Cox v. Phelps

• Decision Date: 13 November 1897
• Citation: 45 S.W. 990
• Parties: COX et al. v. PHELPS et al.
• Court: Arkansas Supreme Court

45 S.W. 990

COX et al. v. PHELPS et al.

Supreme Court of Arkansas.

November 13, 1897.

Appeal from chancery court, Pulaski county; David W. Carroll, Chancellor.

Suit by Sarah R. Phelps and others against N. W. Cox, administrator of the estate of N. G. Hewitt, and others. From a decree in favor of the plaintiffs, defendants appeal. Reversed.

This suit was begun February 13, 1894, to foreclose a deed in trust made to secure a note given by N. G. Hewitt for $6,000 on August 1, 1879, due three years after date, for money borrowed of Mrs. Mary G. Van Horn. The property conveyed in the deed is lot 12 in block 1 in the city of Little Rock. N. G. Hewitt died in February, 1887, leaving a will, which was probated March 18, 1887. N. G. Hewitt paid the interest on this note up to the time of his death. The note was transferred to Mrs. Sarah R. Phelps, the plaintiff in this suit, and was never probated against the estate of N. G. Hewitt, upon whose estate the appellant N. W. Cox was administrator with the will annexed, in the county of Pulaski, in the state of Arkansas, where this suit was commenced. The several defendants, in their answers to the complaint, pleaded the statute of limitations of five years, and set up other defenses not discussed here. It appears from the evidence in the case that D. Reeve (who was indebted to N. G. Hewitt, and had been requested by Hewitt, in his lifetime, to pay the interest on this note for him), after the death of N. G. Hewitt, made two annual payments of interest on the note secured by the deed in trust. The latter of these two payments was made December 23, 1889. Both payments were made with money which Cox, the administrator of N. G. Hewitt's estate, furnished Reeve, which he was unable to repay to Cox as such administrator, and for which he gave Cox, as administrator, his receipt. For the amounts thus paid, Cox charged the estate of Hewitt, in his settlement of said estate, by crediting himself, as administrator, therewith, which was approved by the probate court. It is claimed by the appellees that these payments kept the debt alive, and from being barred by the statute of limitations, up to the time suit was commenced.

Rose, Hemingway & Rose and P. C. Dooley, for appellants. Dodge & Johnson, for appellees.

HUGHES, J. (after stating the facts).

Unless the payments made by D. Reeve, with money of the estate of N. G. Hewitt, furnished him by N. W. Cox, administrator of said estate, and for which Cox was allowed credit, as administrator, in his settlement of Hewitt's estate, by the probate court of Pulaski county, prevented the bar of the statute of limitations, this action was barred when the suit was begun. The inquiry then is, do these payments have the effect, in law, to prevent the bar of the statute of limitations? Is the plaintiff's right of action tolled notwithstanding these payments? "Actions on promissory notes and other instruments in writing not under seal, shall be commenced within five years after the cause of action shall accrue and not afterwards." Act Dec. 14, 1844 (Sand. & H. Dig. § 4827). This note was not under seal. "Actions on writings under seal shall be commenced within five years after the cause of action shall accrue and not afterwards: provided, this act shall not apply to any instrument now in existence." Act March 29, 1859 (Sand. & H. Dig. § 4828). According to the statutes, the right of action on this note was barred within five years from its maturity, unless suit thereon was commenced within the five years, or unless the running of the statute was stopped by a payment thereon within the five years. Section 5094, Sand. & H. Dig. provides that "in suits to foreclose mortgages or deeds of trust it shall be sufficient defense that they have not been brought within the period of limitation prescribed by law for a suit on the debt or liability for the security of which they were given." It will appear from the statement of facts that the note secured by the deed of trust was given August 1, 1879, and was due three years after date (that is, on August 1, 1882); that the last payment of interest was after N. G. Hewitt's death, in February, 1887, and was made by D. Reeve, December 23, 1889, with money of Hewitt's estate, furnished him by Cox, administrator of said estate, for which Cox was allowed credit in the settlement of said estate, which was approved by the probate court of said county. Cox furnished this money without any order of the probate court, and it does not appear that any application had been made to said court for an order, or that any order by said court for the redemption of said lot from the mortgage was ever made. It does appear that said note was never probated or allowed as a debt against the estate of N. G. Hewitt, deceased. Before an administrator can pay or allow any claim against the estate of which he is administrator, the claimant must append to his demand an affidavit of its justice, stating that "nothing has been paid, or delivered toward the satisfaction of the demand, except what is credited thereon, and that the sum demanded, naming it, is justly due," etc. Sand. & H. Dig. § 114; Ross v. Hine, 48 Ark. 304, 3 S. W. 190; Alter v. Kinsworthy, 30 Ark. 756. If the administrator could not allow or pay a claim at all unless the same was authenticated by law, could he, by payment upon it, stop the running of the statute of limitations? "A part payment which will revive a debt barred by limitation, or form a new point from which the statute will begin to run, must be such as can be treated as an admission of the continued existence of the debt, and an implied promise to pay the balance." Chase v. Carney, 60 Ark. 497, 31 S. W. 43; Taylor v. Foster, 132 Mass. 33. "It was therefore necessary, by the rules of special pleading, to avoid the statute of limitations, to reply a new promise, under which it was competent to prove an acknowledgment of the debt. * * * It is not enough to prove an admission of indebtedness, if it is accompanied by circumstances which repel such inference, or even leave it in doubt whether the party intended to revive the cause of action." Roscoe v. Hale, 7 Gray, 275; Bank v. Wooddy, 10 Ark. 642. In the case cited from 7 Gray, it is held that "the payment of a dividend by an assignee under the insolvent laws will not take the residue of the debt out of the statute of limitations against the debtor." Syllabus. "Proof of payment of part of a debt is, in legal effect, only evidence of an acknowledgment, from which a promise to pay the remainder of the debt may properly be inferred." 7 Gray, 276; Wood, Lim. Act. § 97; Alston v. Bank, 9 Ark. 459. "The part payment must be under such circumstances as reasonably, and by fair implication, lead to the inference that the debtor intended to renew his promise of payment." Taylor v. Foster, 132 Mass. 33. "And it must have been made by the debtor in person, or by some one authorized by him to make a new promise in his behalf. And a payment made by a third person, without authority from the debtor to make it, cannot remove the statute bar, because it does not imply any acknowledgment of the debt by the debtor. Under this rule it is held that a partial payment by an assignee for the benefit of creditors will not remove the bar as to the assignor. * * * Nor will a payment by an administrator, under surrogate's decree, take the debt out of the statute, as to the residue." Wood, Lim. Act. § 101. This is equally applicable to a part payment before the debt is barred which might, if it amounted to a promise to pay the balance of the debt, form a new point from which the statute would commence to run. But if the administrator, under our probate system, could neither allow nor pay a debt not probated against the estate of which he is administrator (which is the case), how can it be said that the payment by Reeve for Cox, the administrator of Hewitt's estate, of the interest on this note, prevented the bar of the statute attaching, when there was no order of the probate court authorizing such payment, or authorizing redemption of the lot from the mortgage? How could this be construed into an acknowledgment of the existence of the debt, from which a new promise to pay the balance could be fairly inferred? There was no authority in Cox to make the payment. There could be none to suspend the operation of the statute of limitations by a promise he was not authorized to make. His promise could not set aside the law. No promise could be inferred from such payment. The administrator has no concern with the real estate, unless needed by him as assets for the payment of debts. This was a debt he never could have paid legally, because it was not proven or allowed against the estate; having been barred, as against the estate, by the two-years statute of nonclaim, when suit was brought. The decree of the circuit court foreclosing the mortgage is reversed, and the cause is dismissed for the want of equity, as to the parties appealing.

Dissenting Opinion on Motion for Reconsideration.

(May 21, 1898.)

BUNN, C. J.

In his lifetime, Nelson G. Hewitt borrowed of Mrs. Van Horn $6,000, and, to secure the payment of the same, gave his deed of trust on a certain lot (described) in suit, situated in the business portion of the city of Little Rock. The money was borrowed to put a brick building on the lot mortgaged. The building was erected, and the lot, thus improved, was worth largely more than the amount of the mortgage debt, — perhaps several times more. Hewitt continued to pay, directly and through his agent, the annual interest, until his death. He died, having made a will, with provisions as to care of his property, and its disposition at the end of a certain time, or the happening of certain events; leaving it to be managed...