Opinion
June 28, 1961
Appeal from the Wayne County Court.
Present — Williams, P.J., Bastow, Goldman, McClusky and Henry, JJ.
Judgment unanimously reversed on the law, with costs and complaint dismissed, with costs. Memorandum: Defendant and a comaker signed and delivered to the plaintiff a demand note dated September 11, 1950. The defendant's comaker made numerous payments of principal and interest up to 1959, but defendant has never made any payments, nor has he participated in any manner in the comaker's payments. The comaker is now bankrupt and the plaintiff bank, in this action commenced in 1959, seeks payment of the balance due from the defendant. The defendant has interposed the defense of the six-year Statute of Limitations (Civ. Prac. Act, § 48, subd. 1). The plaintiff contends that this defense is unavailable because the payments on account have tolled the statute. However, at the trial, the plaintiff stipulated that in making such payments, no agency of any kind existed between the comaker and the defendant. This being so, the payments did not effect an extension of the statute as to the defendant ( Shoemaker v. Benedict, 11 N.Y. 176; Hoover v. Hubbard, 202 N.Y. 289; State Bank of Binghamton v. Mangan, 240 App. Div. 327). The plaintiff also contends that the Statute of Limitations will not prevent a recovery because of the following provision in the note: "The maker, endorsers, and all parties hereto, waive presentment for payment, demand, notice of dishonor, protest and notice thereof; and consent to any renewals, extensions or partial payments on this note or the indebtedness for which it is given; and such renewals, extensions or partial payments shall not discharge any party from liability thereon". This provision, however, does not toll the Statute of Limitations. The purpose of the quoted clause was to permit the bank to accept partial payments, grant extensions, renewals and the like to persons primarily liable without releasing indorsers or others secondarily liable. Ordinarily, a person secondarily liable is discharged by a binding extension without his consent unless the right of recourse against him is expressly reserved. (Negotiable Instruments Law, § 201, subd. 6.) The word "discharge" as used in the clause is a word of art. The manner in which parties to negotiable instruments may be "discharged" is spelled out in sections 200-206 of the Negotiable Instruments Law. The Statute of Limitations commenced to run on this demand note the date it was made ( McMullen v. Rafferty, 89 N.Y. 456). The judgment appealed from should be reversed and the complaint dismissed.