117 Ky. 975 | Ky. Ct. App. | 1904
Opinion op the court by
Reversing.
This case is'before us on a second appeal. After the-filing of the record on this appeal, Thomas S. Buchanan, in. whose favor the judgment went in the court below, died intestate, and by order of revivor Percival Moore, administrator of his estate, was substituted as appellee. On February 8, 1888, Buchanan borrowed of the appellant, Louisville Banking Company, $6,700, for which the note in controversy was executed, payable four months after date. On June 1, 1896, this action was instituted upon the note-against Buchanan by appellant, and judgment prayed for the amount thereof, with interest from June 11, 1888. Among other defenses relied- on in the answer was the-plea of the five-years’ statute of limitation, it being averred, therein by Buchanan that the note sued on had been discounted by appellant and thereby placed upon the footing of a foreign bill of exchange, and that, as more than five-years elapsed between ’ the maturity of the note and the institution of the action thereon, the five-years’ statute of limitation barred a recovery.
Upon the trial of the case the lower court rendered judgment sustaining the plea of limitation and dismissing-the action. An appeal was taken from that judgment, and. on November 20,1899, this court held that the note was not on the footing of a bill of exchange, and therefore that the action was not barred -by the five-years’ statute of limitation. Consequently, the judgment of the lower- court was. reversed, and the cause remanded for further proceedings. Louisville Banking Company v. Buchanan, 107 Ky., 125, 21
The only question presented by the record for our consideration is, did Buchanan’s plea of ten years’ limitation, bar a recovery upon the note? It may be remarked that section 17 of the present bankrupt act (Act Cong. July 1,, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428]) expressly excepts from the discharge that may be granted a bankrupt debt created by fraud. Indeed, it does not seem, to be denied by counsel for appellee 'that, if the money for which the note was executed by Buchanan was obtained by fraud, his discharge in bankruptcy did not relieve him from liability upon the note. The sole contention on behalf of his administrator is that there can be no recovery by appellant upon the note, because the fraud was committed more than ten years before the reply complaining thereof was filed. Section 2515, of the Kentucky Statutes of 1903 provides: “An action for relief on the ground of fraud or mistake . . . shall be commenced within five-
We also find the courts of last resort of Arkansas, Indiana and California to be in full accord with the Supreme Court of South Carolina upon the question under consideration. Rhea v. Bagley, 66 Ark. 93, 49 S. W. 492; Robinson et al v. Glass, 94 Ind. 211; Hart v. Church, 126 Cal. 471, 58 Pac. 910, 77 Am. St. Rep. 195. In Hart v. Church, supra, it appears that a note and mortgage were executed by Mrs. Hart through the compulsion of her husband, and that she subsequently brought suit to cancel them. By cross action
We have examined the authorities cited in support of the contention of appellee, but do not find that they militate against the conclusions herein reached. They appear to hold that the statute of limitation can be relied on as against any new or additional cause of action that may be set up by way of amendment in a pending action, and time computed up to the introduction of the new matter. But no new cause of action was brought into this case, as already explained. The fraud of Buchanan does not constitute a new cause of action, but is only pleaded as against and in avoidance of the discharge in bankruptcy; hence the rule announced in the cases cited by counsel for appellee is inapplicable. It is, however, insisted for appellee that the case of Treadway v. Pharis, 90 Ky. 664, 12 R. 639, 14 S.
We do not think the plea of res judicata interposed by ■the appellant can be sustained. It seems to be based upon the theory that because this court on the. former appeal .held that the five-years statute of limitation relied on :at that time by Buchanan as a bar to a recovery upon the note did not apply, therefore Buchanan could not on any ground whatsoever again plead limitation in this case. •The question of limitation raised and decided on the former appeal was as to the five-year statute relied on to bar the 'note, which it was alleged had been placed on the footing •of a bill of exchange. The question of limitation now raised is a separate and distinct matter, which arose after the ¡filing of Buchanan’s supplemental answer, and because -of appellant’s plea that he had procured the money on the note sued on by fraud, and thereby prevented his discharge in bánkruptcy from releasing him from liability on the note. While for the reasons hereinbefore indicated the •statute of limitation can not be relied on as a defense to the note, or in avoidance of the alleged fraud whereby the money was obtained thereon by Buchanan, the question
The judgment is reversed, and cause remanded for further' proceedings consistent with the opinion herein.