Young v. Katz, 131 N.Y. 623 (1892)

A party’s self-serving endorsement of interest payments on a promissory note is inadmissible as evidence to overcome a statute of limitations defense unless it’s proven the endorsement was made when it was against the party’s pecuniary interest.

Summary

This case addresses the admissibility of self-serving endorsements on a promissory note to prove partial payment and thus revive a debt barred by the statute of limitations. The court held that such endorsements, made by the noteholder, are inadmissible unless proven to have been made at a time when they were against the noteholder’s pecuniary interest. The plaintiff’s attempt to introduce his own endorsements of interest payments failed because he did not prove the endorsements were made before the statute of limitations had run, and the testimony of interested parties was deemed inadmissible under the governing statute concerning testimony against deceased persons’ estates. The judgment in favor of the plaintiff was reversed.

Facts

Clarissa Darling held a promissory note from Elizabeth Jayne, dated November 17, 1864, payable on demand with interest. Darling died, and Young, as her executor, presented the note as a claim against Jayne’s estate after Jayne’s death in 1884. The note included several endorsements of interest payments, all written by Young. Jayne’s executor disputed the claim based on the statute of limitations.

Procedural History

Young, as executor of Darling, presented the note as a claim against the estate of Elizabeth Jayne. The executor doubted the justice of the claim, leading to the appointment of a referee to hear and determine the matter. The referee ruled in favor of Young, the claimant. This decision was appealed, and the lower court’s judgment was reversed by the New York Court of Appeals.

Issue(s)

Whether endorsements of interest payments, made by the holder of a promissory note, are admissible as evidence to overcome a statute of limitations defense without proof that such endorsements were made when against the holder’s pecuniary interest.

Holding

No, because an endorsement of part payment is only admissible to rebut the presumption of payment arising from the lapse of time if it appears that when made, it was at variance with the endorser’s pecuniary interest.

Court’s Reasoning

The Court of Appeals reasoned that the statute of limitations for contract actions is six years. To take a case out of the statute’s operation, there must be a written acknowledgment or promise, or proof of part payment. While part payment can be proven by parole evidence, endorsements of payment are only admissible if they appear to have been made by a creditor at a time when they had no motive to give a false credit, specifically before the statute of limitations had operated. The court emphasized that self-serving declarations made after the statutory period are inherently suspect and cannot revive a stale claim. The court cited Roseboom v. Billington, stating, “An indorsement, therefore, on a bond or note, made by the obligee or promisee, without the privity of the debtor, cannot be admitted as evidence of payment in favor of the party making such indorsement, unless it be shown that it was made at a time when its operation would be against the interest of the party making it.” The court also found that the testimony of the plaintiff and other interested parties was inadmissible under Section 829 of the Code, which prohibits testimony about personal transactions with a deceased person against their estate. Because the plaintiff failed to establish that his endorsements were made before the statute of limitations had run and relied on inadmissible testimony, the court reversed the judgment.