Scott v. Degraw
| Decision Date | 14 November 1911 |
| Docket Number | 16,935 |
| Citation | 133 N.W. 179,90 Neb. 274 |
| Parties | ROSEL P. SCOTT, APPELLEE, v. GEORGE DEGRAW, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Morrill county: HANSON M. GRIMES JUDGE. Reversed.
REVERSED.
G. J Hunt, for appellant.
Williams & Williams, contra.
The defendant executed and delivered to one J. W. Harper his promissory note for $ 750, dated March 11, 1901, and due on the 11th day of December, 1901. The plaintiff brought this action upon this note, alleging that the said Harper had assigned the note to him without recourse, and that two several payments, one of June 14, 1901, and the other July 15, 1901, were indorsed on the note, and alleging 13 other credits by cash paid to the plaintiff. The allegation was that 11 of these payments to the plaintiff were made in the years 1901, 1902, and 1903, one payment in 1904, and another payment of $ 6 on the 7th day of February, 1905. The action was begun on the 31st day of December, 1909. The note sued upon appeared upon its face, as alleged in the petition, to be barred by the statute of limitations. It was not alleged in the petition that any payment had been made to the plaintiff within the five years prior to the commencement of the action, except a payment of $ 6 on the 7th day of February, 1905. The petition would have been demurrable as showing upon its face that the action was barred by the statute of limitations, but for this allegation of the payment of $ 6 in February, 1905. These allegations of payment were denied in the answer.
In an action upon a promissory note, if the note upon the face appears to be barred by the statute of limitations, the petition fails to state a cause of action, unless it also contains allegations of fact which show affirmatively that the statute has not run against the note. Hedges v. Roach, 16 Neb. 673, 21 N.W. 404. The statute of limitations in this state is a statute of repose; it is not to be construed as merely raising a presumption of payment; it destroys the right of action. Mayberry v. Willoughby, 5 Neb. 368, 25 Am. Rep. 491; Chapman v. Kimball, 7 Neb. 399; Gatling v. Lane, 17 Neb. 80, 22 N.W. 453. When it does not appear upon the face of the petition, the defendant must plead it, and the party pleading the facts must prove them. Van Burg v. Van Engen, 76 Neb. 816, 107 N.W. 1006. When the plaintiff, as in this case, brings his action upon a promissory note which shows upon its face that more than five years elapsed after the maturity of the note before the commencement of the action, and then to remove the bar of the statute pleads payments on the note within the five years, and these allegations of payment are denied in the answer, with an allegation that the action is barred, the plaintiff must prove the alleged payments in order to remove the apparent bar of the statute. This is the precise point determined in Hedges v. Roach, supra.
The answer also alleged that at the time of the execution of the note the defendant "transferred and delivered to said Harper, as collateral security for the payment thereof, a number of notes payable to defendant, all dated February 25, 1901, and running for one year, payable at Sidney, Nebraska, with 6 per cent. interest from date, the total of the face of which said notes exceeded in the aggregate the amount of the note herein sued upon." This allegation is supported by the evidence, and is not disputed. The evidence further shows that the said Harper and this plaintiff were both interested in the note and entitled to the proceeds thereof, although the note was taken in the name of Harper only as payee, and also shows that it was agreed between the parties to the note that the collateral notes should be left with the Bank of Nebraska of Sidney, of which one Martin was cashier, for collection.
When notes are transferred as collateral to the principal note, in the absence of any agreement to the contrary, the law implies that payments upon the collaterals are payments upon the principal note, and the notes having been left at the bank by agreement of the parties without any evidence of any agreement as to the application of the proceeds of the collaterals, these proceeds must be considered as paid upon the principal note when they were received by the cashier Martin. The evidence shows that before the note sued upon had been...
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