Smiley v. Fry — 49 N.Y. Super. Ct. 134

Majority

p. 134

GEORGE N. SMILEY, Respondent, v. HORACE B. FRY, as Survivor, &c., Appellant.

Headnote

Banking—instrument for payment of money, when deemed certificate of deposit. —Statute of limitations—when runs on certificate.—Demand—evidence of.

An instrument given by a firm of brokers, who also received deposits on demand, in the following form, viz: “ Due A., Trustee, $4,000, returnable on. demand. It is understood that this sum is specially deposited with us and is distinct from the other transactions with said A.”—is to be construed as a certificate of deposit of the sum named, with said firm, as bankers pro hac vice.

So indebtedness arises by reason of said instrument, nor does the statute of limitations begin to run thereon until a demand for the return of the amount has been made.

p. 135

An action on said certificate against the personal representatives of a deceased member of said firm and the surviving partner, in which the surviving partner is not served and does not appear, is not a demand as against him.

It seem.% that the rendition of a statement of account by the depositor to said firm in which the claim on- said certificate is included under the head of “ accepted charges,” is not sufficient evidence of a demand to set the statute running.

Before Sedgwick, Ch. J., O’Gorman, and Ingraham, JJ.

Decided April 9, 1883.

Appeal from a judgment .entered September 4, 1883, against the defendant for $4,855.08, and from an order denying a motion for a new trial on the judge’s minutes.

Defendant’s counsel moved at the close of plaintiff’s case for a non-suit, on the ground that under the evidence in this case the claim appeared to be barred by the statute of limitations; which motion was denied; defendant excepted.

The facts and other exceptions appear in the opinion.

F. C. Bowman, for appellant.

Holmes & Adams, for respondent.

—In the light of Payne v. Gardner ( 29 N. Y. 167 -170) according to both the civil and the common law writers, this transaction was in every sense a “ deposit.” It is elementary that an action for a deposit with a banker does not accrue until formal demand. Under the law of this State, however, it is immaterial whether the bailee is a banker or not; the question in each case to be determined being whether the transaction is a loan or a deposit (Payne v. Gardner, 29 N. Y. 146 ; Howell v. Adams, 68 Id. 314, 321; Boughton v. Flint, 74 Id. 476, 482; Munger v. Albany Bank, 85 Id. 580). It rests upon the party claiming the benefit of the statute to show a demand (Sullivan v. Fosdick 10 Hun, 173 ).

The suit in Philadelphia was no demand against this defendant ; he was never served with process in that suit; plaintiff does not claim that he even had notice of the suit. The joinder of his name as defendant in such a suit was

p. 136

brutumfulmén, for it is familiar law that the representatives of a deceased partner may not be sued for a partnership debt until the insolvency of the survivor has been established in a proper proceeding. The survivor and the representatives of the estate of the deceased partner are not jointly obligated on this certificate, and therefore a demand on the representatives of J. R. Fry is not even a constructive demand on this defendant (Lawrence v. Trustees, 2 Den. 577 ; Troy Iron & Nail Factory v. Winslow, 11 Blatch. 513; see also, Bloodgood v. Bruen, 8 N. Y. 362 ; Jessop v. Millen, 1 Keyes, 321).

—The contention in the case is as to the liability of defendant as surviving partner of a Philadelphia firm, which was dissolved in 1864, on the following instrument. “ Office of J. R. & H. B. Fry, Philadelphia, May 21, 1864. Due S. K. Ashton, M. D., Trustee, four thousand dollars, returnable on demand. It is understood that this sum is specially deposited with us, and is distinct from the other transactions with said Ashton. J. R. & H. B. Fry.”

In 1880, Ashton assigned his interest in all claims against defendant and said firm, to plaintiff. The defendant pleaded ; (1) statute of limitations ; (2) the acceptance of a claim against one Stephen Coulter in full settlement of all Ashton’s claims against the firm.

The firm carried on business in Philadelphia as stock brokers, and also received deposits payable on demand. The question as to the effect of the statute of limitations on the plaintiff’s claim, depends, first on the nature of the instrument itself, whether it was a certificate of deposit, or a promissory note, and second, at what date the demand for payment was first made. ' -

It is in evidence that in August, 1880, Ashton made demand on defendant for payment on this instrument, and that defendant then acknowledged the indebtedness, promised to pay, and even gave to Ashton certain mining stock which he desired Ashton to 'raise money on, as part pay-

p. 137

merit. Ashton took them, endeavored to dispose of them, found they had no market value, and returned them to defendant. There is no clear evidence as to any previous or other demand of defendant, for this money. In 1885, or 1866, Ashton furnished defendant with a written account of the transaction between the firm and him, in which account, under the head of “accepted charges,” this sum of $4,000 is charged against the firm. As far as appears, defendant acquiesced in the correctness of that charge. In 1869, Ash-ton brought a suit in Philadelphia, in which Cornelia Fry, executrix of J. R Fry, deceased, and the defendant here, Horace B. Fry, lately trading as “ J. R and H. B. Fry,” were named as defendants. The defendant, however, was not served with any papers in this action. It is not proved that the claim now in suit was included in that action, although in a letter written to defendant by Ashton, in July, 1880, Ashton referring to the instrument now in suit writes : “The paper you gave me is in your handwriting— suit was begun against you for the deposit as being a trust deposit,” etc. Plaintiff, however, in a subsequent conversation, told the defendant that he had brought the suit against the executrix, but that he, defendant, had not been served. Frequent conversations had taken place between defendant and Ashton about the state of the accounts between the firm and Ashton, and various abortive attempts at settlement had been made.

There is no force in the argument on the part of the defendant, that the instrument in evidence can be regarded as an ordinary promissory note payable on demand, and due when made. The case of Wheeler v. Warner ( 47 N. Y. 520 ), cited in support of that position, is not in point

The instrument here proved is'a certificate, and written evidence of a deposit of $4,000, with the defendant’s firm as bankers “pro Jiac mee,” and no indebtedness arose by reason of such deposit, until demand of return of the amount deposited, and the statute of limitations did not begin to run until demand (Payne v. Gardner, 29 N. Y. 146 ; Howell

p. 138

v. Adams, 68 Id. 314, 321; Boughton v. Flint, 74 Id. 476, 482).

Unless, therefore, it appeared by competent evidence that a demand was made, other and earlier than that of 1880, the defense depending on the statute of limitations is disposed of. There is no proof of any such demand. There is no sufficient- evidence to prove that Ashton ever accepted from the defendant any assignment of property or consideration in full settlement of Ashton’s claim, for the money in suit, or in any way released the claim.1

The only remaining question then, is whether the learned trial judge erred' in the exclusion of material and relevant evidence, or erred in his charge to the jury. The evidence excluded by the court could only have gone to show that the claim here in suit was included in the action brought by Ashton against the executrixes of the defendant’s deceased partners in 1869. But, as the defendant was not made a party to that litigation by service of papers upon him, the admission of such testimony would not properly have been evidence against him.

With these views of the law and the facts, as they appear in this case, we see no subtantial error in the charge of the learned trial judge, and no force in the exceptions thereto. The judgment should be affirmed, with costs, and the order appealed from affirmed with $10 costs.

Sedgwick, Ch. J., and Ingraham, J., concurred.

Cases cited

Payne v. Gardiner 29 N. Y. 146 N.Y. p. 135, p. 137
Bloodgood v. Bruen 8 N. Y. 362 N.Y. p. 136