The action is on a promissory note dated January 3, 1906, by which the defendant promised to pay to the plaintiff on demand $2,005.35. There were certain payments on the note, the last payment being made on March 28, 1907. The action was commenced on the 19th day of February, 1912. The answer set up the Statute of Limitations and the only question presented on this appeal was whether the cause of action was barred. The answer to this question depends upon whether the last payment credited upon the note was sufficient to take the case out of the bar of the statute.
Section 410 of the Code of Civil Procedure provides that “where a right exists but a demand is necessary to entitle a person to maintain an action the time within which the action must be commenced must be computed from the time when the right to make the demand is complete. ” There are exceptions to this provision which do not apply to the case at bar. Section 395 of the Code of Civil Procedure provides that “An acknowledgment or promise contained in a writing, signed by the party to be charged thereby, is the only competent evidence of a new or continuing contract, whereby to take a case out of the operation of this title. But this section does not alter the effect of a payment of principal or interest.” These are the only provisions of the Code of Civil Procedure that apply.
The facts upon which this question is presented are as follows: The defendant had an account with the Cobper Exchange Bank, which became insolvent and went into the hands of a receiver. By an instrument dated November 14, 1905, defendant assigned to the plaintiff any and all sums of money now due or to grow due upon his claim against the Cooper Exchange Bank or R. Ross Appleton, Esq., as receiver of the Cooper Exchange Bank, amounting to $3,006.35, which claim accrued to the defendant by reason of his having been a depositor in the Cooper Exchange Bank, with power and authority, for its own use and benefit, but at the defendant’s own cost, to ask, demand, collect, receive, compound and give acquittance for the same or any part thereof, and further providing that this assignment of claim was *324given “as collateral security for an advance or advances made to me by the Fourteenth Street Bank, East Side Branch, on account of said claim or demand. And it is further understood that when the amount of said debt or claim shall have been collected by the said Fourteenth Street Bank, under this assignment, that said bank shall pay over to me any and all sum or sums of money over and above the amount of any advance or advances with interest thereon made by the said Fourteenth Street Bank, to me, on or on account of said claim or demand. And it is further understood that if the amount paid by the Cooper Exchange Bank, or the receiver thereof, on my aforesaid claim or demand against said Cooper Exchange Bank, shall not be sufficient to pay the amount of the advance or advances and interest thereon, and any and all costs and expenses incurred in the collection of the same by the Fourteenth Street Bank, then in that event I hereby agree to pay any deficiency thus arising.” On the 3d of January, 1906, the defendant made and delivered to the plaintiff his promissory note whereby he promised to pay to the plaintiff or order $2,005.35 on demand. Upon the trial an assistant manager of the plaintiff was called as a witness and was asked: “ Did he [defendant] on January 3rd, 1906, make this note and assignment to your bank?” and defendant’s counsel-stated: “That is admitted.” The witness then testified that on January 8, 1906, the plaintiff received on account of this assignment $502.67; on January 13, 1906, $751.34; on March 28, 1907, $375! 67; that these sums were received from the receiver on account of dividends under the assignment, and that allowing these payments there was due on the note $580.34. The witness then testified that on January 8, 1906, he told the defendant that certain dividends had been paid, and the defendant said he was very glad of it, and hoped that the plaintiff would get it all; that in June, 1906, the witness told the defendant that the bank had received a dividend of twenty-five per cent, and that it had been applied to his loan; that on March 28, 1907, the witness told the defendant that the plaintiff had received from the receiver of the Cooper Exchange Bank another dividend that had been applied to his loan, to which the defendant replied that he was glad plaintiff was getting the money; that on the *32528th of October, 1908, the witness told the defendant that no other dividend had been paid, to which the defendant said he was sorry. Upon this testimony both parties moved for the direction of a verdict, which the court denied, and submitted to the jury the question whether the defendant ratified the acts of Mr. Clark, the cashier of the plaintiff, when Mr. Clark said to the defendant: “We had received a dividend,” or dividends. The court stated to the jury: “If you believe from all the facts in the case and the circumstances connected therewith that the words used by the defendant were a promise or ratification sufficient to take it out of the Statute of Limitations then the plaintiff is entitled to a verdict in the sum of $580.34. ” The jury returned a verdict in favor of the defendant, and from the judgment entered thereon the plaintiff appeals.
In the case of Brooklyn Bank v. Barnaby (197 N. Y. 210) the Court of Appeals held that where the debtor requested the creditor to deliver certain collateral security held by the creditor, and to accept in place thereof $562.50, and the bank delivered the collateral and received the money and credited it on the note, that was a payment by the defendant upon his written request that the plaintiff accept a sum of money in lieu of part of the collateral then held by it, and supported the implication that the defendant intended to acknowledge the obligation of the debt and to make a new promise to pay the balance due; but it was also held that where the bank upon its own initiative sold some of the collateral which it held and realized therefrom the sum of $1,775, and applied the amount thus realized to the payment of the debt, that was not such a payment as suspended the Statute of Limitations. It was said that the effect of a part payment in enlarging the time during which an action may be brought is because a part payment made on account of a claim is an acknowledgment by the debtor of his liability for the whole demand, and from this acknowledgment a new promise on his part to pay the residue is implied. The undertaking of the debtor as to the unpaid part of the debt is thus by a legal presumption renewed and made to date from the time of the part payment. “ The debtor can always make a new promise, but where circumstances are relied upon to constitute such a promise it may make a radical *326difference whether they occurred before or after the debt was barred. In the former case, with a debt still alive, it would require less evidence to create a promise to extend the running of the statute than in the latter case, with a debt barred, to revive the debt and renew the expired period.” There was a strong dissent in that case based upon the transfer of the collateral obligation, which, after enumerating the security pledged for the payment of the note, said: “Which (I) hereby authorize said bank or its president or cashier, to sell * * * in case of the non-performance of this promise, applying the net proceeds to the payment of this note, including interest, and accounting to......for the surplus, if any. In case of deficiency (I) promise to pay to said bank the amount thereof forthwith after such sale, with legal interest.” By the minority opinion it was held that the time that barred that obligation was six years from the ascertainment of the deficiency. The majority opinion, after considering some authorities relied upon by the plaintiff, said: “ Quite different is the case at bar, for here the defendant’s promise was definite and unequivocal, covering the whole debt, dependent upon no condition or contingency which might relieve him from it, and embracing nothing that the law would not have implied if he had not reduced it to writing. If judicial construction can metamorphose such an indivisible transaction into two or more separate and distinct parts, governed by as many different periods of limitation, we may as well abolish the statute, for it will no longer be the shield of him who is sued, but the sword of him who sues.” So that, accepting this decision as controlling, the question is whether the defendant ever either made a payment or authorized the acceptance of money by the plaintiff as a payment upon his obligation from which a new promise to pay the balance due could be inferred. According to the testimony this agreement of the 14th of November, 1905, and the note in suit were made to the bank on the same day, January 3, 1906. By the note the defendant agreed to pay to the bank on demand the sum of $2,005.35. By the agreement that was delivered at the same time he assigned to the bank a claim against an insolvent bank or its receiver amounting to $3,006.35 expressly giving to the plaintiff power and authority *327for its own use and benefit but at the defendant’s cost to ask, demand, collect and receive some or any part thereof, and in the defendant’s name or otherwise to prosecute and withdraw any suits or proceedings at law or in equity therefor. The defendant then agreed that this assignment was made as collateral security for an advance or advances made to the defendant by the plaintiff on account of said claim or demand and that when the- claim or demand shall be collected under the assignment the bank would pay over to the defendant all sum or sums of money over and above the amount of any advance or advances with interest thereon made by the said Fourteenth Street Bank to the defendant on account of said claim or demand, and that if the amount paid by the Cooper Exchange Bank or the receiver thereof on the defendant’s aforesaid claim or demand against siich Cooper Exchange Bank shall not be sufficient to pay the amount advanced with interest and any and all costs and expenses incurred in the collection of the same by the Fourteenth Street Bank, then in that event the defendant agreed to pay any deficiency thus arising. These two instruments must be read together in determining the exact relation between the plaintiff and the defendant. The note was a demand note, was delivered with this assignment, which recited that the defendant delivered a demand note which represented the money advanced at the time the note and assignment were delivered; the money advanced was advanced to the defendant ‘ ‘ on account of said claim or demand ” which had been assigned to the bank; the plaintiff was authorized to ask, demand, collect, receive and give acquittance for the same or any part thereof in the defendant’s name, or otherwise; and the advance thus made on account of the assigned claim was to be paid by the money received from the insolvent bank or its receiver, any surplus accounted for to the defendant, or if the amount received by the plaintiff was not sufficient to pay the amount advanced, the defendant promised to pay. Under Judge Werner’s opinions in Brooklyn Bank v. Barnaby (supra) it seems to me that there was here an express authority given by the defendant to the plaintiff to receive the amount from the insolvent bank or its receiver on account of the indebtedness represented by the note, and the receipt of such a pay*328ment, the statute being not then a bar, was evidence of a new promise which bound the defendant.
The complaint here expressly alleged the making of the note, the delivery of this assignment of the defendant’s claim as depositor against the Cooper Exchange Bank or its receiver, and that thereafter the plaintiff paid to the defendant the sums which it had received as the agent of the defendant from the Cooper Exchange Bank or its receiver and that such receipts were a payment by the defendant. Here the plaintiff advanced to the defendant a sum of money on account of a claim against the Cooper Exchange Bank or its receiver. It took from him a demand obligation for the repayment of that sum. The defendant authorized the plaintiff to ask, demand, collect and receive payments made by the Cooper Exchange Bank and that any balance received in excess of the amount advanced by the plaintiff to the defendant was to be paid to the defendant and any deficiency over the amount received was to be paid by the defendant to the plaintiff. The receipt of any part of that demand assigned to the plaintiff was, it seems to me, clearly a payment by the defendant on account of the amount advanced which implied a new promise to pay what was in excess of the amount received from the Cooper Exchange Bank, and that the defendant’s express promise to pay any deficiency related to the credit by the plaintiff of the amount that it received as agent of the defendant from the Cooper Exchange Bank.
I think, therefore, that the cause of action was not barred by the statute and that the judgment must be reversed. As both parties submitted the right to a verdict to the court and there was no request to submit any question to the juiy, I think we should now grant the plaintiff’s motion and direct a verdict for the amount then due, $580.34, with interest from December 11, 1912, together with costs in this court and in the court below.
Hotchkiss, J., concurred.
Determination affirmed, with costs.