In re Girvin

• Decision Date: 12 March 1908
• Citation: 160 F. 197
• Parties: In re GIRVIN.
• Court: U.S. District Court — Northern District of New York

160 F. 197

In re GIRVIN.

United States District Court, N.D. New York.

March 12, 1908

Edward F. Shea, for trustee.

Carl E Dorr, for objecting creditor.

Edwin Nottingham, for claimant.

RAY District Judge.

While there are many facts and circumstances tending to show that the claimant, Fannie W. Girvin, has no valid claim whatever against the estate of the bankrupt, I am disposed not to disturb the finding of the referee, who saw the witnesses that she loaned money to her husband, James E. Girvin, and a partner (a limited partnership), at the times and in the amounts specified. These loans were at different dates, in different amounts, and with the agreement that interest at 6 per cent. should be paid. The firm opened no account with claimant on its books, but kept the dates and amounts of these loans on a slip or slips of paper, except the amount of six checks, for $500 each, given by claimant to James E Girvin. The first loan was the sum of $100, in September 1896, and on October 20, 1904, the aggregate of the loans, exclusive of interest, was $10,786.32, as shown by the finding of the referee. Thereafter there were loans of $75, December 31, 1903, and $5.50, October 20, 1904. Each loan was a separate and distinct indebtedness or claim, each was due on demand, each drew interest from its date under the agreement, and the statute of limitations ran as against each loan from its date. The evidence is that these were debts of the firm, and so understood and carried, not in the books, but upon these slips. Six checks, of $500 each, were not on these slips.

February 28, 1898, Girvin added up the amount of these loans to that date, exclusive of interest, and entered the total on one of the books of the firm to the credit of the claimant, Fannie W. Girvin. This total was $6,886.32. She had no other account with the firm. October 20, 1904, he added up certain of the other loans, exclusive of any interest, and entered the total of same in said book of the firm to the credit of claimant, viz., $3,900. Subsequently said James E. Girvin showed these entries to his wife, the claimant, and stated, in substance, that this was the account of the amount owing her by the firm. There was no accounting or figuring up between them; and there is no evidence anything further was said or done. There was no credit of interest. Confessedly these aggregates entered on the books did not show the amount due under this agreement for the loans, as interest accrued and due on demand was not included. As all that was said was merely a statement by the debtor to the creditor that this was the account between the firm and her, I do not think it became an account stated and settled, or that it constituted a waiver of the interest. It was done to show the wife that an account was being kept. I think the rights of Fannie W. Girvin were in no way changed or modified by this transaction or exhibition of these entries, to the making of which she was not a party. It is not shown she assented to what her husband said, or to the correctness of the account. October 27, 1904, the said partnership was dissolved, and Girvin assumed all its debts and obligations, and became individually liable to pay the indebtedness. The firm or partnership was not released.

Fannie W. Girvin owed one Warren H. Girvin, on a promissory note made by her, the sum of $1,000. Of this fact her husband was cognizant. October 28, or November 1, 1905, James E. Girvin paid this note. Payment was not demanded, and there was no request on the part of the claimant here, Fannie W. Girvin, that he should pay it. However, it appears that on several occasions James E. Girvin told his wife that he expected to pay it very shortly. On this subject the evidence of the husband is:

'I paid for her that $1,000 note. Q. What, if anything, had you said to her about paying that note for her prior to this time that you made the payment? A. From time to time, during a period of two or three years, I had said that very shortly I expected to pay the note. Q. What note? A. The $1,000 note that Mr. Girvin held against my wife. Q. And did you say anything to her at the time you paid the note, about having paid it? A. Shortly after. Q. What did you say? A. I told her that I had paid the $1,000 note that my brother held against her, and charged it to her account in the store, and showed her the note canceled. Q. Did she say anything? A. I don't recall what she said.'

The wife says her husband simply showed her the note and told her he had charged it to her on her account. She said nothing. In fact, it was charged to her in the firm book referred to on the debit side: 'Fannie W. Girvin, $1,000."' There was no other payment made on these loans, or either of them.

The trustee and objecting creditor set up the statute of limitations, state of New York, as a bar to so much of this claim as had accrued due more than six years prior to the adjudication in bankruptcy, which was on the 6th day of March, 1906. This would cover all items of the claim prior to March 5, 1900. Between February 15, 1899, and October 31, 1903, no loans were made, or, if made, they were not put on the slips or books. The loans after February 15, 1899, and commencing October 31, 1903, were as follows: October 31st, $500; October 31st, $500; December 17th, $500. In 1904: March 17th, $500; April 12th, $500; July 8th, $500; and after that items aggregating $900, or $3,900 in all. This is the second aggregate amount carried to the firm book; but of this only $819.50 comes from any slip or memoranda, and does not include either of said checks. I find no evidence of an agreement or understanding to pay interest an these loans evidenced by these checks. It would seem they were temporary loans, if loans at all.

The trustee and creditor objecting says the payment of the note of Mrs. Girvin, made by James E. Girvin, and charged to her on the book, must apply on these items of indebtedness incurred subsequent to February 15, 1899, and commencing October 31, 1903, and that it cannot be treated or regarded as a payment made to apply on the prior, stale, and outlawed items of indebtedness; that is, cannot be used as an acknowledgment of the continued existence of same as valid debts or claims, sufficient to take same from the operation of the statute. They insist there is no evidence of an agreement or understanding the payment of the note should so apply, and that in the absence of such evidence the payment of the note and entry on the book were ineffectual to remove the bar of the statute.

Sections 380 and 382 of the Code of Civil Procedure of the state of New York (1 Bliss' N.Y. Ann. Code (5th Ed.) pp. 225, 227) provides as follows:

'Sec. 380. The following actions must be commenced within the following periods after the cause of action has accrued: * * *

'Sec. 382. Within six years: (1) An action upon a contract obligation or liability, express or implied; except a judgment or sealed instrument. * * * '

This bars all remedy, unless there is an acknowledgment of the debt or a new promise, which must be in writing and signed by the party to be charged thereby, or a payment thereon of principal or interest.

Section 395, Code of Civil Procedure, reads as follows:

'An acknowledgment or promise, contained in a writing signed by the party to be charged thereby, is the only competent evidence of a new or continuing contract, whereby to take a case out of the operation of this title. But this section does not alter the effect of a payment of principal or interest.'

Before considering the effect of the payment of said note by Girvin, it is well to dispose of another section of the Code (section 386) which reads as follows:

'Sec. 386. In an action brought to recover a balance due upon a mutual, open, and current account, where there have been reciprocal demands between the parties, the cause of action is deemed to have accrued from the time of the last item proved in the account on either side.'

This account between the firm and this claimant, Mrs. Girvin, kept on the books or slips, did not constitute it a mutual, open, and current account. Adams v. Olin, 140 N.Y. 150, 35 N.E. 448; Matter of Gladke, 45 A.D. 625, 60 N.Y.Supp. 869; Green v. Disbrow, 79 N.Y. 1, 35 Am.Rep. 496; Compton v. Bowns, 5 Misc.Rep. 213, 25 N.Y.Supp. 465; Raux v. Brand, 90 N.Y. 309. Thus a current account kept by a husband of his transactions with his wife's money does not constitute a mutual account; and an account simply containing items of moneys received and paid is not a mutual, open, and current account within this section. Adams v. Olin, 140 N.Y. 150, 35 N.E. 448. An account upon which but three items of credit appear in five years is not a mutual, open, and running account. Matter of Gladke, 45 A.D. 625, 60 N.Y.Supp. 869. Cash items form no part of a mutual, open, and running account Raux v. Brand, 90 N.Y. 309.

We have, therefore, several separate and distinct loans of money, on interest, made at different dates, and one payment credited to Girvin by himself, which he made for his creditor without her request, but of which she was informed, with a statement that he had charged it to her in her account. There was no agreement or statement on what items of indebtedness or on which loans it should apply as a payment, and it was not apportioned, and the account where it was credited did not show the several loans or the amounts thereof separately. Some-- the most-- of these items of indebtedness were then barred by the statute of limitations. There were new and recent loans, not affected by the statute, against which in no event had the statute run. Is this payment of $1,000 to be apportioned pro rata to all of these various items, those accruing due before the statute...