123 P.2d 975 | Mont. | 1942
The court erred in granting defendants' motion for a directed verdict. The entire question revolves about the $25 payment *48 alleged to have been made on the note in suit on August 7, 1934. The court, in granting the motion, held in effect that the evidence concerning this payment was insufficient to raise a question of fact and be submitted to the jury. We think the matter was one for the jury to determine, and in taking this position, we are mindful of the general rule, stated in 37 C.J. sections 625-627, that a creditor relying on a part payment to arrest the running of the statute of limitations, must show that the payment was voluntarily made by the debtor upon the debt sued upon. In determining the effect of this endorsement, we must consider carefully the facts surrounding its making. An endorsement of payment on the back of a note, standing alone, will not give rise to any presumption that a payment was made on the date the endorsement bears, particularly if the endorsement was made by the holder, rather than by the maker. This is because it is an easy matter for the holder of a note, seeking to avoid the running of the statute, to simply make the endorsement, whether a payment has been made or not. Therefore, such an endorsement is in the nature of a self-serving declaration. But there are exceptions. In the first place, the date of the endorsement is important. If it is dated after the statute has run, the endorsement is obviously self-serving, and no presumption arises. But if the endorsement is dated before the running of the statute, then it was not self-serving, but against interest. Still another consideration arises: It would also be an easy matter for the holder, after the statute had run, to put on the endorsement, and date it back to a time before the statute had run. Consequently, although some cases hold to the contrary, on logical reasoning, the endorsement is still self-serving, and no presumption should arise. But where the endorsement is dated before the running of the statute, and there is evidence aside from the note itself that the endorsement was actually made on the date it bears, then the endorsement was against interest, and a presumption of payment arises.
This rule is nowhere better stated than in 37 C.J. 1242, section 768: "However, where there is evidence that the holder *49 of a note made, or caused to be made, a credit indorsement thereon at a time when it was not barred, and consequently when it was against his interest to make it, it will be presumed that the credit was made on the date it bears, and that an actual payment was made at that time, by the makers or one of them." This presumption is in and of itself sufficient to take the case to the jury. The only evidence opposed to it is the denial of the defendants themselves that a payment was made, and surely it must be the province of the jury to pass upon the credibility of the defendants, particularly in view of their actions and representations concerning this note since the date of the payment.
If the presumption arises at all, it is sufficient to take the case to the jury. Section 10600, Revised Codes, provides that a presumption constitutes indirect evidence, section 10602 defines a presumption, and 10604 provides that unless a presumption is expressly declared to be conclusive, it may be controverted, but unless controverted, the jury are bound to find according to the presumption. (See Renland v. First National Bank,
From the foregoing cases it appears to be the law in this state that once a presumption arises, it presents a question of fact for the jury, unless the evidence contrary to the presumption is practically conclusive. If reasonable men could differ, the case is one for the jury.
That the presumption of payment arises in this case, and is sufficient to take the case to the jury is supported by the vast weight of authority the country over, though the question does not seem to have previously arisen in Montana. The presumption is based upon the fact that the endorsement constituted an admission of a payment, and if made at a time when the statute had not run, the admission is against interest and not reasonably presumed *50
to have been made unless a payment was actually received. (SeeAddams v. Seitzinger, 1 Watts and S. 243, 59 A.L.R. 912;Meffert v. Lawson,
In Jones v. Hall,
Under Section 9062, Revised Codes, partial payment of a note past due by one joint maker does not extend the time within which the action may be brought against a co-maker. (Breese v.O'Brien,
There is utterly lacking any proof whatever of privity between the defendants, or either of them, either in the alleged "payment" or the matter of endorsement. Nor is there any proof of privity between Nathan, the administrator, and Ed Hirshberg or the witness young. There is not a case where plaintiff proves the note, introduces it with the endorsement, shows non-payment, and rests. The plaintiff, himself, has shown *52 who made the endorsement at whose request it was made, the source of the $25, with proof of necessary privity utterly lacking. Defendants, in addition, show by clear, uncontradicted testimony, they were not a party in the premises — no privity whatever. Both defendants testify positively they did not make any such payment, and knew nothing of the endorsement until after the statute had run on the pretended note.
Plaintiff could not recover upon any view which could reasonably be drawn from the facts established by the uncontradicted evidence in this case. To permit the jury to speculate required submission only upon conjecture or suspicion. On plaintiff's case, no "presumption" of "payment" by defendants can arise, and plaintiff should have been nonsuited when he rested. Even if a "presumption" be recognized in the mere endorsement, it is removed in this case by all the other evidence and "the presumption" as a rule of law is satisfied and disappears. (Johnson v. Kaiser,
Counsel for plaintiff relies much upon Meffert v. Lawson,
Smith v. Brinkley,
The plaintiff alleged in the complaint that a payment of $25 was made on the note on August 7, 1934. The defendants in their answer denied the making of this payment and pleaded the statute of limitations. The motion for directed verdict raised the point that there was no proof showing, or tending to show, that the $25 payment had been made on the note by the defendants or either of them. Hence that question is the only important point in the case.
The evidence discloses that the note was executed on October[1] 31, 1929, in the sum of $925, as a renewal of a note in like amount, and was made payable on demand. Shortly after the note was executed Frank J. Hirshberg died and Edward Hirshberg was appointed administrator of his estate and served until February 16, 1934, when he was succeeded by Robert A. Nathan as such administrator. On August 7, 1934, Edward Hirshberg, in addition to being administrator of the estate of Frank J. Hirshberg, was president of the bank at Fairfield, and J.E. Young was at that time cashier. The $25 endorsement on the note is in the handwriting of J.E. Young, who testified that he made it on the 7th day of August, 1934, at the direction of Edward Hirshberg, and that the latter at that time gave him $25 in currency with instructions to credit that amount on the note. Young did not know where Hirshberg had obtained the money. Plaintiff produced no direct evidence that the money came from the defendants. Both of the defendants deny that they paid the money to Edward Hirshberg, and deny that they had any knowledge of the fact that the $25 credit had been given on the note.
There is evidence that E.W. Huele interviewed defendants several times as plaintiff's agent in the fall of 1937, and the spring of 1938, in an attempt to collect the note together with other indebtedness and informed defendants that the balance due on the note was $900 plus interest. Defendants at that *55 time made no claim that the balance was $925, instead of $900. There is evidence also that defendants attempted to borrow money from the Federal Land Bank and had interviews with Fred Fligman with reference thereto. Mr. Fligman was endeavoring to ascertain all the indebtedness owing by the defendants. They reported to him the note here in question, and at first stated it was something over $900, but later gave the figure as $900. At the trial they explained that this was simply the method of identifying the note and that they did not thereby intend to assert that the note was in the sum of $900, or to imply that it was not in the sum of $925. At any rate, this evidence, as well as that given by Mr. Huele, was not sufficient either to offset their denial of such payment or to show ratification of an unauthorized credit so as to toll the running of the statute. (See note in 124 A.L.R. 234.)
Plaintiff relies upon the rule of law stated in 37 C.J. 1242, as follows: "However, where there is evidence that the holder of the note made, or caused to be made, a credit endorsement thereon at a time when it was not barred, and consequently when it was against his interest to make it, it will be presumed that the credit was made on the date it bears, and that an actual payment was made at that time, by the makers or one of them." This, as we shall presently point out, is not the universal rule.
The only cases cited in support of the text are Missouri cases. The courts are divided as to whether the mere endorsement of a credit on a note by the holder before action thereon is barred is sufficient to make out a prima facie case of part payment to toll the statute. There are cases holding that such evidence makes out a prima facie case. They are listed in the note on page 914 of 59 A.L.R. Other courts take the opposite view and hold that such entry or endorsement, standing alone, is not sufficient evidence of a part payment by the makers or either thereof to toll the running of the statute. They are listed in 59 A.L.R., page 922. And see 37 C.J. 1152, where it is said: "Indorsements by the creditor of payments on a bond, note or *56 other evidence of debt, without more, do not operate to interrupt the running of the statute." "It is payment and not the indorsement on the evidence of debt that operates to toll the statute." (37 C.J. 1151.)
Our statute applying to the situation is section 9062, Revised Codes, reading: "No acknowledgment or promise is sufficient evidence of a new or continuing contract, by which to take the case out of the operation of sections 9011 to 9066 of this code, unless the same is contained in some writing, signed by the party to be charged thereby. But this section does not alter the effect of any payment of principal or interest, which payment is equivalent to a new promise in writing, duly signed, to pay the residue of the debt."
We are impressed by the reasoning of the court in the case ofConnelly v. Pierson, 4 Gilm. 108,
It is significant, too, that part payment by one joint debtor[2, 3] does not suspend the running of the statute as against the joint obligator. (Monidah Trust v. Kemper,
We think the better reasoned cases support the view that the endorsement, standing alone, does not make out a prima facie case. We can see no good reason why such an endorsement, standing alone, raises a presumption that the payment was made by the makers of the note or either of them. The statute — section 10606, Revised Codes — does not classify this as one of the statutory presumptions. While it is true that such an endorsement is against the interest of the payee, were the defendants asserting that the partial payment had been made, yet, as here attempted to be used, the endorsement promotes the interest of the payee by allowing him additional time within which he must commence the action before it is barred, and in that sense is self-serving. (Catlin v. Mills,
The judgment is affirmed.
MR. CHIEF JUSTICE JOHNSON and ASSOCIATE JUSTICES ERICKSON, ANDERSON and MORRIS concur.
Rehearing denied March 24, 1942.