Labatt v. Smith
| Decision Date | 06 February 1886 |
| Citation | 7 Ky.L.Rptr. 631,83 Ky. 599 |
| Parties | Labatt, & c., v. Smith, & c. |
| Court | Kentucky Court of Appeals |
APPEAL FROM BATH COURT OF COMMON PLEAS.
REID & YOUNG, WM. LINDSAY AND W. R. PATTERSON FOR APPELLANTS.
Briefs not in record.
HENRY L. STONE FOR APPELLEES.
Brief not in record.
In this case the judgment of the court below has been affirmed by the Superior Court, and an appeal prosecuted to this court. Lewis and Silas Lane, who were residents of the county of Montgomery, in this State, in the spring of 1870, had taken for sale, to the New Orleans market, a large lot of mules and while in that city, attachments, issued in behalf of creditors, were levied on the mules, with a view of enforcing the payment of their several claims.
The appellees, Smith & Whitney, who were also residents of Montgomery county, had sold to the Lanes a lot of mules for six thousand six hundred and fifty dollars, for which they held their notes. Whitney, in March, 1870, went to New Orleans for the purpose of having the indebtedness secured and instituted proceedings for that purpose. The mules were sold, and while the proceeds were in the hands of the collecting officer, and before any distribution had been ordered, or the rights of the creditors determined, Whitney sold to the appellants, who were his attorneys, the claim of Smith & Whitney for three thousand dollars--one thousand in cash, and their note for two thousand dollars, payable in sixty days from the third of March, 1870. After this transaction the Lanes were forced into bankruptcy by their Kentucky creditors, and one Richart made the assignee. In September, 1876, the present appellees instituted an action in the Bath Circuit Court on the note due by appellants, and garnished in the hands of Richart, the assignee, the amount of the dividends the appellants were entitled to by reason of their purchase of the note of six thousand six hundred and fifty dollars on the Lanes. Appellants were proceeded against as non-residents, and a judgment rendered by which the dividends, one thousand three hundred and thirty-one dollars were applied to the payment of the note held on the appellants. The appellants, after this judgment had been rendered, moved to set it aside, tendering an answer that presented a defense to the action. The motion prevailed, and an issue was raised as to the right of recovery by appellees on the note.
The substance of the defense was, that the note was procured by the fraud of Whitney, and for that reason it was asked to be canceled, and that appellees be compelled to restore the one thousand dollars paid at the time the note was executed. On the hearing, appellees recovered a judgment, subject to the credit for the amount collected or ordered to be paid by the assignee in bankruptcy.
There are several assignments of error. The first is, that the contract was invalid by reason of the Louisiana statute prohibiting such contracts between the client and attorney. Such a question can not arise for the reason that we find neither plea nor proof to support it. Second, that the note was procured by fraud.
It is sufficient to say, that the facts presented by the record conduce to show that appellants purchased with their eyes open. They must have known that the Lanes were in failing circumstances; creditors had then seized upon their property, and they were purchasing the note at less than half the sum stipulated to be paid by the Lanes, and without even requiring that the appellees should by their indorsement make themselves liable as ordinary assignees.
Appellants, in addition, executed a receipt to the appellees reciting the sale of the claim, and that all costs were to be paid by them, and that appellees were not to pay them or to be in any way responsible therefor.
During the progress of the action, and after the original answers had been filed, the appellants tendered an amended answer, in which is pleaded the Louisiana statute of limitation of five years as a further defense to the action, and this is the principal question involved on this appeal.
The statute of Louisiana bars the recovery on such a note after the expiration of five years from its maturity, and makes the statute by an express provision apply to persons residing out of the State.
It is attempted to be maintained that the lex loci has controlled this class of cases since the adoption of the Revised Statutes.
The general rule " that all suits must be brought within the period prescribed by the local law," is conceded, but it is urged that by reason of the statute the doctrine of the common law has been...
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