Smith v. Dowden

• Decision Date: 24 January 1919
• Parties: SMITH et al. v. DOWDEN.
• Court: New Jersey Supreme Court

105 A. 720

92 N.J.Law 317

SMITH et al.

v. DOWDEN.

Supreme Court of New Jersey.

Jan. 24, 1919.

(Syllabus by the Court.)

Appeal from District Court of East Orange.

Suit by Frederick H. Smith, 3d, and others, executors, against Willis G. Dowden, executor of George A. Dowden, deceased. Judgment for plaintiffs, and defendant appeals. Reversed.

Argued November term, 1918, before BKKGEN, KALISCH, and BLACK. JJ.

Payne & MtCall, of Newark, for appellant.

Gedney, McBride & Gedney, of East Orange, for respondents.

BERGEN, J. The plaintiff brought suit against the executor of George A. Dowden, deceased, to enforce the alleged liability of defendant's testator as indorser and guarantor on a promissory note. The note, mad:' by Clara Collins, bears date October 1, 1999, payable two months after date, to the order of S. Collins, for $1,100, indorsed by the latter and Dowden, and purchased before maturity by the testator of the plaintiffs. To induce the purchase, Dowden signed and delivered to the purchaser the following writing:

"I hereby waive demand, protest, and notice of protest of note of Clara. Collins, October 1, 1909, 2 mos., $1,100, indorsed by me, and authorize payments on account of same without prejudice, and guarantee payment of balance due on same."

The principal defense was the statute of limitations, which the trial court overruled, and ordered a judgment for plaintiff, from which the defendant appeals.

Without any intervening circumstance, this note would mature December 1, 1909, and the bar of the statute become effective December 1, 1915, while the suit was not brought until October 18, 1910. One of the intervening circumstances was the death of Dowden September 19, 1915, which extended the period within which the action might be brought for 6 months, or until June 1, 1910, and in the absence of any other relevant circumstances, an action not commenced until October 18, 1916, would be subject to the bar created by the statute. Another circumstance is that several payments on account of the note were made by the maker, aggregating $700, the last being June 24, 1910, which, if binding on Dowden or his executor, would prevent the statute from becoming a bar until after this action was instituted, allowing the 6 months' suspension of the right of action against Dowden's estate.

The trial court was of opinion that, because a claim was presented against the estate of Dowden March 30, 1916, that action in some way suspended the statute. This was clearly erroneous, for it was not the commencement of an action, and only furnished the basis of a suit for a legal claim, as the estate of Dowden is not claimed to be insolvent, so that Smith v. Crater, 43 N.J.Eq. 636, 12 Atl. 530, does not apply.

The trial court based its judgment upon a determination that Dowden was liable as indorser, because he was chargeable with payments made by the maker, which is contrary to the law in this state, and declined to consider the effect of such payments on the liability of Dowden under the terms of his guaranty; but if the judgment can be sustained upon any of the issues tried, supported by...