Jacobs v. Hester
| Decision Date | 07 November 1925 |
| Docket Number | 26,229 |
| Parties | FLOYD E. JACOBS, as Administrator of the Estate of DIETRICH FADLER, Deceased, Appellant, v. WILEY HESTER, H. T. ABERNATHY, THE FIRST NATIONAL BANK OF KANSAS CITY, MISSOURI, et al., Appellees |
| Court | Kansas Supreme Court |
Decided July, 1925.
Appeal from Bourbon district court; EDWARD C. GATES, judge.
Affirmed.
SYLLABUS BY THE COURT.
1. AGENCY--Requisites and Validity--Relation of Parties. In an application for a farm loan addressed to a mortgage loan broker, where the latter is also designated as the agent of the borrower to procure a loan for the applicant, the relation of principal and agent does not arise when the broker does not in fact perform any service as agent for the borrower, but in lieu thereof closes a contract with the applicant by making him a loan evidenced by a negotiable note and mortgage where the mortgage loan broker is himself named as payee, and where no third party is concerned in the transaction at the time the loan is made--following Fitzgerald v. Realty Co., 106 Kan. 54, 186 P. 739.
2. MORTGAGES--Payment and Satisfaction--New Note and Mortgage--Rights of Undisclosed Assignee. By agreement of the parties concerned, payment of an outstanding mortgage indebtedness may be made by giving a new note and mortgage in lieu thereof, and such agreement may be made with the mortgagee of the outstanding mortgage where the record does not disclose that it has been assigned and where the debtor has no other notice of its assignment.
3. SAME -- Assignment -- Effect of Failure to Record. Defendants purchased eighty acres of land and gave the vendors their note and mortgage in payment of the purchase price. The payees sold and assigned the note and mortgage to plaintiff's decedent, who failed to record the assignment. At the maturity of the note defendants, who had no actual notice that it and its related mortgage had been assigned and had no notice of plaintiff's interest therein, gave a new note and mortgage to the original payees to take up and satisfy the older obligation, and the payees negotiated the later note and mortgage to a bank and its trustee. Held, that the first note and mortgage were paid by the execution and delivery of the later note and mortgage since such was the intention of the parties; and held, also that the mortgagors could safely deal with the original mortgagees in such transaction since there was no record of the assignment of the original mortgage.
Stephen H. Allen, Otis S. Allen and George S. Allen, all of Topeka, for the appellant.
Harry Warren, B. Hudson and Douglas Hudson, all of Fort Scott, for the appellees.
Plaintiff brought this action to foreclose a mortgage for $ 2,750 covering eighty acres of Bourbon county land, executed by defendant Hester and wife in favor of J. L. Pettyjohn & Company, dated July 1, 1915, and due in five years. This mortgage was given to secure an indebtedness of the same amount, due from the mortgagors, for the purchase price of a farm owned by Pettyjohn & Company. There were 240 acres in the farm, but for the convenience of the parties three separate obligations secured by separate mortgages on eighty-acre parcels of the farm were executed by Hester and wife, supplemented by a blanket mortgage on the whole farm. Pettyjohn & Company, payees of the mortgage of present concern, sold and assigned it on July 17, 1915, to Dietrich Fadler, plaintiff's decedent, but the assignment was never recorded. Hester and wife paid the interest on this mortgage from time to time, and when the principal sum became due in 1920 they executed a new note and mortgage to Pettyjohn & Company to pay the mortgage of 1915. On December 30, 1920, Pettyjohn & Company assigned the mortgage of 1920 to H. T. Abernathy, trustee for the First National Bank of Kansas City, Mo. Abernathy recorded his assignment on January 14, 1921. The validity of the assignment to Abernathy and the First National Bank was the subject of some federal court litigation instituted by the trustee of the bankrupt estate of Pettyjohn & Company, but that litigation was compromised and the parties to this action have stipulated that Abernathy is the owner and holder of the note and mortgage of 1920, for value, before maturity, and without notice of any infirmities therein, "except such as may be constructively implied by the record of said mortgage."
In this action on the note and mortgage of 1915, defendants pleaded payment. The evidence tended to support that defense. In the negotiations leading up to the execution of the note and mortgage of 1920, Hester was required to fill out and sign an application which contained various questions and answers, for example:
. . . .
[What incumbrance?] "The only incumbrance against this land is, will be this loan of $ 2,750 held by J. L. Pettyjohn, upon which there is no past interest due."
This application also contained the following:
Judgment for costs was entered in favor of Hester and wife and against the plaintiff, and foreclosure of the mortgage of 1920 was decreed in favor of Abernathy and the bank.
Plaintiff appeals, conceding that the...
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Pletcher v. Albrecht
...appellant concedes, as our decisions hold (Allen v. Waddle, supra; White v. Kemberling, 114 Kan. 112, 216 P. 1087; Jacobs v. Hester, 119 Kan. 661, 665, 240 P. 952), that under 67-321, supra, if appellee (Pletcher) had made his payments direct to L. M. Stevens he would have been entitled to ......
- State v. McKimson