My samurai is sitting on 32's right now, and my buddy has brand new 35's that he wants to trade me because he doesnt want to lift his jeep. My question is how much tire can a sammy with stock axle handle? I have plenty of clearance for them, just curious how much the small looking samurai axles can handle....also how well will a 1.6l 16 valve move these tires?

It all depends on how you drive and where you drive.  If you are light on the gas pedal and just drive up and down the road, samurai axles could handle 44s.  On the other hand, some people break axles on 31s, while off roading.  The general consensus is....31s are pretty safe, and 33s are liveable as long as you don't drive it like a dumb-ass.  35s are pushing it.
Even with a 1.6 16V, you will need lower tcase or axle gears to make it "nice" to drive and not burn up your clutch.