Crane v. Elder

• Citation: 29 P. 151,48 Kan. 259
• Parties: F. E. CRANE v. P. P. ELDER, as Administrator of the estate of E. E. Fuller, deceased
• Decision Date: 01 January 1892
• Court: Kansas Supreme Court

29 P. 151

48 Kan. 259

F. E. CRANE v. P. P. ELDER, as Administrator of the estate of E. E. Fuller, deceased

Supreme Court of Kansas

January 1, 1892

Error from Franklin District Court.

THE opinion states the nature of the action and the material facts. Judgment for plaintiff, Elder, at the October term 1888. The defendant, Crane, brings the case to this court.

W Deford, and H. P. Welsh, for plaintiff in error.

W Littlefield, for defendant in error.

OPINION

SIMPSON, C.

Action by Fuller against Crane for damages for deceit in the sale of certain promissory notes. The petition alleges that on June 30, 1886, he conveyed a "residence property," on Walnut street, in Ottawa, worth $ 2,200, to defendant, in exchange for "about 100 promissory notes," then held by him, given by parties residing in "various parts" of Kansas, for "life insurance in the Temperance Mutual Benefit Union," and ranging in amounts from $ 13 to $ 60, "payable to bearer," and transferred by Crane to Fuller, "by delivery." The misrepresentations averred are:

"That said notes were all perfectly good, and would be paid promptly when due, and that Crane had, before that time, sold and transferred to the firm of Hunt & Kelly, contractors and builders, of Ottawa, Kan., a large number of the same class of notes, that is, notes given for life insurance in the said Temperance Mutual Benefit Union, to wit, about $ 7,000 in amount, and that they had collected nearly the entire amount of them, and that said notes had been paid promptly, and without trouble to the holders, and he referred the plaintiff to the said firm of Hunt & Kelly, 'to substantiate' the truth of his statement that the notes he had transferred to them had been paid promptly, and without any trouble in collecting; that thereupon the said plaintiff called upon Mr. G. A. Kelly, of the firm of Hunt & Kelly, and made inquiry of them in relation thereto, and was informed by said Kelly that the firm of Hunt & Kelly had purchased notes from the said defendant to the amount of $ 7,000, and that nearly the entire amount of the notes so purchased by them were paid promptly, and with but little trouble to them; that there was only about $ 200, out of said $ 7,000 of notes, unpaid; that said plaintiff did not inquire of said Kelly what class or kind of notes they were that the firm of Hunt & Kelly had purchased from said Crane, because of the aforesaid statement made to him by the said defendant that they were of the same class with those he was offering to transfer to the plaintiff, that is, notes taken for life insurance in the Temperance Mutual Benefit Union, but relied implicitly on said statement, believing it to be true, and had no thought that they might be of a different class.

"2. In fact, the notes taken by Hunt & Kelly were 'lightning-rod notes,' and a 'different class from' those transferred, as the defendant well knew, etc.

"3. When the benefit union took the notes, Crane was its superintendent, had 'general charge of the business of soliciting insurance,' and 'of taking said notes;' but they were, 'or a large portion of them were, obtained from the makers by fraud and misrepresentation,' etc., as defendant well knew, and so could not be collected, although plaintiff has made great effort to collect them, and brought suits on a number of them, but was defeated, and has incurred expense and loss in such attempts; that they were not good, or collectible, as defendant always well knew.

"4. Fuller was ignorant of all these things, when he purchased the notes; had no 'means at hand of ascertaining the facts, but relied solely and entirely on Crane's statements;' was 'induced thereby,' etc.; and otherwise would not have done so; that he has received 'no consideration whatever,' for his 'residence property,' and has been damaged $ 3,000."

Crane's answer was: (1) A general denial, except as admitted. (2) Alleges that he did exchange the notes for the realty, but that at the time of the dealing it was "well understood and agreed" by Fuller and himself that it was not worth in cash over $ 1,000; that some of the notes might not be collectible; that the "residence property" was valued at $ 2,200, "so as to equalize and compensate for any loss which Fuller might sustain by reason of his inability to collect some of the notes, but that he has collected on the notes more than the cash value of the house and lot. "The reply was a...