498 GUNTHER v. COTNER. • [192 GUNTHER: V: .COTNER. 4-4254 •. Opinion deliVered March . 30, .1936. LIMITATION OF ACTIONS , .-7A creditor may not arbitrarily apply ' payments made upon unmatured obligations when there are debts past due upon which a.ine may lie applied. So payments made by•a debtor cannot arbitrarily be 'applied by the creditor to the payment of unearned -interest to create a presumption' that statute of , limitation was to run from that time. 2. BILLS AND Noms.—Holder of notes to whom they had been transferred by bank which was in hands of receiver brought suit on them, and it was held , 'that testiinony of receiver as to state of holder's account was admissible on question whether holder was holder in due course, where the testcmony showed that the bank's cashier made investments for the holder from his account when he thought the security, good. Appeal from Sebastian Circuit Court, Greenwood District; J. Sam , ' Wood; Judge; a-ffirmed:
OUNTHER V. COTNER. :499 Thomas Harper, for appellant. Geo. W. Johnson, for appellees. • ,,AKER, J. S. N. Gunther,: :plaintiff in the circuit court; appellant on appeal, sned.L.: N. Cotner„T: M: Cot-. ner, and . J: C. Cotner upon tWo• notes: The• first note, dated January 3; 1928, matUred: October 15, 1928, and was: :for the suM Of $385 with interest from maturity at ten per cent. per annum until . paid. : • The second note dated December 12, 1929, matured six months• after dote with interest from date, at thit'per cent, per annum until paid. . „. • •• The first note had : two: ;payments. indorsed -upon it .as ;follows : 4-29-1929 • • $ 20.00. ' to 5115-1929' 5-28-1929 : • 18.50 • to 10-151 49292 • The seeond noth also here • certain creditS•aS•fellOWS: Dec. 1930 $106.09 10-27-32 pd 1-31-33 pd 5:50 , 321-33 5500' • Both notes were payable . to the order , of the, nrst National n Bank of Mansfield. Both borel an indorsement " Transferred to. S., N. Gunther „Without recourse.. :First, f*., Mansfield; Ark.::By..W.:L. Yo■velt, Above this indorsement was a guaranty, of payment, waiver of demand, notice of nonpayment, ,etc. P.arties 'have "disregOrded . thiS 'gnaranty . VerY 'ProperlY, and it Will reeeive no censideratien froM Us.. Th'e complhint . allei T ed the tran s . fer Of the nbte,,s- to Plaintiff as having . . been Made on December 31 _ 1929 tor - the face amount thereof. , • Defendants answering . dethed the transfer , .of,,said notes to . plaintiff at: . any . time for a valuable eonsidCra-tion; . alleged that the transfer was by officers of the b,o.nk after. its insolvency for The purpose of giving a preference to. plaintiff who, .was a brother,in:-la.w . to the . cashier . Yowell.: They also, pleaded that . at the time of the trans-• fer said notes were Overdue, and that-at o maturity s.nd ,continuonsly thereafter J. C. Coiner had an.:accoimt the . baulcgreatly in excess:of, the . amount clue,.on the notes
500 GUNTHER: V: . 'COTNER. [192 and that defendants . -ware entitled to offset the 'deposit against the notes. . *This plea was relied upon as to the second or larger note,..while the bar of limitations was relied upon. as -to the first• note. The court sustained the plea of limitations • as to the first note, and a. jury trial as' to the matters in issu0 upon the second note:resulted in favor of defendants. From the resulting judgment comes this appeal. •• There is but one 'issue as to the: first' note, 'the one 'held to have I been barred by • the statute. The *note as stated above had two payments indorsed thereon;:the total amount thereof •equaling, one year's interest $38.50. The cashier of the bank had, when payments.were . made, credited the. whole amount as interest showinu payment of interest to October 15, 1929. - There is no.evidence that .st-tch credits . yere made by any agreement with defendants . or any of them, but such credits were defended upon the well-recognized theory that unless the payer directed a pattieular application of the payment the creditor could apply' same as he pleased. Appellant further. contends that since the interest was paid in advance to' October • 15, 1929, there arises in law a' presumPtion'that the date 'Of . payinent was eXtended to that date.. That being true, , the . bar of JIM statute was not effective Matil five* years thereafter; The suit was 'filed *within five years after OCteber 1.5, 1929: It may be conceded that . if .appellant's premises are correct the concluSions* . follow.. We .do not agree yith the first proposition 'stated by appellant that he could, 'without •n express agreement, credit the payments ,upon unearned interest. 'We know of no . authoritY,' and nOne has been cited, empowering the crediter arbitrarilY to apply . payments Made ' Upon uninatured obligations' when there are debts past due uPen' which same-may be plied: The error of appellant"s contention will *be • apparent if the 'case . of JOpes v.-Dowell, 176 Atk. 986; 4 S. W. (2d) 949, be considered 'in relation to , the facts stated. This 'case is in &infertility with a.much 'earlier case holding: "The rernaiiiing notes were not matured when the last payment was Made, and without agreement with his debtdr the creditor could riot, and the la* does
: ARK.] GUNTHER v. COTNER:. 501 not; appropriate paythents t6 debts hot due." Kli,:lie v. 'Hagland; 47 Ark. 111, 14 S. W. 474. Besides the fact that without an agreement to appropriate the debtor's money to payment of .unearned interest is to violate his right to pay:before the newly-fixed maturity . date without loss ;.it also runs counterth the provisions of § 7358, Crawford & Moses' Digest, whick furnishes., the • rule applicable. to partial phyments. No presumption obtains; as argued, that there. was ah eXtenkion of. the-maturity date of the note,,such . presumption being ineonflict with law. The last payment on this note was May 28, 1929. Suit was -filed Jhne 11, 1934. The note .was barred. The second note and the.facts in: relation thereto pro-sent other questions and . difficulties.. . • ... We: cahnot ConceiVe . that ; it ' Would result in ally par-' ticular benefit to' anybOdy. . to •state 'in detail evidence ' introduced'. mion trial. ' . We content; Ourselves ''with statement Of shch pertihelit Tacts; . .and of 'our cohelusiOns from the record as•maybe heces'sary tO settleineht of the issues: The . date 'of' the fransfer:of this . note E was . material matter. about Which appellant gaVe 'very little' matioh. Yowell, the cashier Of the . bahk, was . the: brOther-in-law • of appellaht While the bank was 'opeii he was the agent 'of appellant, mAing'inVestMehts for his priiicipal, checking on his account for'inoheY'hS' heeded 'therefor. This. is .the effect of Gunther's .testimony. Notes were Jeft at the:bank alter purported parchase hntil. about .time the bank , closed. The last .paymept thercon.was by L. N..Cotner,- March 21,.1933;: at the bank ; to_ Yowell.,This -wasA1ie.,$55::er,edited on note of. fh fdnt •'The receiver of the 'bank, Rex 'RaMsey,' thstifibd and introduced .Gunther'S 'bank .aceount d yer' 'objections of Gunther. 'Ramsey said:he: cOuld' net'. tell' 'when mOhey was withdrawn from the :accouht , to py:the hank:for the notes. , The account did not ishowany withdrawals, on the .date the . notes • were shown -49 have been paid accorelip.g tobank's hOoks.. He , cohidhOt . .,tell w.hether..the hank received a eheck 01 cash;or that .ifi*fact :received .anything for the nOtes. He also testihed that J. C. Cotner had $2,000 . in the' bank frOm4.029 . hntil it do ea. ag oht Novem-ber '3 '; 1933:-. lt .:had iheen inSOlveht sinee: March"51933 .
502 GUNTHER V. ' COTNER. 1192 This appeared, from examiner's reports. He stated positively there was nothing to show how or when Gunther paid off these notes. After the •bank failure L. N. Cotner talked with Gunther ab6ut the notes: :He said: "I understand you have some notes of mine." Gunther replied: "Hell, no, I have not got any of your notes." When Cotner . advised him he had been: so informed by Yowell he proinised to See Yowell about it. This is not all of tbe testimony relative to the transfer or possession of the notes. Appellant objected vigorouslY to ihe testimony of Ramsey the receiver in regard to Gunther's account. The positive statement that such testimony was incompetent does not make it so. Whatever force the objection may have had prior to Gunther's testimony was destroyed when he testified that Yowell made investments for him from, his account when.he" thought the security good. If this transaction was in good faith and legal in all respects a thorough investigation of i . Gunther's account would have . disclosed credits for the partial payMents made upon the notes after the . purchase. It is to. us significant in this state of the record that Yowell was not called as a witness.. He certainly was not unfriendly to appellant according to this record. • It became. a question of fact' aS to the date of the transfer of the-notes. • We, like :the receiver • -who had charge of•the books and : records, Cannot' say when, the • transfer was made' or whether paid for. The testimony of the interested parties cannot be said to be undisputed, in determining the legal sufficiency. Bridges v. ,Shop-leigh Hardware Co., 186 Ark. 993, 57. S. W. (2d) 405; McGraw T. Miller, 184. Ark. 916,44 S. W: (2d) 366. These'questions -were for the jurylo determine. Tbe verdict was against appellant's contentions, and the transfer must be 'regai-ded as having been made after insolvency of the bank and after maturity of the notes, and subject to set-off bY the deposit of one of the makers. The objections to instructions are such only as to stress or accentuate the propositions discussed. The in-
ARK.] 503- structions correctly . presented the issues; and are free from prejudicial• errors. • • • The verdict is supported by substantial testimwiy. • Affirmed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.