Spencer v. Mathews

• Decision Date: 12 November 1891
• Citation: 17 S.W. 433
• Parties: Spencer v. Mathews.
• Court: Kentucky Court of Appeals

17 S.W. 433

Spencer v. Mathews.

Court of Appeals of Kentucky.

November 12, 1891

Appeal from circuit court, Henry county.

"Not to be officially reported."

Action by John O. Mathews against John H. Spencer to recover usury paid. Judgment for plaintiff. Defendant appeals. Reversed.

Bennett J.

August 23, 1873, the appellee executed to the appellant his promissory note for $500, payable four months from the date of the note, and bearing 10 per cent. interest from date. March 1, 1876, there was paid upon the note $100, and on February 28, 1887, $500; and on September 1, 1887, as a settlement in full of the amount due on the note, $400 was paid; and a note of $93, due four months from date, was executed. The payments were made, and the note for $93 was executed, upon the basis that the note for $500 bore interest at the rate of 10 per cent. per annum from its date until the final settlement of it. And after the settlement the appellee brought this action to recover back the interest paid in excess of 6 per cent. from the maturity of the $500 note, and to cancel the note for $93, upon the ground that the said excess and the note for $93 were usurious. The length of time between the settlement of the 1st of September and the bringing of the action having been more than a year, the appellant relied upon the statutory period of one year, the time allowed in which to recover usury paid, as a bar to the appellee's right of action. To this plea the appellant alleged that said excess was paid and the note given by mutual mistake; and that the statute that allowed five years after the discovery of the mistake in which to bring an action, etc., protected his rights. It is conceded that the note for $500 only bore 10 per cent. interest from its date until maturity, and the payment of 10 per cent. interest on the note after its maturity was usurious to the extent of 4 per cent. Therefore the sole question as to the payment of the excess is, does the statute of one year's or five years' limitation control the right to recover? The appellee's contention is that he paid 10 per cent interest on the note after its maturity under the belief that the note, after maturity, legally bore 10 per cent.; and, as he was mistaken as to his legal liability in that regard, the payment in excess of 6 per cent. was made under a mistake of law consequently he was entitled to five years, etc., after the discovery of the mistake, in...