This action is brought on a note not under seal, given by Reuben King, the testator of defendant, to W. R. Bryan, for $803.04, on 2 January, 1856, payable one day after date, and as a second (364) cause of action, upon a bond made by King to Bryan on 14 February, 1857, for $1,000, payable one day after date. The defendant answered, (1) Both the note and bond have been paid. (2) As to the note not under seal, it is barred by the statute of limitations. (3) That he has counter-claims to both the note and the bond, which are described and numbered from 1 to 60, in a schedule attached to the answer. The plaintiff replied: The counter-claims are barred by the statute of limitations.

The case was by consent referred, the findings of the referee as to facts to be conclusive. The referee made a report in which he finds among other things not material to be here stated, (1) That the two notes sued on were made by King at their respective dates, and are as described. (2) That at the commencement of the action on 16 September, 1873, they were the property of the plaintiff, though he does not find at what date they were assigned to him. (3) That "there is no evidence of payment either on the bond or note sued on." By which we understand him to mean merely that no payments are endorsed on them, as there certainly is evidence from which payments might be inferred as will be seen. (4) Of the counter-claims pleaded, the referee finds that No. 54, which is a note for $4.74, dated 27 Sept., 1856, is barred by the statute of limitations. (5) No. 55, which he describes as "a payment by defendant Brown's testator of $100 to W. B. Bryan, on 10 July, 1863, "is scaled and allowed." (6) No. 56, which he in like manner describes as a payment of $25 made on 9 July, 1863, is scaled and allowed. (7) The counterclaim No. 60 is described as a judgment recovered at Spring Term, 1870, of Robeson, in favor of D. F. Edmond to the use of R. King v. B. Bryan and John Moore for $322. (365) It does not distinctly appear whether the referee finds this to be a good counterclaim or not. Apparently he does not deduct it from the sum which he finds owing by defendant independent of all counterclaims, while he does deduct Nos. 55 and 56 after scaling them. Why he declined to allow it, if he did decline, we can only conjecture. (8) The rest of the matters pleaded as counterclaims, consist of payments made by King of debts owing by Bryan to sundry persons, at the request of Bryan. The payments were made while Bryan held the notes sued on and it is said before April, 1869; but they must have been made before March, 1869, as King died early in that month, and his will was proved on 10 March.

The referee finds as conclusions of law: (1) That the note not under seal is barred by the statute of limitations. (2) That the counterclaims, except Nos. 54, 55, 56, and 60, are barred by the statute of limitations. (3) How he found as to counterclaims Nos. 54, 55, 56, and 60 has been stated above.

The defendant excepted to the report of the referee (1) because he found that the counterclaims (except Nos. 54, 55, 56 and 60) were barred by the statute of limitations; whereas they had in fact been paid by King as the agent of Bryan; (2) because the referee erred in finding that defendant was liable to judgment for any sum whatever.

The Judge overruled the first exception and "allowed" (sustained) the second, and referred the case back to the referee. He expressed the opinion that the matter pleaded as counter-claims (except as aforesaid) were not counterclaims, but payment, and consequently not affected by the statute of limitations. The plaintiff appealed from this judgment.

RODMAN, J. (After stating the facts above.)

In considering the questions which have been raised, it will be necessary to treat them in order; and it will be convenient to examine first the counterclaims excepted from the mass, and standing on their particular grounds:

As to No. 54. If this is to be considered as a counterclaim, or more properly, a setoff, it is clearly barred by the statute; and as it is stated, and without any evidence other than the note itself furnishes tending to show that in the transaction in which it was given it was expressly or impliedly agreed that it was to be a payment on King's indebtedness, it is a setoff, and not a payment. On this point we agree with the referee. Though as will be seen, we think there is evidence upon which he might find it to be a payment.

Nos. 55 and 56 are similar, and may be dealt with together. The referee allowed these as payments, but scaled them, they having been made in 1863. If they had been endorsed on the notes and decisions are that they were not subject to be scaled. Hall v. Craige, 65 N.C. 51; Walkup v. Houston, 65 N.C. 501; Mercer v. Wiggins, 74 N.C. 48; Berry v. Ballows, 30 Ark. 198.

We can see no reason why their not being endorsed, but only evidenced by a receipt on a paper not attached to the notes — but it must be supposed in some way referring to them — can make any difference. If $100 in Confederate money was accepted as a payment of that sum it was presumptively made a payment of that sum by the agreement of the parties, unless it appeared in some way that it was agreed that it should be taken only for its then value in gold. If these payments were properly allowed at all they should have been allowed to the full amounts paid.

3. As to No. 60. We see no reason why the referee did not allow this judgment as a setoff. We may suppose, however, that (367) it was because the judgment was recovered in 1870, after Bryan had sold his interest in the notes sued on to the plaintiff. But the judgment does not show that the debt did not exist before it was rendered. In fact as the action was brought to the use of King, who died in March, 1869, he must have owned the debt sued for, while Bryan held the notes sued on in this action, which seems to have been until about April, 1869. As has been heretofore stated, however, the report does not expressly show what the referee did decide as to this claim, and we only gather his decision inferentially. The report is either defective or erroneous. Some part of it has apparently been omitted from the transcript to this Court.

4. The most important exception to the report is in respect to the manner in which the referee dealt with the other matters stated in the schedule. The answer alleged a payment of the notes sued on; and although the defendant afterwards scheduled the debts of Bryan which King had paid at Bryan's request, as counterclaims, we think he was not thereby precluded from insisting before the referee that they were in fact payments upon the notes, or one of them, which Bryan then held against King. It does not appear that this view was presented to the referee. He considers these payment for Bryan as counterclaims, and as such, out of date, but does not except as may be inferred pass upon the question whether the payments for Bryan were or not intended, and agreed to be considered as payments to him. Of such an express agreement there was no evidence. But from the evidence before the referee, stated by him as facts, he might reasonably, though he need not necessarily, have inferred such an agreement, and the fact that the payment were payments on the debt sued on. Such an inference is not one of law which a Court can draw, but of fact which a jury, and consequently (368) a referee, acting instead of a jury, might draw or not, and was obliged to draw or reject, in finding on the issue of payment. For this doctrine McDowell v. Tate, 12 N.C. 249, is authority. To an action on a bond payable to plaintiff, the defendant offered in support of his plea to setoff, an account against the plaintiff for $78, which the Judge held barred by the statute of limitations. The case came to this Court and it was held that the Judge below should have left it to the jury as evidence of a payment. HENDERSON, J., in an able opinion showed that the inference of payment was a reasonable one which the jury would have been justified in making from the nature of the transaction and the relation between the parties. To the same effect is Dodge v. Swazey, 35 Me. 535, where the Court having the power to find the fact, drew an inference of payment from facts similar to those in McDowell v. Tate. Had the referee found that there had been no payment on the notes sued on we should have taken his finding as final. But he has not distinctly so found and does not seem to have passed on that question, as the jury did not in McDowell v. Tate. In that case for the omission of the Judge to inform the jury that the evidence of the debt to the defendant might be considered in support of the plea of payment, a new trial was granted. In Earp v. Richardson, 75 N.C. 84, the finding of the facts by the referee was so vague and scant that the Court could not intelligently review his conclusions of law, and the case was remanded in order that he might amend his report. We think that in this case the report should be remanded in order that the referee may pass distinctly on the question whether King paid during his life any part, and if any how much, of the debt sued on, and that he may correct his report in respect to the payments made in July, 1863, which he scaled.

If the referee shall find that the payments made by King at the request of Bryan were in fact payments upon the notes sued on, it (369) is easy to see that interesting questions will arise as to the appropriations of the payments, and in their effect in repelling the bar of the statute. It is not our duty to anticipate these.

The order of the Judge below is affirmed, and the case remanded to the referee with directions to amend his report by finding such additional facts as will enable the Superior Court to decide intelligently upon his conclusions of law.

Affirmed and remanded.

Cited: McRae v. Malloy, 87 N.C. 196; Fertilizer Co. v. Reams, 105 N.C. 283.