Theis v. Wood
| Decision Date | 23 December 1911 |
| Citation | 142 S.W. 431,238 Mo. 643 |
| Parties | GEORGE THEIS, Jr., Appellant, v. E. A. WOOD |
| Court | Missouri Supreme Court |
Appeal from Pettis Circuit Court. -- Hon. Louis Hoffman, Judge.
Affirmed.
C. C Lawson and R. S. Robertson for appellant.
(1) The Missouri law governs as to the Statute of Limitations in this case. Gross v. Watts, 206 Mo. 373; Sterling v Hunt, 10 Mo.App. 596; McMerty v. Morrison, 62 Mo. 140; Lyman v. Campbell, 34 Mo.App. 213; Morgan v. Railroad, 51 Mo.App. 523; O'Beer v. Bank, 33 L. R. A. 384; Thomas v. Clarkson, 6 L R. A. (N. S.) 658; Flowers v. Foreman, 23 How. 132; Field v. Dickenson, 3 Ark. (3 Pike) 409; Hoggett v. Emerson, 8 Kan. 262. (2) The payment made by Mayse, joint maker with defendant on the note in 1899, was sufficient to stop the Statute of Limitation from running in favor of Wood, and it would commence running from that date. McClerg v. Howard, 45 Mo. 365; Harris v. O'Deal, 39 Mo.App. 270; Bender v. Markel, 37 Mo.App. 234; Regan v. Williams, 185 Mo. 628; County of Vernon v. Stark, 64 Mo. 408; Merritt v. Day, 38 N. J. L. 32; Burr v. Williams, 20 Ark. 188; Beardsley v. Hall, 36 Conn. 270. (3) By the above cases, we can recover under Missouri law, irrespective of what the Kansas law might be, but even under the Kansas law this note is not barred, but an action thereon can be maintained in Kansas if Wood could be summoned there, and an action can be maintained in Missouri under the Kansas law. Williams v. Railroad, 64 L. R. A. 794; Lane v. Bank, 6 Kan. 74; Hoggett v. Emerson, 8 Kan. 262; Morrell v. Ingle, 23 Kan. 32; Colon v. Lanther, 37 Kan. 431; Anent v. Lowenthal, 52 Kan. 706; Investment Securities Co. v. Bergthold, 60 Kan. 813; Coale v. Campbell, 58 Kan. 480.
G. W. Barnett and J. H. Bothwell for respondent.
(1) The court did not err in giving a peremptory instruction for the defendant in this case. The admission is that the defendant Wood had resided continuously in Missouri for more than ten years before the bringing of this suit, and for that reason the cause of action was barred under the statutes of Missouri. Sec. 1888, R. S. 1909. (2) In those states where a payment by one joint maker of a note arrests the running of the Statute of Limitations as to the other makers, it is on the theory of virtual agency. Each is the agent of the other for the making of payments. It is a mutual agency created by and growing out of the note itself. Craig v. Callaway Co., 12 Mo. 97; Smith's Admr. v. Irwin, 37 Mo. 174; Lane v. Doty, 4 Barb. (N. Y.) 532; Kallenbach v. Dickinson, 100 Ill. 427; Disborough v. Bedleman, 21 N. J. L. 680. (3) As to whether the note in this case created each joint maker an agent for the other in the matter of making payments on the note, with power to bind each other by such payments so as to start the running of the Statute of Limitations afresh from that point, depends on what the law of Kansas is and was on that subject. The note is a Kansas contract and the law of Kansas must be read into it. The parties are presumed to know the law and to have contracted with reference to the law of the State where the contract was made and where it was to be performed. Under the laws of Kansas no such implied agency was created by the making of the joint note. Under the laws of Kansas which must govern here, the payment by one joint maker of a note does not stop the running of the Statute of Limitations as to the other joint maker but only as to the party making the payment. Steele v. Souder, 20 Kan. 39. (4) Not only did the note fail to create any agency as to each other for the purpose of making payments such as to toll the statute, but, at the very time the payment was made by Mayse, the effect of that payment must be determined by the law of Kansas where the payment was made, which law in effect declares that such payment does not arrest the Statute of Limitations as to the other joint maker. The making of the payment is governed by the law of Kansas, and not of the forum, because the making of a payment is contractual in its nature. It is the recognition of the debt and is a new promise to pay the balance. The law of the place where the contract is made must govern. Regan v. Williams, 185 Mo. 632; Lane v. Doty, 4 Barb. 532; Disborough v. Bedleman, 20 N. J. L. 277; Kallenbach v. Dickinson, 100 Ill. 427; 25 Cyc., 1368 and 1369; Howard v. Fletcher, 59 N.H. 151; Gillman v. Stevens, 63 N.H. 342; Lacoste v. Benton, 3 L. R. A. 220; Electric Co. v. Palmer, 53 N.W. 1137; Gates v. Tebbetts, 100 Mo.App. 590; Bank v. Salman, 117 Mo.App. 512; Foundry Co. v. Jackson, 128 Mo. 119; Baker v. Stonebraker, 36 Mo. 338; Roberts v. Modern Woodmen, 133 Mo.App. 207. (5) The payment by H. C. Mayse, the joint maker, in the State of Kansas, made December 16, 1899, did not prevent the Statute of Limitations from running against the defendant, Wood, in Missouri. The Statute of Limitations as to such actions in Kansas is five years. Sec. 3811, Statute of Kansas. At the time this payment was made by Mayse, he had made no previous payment since February, 1894; more than five years had elapsed since a payment by Mayse, and at the time of the payment in question relied upon by plaintiffs to toll the statute, the cause of action had been barred by the statute of Kansas as to Mayse. He was under no legal obligation to pay the same. His payment was voluntary. His relation as co-obligor with Wood on the note had been severed by reason of the note being barred as to him. There was no longer any implied agency on his part. They were no longer joint obligors. After the debt had been barred as to him, and he was released, Mayse could not, as agent of Wood, by making a payment, arrest the statute as to Wood, as he was not bound to pay the same, and his action in making the payment affected no one but himself. There must be a community of interest and a common obligation to pay. Payment after severance of the joint liability by one of the joint debtors will not prevent the statute from running as to the other. 25 Cyc., 1386 and 1387; Davis v. Coleman, 7 Ired. (N. C.) 424; Lane v. Doty, 4 Barb. (N. Y.) 530; Disborough Ex'r v. Heirs of Bidleman, 21 N. J. L. 677; Disenborough v. Heirs of Bidleman, 20 N. J. L. 275. One joint maker cannot toll the statute as to the other after the debt is barred. Craig v. Callaway Co., 12 Mo. 97; McClurg v. Howard, 45 Mo. 367; Smith's Admr. v. Irwin, 37 Mo. 169; Block v. Darwan, 51 Mo. 31; Regan v. Williams, 185 Mo. 628. Under a statute of this kind all the persons liable on the joint contract must depart from the State of Kansas in order to arrest the statute in said State as to the party who departs, as such nonresident party could be sued in Kansas by service of summons on the resident joint maker of the note. Brown v. Delafield, 2 Denio (N. Y.) 447; Ware v. Galveston, 3 U.S. 170; Reybold v. Parker, 6 Houst. (Del.) 544.
This suit was instituted April 5, 1907, based on a promissory note for $ 2475.60, dated December 1, 1888, due March 1, 1889. The note was made in Kansas and payable there; it bears on its face interest at the rate of twelve per cent per annum, and was nearly twenty years past due when the suit was begun. The defendant was one of the two joint makers, the other was H. C. Mayse; the payee was H. P. Scrogin, cashier of the State Bank of Ashland, Kansas, the owner of the note. The petition alleges that in 1896 the bank transferred the note to the plaintiff; it also alleges that on February 27, 1894, defendant paid on the note the sum of five dollars, and that on December 16, 1899, the defendants paid on the note the sum of $ 42, which sums were duly credited on the note, the balance remaining unpaid.
Defendant's answer admitted the execution of the note and denied all other allegations of the petition; it also pleaded the Statute of Limitations, both of Kansas and this State, and other statutes of Kansas. The Kansas statutes referred to in the answer were introduced in evidence by the defendant, and also a decision of the Supreme Court of that State construing one of the statutes pleaded. Those statutes and the decision will be referred to hereinafter.
The testimony on the part of the plaintiff tended to show as follows:
The consideration for the note was money loaned by the bank to the makers, to enable them to buy some town lots they desired to invest in. February 27, 1894, Mayse paid on the note five dollars, which was duly credited; the note was then held by the bank. The president of the bank testified that he had frequently asked Mayse to pay the note, but the latter always said he was financially unable to do so; seeing the note about to become outlawed, witness told Mayse that he did not intend to let the note become outlawed, and he must make a payment or suit would be brought; then Mayse made the $ 5 payment. Along in 1892 or 1893 the bank went into liquidation, payed its debts and ceased to do business. At that time the witness and Theis, the plaintiff, owned all the shares of stock in the corporation, and, therefore, after paying the debts, those two divided the remaining assets between them; this note fell to the plaintiff's share, and witness, as president of the bank, indorsed the note to plaintiff. It was then past due.
The $ 5 payment is indorsed on the back of the note thus: "Paid Feby. 27, 1894, $ 5.00, by H. C. Mayse." The alleged $ 42 payment is indorsed thus: "Dec. 16/99 By account $ 42.00." The plaintiff, Theis, as a witness in his own behalf, testified that he made that indorsement, and when asked to state how the payment was made said: "Mr. Mayse ran a paper there [in Ashland, Kansas] and he did some printing for me, and there was a running account between us and when we settled it he owed me $ 42, and I asked him if I...
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