p. 432The will of Thomas H. Smith, the defendant’s testator, contained the following clause, which the plaintiffs insisted created a trust for the payment of the testator’s debts, and that the .statute of limitations therefore did not apply, viz.: “I direct all my just debts to be paid, and in relation to all claims and demands, either in my favor or against it, I give to my executors power to compound, compromise, submit to arbitration, or otherwise in their discretion, adjust and settle the same, as they shall judge most for the interest of my estate and conformable to justice.”
Replications were filed, and proofs taken, in the cause. It was transferred from the supreme court to this court,- under the act of 1849.
T W. Tucker and G. O’Conor, for the complainant.
I. George W. Bruen, sole executor and surviving partner of Thomas H. Smith, within six years of the commencement of this suit, in an answer in chancery, under oath, to a bill filed by one James Iddings, averred the debt which the plaintiff seeks to recover to be due and unpaid. This averment was sufficient to prevent the plaintiff’s claim from being barred by the statute of limitations. It was an unequivocal admission, unaccompanied by any qualification or condition. The averment was made to protect the testator’s estate, and his own interest, and was intended to convey the idea of an intention to pay. It was not necessary that the admission should have been made to the plaintiff. If made to a stranger, or in plaintiff’s absence, it would be sufficient to bar the statute. (Angell on Limitations, 296: Adams v. Orange County Bank, 17 Wend. 514 ; Purdy v. Austin, 3 Wend. 187 ; Allen v. Webster, 15 Wend. 284 ; 1 Peters, 351; McCrea v. Purmort, 16 Wend. 460 .)II. The admission and promise of George W. Bruen, the surviving partner, was sufficient to take the plaintiff’s'claim out of the statute of limitations. Bruen, as surviving copartner, had, after the death of Smith, authority as to all things indispensable to winding up the copartnership. (Van Keuren v. Parmelee, 2
p. 433Comstock, 531.) This necessarily gives him the right to employ the copartnership funds, in his hands, in the payment of the copartnership debts. A surviving partner, in whose hands the partnership assets are, is in equity a trustee to pay the copartnership debts. ’ (Abeel v. Abeel, 1 Paige, 498.) At the time of Bruen’s admissions, it was' established- by the decree in Iddings v. Bruen, that Thomas H. Smith owed the copartnership of which he and Bruen were members, $800,000. This debt is copartnership assets, and is liable in equity for the copartnership debts. As to the assets in question, Bruen is to be regarded as the trustee of the plaintiff. There has been no ádverse holding, no demand, or refusal, and the statute has never commenced running.III. George W. Bruen, executor of Thomas H. Smith, within six years of the commencement of this suit, expressly promised to pay the1 plaintiff’s demand. This promise was sufficient to bar the statute of limitation. The statute had not commenced running at the testator’s death ; the note not being payable until afterwards. An express promise by an executor, to pay a debt not barred -at the testator’s death, will take the debt out of the statute. (2 Williams on Ex. 1384; Mauson v. Felton, 13 Pick. 206 ; Johns v. Beardslee, 15 John. 3 .) The promise of Bruen creates no new obligation. It being the duty of the executor, to pay the debts due, at the testator’s death, and the law not obliging an executor to. plead the statute of limitations, (2 Williams’ Ex. 1288,) it follows that he may pay, and a fortiori may promise to pay, notwithstanding lapse of time.! It is the duty of an executor to apply the assets as they come into his hands, to the payment of the testator’s debts. In the performance of this duty he is a, trustee for the creditors, and it is'' not necessary, in order to protect their claims against the ' statute, that they should commence suits against an executor who is acting in good faith for their advantage.IY. The will of Thomas H. Smith, the testator, créatéd a trust to pay the plaintiff’s claim against which the'statute never had any operation. The plaintiff’s demand was a just debt at the testator’s death; the note on which the claim is founded
p. 434not being then due. The executors have, under the will, power of satisfying not only just or legal debts, but any claim that may amount to a moral obligation, so long as they have assets in their hands. The most common mode of creating direct trusts not cognizable at law, is by the appointment of executors and administrators, (Angelí on Lim. 163,) and a trust created by will, prevents the statute from running in equity against debts not barred in the testator’s lifetime. (2 "Williams’ Ex. 1452; Blanchard on Lim. 39; Baker v. Martin, 5 Sim. 380; Fenwick v. Chapman, 9 Peters, 461; Kane v. Bloodgood, 7 Johns. Ch. Rep. 90 ; Roosevelt v. Mark, 6 Johns. Ch. Rep. 293 ; Rogers v. Rogers, 3 Wend. 517 ; Auld v. Goodrich, 4 Russ. 430; Crallan v. Outton, 3 Beavan, 1.)Y. The testator’s right of action accrued prior to 1830. The limitation created by the revised statutes in respect to trusts does not affect this claim. (Williamson v. Field, 2 Sandf. Ch. Rep. 533; Spoor v. Wells, 3 Barb. Ch. Rep. 199 ; Ward v. Smith, 3 Sandf. Ch. Rep. 596.)YI. The defendant, Herman Bruen, has not set up in his answer the bar of ten years, but only that of six years. The plaintiff would be, therefore, entitled to recover, even if the revised statutes had a retroactive effect, so as to affect trusts created previously to their enactment. This point was expressly adjudged in Dickinson and Wife v. Codwise, 1 Sandf. Ch. Rep. 214, 233; also in Van Hook v. Whitlock, 3 Paige, 407.YII. There is now in the hands of Herman Bruen, executor, five hundred thousand dollars, realized from the sale of real estate of Thomas H. Smith, which, by the testator’s will, and the decree in Iddings v. Bruen, he is directed to apply to the payment of the debts of Thomas H. Smith and Thomas H. Smith & Son.Wm. M. Hearts and Wm. Kent, for the defendant, Herman Bruen, executor.
I. The cause of action against the firm of Thomas H. Smith
p. 435& Son, (composed of Smith and George W. Bruen,) set up in the bill, accrued to the plaintiff’s testator, on the 22d day of September, 1828. This bill was filed August 16th, 1845, and alleges admissions made by George W. Bruen, that the debt remained due and unpaid as late as the year 1842.II. The cause of action arising upon a promissory note is, in its nature, exclusively of common law jurisdiction; it comes to be a matter of equitable cognizance, only from the death of one partner, and the bankruptcy of the other; the statutory limitation, therefore, applicable to the case is, that a suit must be commenced within six years after the cause of action accrued. (2 R. S. p. 296, § 18; 301, §49; 365, § 8; which are in accordance with the law previous to their passage.)III. The bar of the statute of limitations is sought to be avoided by admissions of the debt made by George W. Bruen, within the necessary period before the commencement of the suit; such admissions, to be effectual against Bruen himselfj must amount to a new promise, -and can be claimed to bind the estate of Thomas H. Smith only, (1) as a new promise made by Bruen, as surviving partner; or (2) in his office of executor of Thomas H. Smith.IV. The bill contains no allegation of any admission by George W. Bruen within the time necessary to avoid the operation of the statute, except that in his answer in the suit of Iddings v. Bruen, sworn to and filed June 18th, 1842, and evidence of this specific admission only is competent under the allegation.This admission does not make out in law a new promise as against George W. Bruen. (1.) Its terms express no promise to pay, or expectation or design of paying the debt admitted. (2.) It was not made to the creditor, nor to any agent of his, nor upon application or inquiry in his behalf, and is too indefinite as to the debt and the amount of it. (3.) It was a compulsory statement, under oath, respecting the condition of the fund applicable to the satisfaction of the claim of the complainant Jddings; if was, and was required to be, historically true, but the occasion on which it was made, permitted no implication of
p. 437suit; and should a decree be made for the debt, as revived by a new promise of the executor, it should be limited, so as to confine its collection to legal assets only in the hands of the executor. (Morris v. White, 6 Johns. Ch. R. 373; 2 R. S. p. 101, §10.)X. If a decree should be made for the principal debt, it should be without interest, or with interest at an equitable rate, and for not more than six years.By the Court.
The original justice of the plaintiff’s demand against Thomas H. Smith & Son is not disputed ; nor is it pretended that any portion of either principal or interest has ever been paid upon it. The only question discussed before us was, whether the claim is or is not barred by the statute of limitations.
It was contended by the plaintiffs that the testator had created a trust for the payment of his debts, and that the statute of limitations therefore did not apply. The will contained the usual direction that all his just debts should be paid, but we are not aware that such a direction has ever been held to create a trust. It is only where the testator has ordered his real estate to be sold, or has devised it to be sold for the payment of his debts, that a trust is created, which is not affected by the statute of limitations. We have not been able to find any such devise or order in the will before us, or any clause or expression from which an appropriation of the real estate for the payment of debts, can be inferred. The idea that it might become necessary to resort to it for that purpose, does not appear to have entered into the testator’s thoughts. He evidently considered his personal estate to be much more than sufficient for the discharge of all his pecuniary obligations, for he directs that all the debts and incumbrances upon his real estate shall be paid ■ out of his personal estate, and gives a legacy of $30,000 to each of his children, and also the sum of $280,000 to be invested by his executors for their benefit, and then directs that if the personal estate should not suffice, after payment of all his debts, for these large sums thus given to his
p. 438children or set -apart for their benefit, his executors should sell such part of his real estate as would enable them to make up and provide, not for his debts, but for the personal sums thus given to his children. He thus had distinctly in view, at the time of penning or dictating this clause, the existence of debts, and the necessity of their payment, as well as the amount of the legacies, and his direction to sell a portion of the real estate for the payment of legacies, and not of debts, is conclusive to show that he considered the personal estate to be sufficiently large to pay all the debts, and that therefore a provision for them out of the real estate was wholly unnecessary.
There was no trust then created by this will which would prevent the statute of limitations from running against this demand.
The plaintiffs next insisted, that, admitting the statute of limitations to be applicable to the claim, George W. Bruen, the executor, had made a sufficient acknowledgment of it to remove the bar of the statute, and, in support of that position, read his answer verified in June, 1842, to a bill in chancery, filed against him by one James Iddings. The plaintiff in that case was a receiver appointed by the court of chancery in a creditor’s suit, brought by Joseph Cowperthwaite, upon a judgment recovered by him against George W. Bruen for the sum of $36,000, or thereabouts; and the bill set forth the will of Thomas H. Smith and the various relations which George W. Bruen held towards his estate as surviving partner, executor, and devisee. It also charged, that all or nearly all of the debts and liabilities of the firm of Thomas H. Smith & Son had been compromised or paid and discharged, and that upon a settlement of the estate of Thomas H. Smith, there would be found a large balance belonging to Bruen individually, as one of the partners of Thomas H. Smith & Son, and also in right of his wife as devisee or heir of her father, and prayed for an account by him of the private estate of which he was executor, as well as of the partnership property.
In his answer to this bill, George W. Bruen admitted that a large amount of the debts and liabilities of the firm of Thomas
p. 439H. Smith & Son had been compromised or paid, but insisted that there was still a considerable amount of debts and ..claims outstanding against them, several of which he specifies, and among them a debt due by the firm to Thomas Bloodgood, amounting to $20,000 and upwards, including interest, and that all these specified debts amounting in the whole to about $57,000, 'including interest, were, exclusive of certain judgments amounting to more than $800,000, recovered against them by the United States. He therefore denied that there was a large sum belonging to the firm of Thomas H. Smith & Son, in which he had an individual interest. He also denied that he had any interest in right of his wife in any surplus of the estate of Thomas H.'Smith, after payment of the debts and liabilities existing against it, because he believed that such debts and liabilities would, if they were all. paid, absorb the whole property of himself and wife, or either of them, in right of his said wife, as one of the heirs of Thomas H. Smith or otherwise. He then set forth two debts due from the individual estate of Thomas H. Smith, amounting, with interest, to $75,000, and said that those debts, being added to the before-mentioned debts of $57,000 against the estate of Thomas H. Smith & Son, made an aggregate liability against the estate of Thomas H. Smith, of $132,000 or thereabouts, exclusive of the judgments in favor of the United States for $800,000.
It was admitted that there was no other debt due from Thomas H. Smith & Son to Thomas Bloodgood than the 'debt mentioned in the pleadings in this cause. ' Here, then', was an acknowledgment in the year 1842j by Bruen, not only in his capacity of surviving partner of Thomas H. Smith & Son, but as executor of Thomas H. Smith, that the plaintiff’s debt, with the interest upon it, was a subsisting and valid claim against the estate of his testator, entitled to priority over the claims of the legatees and devisees under the will, he himself, in right of,his wife, being one of such legatees and devisees. The acknowledgment, considering the circumstances under which it was made, implied not only his obligation, but his willingness to pay, if he had sufficient funds of the estate in
p. 440his hands for that purpose. The interposition of the statute against the payment of this debt would have been entirely inconsistent with the defence set up against the claim of the receiver. The answer was, to use the language of Mr. Justice Bronson, in
Van Keuren v.
Parmelee, (2 Comst. 531,) a plain admission that the debt was due, and that the party was willing to pay it, for it was an absolute denial of any interest in the estate until after the debt should have been paid.
It was objected, however, that the acknowledgment was made, not to Bloodgood himself, nor to any one in his behalf, but to a third person. But it has been repeatedly decided,' both in this state and in England, that it is not necessary that the acknowledgment of a debt should, in order to take it out of the statute, be made to the creditor or his agent; it is sufficient if made to a stranger. In Walden v. Lawrence, ( 9 Wend.. 297 ,) the court, in answer to this objection, said that the statute .of limitations does not, like an insolvent’s discharge, impair the contract, but only operates upon the remedy by affording a presumption of payment, and hence the acknowledgment of the existence of the debt revives the debt by removing the presumption; and upon this ground it is obviously unimportant to whom the acknowledgment is made; and so, the court adds, are the authorities. The same point was lately decided by the supreme court in the third district in Carshore v. Huyck, 6 Barb. S. C. R. 583;) see also Whitney v. Bigelow, ( 4 Pick. 110 ,) Mountstephen v. Brooke, (3 Barn, and Ald. 141,) Clarke v. Houghton, (2 Barn, and Cres. 149.)
The defendant’s counsel further contended, that whatever might be the effect of the acknowledgment by the executor upon the personal estate, it could not bind the testator’s real estate, and cited the case of Mooers v. White, (6 J. C. R. 373,) in support of his position. Chancellor Kent in that case held that an admission or acknowledgment by the executor ought not to bind the real assets in the hands of the heir or devisee, inasmuch as the executor does not represent the heir, and has no control over the real estate. In the present instance, however, the executor who made the acknowledgment was also devisee
p. 441in trust of the whole estate, and had the entire management of it in his hands, and the whole control over its disposition. Admitting, then, the authority of
Moers v.
White, in ordinary cases, where the executor has no duties to perform or power to exercise with regard to the realty, it has no application to a case in which the real estate is placed as entirely under the control of the executor as the personal. The same principle which renders his acknowledgment as executor binding on the personal estate, gives to it an equal power over the real estate.
But this question does not necessarily arise at present in this suit. The plaintiff, on the hearing, did not ask any relief against the real estate of the testator. It appears from a statement of the decree in the case of Iddings v. Bruen, which is in evidence, that provision has been made in that decree for the payment out of the estate of all the debts of Thomas H. Smith and Thomas H. Smith & Son. All that is necessary, therefore, in the present suit, is to declare that the note given by Thomas H. Smith & Son to the plaintiff’s testator, and set forth in the bill, is a valid and subsisting claim against the estate of Thomas H. Smith, to be paid with the interest accrued thereon, in a due •course of administration. The plaintiff is entitled to a decree declaring the amount due for principal and interest on the note, (which may be ascertained and shown to the court upon affidavit,) to be a valid and subsisting claim against the estate of Thomas H.’Smith, to be paid in a due course of administration.
The plaintiff is álso entitled to recover his costs, to be paid at the same time with the debt.