Appeal from Grant Circuit Court.
OPINION OF THE COURT BY JUDGE CLAY — Reversing.
J. W. Kennedy and J. G. Kennedy are brothers. They had been engaged in buying and selling tobacco and each had sustained a large loss. To relieve his brother of his financial embarrassment, J. G. Kennedy loaned him $5,000.00, which he raised by mortgaging his farm. On July 26, 1893, the indebtedness, with the accumulated interest, was merged into three notes, one for $3,000.00, payable one day after date, one for $2,950.00, payable sixty days after date, and both payable to the order of Annie Kennedy, the wife of J. G. Kennedy, and one for $1,000.00, payable twelve months after date to the order of Katie Kennedy, a daughter of J. G. Kennedy. Later on the notes were endorsed in blank by the payees and delivered to J. G. Kennedy. On the $3,000.00 note are the following endorsements:
"Received on within note eight hundred and fifty dollars this Nov. 3rd, 1898.
"Received on within note $200.00 credit derived from note given Union Bank Feb. 1910, said note paid by J. W. Kennedy Dec. 12-1923."
On the $2,950.00 note are the following endorsements:
"$850.00. Received on the within note eight hundred & fifty dollars, this Nov. 3rd, 1898.
"Received on the within note $200.00 credit derived from note given to Union Bank Feb. 1910, said note paid by J. W. Kennedy, Dec. 1913."
On the $1,000.00 note are the following endorsements:
"$300.00. Received on the within note three hundred dollars, this Nov. 3rd, 1898.
"Received on within note $100.00 credit derived from note given to Union Bank Feb. 1910, said note paid by J. W. Kennedy."
On January 28, 1920, J. G. Kennedy brought suit on the notes. The defense was a plea of limitation and a further plea that the action could not be maintained because the notes had never been listed for taxation. The
defendant declined to offer any evidence, and at the conclusion of the evidence for plaintiff, the court directed the jury to return a verdict in his favor. Defendant appeals.
In the case of a promissory note not placed on the footing of a bill of exchange, the period of limitation is fifteen years, but a payment on the note is a sufficient acknowledgement of the debt to stop the running of the statute up to that time, and the period of limitation will then be computed from the date of the payment. Brown's Admr. v. Osborne, 136 Ky. 456, 124 S. W. 405. However, if, as in this case, the payments represented by the credits are denied, the burden is on the holder of the note to show that the payments were made at the time they purport to have been made, or at least within fifteen years from the time the note became due. Tate v. Hawkins, 81 Ky. 577.
Respecting the credits of November 3, 1898, appellee testified as follows:
"Q. I say there was endorsed on this note, `Received on within note, November 3, $850.00.' That is November 3, 1898, and also on the other $3,000.00 and on the $1,000.00 note $300.00 on that day. Now will you explain to the jury how you came to credit these notes with that amount? A. Well, it was through an understanding with me and him. I gave him credit of $2,000.00 on the three notes. Understand he knows all about it. Q. How did the $2,000.00 come about, explain it. A. It came this way. He always claimed in his settlement with Wayne — it has nothing to do with my settlement with Wayne — he always claimed that he did not get a fair settlement, Wayne did not treat him right. I told him I could not help that, what Wayne done to him. I said when I get my settlement through with Wayne ____ (Defendant, by counsel, objects to the foregoing answer.) A. That is a credit that I gave him then, there is nothing crooked about it, he understands the whole business. Q. Now we were interrupted there so I don't think the jury heard you. Tell the jury as clearly as you can what the transaction was about by which you gave him credit for $2,000.00, explain it fully. A. It was just this ____ Q. Tell what occurred between you and J. W. Kennedy. A. It was not concerning him at all. I just simply made him a present in settlement. Q. I am not asking you that. I am asking you about the transaction, tell me
that. A. I don't know what you mean. Q. That don't tell me about the transaction itself. A. There was an understanding that I give him credit. Q. What was the understanding? A. After I got off from Wayne with my settlement, why ____ Q. You had an agreement with him about that? A. Yes, sir, he understood it and he understands it today. Q. Well, what did you get off of Wayne? A. $4,000.00. Q. Credited him? A. Credited him with half on them notes as a present. Q. Mr. Kennedy, where did you get this $2,000.00 that you credited on these notes in 1898? A. I got it from Wayne. Q. Why did you get it from him? A. Got it in settlement. Q. Do you mean to tell this jury you collected $2,000.00 belonging to your brother? A. I tell the jury and I will tell you that it was the understanding that if I got anything out of my individual settlement with Mr. Wayne, I would give him half of it, credit it on the notes and I done so. Q. Do you mean to tell this jury you gave him one-half of $4,000.00 that you collected that was coming to you as a credit on these notes? A. Yes, sir. Q. Was the money coming to your brother? A. Not until I agreed to give it to him. Q. It was simply a gift? A. Yes, sir. Q. In so far as the money itself was concerned, he had no interest in it till you gave it to him? A. No, sir. Q. But the $4,000.00 ____ A. I will ____ Q. Wait a minute, please; $4,000.00 of this? A. Yes, sir. Q. You simply applied it as a credit, half of it on his notes? A. Yes, sir, just as I agreed to. Q. Was he entitled to any interest in the $4,000.00 at all? A. No, sir. Q. Never did have? A. Never did have."
It is the contention of appellant that the foregoing evidence merely shows that appellee made appellant a present of half of the money that he received in the settlement with Wayne, and that the holder of a note cannot suspend the running of the statute of limitations by making the payor a present and crediting that present on the note. It seems to us, however, that the evidence considered as a whole goes further than is claimed by appellant. Appellee sums up the transaction in the following language:
"I tell the jury and I...
