Bolt v. Dawkins

16 S.C. 198 | S.C. | 1881

The opinion of the court was delivered by

McIveb, A. J.

Some time in August, 1870, J. P. Dawkins died intestate, possessed of a small personal but a very considerable real estate, leaving as his heirs-at-law, his widow, Sarah A., and his two children, B. F. Dawkins and Nannie E. Tench, the wife of John W. Tench.

It seems that, during the latter part of his life, the intestate had turned over the management of his property to his son, B. E. Dawkins, and his son-at-law, John "W. Tench, and that after his death they continued the management and control of the same without taking out letters of administration — theirpurpose, as expressed by them, being to pay up the debts of the intestate, provide for the support of the widow, and divide the estate between them, in pursuance of the “verbal will,” as they termed it, of the said J. P. Dawkins. These expectations were, however, never realized, and, on the contrary, Tench and Dawkins not only failed to pay the debts of the intestate, but contracted a large liability to the defendants, Mowry & Son, principally for advances made to them to carry on the planting operations which they undertook to carry on with the property of'the estate and to pay debts due by the intestate. To secure this liability to Mowry & Son, all the heirs of J. P. Dawkins, on April 13th, 1875, united in a bond, secured by a mortgage of the real estate left by the intestate, duly recorded, to the said Mowry & Son, who, as a further security, took an assignment of a judgment which one William Choice had recovered against Tench and Dawkins, as executors of J. P. Dawkins, on a note under seal given by the intestate to said Choice, the said Mowry & Son having furnished the money to pay Choice the amount due to him.

Subsequently, to wit, on October 6th, 1877, the plaintiff,' who was clerk of the court, upon the demand of some of the creditors of J. P. Dawkins, obtained letters of administration on his estate, and on January 10th, 1878, commenced this action in the nature of a creditor’s bill. The creditors were called in to prove their demands before a referee appointed for that purpose, and various claims were presented; but it is only necessary to direct our attention to two of these claims — one presented by Mrs. Sarah A. Stringfellow, and the other by James B. Dawkins, as the questions presented by this appeal arise out of these claims.

The Stringfellow claim was in the form of a promissory note of the intestate, payable to James B. Dawkins, or bearer, for $5,200, dated February 1st, 1870, payable one day after date, and transferred to Mrs. StringfelloAV by James B. DaAvkins on February 12th, 1872, as collateral security for a debt due by him to her. The claim of James B. Dawkins was in the form of a note under seal, executed by the intestate to said James B. Dawkins on October 11th, 1869, payable one day after date, for the sum of $8,100. On February 1st, 1870, James B. Dawkins voluntarily accepted the above-mentioned promissory note for this note under seal, and, at the same time; canceled the sealed note by pen and ink marks drawn across the face of the note and the signature, and by the words “ canceled by another note, (signed) J. B. Dawkins,” written across its face, and delivered the same to the intestate, among whose papers it was found after his death and delivered to the attorney of James B. Dawkins by B. F. Dawkins after this action was commenced.

To th<? Stringfellow note, the Statute of Limitations was pleaded by the plaintiff, and to the sealed note for $8,100 the plea of payment and satisfaction was interposed. Both of these pleas were sustained by the referee, and, upon exceptions to his report, the Circuit judge overruled the exceptions and confirmed the report of the referee. From his judgment this appeal comes up, by which the questions raised are: 1. Whether the String-fellow note is barred by the Statute of Limitations. 2. Whether the sealed note presented by James B. Dawkins has been j>aid or satisfied. The Stringfellow note became payable on February 5th, 1870, so that, allowing five instead of four years on account of the payee and holder being “beyond seas,” and adding thereto the nine months allowed by the act of 1789, the bar would have been complete on November 5th, 1875, unless something had occurred to arrest the operation of the statute. It will be observed that, inasmuch as the right of action upon this note had accrued before the adoption of the Code of Procedure, the question must be determined by the old law and cannot be affected by the provisions of Section 125 of the code. Bratton v. Guy, 12 S. C. 42.

Under the law as it stood prior to the code, there can be no doubt that, as the right of action had accrued during the lifetime of the maker of the note, the currency of the statute was not suspended during the time that there was no administration upon his estate. Nicks v. Martindale, Harp. 135; McCollough v. Speed, 3 McC. 255; Bugg v. Summer, 1 McM. 333.

It is contended that the bar of the statute is prevented: 1. By the admissions, promises and payment made by the heirs of the intestate while in possession of his land. Under the view which we take of this matter it will not be necessary to inquire particularly when these admissions, promises and payment were made, because, even if made before the statutory bar was complete, we do not think they could have the effect of reviving or continuing the legal obligation which the intestate incurred when he executed the note. Executors of Blake v. Executors of Quash, 3 McCord 340. The persons who made these admissions, promises and payment did not stand in such a relation to the intestate as to entitle them either to create, revive or continue an obligation of the intestate. They did not represent the intestate, and nothing that they said or did can be allowed to have the effect of fixing a debt upon the estate. They cannot be regarded as legal administrators, because the law prescribes the only mode in which such a relation can be created, and, as they have not seen fit to adopt that mode, we are unable to perceive by what authority such a position can be claimed for them. They cannot be regarded, so far as this question is concerned, as standing in any other relation to the estate than that of executors de son tort, and, as such, no promise, admission or payment made by them can be allowed to have the effect of creating, reviving or continuing any legal obligation binding upon the estate, and for this doctrine express authority may be found in the case of Haselden v. Whitesides, 2 Strobh. 353. The fact that they were heirs of the intestate cannot affect the question, for, as such, they have no more authority to create or revive a debt against their ancestor than any other person would have. The question here is whether the legal obligation of the intestate still subsists or has been destroyed. They may create obligations binding upon themselves and upon their interests in the estate, but we are at a loss to discover any authority by which they can fix a debt upon their ancestor or upon his estate.

■ For like reasons we do not think that the judgment recovered by Mrs. Stringfellow on her note against Tench and Dawkins, as executors, so called, can help the appellant. Such a judgment would not bind the estate, inasmuch as it was obtained against persons who had no authority to represent the intestate, and it cannot have the effect of arresting the operation of the Statute of Limitations when pleaded by the lawfully appointed administrator, the legal representative of the intestate.

Next, it is contended that the administrator having invoked the aid of the Court of Equity to reach the real estate for the payment of the debts of his intestate, that court will not permit him to plead the statute to this claim, which has always been and still is acknowledged to be justly due by the hems. The authorities cited by the appellant to sustain this position are, in our judgment, far from establishing it, and, on the contrary, we think that the true rule is, as stated in Cumming v. Berry, 1 Rich. Eq. 114, that a Court of Equity is bound to apply the bar of the Statute of Limitations to a legal demand in the same manner as a court of law would apply it. Here, the demand is undoubtedly a legal demand, and if an action were brought upon it on the law side of the court, there cannot be a doubt that the plea of the statute would prevail.

Again, it is contended that the administrator is estopped from pleading the statute by reason of the fact that he has recognized the claim in his complaint as an existing demand against the estate. The foundation of this position is that the plaintiff in his complaint alleges that the indebtedness of the estate is very large, and that he names Mrs. Stringfellow as one of the creditors of the intestate, and that, without her claim is established, the indebtedness would be small. Without stopping to inquire whether such loose allegations would amount to an admission of the debt and an implied promise to pay it, and assuming, for the present, that the administrator had in the most positive and unqualified terms admitted the validity of the claim, we still do not think that this would prevent the bar of the statute. This so-called admission, it will be observed, was made after the claim was barred, for, as we have seen, the bar was complete on November 5th, 1875, and the action was not commenced, and, of course, the complaint was not filed until January 10th, 1878. Whether this was such a positive and unqualified admission of the debt as would imply a promise to pay it, even if made by the debtor himself, might well be questioned, but, waiving that question, the point now presented is whether a promise to pay a debt of his intestate made by an administrator, after the bar of the statute is complete, would revive the debt, or, more properly speaking, would constitute a valid cause of action against the estate; for the rule as established by the case of Smith v. Caldwell, 15 Rich. 373, and recognized recently in Hayes v. Clinkscales, 9 S. C. 450, is that a promise to pay a debt already barred by the statute constitutes a new contract and a new cause of action, the right of "action upon the original obligation being absolutely gone. The question, then, is narrowed down to the inquiry whether an administrator can create a new debt against the estate of his intestate. To the question thus stated there can be but one answer. It is clear, therefore, that even if the administrator had in the most unqualified manner acknowledged this debt, and promised to pay it, after the bar of the statute was complete, it could not have the effect of either reviving the original debt or creating a new debt against the estate.

We are unable to see how the doctrine of estoppel applies to the case. This statement made by the administrator in the complaint cannot be said to have had the effect of inducing Mrs. Stringfellow to delay action until after the statutory period' had elapsed, because, as we have seen, the bar of the statute was complete long before the complaint was filed and before such statement was made. There is no foundation, therefore, for the idea that Mrs. Stringfellow has, by this statement on the part of the administrator, been induced to alter her condition to the prejudice of her rights. '

We are unable to perceive the force of the objection that the plea of the statute was interposed only by the administrator. As a matter of fact, we understand that the plea was insisted upon before the referee by some of the creditors, also. But, according to our view, this is not material, for the administrator was the proper party to set up the plea, and, indeed, according to some of the authorities, it was his duty to do so. Bird v. Houze, Spears Eq. 255. See, also, remarks of Carroll, Ch., in Hinton v. Kennedy, 3 S. C. 478; and see, also, the case of Shewen v. Vanderhorst, 1 Russ. & M. 349, 2 Russ. & M. 75, as stated in 2 Wms. Ex. 1283, in these words: “ Under the common decree in an administration suit, a creditor applied to prove a debt which was barred by lapse of time, and, the executor refusing to interfere, the plaintiff, a residuary legatee, insisted upon setting up the objection of the statute. Sir John Leach, M. B., held that it ivas competent for the plaintiff or any other person interested in the fund to take advantage of the statute before the master, notwithstanding the refusal of the executor, and this decision was confirmed by Lord Brougham on appeal.”

The next question raised by the appeal is’whether the sealed note presented by James B. Dawkins has been satisfied by his acceptance of the promissory note now held by Mrs. Stringfellow, and by his canceling and surrendering the sealed note to the intestate. The question whether one security is taken in satisfaction or as a mere substitute for another is a question of fact dependent upon the proof of the intention of the parties. If the intention is that the new security shall operate as a payment or extinguishment of the other, then such will be the effect of the transaction. Here both the referee and the Circuit judge have found the fact to be that the intention was to extinguish the larger note by the smaller, and we think their finding is fully supported by the evidence. The larger note was canceled and surrendered to the maker and remained in his possession up to the time of his death, and, in fact, should now be regarded as legally in possession of the administrator, for the return of it to the attorney of the payee by one of the family of the intestate after his death, and after this action was commenced, was altogether unwarranted and cannot be allowed to affect this question. The canceling and surrendering the note to the payee was the same in effect as if the payee had, upon the receipt of the smaller note, burnt or otherwise destroyed the larger note as a means of utterly extinguishing the debt secured by it.

The fact that the new security was a smaller amount and of inferior rank does not alter the result. The old artificial rule, which has no foundation in reason and ought not to be extended, but which has prevailed ever since Pinnell's Case (5 Co. 117), that the payment of a less sum than the whole amount due, on the day when the debt matures or afterwards, cannot be a satisfaction of the debt, applies only to a payment in money, and, therefore, when something other than money is accepted in satisfaction of the debt it will be discharged, even though the value of the thing so accepted should be far less than the amount of the debt. Here the thing received in satisfaction of the debt was not money, and the rule does not apply, but the effect of the transaction must be determined by .the intention of the parties.

So, too, the fact that the note received in satisfaction was a promissory note, and, therefore, inferior in rank, cannot affect the result. In Peters v. Barnhill, 1 Hill 236, a sealed note was allowed to operate as payment of a judgment. In Dogan v. Ashbey, 1 Rich. 36, a promissory note was held to be payment of a judgment. In Mayer v. Mordecai, 1 S. C. 398, confederate treasury notes, which were never money in any legal sense, but simply promises to pay, having been accepted, even by a trustee, in payment of a bond secured by a mortgage, by the legal owner of the bond, it was held that the bond was extinguished and the mortgage satisfied. So in numerous cases of a like character the same doctrine was held. It is clear, therefore, that there was no error on the part of the Circuit judge in holding that the sealed note to James B. Dawkins was extinguished by his acceptance of the note now held by Mrs. Stringfellow in satisfaction thereof.

It is also urged by the appellants that the claim in favor of Choice against the estate of J. P. Dawkins, assigned to Mowry & Son, is embraced in the mortgage debt held by them, and that any payment made on the Choice debt out of the assets of the estate should operate as a payment on the said bond and mortgage, a,nd that the Circuit judge erred in not so ordering. We do not understand that anything is adjudged upon this point by the Circuit decree, as there was no exception to the referee’s report bringing the question before the Circuit judge. All that is there adjudged is that the proceeds of the sales of the real estate shall be applied: 1. To the costs of the case. 2. To the debts of the intestate, as ascertained and allowed by the referee, amongst 'which is the- Choice claim assigned to Mowry & Son. 3. To the mortgage debt due to Mowry & Son. 4. That the residue, if any, be held by the clerk until the further order of the court. If, therefore, it be true, as alleged by appellants, that the amount due on the mortgage debt to Mowry & Son has never been judicially ascertained, that, of course, will have to be-done before the Circuit decree can be fully carried out, and in doing this the appellants may then raise the question whether the amount applied to the Choice debt, now held by Mowry & Son, out of the assets of the intestate, should operate as a payment pro tanto on the mortgage debt to Mowry & Son.

The judgment of this court is that the judgment of the Circuit. Court be affirmed.

Simpson, C. J., and McGowan, A. J., concurred.