Kail v. Bell

• Decision Date: 08 February 1913
• Docket Number: 17,803
• Citation: 129 P. 1135,88 Kan. 666
• Parties: HENRY G. KAIL, Appellee, v. WILBER L. BELL, Appellant
• Court: Kansas Supreme Court

129 P. 1135

88 Kan. 666

HENRY G. KAIL, Appellee, v. WILBER L. BELL, Appellant

No. 17,803

Supreme Court of Kansas

February 8, 1913

Decided January, 1913.

Appeal from Allen district court.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. CONTRACT--Sale of Land--Payment in School Orders--Validity Guaranteed--Assignment "Without Recourse." A written contract for the sale of land stipulated that the vendee should pay the price in school orders for school supplies. The validity of the orders was expressly guaranteed. When the contract was consummated by delivery of the deed to the land and delivery of the orders an assignment to the vendor of the land was indorsed on each order, which specified that the assignment was without recourse. Held, the written guaranty of the validity of the orders was not abrogated.

2. CONTRACT--Evidence Showed School Orders to be Invalid. The evidence examined and held to be sufficient to establish the invalidity of the order sued on, for want of power in the school board to purchase the article ordered.

3. APPEAL--Submission of Agreed Abstracts Commended. The practice of filing abstracts agreed to by counsel for both sides commended.

E. G. Wilson, of Oklahoma City, Okla., and F. W. Casner, of Kansas City, Mo., for the appellant.

Cook & Gossett, of Kansas City, Mo., for the appellee.

OPINION

BURCH, J.:

The plaintiff, Kaill, sold a tract of land to the defendant, Bell, and received in part payment of the price an order for the purchase of a book described as "Bell's Louisiana Portfolio" signed by the board of school directors of a parish in Louisiana. The order proved to be uncollectible, and Kaill sued Bell to recover the sum of money represented by it. The plaintiff recovered, and the defendant appeals.

The order was one of a number, aggregating $ 7500, delivered to the plaintiff pursuant to a written contract of sale wherein the defendant guaranteed that the orders were valid and were taken in the regular course of business. The contract provided that the plaintiff should have ten days' time in which to furnish an abstract of title to the land, and that the defendant should have ten days' time in which to examine the abstract. In due time the contract was consummated by a delivery of a deed to the land and delivery of the orders referred to. The contract did not specify the particular orders to be supplied, and the first time the plaintiff saw those which he accepted was when they were turned over to him in exchange for his deed. At that time the defendant, in the plaintiff's presence, placed the following indorsement upon each order, which he signed and then handed to the plaintiff, who blotted the signature:

"For value received, this account is assigned to Henry G. Kaill, without recourse."

The plaintiff examined the orders, observed the indorsement, and knew the meaning of the words "without recourse," but nothing was said by either party respecting any change in the terms of the previous contract. The defendant contends that by virtue of the indorsement and its acceptance by the plaintiff a novation was accomplished, and that the defendant is relieved from his guaranty of validity.

There is nothing in the situation or conduct of the parties to indicate that an abrogation of the express contract of guaranty was mutually intended, and the insertion of the words "without recourse" in the instrument passing title does not have that effect. Those words have no precise legal signification outside the law of commercial paper, and unless it is manifest that they were intended to express a different meaning they must be given their ordinary effect, which is that the indorser assumes no contractual liability by virtue of the indorsement itself. Even in the case of commercial paper indorsed without recourse the vendor impliedly warrants that the instrument is a valid obligation of the kind it purports to be. The following authorities are sufficient to furnish a key to the law on the subject. (Challiss v. McCrum, 22 Kan. 157; Drennan v. Bunn, 124 Ill. 175, 16 N.E. 100; Hannum v. Richardson, 48 Vt. 508; Meyer v. Richards, 163 U.S. 385, 41 L.Ed. 199, 16 S.Ct. 1148; Gompertz v. Bartlett, 2 El. & Bl. 849; Gurney v. Womersley, 4 El. & Bl. 132; 7 Cyc. 831; 2 Randolph on Commercial Paper, §§ 720, 756.)

In the case of Hannum v. Richardson, supra, a note given for intoxicating liquor sold contrary to law, and consequently void at its inception, was transferred by indorsement without recourse. The court said:

"By indorsing the note 'without recourse' the defendant refused to assume the responsibility and liability which the law attaches to an unqualified indorsement, so that in respect to such liability it may perhaps be regarded as standing without an indorsement. If it be so regarded, then in what position do these parties stand in respect to the transaction? The principle is well settled, that where personal property of any kind is sold there is on the part of the seller an implied warranty that he has title to the property, and that it is what it purports to be, and is that for which it was sold, as understood by the parties at the time. . . . In this case the note in question was given for intoxicating liquor sold in this state in violation of law, and therefore was void at its inception; in short, it was not a note, it was not what it imported to be, or what it was sold and purchased for; it is of no more effect than if it had been a blank piece of paper for which the plaintiff had paid his fifty dollars. In this view of the case we think the defendant is liable upon a warranty that the thing sold was a valid note of hand." (pp. 510, 511.)

In this case the defendant contracted to deliver to the plaintiff school orders for school supplies, and if the instruments were not legal orders they failed to answer the description contained in the contract precisely as the instrument in Hannum v. Richardson failed to possess the character imported by its face. Such being the law, the greatest effect the restrictive words of the assignment could have...