Hess v. Conway

• Decision Date: 07 July 1914
• Docket Number: 18,792
• Citation: 142 P. 253,92 Kan. 787
• Parties: A. E. HESS (C. F. HARDER and S. C. HOLMES, Appellants) v. E. S. CONWAY et al., Appellees
• Court: Kansas Supreme Court

142 P. 253

92 Kan. 787

A. E. HESS (C. F. HARDER and S. C. HOLMES, Appellants) v. E. S. CONWAY et al., Appellees

No. 18,792

Supreme Court of Kansas

July 7, 1914

Decided July, 1914.

Appeal from Woodson district court; OSCAR FOUST, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. JUDICIAL SALE--Certificate of Purchase--Redemption--Knowledge by Attorney Imputed to His Principal. Knowledge by an attorney for the holder of a certificate of purchase of land sold at a judicial sale of a contract which he had negotiated between the purchaser and the landowner relating to redemption, and of the payment of money, which came into his hands, by way of redemption according to the contract, will be imputed to an assignee of the certificate who soon afterward employed the same attorney to represent his interests, when the knowledge was present in the mind of the attorney throughout his second employment.

2. SAME--Knowledge of Agent Imputed to Principal. Knowledge that the attorney had obtained possession of the redemption money paid under the contract, imparted to an agent of the assignee who had active charge of his principal's interests as a holder of the certificate, will be imputed to the principal.

3. SAME--Holder of Certificate of Purchase--Estoppel to Deny Redemption Has Been Effected. With knowledge of the contract and of the possession by his attorney of the money paid for redemption, the assignee of the certificate acquiesced and permitted the landowner to complete redemption by paying to the clerk of the district court the remainder of the sum necessary for that purpose. Held, after the period of redemption expired the holder of the certificate was estopped to deny that redemption had been effected.

4. SAME--Money Paid Attorney for Redemption Rightfully Ordered Returned to Court. The portion of the redemption money obtained by the attorney not having been paid to the holder of the certificate, it belonged in the custody of the clerk of the district court and the court had summary jurisdiction to compel the attorney to restore to the treasury of the court the money which he had diverted.

5. SAME--Unprofessional Conduct of Attorney--Power of Court to Discipline. The facts were developed on the hearing of a motion filed by the attorney on behalf of the certificate holder to require the sheriff to execute a deed. The only substantial issues were those involving the professional conduct of the attorney, who was a witness and who conducted the proceedings as an attorney. Held, the court was authorized to exercise its disciplinary power over the attorney as one of the results of the investigation.

C. W. Shinn, of Neodesha, and S. C. Holmes, of Yates Center, for the appellants.

G. H. Lamb, and W. E. Hogueland, both of Yates Center, for the appellees.

OPINION

BURCH, J.

The action was commenced originally by Hess to foreclose a real-estate mortgage given by Conway. Judgment was rendered for the plaintiff and the property was sold. After the period of redemption expired Harder, as the holder of the certificate of purchase, presented it to the sheriff and demanded a deed. On the refusal of the sheriff to comply with the demand Harder filed a motion to require him to do so. The motion was resisted by Conway, who claimed that he had redeemed. Judgment was rendered in his favor, and Harder appeals.

There are some serious disputes in the briefs concerning the true facts in the case. It would serve no beneficial purpose to print the evidence and to discuss it at length, as would be necessary if it were discussed at all. There are some unfortunate conflicts of testimony to be resolved, and some inferences are to be derived from pregnant facts and circumstances and from failure to frankly clear up some matters left in doubt. Consequently, the facts upon which the questions of law arise will be stated as the court evidently found them to be by its general finding in favor of Conway, in which finding this court is constrained to concur.

The judgment of foreclosure was rendered on November 16, 1910, and included a personal judgment against Conway for $ 2612. On December 14, 1910, an order for the sale of the property was issued. On December 30, 1910, a building forming a part of the mortgaged premises was destroyed by fire. On January 19, 1911, the sheriff's sale occurred, which was confirmed on February 6, 1911. The sale was made to the plaintiff, Hess, and the certificate of purchase was issued to him, but it was immediately assigned to Harder in consideration of the payment of the sale price, from which the costs were deducted. The assignment of the certificate to Harder was prepared by S. C. Holmes, the attorney for the plaintiff, who thereafter had professional charge of Harder's interests as occasion required. Harder's son, F. H. Harder, was present when the certificate of sale was assigned.

The building which burned was insured, and on January 9, 1911, Hess filed a motion asking that Conway be required to bring into court the policies of insurance and any moneys received thereon. It was doubtful whether or not the insurance was legally collectible, and W. E. Hogueland, attorney for Conway, agreed with Holmes, as attorney for Hess, to effect a settlement with the insurance company and to apply the proceeds to the redemption of the property. Thereupon the motion which had been filed was abandoned. This arrangement was made three days before the sale was to take place. On February 24, 1911, Hogueland paid to the clerk of the district court insurance money which he had collected in the sum of $ 500 and applied it to the redemption of the property, taking the clerk's receipt accordingly. On the next day Holmes drew this money from the clerk. On March 31, 1911, Hogueland received a draft for insurance money payable to the order of Conway, Hess, and Holmes. After Conway had indorsed the draft Hogueland turned it over to Holmes, who received the money upon it. On July 15, 1912, Conway paid to the clerk of the district court the remainder of the sum necessary to effect redemption.

The testimony of Hess was taken by interrogations propounded to him and answered under oath on November 22, 1912. In answer to one of the questions Hess stated that since February 24, 1911, Holmes had not sent him any money on the Conway judgment. Following this interrogatory was another asking him to state when and how much money he had received from Holmes on the Conway judgment, if any had been received, but the second interrogatory was unanswered. Some months later Hess made affidavit that he received from Holmes personal checks for the proceeds of the insurance money, which he cashed, but he did not modify his earlier testimony. The insurance money was more than sufficient to satisfy the excess judgment against Conway, if so applied, but the judgment has never been released.

The certificate of purchase included a hotel building at Durand, which needed insurance, and on June 1, 1911, Holmes presented to the court an application for the appointment of a receiver in order that insurance might be effected. The application was made in the name of C. F. Harder's son, F. H. Harder, and was supported by an affidavit of F. H. Harder that he owned the certificate of purchase. On October 23, 1911, Holmes again presented a motion in the case supported by his own affidavit that F. H. Harder was the owner of the certificate of purchase. This affidavit stated that F. H. Harder had advanced the sum of $ 25.80 to insure the property and the purpose of the motion was to secure the appointment of a receiver to collect rents to pay this sum and to make some repairs. C. F. Harder was in fact the owner of the certificate of purchase at all times subsequent to its assignment to him, and F. H. Harder and Holmes were acting for him in the various matters referred to.

While F. H. Harder was acting for his father, Conway had a conversation with him in which he was told that Conway had paid $ 1075 to his father's attorney, Holmes, for the purpose of redeeming the property. Before the final payment by way of redemption was made Conway had a conversation with Holmes in which Conway inquired the amount necessary to redeem after deducting the sums already paid. Holmes replied that he did not have all the dates of payment but that the clerk of the court had them and that the clerk would furnish the figures. Holmes had possession of the insurance policy which had been procured on the Durand hotel. After the last payment by way of redemption had been made Holmes, without objection, delivered the policy to Conway upon Conway's paying for it. The period of redemption expired on July 19, 1912. On August 12, Holmes as Harder's attorney filed the motion which is the basis of the present controversy.

There were two full hearings on the motion to require the sheriff to make a deed, one in August, 1912, and the other in February, 1913. C. F. Harder filed an affidavit in the cause but he gave no testimony in denial of Conway's contention that Holmes had been his attorney from the inception of his interest, or that he was ignorant of the payment of the insurance money to Holmes under the agreement that it would be applied to the redemption of the property. The clerk of the court made the following certificate, which was read in evidence:

"I hereby certify that beginning with the November term, 1902 of this court the name of C. F. Harder appears on the trial dockets of this court as a litigant forty-two (42) times, and at each of said times S. C. Holmes has appeared as his attorney. I also certify that at each of said terms of court during the 10 years from November, 1902, to and including November, 1912, except November, 1910, March, June and November, 1911, and ...