Earll v. Searl, 1386.

• Decision Date: 04 December 1953
• Docket Number: No. 1386.,1386.
• Citation: 101 A.2d 248
• Parties: EARLL v. SEARL et al.
• Court: D.C. Court of Appeals

101 A.2d 248

EARLL v. SEARL et al.

No. 1386.

Municipal Court of Appeals District of Columbia.

Argued October 19, 1953.

Decided December 4, 1953.

H. Max Ammerman, Washington, D. C., for appellant.

Arthur J. Hilland, Washington, D. C., with whom Vincent C. Burke, Jr., Washington, D. C., was on the brief, for appellees.

Before HOOD and QUINN, Associate Judges, and WALSH, Chief Judge, Municipal Court for District of Columbia, sitting by designation.

HOOD, Associate Judge.

This case commenced as an action by Earll for the balance of a $2,000 note given by the Searls to Earll as a commission for securing an $18,000 loan from Mrs. Earll. On a prior appeal we reversed a judgment in Earil's favor. We held that the taking of a $2,000 commission by Earll with the knowledge of his wife, for whom he acted as agent, plus the charging of six per cent interest on the loan, constituted usury. Searl v. Earll, D.C.Mun.App., 62 A.2d 374. We sent the case back for a new trial on the issue of what amount; if any, was recoverable by the Searls on their counterclaim.

At the new trial no additional evidence was offered. On consideration of the transcript of testimony and exhibits on the original trial, the court found for the Searls on their counterclaim in the sum of $3,000. It was definitely established by our prior decision that the transaction was usurious. Hence the only question is whether the Searls are barred from recovery of the unlawful interest paid by them. Our statute, Code 1951, § 28-2704, permits recovery of all interest paid on a usurious transaction "provided said suit be begun within one year from the date of such payment." The counterclaim (and Earll's suit also) was filed more than a year after the last payment by the Searls on either the $2,000 note or the $18,000 loan. The point is therefore made that any recovery is barred by the statute.

The trial court ruled that Earll had waived the benefit of the bar of the statute because he "did not offer as a defense the bar of the statute of limitations which being an affirmative defense must be pleaded." The one year limitation here involved is not a general statute of limitations. It is a limitation imposed by the statute which created the right and is a limitation of the right itself. Lewis v. Reconstruction Finance Corporation, 85 U.S.App.D.C. 339, 177 F.2d 654; Moran v. Harrison, 67 App. D.C. 237, 91 F.2d 310, 113 A.L.R. 505, certiorari denied 302 U.S. 740, 58 S.Ct. 142, 82 L.Ed. 572. Lapse of the time limitation not only bars the remedy but destroys the liability. Central Vermont R. Co. v. White, 238 U.S. 507, 35 S.Ct. 865, 59 L.Ed. 1433. Unlike a statute of limitations it need not be pleaded in defense. Carpenter v. United States, 2 Cir., 56 F.2d 828; Morrison v. Baltimore & Ohio R. Co., 40 App.D.C. 391. We therefore hold that the defense of the one year limitation was not waived by failure to plead it. And we do not think, as the trial court apparently thought, that this defense was waived because not presented to the court at the original trial and not argued before us in the prior appeal. At the original trial the main issue was usury or no usury. The trial court there found no usury and consequently never reached the question of defenses to the claim of usury. And the same was true of the prior appeal. We were careful in remanding to say that the trial court should determine what amount, if any, was recoverable on the counterclaim.

The Searls argue that the one year limitation was stayed because of fraud on the part of Earll in concealing the name of the actual lender. There are many authorities to the effect that fraud will not toll the limitation period which conditions the right itself, but some of the more recent authorities hold that such a limitation may be extended by fraud to the same extent as a general statute of limitations may be extended. See Scarborough v. Atlantic Coast Line R. Co., 4 Cir., 178 F.2d 253, 15...