Redding v. Main
| Decision Date | 08 October 1946 |
| Citation | 303 Ky. 41 |
| Parties | Redding v. Main. |
| Court | United States State Supreme Court — District of Kentucky |
2. Limitation of Actions. — Where five-year limitation period on an action upon a promissory note placed upon the footing of a bill of exchange has elapsed by reason of alleged fraud or mistake, plaintiff must allege and prove that fraud or mistake was not only not discovered within such five-year period, but that it could not have been discovered sooner by reasonable diligence, and, even so, an action cannot be maintained after lapse of 10 years from perpetration of the fraud. KRS 413.120(12), 413.130(3).
3. Limitation of Actions. — The trusts intended to be embraced by statute excluding from application of limitations continuing and subsisting trusts are those of an exclusively equitable character, as where trustee has a right to hold estate and cestui que trust has no right to sue for it. KRS 413.340.
4. Limitation of Actions. — Allegation by indorsee of note that indorser had received payment from maker and concealed that information from indorsee, at most, disclosed a constructive trust, which is not the type of trust excluded from application of limitation statute, and limitations commenced to run against such a trust from time it was created. KRS 413.120, 413.340.
5. Limitation of Actions. — Action by alleged indorsee of note against indorser nearly 14 years after note matured was barred by limitations whether action was brought on theory of indorser's liability, on theory of fraud, or on theory of a resulting trust by reason of indorser's alleged receipt of payment from maker without notification to indorsee of such fact. KRS 413.120(12), 413.130(3), 413.340.
Appeal from Knox Circuit Court.
Golden & Lay for appellant.
H.H. Owens for appellee.
Before Flem D. Sampson, Judge.
Reversing.
On June 4, 1927, Mrs. Anna E. Ketcham sold to L. F. Mays a lot in Barbourville, Kentucky, for $2,000. $800 was paid in cash, and Mays executed and delivered to Mrs. Ketcham six notes for $200 each, payable at intervals of six months. A lien was retained in the deed to secure payment of the notes. The sixth note was due thirty-six months after date, and it is this note which is the subject of the present controversy. On March 10, 1944, nearly fourteen years after the note matured, W. H. Main brought an action in the Knox Quarterly Court against Anna E. Ketcham to recover $200, with interest from June 4, 1927. He alleged in his petition that before maturity he became the owner of the note for a valuable consideration; that L.F. Mays, maker of the note, had paid to the defendant, Anna E. Ketcham, the amount of the note; and that she had released of record, in the office of the clerk of the Knox County Court, the lien retained in the deed executed by the defendant to Mays. In her answer the defendant alleged that before maturity and for a valuable consideration she indorsed and transferred the note described in the petition, but not to the plaintiff, W.H. Main; that more than five years had passed since the maturity date of the note, and she invoked the five year statute of limitations. In a reply the plaintiff alleged that without his knowledge or consent, and while he was the owner of the note, the defendant accepted from the maker, L.F. Mays, the sum of $200 and interest, and held said sum in trust for the plaintiff. In an amended reply it was alleged that the defendant had wrongfully concealed from the plaintiff the fact that she had received the money due on the note assigned to him. In a rejoinder the defendant invoked the five and ten year statutes of limitations. The plaintiff recovered a judgment in the Quarterly Court, and the defendant appealed to the Knox Circuit Court. Pending the appeal the defendant died, and the action was revived in the name of Mrs. J.Q. Redding, the administratrix of her estate. The plaintiff was again successful, and the administratrix has moved for an appeal in this court.
At the trial in the Circuit Court, the plaintiff testified that in June, 1927, he sold to L.F. Mays, for $2,000, a lot in Barbourville owned by Anna E. Ketcham. His commission for making the sale amounted to $100, and Mrs. Ketcham paid him by assigning to him the sixth purchase money note for $200, due June 4, 1930, after he had paid to her in cash the difference of $100. He misplaced the note and forgot it until he discovered it seventeen years later. He presented it to L.F. Mays, the maker, who stated that he had paid the amount of the note and interest, to Mrs. Ketcham, and that she had released the lien of record. An examination of the records revealed that Mrs. Ketcham had released the lien on the margin of the deed book on July 16, 1930. On cross-examination the witness was shown a check for $25 on the First National Bank of Barbourville, dated June 6, 1927, signed by A.E. Ketcham, payable to the order of W.H. Main, and indorsed on the back "W.H. Main." He admitted that the indorsement was in his handwriting, but stated that he had no recollection of the transaction. L.F. Mays was introduced by the defendant and testified that Mrs. Ketcham assigned the fifth and sixth notes due, respectively, thirty and thirty-six months after date, to Jim Bain, and that when the last note fell due he paid the amount thereof to Jim Bain in the county clerk's office in the presence of Mrs. Ketcham, and that she then released the lien. He did not know how the sixth note thereafter came into the possession of W.H. Main. Jim Bain testified that he purchased two of the lien notes from Mrs. Ketcham, and he identified the note in controversy as one of them. When the last note fell due L.F. Mays...
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