STEWART v. MCBURNEY.

November 2, 1885.

STATUTE OF LIMITATIONS-DISCOVERY OF FRAUD-BROKEN PROMISE. Where a creditor is kept in ignorance of the cause of action, by actual fraud on the part of the debtor, the statute does not begin to run until the creditor has had knowledge, or has been put upon inquiry with the means of knowledge, that such cause of action has accrued.

A. having lived with B. for twenty years, doing all manner of farm work, brought suit for services rendered during that period. Upon the trial A. averred that B. had promised him a certain farm if he would continue with him. Held, that the breach of the promise was not such fraud as to toll the running of the statute of limitations.

Error to the common pleas of Butler county.

In the year 1864 James McBurney, who was then a boy of fifteen years of age, was placed by his father with Robert Stewart, a farmer, with whom he lived until 1884, doing all manner of farm work. In the latter year he was discharged by Stewart; he then claimed compensation for his services, and brought an action against Stewart to recover; Stewart pleaded inter alia the statute of limitations; on the trial, McBurney, to toll the statute, offered to prove that Stewart had promised, if he would continue with him, he would give hin one of his farms. The common pleas took the position that the breach of the promise, if it existed, was a fraud on McBurney, such as would avoid the running of the statute. The verdict was for plaintiff, whereupon

defendant took a writ of error.

W. D. Brandon, for plaintiff in error. Leo. McQuintion and J. C. Vanderlin, for defendant in error.

GREEN, J. This was an action to recover the value of services rendered by the plaintiff during a period of twenty years to the defendant. The defendant pleaded payment, set off, and the statute of limitations. In reply to the plea of the statute the plaintiff gave evidence of declarations of the defendant to the effect that he would give the plaintiff a farm, and contended that, because the farm was not given, the defendant was guilty of such fraud as would prevent the running of the

statute.

The court below adopted this view, and told the jury, if they believed that the defendant promised the plaintiff to give him a farm for his services, and did not do it, this was a fraud upon the plaintiff, such as would prevent the running of the statute of limitations until after its discovery. This was a strange misapplication of the doctrine that fraud is a good reply to a plea of the statute.

The evidence of the promise in this case was of the most uncertain and indefinite character. The plaintiff does not say when the promise was made, nor when the farm was to be given, nor what it was to be given for, nor whether it was to be in payment for services, either in the past or in the future, nor, if it was to be given in payment for services, at what price it was to be given and taken, nor whether it was promised as a mere gratuity. But, if the evidence had been free from all of these objections, and had been precise and definite in all respects,

it is impossible to understand how the promise and its breach can in any manner be regarded as a fraud. At the best it was not and could not be any thing more than a broken promise. But a mere breach of contract is not a fraud. It is a civil wrong for which the party injured may recover appropriate damages, but that is all. A refusal to convey a tract of land, after having contracted to do so, is no more a fraud then a refusal to pay a promissory note or a merchant's bill for goods sold and delivered.

There is no element of deception or of imposition in such a situation. Moreover, the plaintiff in this case cannot aver any ignorance, either of the terms of the alleged promise or of the fact that he had a right of action, whether for the value of his services or for breach of the special promise, and certainly he would know quite as well as the defendant when that right of action commenced. He does not allege that any concealment in this respect was practiced upon him by the defendant. When he completed six years of service he was certainly competent to demand pay for his services whether in money or in a farm. As he is presumed to know the law he then knew that if he made no demand and brought no suit the statute would begin to run from that time. It is not pretended that the defendant ever misinformed him, or withheld any knowledge from him on this subject.

Where then is the fraud? There is none, and it was error to hold otherwise. This whole subject was fully reviewed in the case of Sankey v. McElevey, 104 Penn. St. 265. We then held that the relation of debtor and creditor is not one of trust or confidence so as to make it the duty of the debtor to disclose to the creditor the fact or amount of his indebtedness. Mere silence or concealment by the debtor without affirmative misrepresentation will not toll the running of the statute of limitations. Where, however, by actual fraud the debtor keeps his creditor in ignorance of the cause of action, the statute of limitations does not begin to run until the creditor had knowledge, or was put upon inquiry with means of knowledge, that such cause of action had accrued. This is sufficient. There is no There is no possible view of the evidence in case which will permit the application of the doctrine that fraud tolls the running of the statute. The assignments of error are all sustained. Judgment reversed and venire de novo awarded. Judgment reversed.

TENANT AND BROWN v. TENANT.

November 2, 1885.

NEGOTIABLE INSTRUMENT-DISCHARGE OF SURETY-LAW OF THE COURT-LAW OF THE PLACE OF CONTRACT-DEFENSE BY SURETY.

A note delivered in West Virginia, payable in that State, for goods sold there, must be deemed and taken to be a West Virginia contract, and the law of that State must govern in determining its validity, obligation and construction. The right of a surety, on such a note, to discharge his obligation by a disregarded notice to the creditor to pursue the principal debtor is a matter affecting the obligation of the contract, and it too must be determined by the law of that State. STATUTE OF LIMITATIONS AFFECTS REMEDY ONLY.

The statute of limitations is, in substance, a prohibition upon the use of process after a defined period, and this, of course, makes it matter of remedy only.

It is no defense for a surety on a note that the payee had purchased land from the drawer, and had paid him purchase-money that he might have retained, and applied to the payment of the note, unless it be shown that the drawer was willing to allow the note to go in payment of the consideration money. EVIDENCE-LAW OF ANOTHER STATE-PRINTED VOLUME OF SESSION LAWS.

The law of another State may be proved by means of a printed volume, purporting to be printed by authority and to contain the laws of such State.

Error to the common pleas of Greene county.

A. died in May, 1869; B., his son, administered on his estate, and in the fall of 1869 sold at vendue in West Virginia to C., another son, certain articles of personal property; for these C. gave to B. his note, under seal, for $130.52, dated October 26, 1869, with D. and E. as sureties, C. and D. resided and signed the note in Pennsylvania; B. and E. resided in West Virgina, and the note was delivered in that State. In 1872 D. notified B. to proceed and collect the amount due on the note from C., and again he notified him that C. was squandering his estate, and that he (B.) should make his money out of C.'s property, otherwise he (D.)" would not stand bail on the note any longer" (these notices were parol). C. died in 1879 insolvent. On June 11, 1881, B., as administrator, brought suit on the note against D. and E.

On the trial it was claimed by the plaintiff, that the note having been executed and delivered in West Virginia, was a West Virginia contract; that, under the laws of that State, the notice from a surety to a creditor to collect from the principal must be reduced to writing. To establish the West Virginia law, he offered in evidence a volume, styled on the back, "Code of West Virginia, 1868." On the part of the defendants it was claimed that the suit having been brought in Pennsylvania, the questions of notice and the release of the surety are governed by the laws of Pennsylvania. They also offered to show that the plaintiff in 1870 purchased from C. an interest in land in West Virginia; that the purchase-money had been in plaintiff's hands, and they further claimed that it could and should have been applied to the payment of the note in suit.

The verdict was for plaintiff.

R. F. Downey and A. A. Purman, for plaintiffs in error. Buchanan & Walton, for defendant in error.

Wyly,

GREEN, J. The contract in suit in this case was in form a promissory note, under seal, for the payment of one hundred and thirty dollars and fifty-two cents ($130.52), dated October 26, 1869, payable at

nine months from date.

No place of payment is designated in the instrument, but it was given to a A. W. Tenant, administrator of William Tenant, deceased, who was resident of West Virginia at the time of his death, and the administrator was, and is, also, a resident of the saine State. The note was given in payment of certain articles purchased at administrator's sale, held in West Virginia, soon after the intestate's death, and was delivered to the payee in that State. Two sureties joined in the note, one of whom lived in West Virginia, and the other in Pennsylvania, and it is against these the present snit is brought. Of course, the note being payable at the residence of the payee, and having been delivered

there, for goods sold there, must be deemed and taken to be a West Virginia contract. This contract was made and was to be performed in that State, and, hence, the law of that State must govern in determining its validity, obligation and construction.

The only question in the case is whether the defense set up by the sureties must be determined by the law of West Virginia or the law of Pennsylvania. The defense is that the sureties gave notice to the creditor that he must proceed against the principal for the collection of the note, or they would no longer be responsible. By the law of West Virginia such a notice to be effective must be in writing. In this case it was verbal only, and therefore, if judged by the law of West Virginia, it was nugatory. It is argued for the defendants that this right of relief to a surety is a matter relating to the remedy and must, therefore, be determined by the lex fori. But we do not think this position tenable. The right of a surety to discharge his obligation by notice to the creditor to pursue the debtor is an incident of the contract of suretyship. It is a part of the law of that contract, and is, therefore, a part of the contract itself. It is a qualification of the obligation of the contract reducing it from a peremptory and absolute obligation to one of a qualified or conditional character. It is true the surety may not exercise his right, and if he does not, his obligation remains intact.

But on the other hand he may exercise it, and if he does, and the creditor pays no heed to the notice, and thereby fails to recover from the principal debtor, the very root of the surety's obligation is reached and destroyed, he is no longer liable, it is as though he had never contracted. Very different is this from the defense of the statute of limitations. There the obligation of the contract is not terminated or defeated. Only a right to enforce it, by an action in the courts, is imperiled. The State simply declares that if her process is used it must be done within certain fixed periods of time, and if not so used, the defendant may, at his option, plead the laches of the plaintiff and receive the benefit of the prohibition. It is in substance a prohibition upon the use of process after a defined period and this, of course, makes it matter of remedy only. For these reasons we think it quite clear that the right of a surety to discharge his obligation by a disregarded notice to the creditor to pursue the principal debtor is a matter affecting the obligation of the contract, and must, therefore, be determined by the law of the place of the contract. The notice given in this case was verbal only, and, therefore, of no effect by the law of West Virginia, and hence, unavailing here.

Another defense offered to be proved but rejected was that the plaintiff had in his hands the means of satisfying the debt due by the principal debtor, because he had bought from the debtor an interest in some land for $400, and paid him the money for it instead of applying enough of it to pay off this debt. The offer of proof does not disclose whether the debtor was willing to convey his land to the plaintiff, and take the note in suit in part payment, and if he was not willing it is difficult to see how he could have been compelled to do so. Nor does the offer

disclose whether the debtor did convey, or was willing to convey, the land upon credit, and without that element it does not appear that the

plaintiff ever did have the means of extinguishing the debt in suit by applying his own debt in discharge of it. For aught contained in the offer it does not appear that the debtor was willing to accept, or did accept, any thing but actual cash down, as the consideration of his conveyance and, therefore, there was no error in rejecting the offer. But even if the plaintiff did for a time owe the purchase-money to the principal debtor it was due by him individually, while the debt due to him was due in his representative capacity, and he certainly could not lawfully use the assets of the estate to pay his private debt. He could not in any event be compelled to do so against his will, and that is what is asked by the rejected offers of proof. Miller v. Ege, 8 Penn. St. 356. As to the proof of the law of West Virginia by means of a printed volume, purporting to be printed by authority and to contain the laws of that State the very question was ruled in Muller v. Morris, 2 Penn. St. 85, in favor of its admissibility. Judgment affirmed.

MOORE V. KILGORE.

November 2, 1885.

ATTORNEY-COMMISSION-JUDGMENT NOTES.

Judgment-notes entered up contained a clause authorizing the inclusion of "costs of suit and attorney's commission of five per cent for collection" at maturity of the notes, the defendant expressed a willingness, etc., to pay, and offered to plaintiff the amount of debt, interest and costs, less attorney's commission ; this was not accepted; defendant then paid the money into court and the court taxed an attorney's commission of two and one-half per cent. Held to be error.

Certiorari to common pleas of Westmoreland county.

Welty McCullogh, for appellant. John F. Wentling, for appellee. GREEN, J. The judgment notes in this case contained a clause authorizing the inclusion of "costs of suit and attorneys' commissions of five per cent for collection" in the judgments to be confessed. They were dated November 26, 1883, and were payable at one year after date, with interest. On November 26, 1884, being the date of the maturity of the notes, the defendant, by leave of the court, paid into court the full amount of debt, interest and costs, on all the judgments. He refused to pay any attorney's commissions because he was ready and willing to pay the whole amount due, thus rendering unnecessary any services by an attorney in the way of collection.

The learned court below allowed a commission of two and a half per cent for the attorney, and in this there was error. To permit such a practice as this, where the defendant offers to pay all that is due at the maturity of the obligation, would be sanctioning an intolerable and unreasonable oppression. There is no occasion whatever in such a case for the service of an attorney for the purpose of collection, and it was no part of the contract in this case that any commission should be paid for the mere entering of the judgment.

We said in Imler v. Imler, 94 Penn. St. on page 375: It was never intended, nor can we permit such a clause to be used, to compel a debtor to pay attorneys' commission where the latter does not dispute

VOL. III.-51