Murchison v. Nies

• Court: Kansas Supreme Court
• Writing for the Court: JOHNSTON, C. J.:
• Citation: Murchison v. Nies, 87 Kan. 77, 123 P. 750 (Kan. 1912)
• Decision Date: 11 May 1912
• Docket Number: 17,560
• Parties: R. F. MURCHISON, Appellant, v. F. G. NIES et al., Partners, etc., Appellees

123 P. 750

87 Kan. 77

R. F. MURCHISON, Appellant, v. F. G. NIES et al., Partners, etc., Appellees

No. 17,560

Supreme Court of Kansas

May 11, 1912

Decided January, 1912.

Appeal from Sedgwick district court.

Judgment affirmed.

SYLLABUS

1. PROMISSORY NOTE--Fraud--No Consideration. Upon an examination of the testimony, it is held to be sufficient to support a general finding that the execution of the note in suit was procured by fraud in which the holder participated and also that it was without consideration.

2. PROMISSORY NOTE--When Fraud and No Consideration Are Available as Defenses. An agreement by the makers of the note for its transfer from the payee to another, and recognizing its validity, does not preclude the defense that its execution was fraudulently procured and that it was without consideration, where the makers were not aware of the fraud nor of the want of consideration when the agreement was made, and where the indorsee and holder was acquainted with these facts.

3. PROMISSORY NOTE--Same. The rule that an equity arising in favor of the maker and against the payee of a promissory note after the transfer of the note can not be interposed as against an action thereon by the indorsee is not applicable here, as the infirmities in the note, of which the indorsee had notice, existed when it was transferred to him.

E. L. Foulke, and C. A. Matson, for the appellant.

John W. Adams, and George W. Adams, for the appellee.

OPINION

JOHNSTON, C. J.:

This action was brought by the appellant, R. F. Murchison, against the appellees, F. G. Nies and Arthur Nies, upon a promissory note for $ 2100 executed by appellees to the Medical Chemical Company, which was another name for W. M. Doty.

The note was transferred by Doty to appellant after it became due, and in his petition appellant alleged in substance that appellees agreed with Doty that the note should be transferred to appellant without recourse upon consideration that other notes which they had given to Doty, on the purchase of Protection Stock Powder which had been sold to them as a cure for hog cholera, should be canceled and surrendered. It was further agreed that these notes should be released from a garnishment process placed on them in an action by appellant against Doty, and that certain other business matters arising from the sale of the stock powders should be settled. The answer of the appellees was that the note was fraudulently obtained from them without consideration; that appellant and Doty cooperated in the fraud by which it was procured by inducing them to come to appellant's place of business in Wichita where a party who was represented to be Frank Sayers, the owner of a large tract of land in Oklahoma, went through the form of purchasing a considerable quantity of the stock powder after making a property statement and giving his note for $ 2400 to the medical company for which appellant and Doty claimed to be agents. It was then averred that these agents then induced appellees to take the $ 2400 note of Sayers and give in its place the note in suit, representing that Sayers was a real party and that he was responsible, that the note was good, and by which they were induced to sign and deliver the note on which this action was brought. In fact, however, it is alleged there was no such person as Sayers, that no purchase of stock powder was made by him, that the note was fraudulent and worthless, that appellant and Doty entered into and carried out this fraudulent scheme and staged the play of the Sayers purchase and execution of a note in...