Lockrow v. Cline

• Decision Date: 01 October 1896
• Docket Number: 147
• Citation: 4 Kan.App. 716,46 P. 720
• Parties: ABBY J. LOCKROW v. THOMAS B. CLINE et al
• Court: Kansas Court of Appeals

46 P. 720

4 Kan.App. 716

ABBY J. LOCKROW v. THOMAS B. CLINE et al

No. 147

Court of Appeals of Kansas, Northern Department, Central Division

October 1, 1896

Opinion Filed October 17, 1896.

MEMORANDUM.--Error from Lincoln district court; W. G EASTLAND, judge. Action by Thomas B. Cline against Abby J Lockrow and others to cancel and release of record a real-estate mortgage. Judgment for plaintiff. Defendant Lockrow, brings the case to this court. Affirmed. The opinion herein, filed October 17, 1896, states the material facts.

Judgment affirmed.

W. E. Saum, John E. Hessin, and E. A. McFarland, for plaintiff in error.

C. B. Daughters, for defendants in error.

CLARK J. All the Judges concurring.

OPINION

CLARK, J.:

On October 1, 1886, the Western Farm Mortgage Company, of Lawrence, a corporation organized and doing business under the laws of Kansas, loaned to Thomas V. Malone and wife $ 1,000, and accepted as evidence of such indebtedness their real-estate coupon bond for $ 1,000, payable to the order of one W. J. Neill, at the Third National Bank in the city of New York, on the 1st day of October, 1891, bearing interest at the rate of 7 per cent. per annum, payable semiannually. To secure payment of this bond, Malone and wife executed in favor of Neill a mortgage deed on 80 acres of land in Lincoln county. This bond recited that it was given for an actual loan of $ 1,000, and that said loan was secured by a mortgage deed on real estate duly recorded, and also contained this clause: "To which said deed reference is hereby made, and which is made a part of this contract." Thomas B. Cline subsequently became the owner of this real estate, by a conveyance thereof from one John A. Shannon, a grantee of George Green, to whom Malone and wife had conveyed the same. By the terms of the deed from Shannon to Cline, the latter assumed payment of this mortgage. Cline paid several installments of interest, and finally, on October 1, 1891, he remitted by bank draft the entire amount then due on the bond and mortgage, being the principal sum and interest thereon, amounting in all to $ 1,097.70. All of these payments and remittances were made by Cline to the mortgage company which made the loan originally, although the name of the company had changed to the Western Farm Mortgage Trust Company, of Denver.

In March, 1887, Neill transferred and assigned the bond and mortgage to one J. H. Pratt, and by successive assignments the same were transferred from Pratt to J. B. Burgess, and from Burgess to Abby J. Lockrow, the plaintiff in error herein, the last assignment having been made January 21, 1889. The trust company retained the $ 1,097.70 remitted to it by Cline and failed to forward the same to the then owner and holder of the bond and mortgage, Abby J. Lockrow, and on July 26, 1892, Cline commenced an action in the district court of Lincoln county against Neill, Pratt, Burgess and Lockrow to secure a cancellation and release of this mortgage. Lockrow answered, alleging her ownership of the bond and mortgage; that the same were unpaid, and asked for a personal judgment against Malone and wife, who were on her motion subsequently made parties defendant, and against the plaintiff, Cline, upon his assumption of the mortgage indebtedness as set out in the deed from Shannon to him. The trial resulted in a verdict and judgment in favor of the plaintiff as prayed for in his petition, and Abby J. Lockrow seeks a reversal of that judgment.

The jury returned the following special findings of fact:

"1. Did the mortgagee, W. J. Neill, have any interest in the note and mortgage in controversy other than nominal? Ans. He did not.

"2. Was the Western Farm Mortgage Company the real owner of the note and mortgage in controversy at the time of their execution and delivery? A. It was.

"3. Did the Western Farm Mortgage Company quit business about November, 1887? A. It did.

"4. Did the Western Farm Mortgage Trust Company of Lawrence, Kansas, and Denver, Colo., purchase the assets of the Western Farm Mortgage Company about November, 1887? A. Part of them.

"5. Did the plaintiff continually, from 1888, pay all the interest coupons on the note in controversy to the Western Farm Mortgage Trust Company at Denver, Colo.? A. He did.

"6. Did the plaintiff pay to the Western Farm Mortgage Trust Company the interest and principal in full after due? A. He did.

"7. Did the plaintiff have any knowledge or notice of the interest claimed by defendant, Lockrow, before the payment to the Western Farm Mortgage Trust Company? A. He did not.

"8. Did plaintiff pay the note and mortgage in controversy to the Western Farm Mortgage Trust Company in good faith, believing the company had the right to collect same? A. He did.

"9. Did defendant, Abby J. Lockrow, sell the coupons detached while she was the owner to the banks where she received payment, or did she place them in the possession of the banks only for collection? A. For collection only.

"10. Did Cline, at the time he forwarded the money to the Western Farm Mortgage Trust Company, at Denver, Colo., believe and suppose that said company was owner and holder of the note executed by Malone and wife? A. He did.

"11. What acts, if any, did Abby J. Lockrow do or authorize to be done for her prior to October 13, 1891, in direction of the collection of the coupons upon said bond or the collection of said principal bond? A. She did nothing.

"12. Where was the principal note and mortgage kept and held; that is, in whose possession were they on October 13, 1891? A. In Abby J. Lockrow's possession."

The jury further specially found that Cline paid the note and mortgage to the original owner and holder thereof; that he did not examine the records at any time to ascertain where the mortgage was payable; that he did not know at the time he sent his last payment to Denver that Neill was not the real mortgagee; that Abby J. Lockrow was the owner and holder of the note and mortgage at the time Cline made his final payment; that she had possession of and control over the note and mortgage at all times after she bought them in 1889, and had no correspondence either with Neill or the Western Farm Mortgage Trust Company about the payment of interest or principal, and that she never authorized either of them to collect any interest or the principal on the note and mortgage in controversy.

The plaintiff in error contends that under these special findings of fact the payment by Cline to the trust company of $ 1,097.70, on October 13, 1891, being unauthorized by her, did not in law amount to a satisfaction of the indebtedness, and that she was entitled to a personal judgment against the defendants in error for an amount equal to the face of the bond, and interest thereon from April 1, 1891, and a decree foreclosing her mortgage, notwithstanding the...