Huus v. Huus

• Decision Date: 10 July 1947
• Docket Number: 7050.
• Citation: 28 N.W.2d 385,75 N.D. 392
• Parties: HUUS v. HUUS et al.
• Court: North Dakota Supreme Court

28 N.W.2d 385

75 N.D. 392

HUUS v. HUUS et al.

No. 7050.

Supreme Court of North Dakota

July 10, 1947

Syllabus by the Court

1. Where an action to recover upon a debt, evidenced by a promissory note, is parred by the statute of limitations and the holder relies upon a written acknowledgment or promise to pay the debt as evidence of a new or continuing contract whereby to take the case out of the operation of the statute of limitations and the pleadings and the proof show the defense has merit, the burden is upon the plaintiff to show that defendant has made a sufficient written acknowledgment or promise in order to avoid the effect of the statute of limitations.

2. Where the holder of the note relies upon an acknowledgment, a promise may be inferred from an unconditional express written acknowledgment of the debt.

3. Where the plaintiff relies upon a promise inferred from a written acknowledgment of the debt this promise must be such as is deducible from the acknowledgment so that it can be said the acknowledgment clearly and fairly implies that the debtor promises to pay; but if the acknowledgment be such that the debtor merely intimates he will pay the debt if certain conditions which he mentions are fulfilled and retains to himself the power to determine whether he will pay under such circumstances it cannot be said that promise is so sufficiently explicit and unconditional as permits the removal of the bar of the statute.

R E. Swendseid, of Stanley, for plaintiff-appellant.

Wyckoff & Schulte, of Stanley, for defendants-respondents.

BURR, Judge.

January 18 1928, the defendants gave Ex. 1, their promissory note for $100 to one Sven A. Huus who sold it to the plaintiff. The note recites: 'Nov 1st 28 after date we promise to pay to the order of Sven A Huus, One Hundred--no--100 Dollars at 5% Int. * * *.'

In 1940 there was some correspondence between the plaintiff and the defendant Theo. Huus, regarding Ex. 1, and on December 5 1940, Huus wrote to the plaintiff Ex. 2, as follows:

'Received your letter some time ago which was delayed.

Was sure surprised the other day to receive a letter from Attorney Swenseid of Stanley and summoned a day after

I wrote you at Hatton on Oct 26th and was waiting for an answer.

At that time I was waiting for my wheat Loan and did not know how much I would have left of same.

Now I know my doom: On the 1/4 Section I rent, I get 1/2 or 516 bu. wht and after taking off combining the (Barnyard Loan) took all except $27.00.

And on the Land I own the Federal Land Bank took about $300.00 with Taxes. So you see if we get a fair crop it does not mean much. All I have left now and for the coming year is the seed and some oats & barley of which to live on this winter from the latter.

Have two cows milking which furnish milk & cream & butter for my family of 6 and not eggs at this time of the year and no other income.

I am sorry we could not pay you what you asked: but am willing to renew the note the best way we can.

Hope you will see into our situation, even with a fair crop at only 68¢ a bu. it did not leave anything extra after paying expenses and the big debts as we all have out here that has been piling up every year. * * *.'

The holder commenced action on the note, both defendants being served with the summons and complaint on November 30, 1946. The answer is a general denial coupled with the defense of the statute of limitations.

On the trial of the case the parties stipulated that the defendants signed Ex. 1, and plaintiff is the owner thereof; that Ex. 2 was received by plaintiff in due course of mail, and that the statements 'I wrote you at Hatton on Oct 26th and was waiting for an answer'--and 'At that time I was waiting for my wheat loan and did not know how much I would have left of same' referred to the note Ex. 1. The note and letter were received in evidence by stipulation. There is no stipulation nor any proof offered regarding any endorsement on the note nor was an endorsement on the note offered in evidence.

The only witness sworn was defendant Oscar G. Huus, who testified he never made any payment on the note nor authorized any payment to be made on the note.

The case was tried to the court and in Finding No. 4 the court set forth Ex. 2 in full. From this the court concluded, 'that the written instrument mentioned and set forth in paragraph four of the Findings of Fact herein is not sufficient to toll and suspend the running of the Statute of Limitations.'

The court ordered judgment dismissing the action with costs in favor of the defendants, and the plaintiff appealed.

The note involved is a joint note. Where one of the makers of a joint note pleads the statute of limitations in bar of the action against him a payment by one of the other joint debtors does not operate as a promise binding any one except the debtor who makes or authorizes the payment and this rule is based upon the theory that the relationship of agency does not arise upon the mere relation of joint or joint and several debtors. Grovenor v. Signor et al., 10 N.D. 503, 510, 88 N.W. 278, 281.

In the case at bar the pleadings and the proof show that by November 28, 1934, the cause of action was barred as against both defendants there being no proof of any payment on the note though it bore an endorsement of $1 as of Dec. 4, 1940. It therefore became incumbent upon the plaintiff to show that the defendants had made the written acknowledgement or promise required by statute. See Paine v. Dodds et al., 14 N.D. 189, 199, 103 N.W. 931, 934, 116 Am.St.Rep. 674.

It is not claimed the defendant Oscar G. Huus knew anything about Ex. 2, or authorized the same. Neither is it claimed he made any acknowledgment of the debt or any promise to pay the same. The judgment of the court in dismissing the action against Oscar Huus must be sustained.

For the required acknowledgment or promise the plaintiff relies solely on this sentence found in Ex. 2: 'I am sorry we could not pay you what you asked: but am willing to renew the note the best way we can.' This sentence must be interpreted in the light of the letter as a whole. Does the letter contain an unconditional promise to pay an outlawed debt or such written acknowledgment of an outlawed debt that it may be said an unconditional promise may be implied therefrom. There is no claim any condition was accepted.

The statute of limitations is: 'a statute of repose. It is a statute enacted as a matter of public policy, to fix a limit in which an action must be brought or the obligation will be presumed to have been paid. The statute is intended to run only against those who are neglectful of their rights, and fail to use reasonable and proper diligence in the enforcement thereof. They are based on the presumption of law that, from the lapse of time, it is fair to presume that the debt has been paid.' County of Burleigh, etc., v. County of Kidder, etc., 20 N.D. 27, 34, 125 N.W. 1063, 1065. See also State of North Dakota v. Halverson, 69 N.D. 225, 227, 285 N.W. 292, 293.

The case involves the construction of Sec. 28-0136 of the R.C. of 1943, which provides: 'No acknowledgment or promise is sufficient evidence of a new or continuing contract, whereby to take the case out of the operation of this chapter, unless the same is contained in some writing signed by the party to be charged thereby, but this section shall not alter the effect of any payment of principal or interest.'

The language of this statute is in harmony with the language of the statutes in most of the states. It is practically the identical language of Sec. 63 of the Code of 1868 at least. And the language has remained unchanged since the Code of 1877. Prior thereto Ch. 8 was enacted at the first session of the legislature of Dakota Territory in 1862. Section 21 of the chapter provided: 'In any case, founded on contract, when any part of the principal or interest shall have been paid, or an acknowledgment of an existing liability, debt, or claim, or any promise to pay the same shall have been made, an action may be brought on such case within the period prescribed for the same, after such payment, acknowledgment, or promise.' This 'period prescribed for the same' is found in Sec. 11 and states it as six years. It will be noted the evidence of intent required of the debtor is stated in the alternative--'no acknowledgment or promise' etc.

Most jurisdictions appear to hold that 'an unqualified acknowledgment' infers a 'promise' and is sufficient to toll the statute. This inference however must be clearly deducible as a direct promise. Some seem to hold the terms 'acknowledgment' and 'promise' are synonymous and some that 'acknowledgment' and 'promise' are separate and each must be in writing.

34 Am.Jur. 233, et seq., sets forth this general rule in sections 290 and 291: 'that a new promise to pay a debt or an unqualified acknowledgment of a debt from which a promise to pay may be implied will take a case out of the statute, * * *. It is not, however, the mere acknowledgment of a subsisting indebtedness which removes the bar. Where a debt is admitted to be due, the law raises a promise to pay it. It is this new promise, either made in express terms or deduced from an acknowledgment, as a legal implication, which is to be regarded as reanimating the old promise. * * *.'

In 37 C.J 1104, it is shown a promise preventing or repelling the bar of a statute 'may be implied from a clear, unconditional admission of the existence of the debt at the time of such admission if it is unaccompanied by any circumstances which rebut such implication, such for example as * * * expressions indicating a mere willingness to pay at a future time, * * *.' At page 1108 the same authority shows, 'The...