tolling the statute as regards one who is a guarantor or indorser of the note representing the debt.In Carpenter v Thompson,66 Conn. 457, 34 A. 105, while pointing out that a contract of guaranty upon a note was a distinct obligation from that created by the note itself, w...