Chapman v. Steiner

• Decision Date: 22 March 1897
• Docket Number: 157
• Citation: 5 Kan.App. 326,48 P. 607
• Parties: C. C. CHAPMAN v. JOHN STEINER AND FRANCES STEINER
• Court: Kansas Court of Appeals

48 P. 607

5 Kan.App. 326

C. C. CHAPMAN v. JOHN STEINER AND FRANCES STEINER

No. 157

Court of Appeals of Kansas, Northern Department, Central Division

March 22, 1897

March 22, 1897.

Error from Ellsworth District Court. Hon. W. G. Eastland, Judge. Affirmed.

Judgment affirmed.

Wheeler & Switzer, for plaintiff in error.

Ira E Lloyd, for defendants in error.

OPINION

MCELROY, J.

On the second day of August, 1886, the Western Farm Mortgage Company, of Lawrence, a corporation organized and doing business under the laws of the. State of Kansas, loaned to John Steiner and Frances Steiner the sum of five hundred dollars, and accepted as evidence of such indebtedness their real estate coupon bond, payable to the order of one W. J Neill, at the Third National Bank in the city of New York, on the first day of August, 1891.

On the same day the defendants in error executed and delivered to the said W. J. Neill their mortgage deed, by which, to secure said note together with the interest thereon, they conveyed to the said W. J. Neill certain real estate located in Ellsworth County, Kansas. About January 29, 1887, W. J. Neill assigned and delivered said bond to the plaintiff in error.

Steiner paid the several installments of interest, and finally, on about the first day of August, 1892, he remitted by bank draft the entire amount then due on the bond and mortgage, being the principal sum and interest thereon, amounting in the aggregate to $ 522.50. All of these payments and remittances were made by Steiner to the mortgage company which made the loan originally, although the name of the company had been changed to the Western Farm Mortgage Trust Company, of Denver. After the maturity of said note, and on the thirteenth day of February, 1893, the plaintiff in error brought this action in the District Court to recover from the defendants in error upon said promissory note, and to foreclose the mortgage securing the same. To the petition the defendants in error filed an answer, alleging as a defense substantially as follows:

That the loan evidenced by said note was negotiated by the Western Farm Mortgage Company, a corporation at Lawrence, Kan.; that, while the note was executed to W. J. Neill as payee, the Western Farm Mortgage Company was the real party in interest, and that the said W. J. Neill had no interest therein except as the agent and representative of the Western Farm Mortgage Company; that the Western Farm Mortgage Trust Company, was, after the negotiation of said loan, organized for the purpose of succeeding to the business of the Western Farm Mortgage Company; that the defendants in error had no notice, actual or constructive, of the transfer and sale of the note, by said W. J. Neill of the Western Farm Mortgage Company, to the plaintiff in error; that after the execution of the note and mortgage defendants in error paid the interest, as it became due, either to the Western Farm Mortgage Company or to the Western Farm Mortgage Trust Company, its successors, and at the maturity of the note paid the principal to the Western Farm Mortgage Trust Company at its office in Denver, Colo.; that at the time the note was paid to the Western Farm Mortgage Trust Company at Denver, Colo., the company was acting as the duly authorized agent of the plaintiff in error for the collection of the same.

To this answer the plaintiff in error filed a reply admitting the negotiation of the loan by the Western Farm Mortgage Company, and the organization and succession in business of the Western Farm Mortgage Trust Company, and also admitting the payment by the defendants in error of the several interest coupons to the Western Farm Mortgage Company and the Western Farm Mortgage Trust Company; but denying the agency or authority of either of said companies to collect the interest or the principal for the plaintiff in error; that he had no knowledge of the fact that W. J. Neill was not the real payee in the said note, or of the relation existing between the Western Farm Mortgage Company and the Western Farm Mortgage Trust Company, or of the fact that the defendants in error had paid either interest or principal as alleged in their answer to the Western Farm Mortgage Company, or the Western Farm Mortgage Trust Company; that the interest coupons and the principal note were made payable by their express terms at the Third National Bank of New York City; that the interest coupons were paid in due course of business through the said Third National Bank of New York City, where they were made payable; and that the plaintiff in error had nothing to do with W. J. Neill, the Western Farm Mortgage Company, or the Western Farm Mortgage Trust Company in the way of receiving interest or principal upon said note after it was delivered to him.

Upon the issues as thus formed the case was tried and the facts disclosed upon the trial are as follows:

That the mortgage and note were executed as alleged in the plaintiffs petition; that the note was assigned as follows: "For value received, I hereby assign and transfer the within bond, together with all my rights, title and interest in the mortgage deed securing the same to ," and was then delivered to the plaintiff in error on or about January 29, 1887; that the loan evidenced by said note was negotiated by the Western Farm Mortgage Company, and that W. J. Neill was simply a nominal party as payee therein, and acted simply as the agent or representative of the Western Farm Mortgage Company; that the Western Farm Mortgage Trust Company was organized for the purpose of succeeding to the business of the Western Farm Mortgage Company; that the defendants in error paid the several interest installments as they became due, to the Western Farm Mortgage Company and its successor, the Western Farm Mortgage Trust Company; that there was no assignment of the mortgage, sued on in this action, recorded in the office of the register of deeds of Ellsworth County, Kansas; that on July 20, 1891, and before the defendants in error had notice that the note and mortgage had been transferred to the plaintiff in error, said defendants, Steiner, paid the amount due thereon in full, $ 522.50, to the Western Farm Mortgage Trust Company, of Denver; and that said company retained the principal amount of said note, the five hundred dollars remitted to it by Steiner, and failed and neglected to forward the same to the then owner and holder of the bond and mortgage, C. C. Chapman.

The case was submitted to the jury upon the admissions of the parties and the evidence, under the instructions of the court, and the jury returned a general verdict in favor of the defendants in error, and certain special findings of fact. The plaintiff in error duly filed his motion for judgment upon the special findings of fact and also his motion for a new trial, both of which were overruled by the court, the...