Neosho Valley Investment Company v. Cornell

• Decision Date: 11 March 1899
• Docket Number: 11106
• Citation: 60 Kan. 282,56 P. 475
• Parties: NEOSHO VALLEY INVESTMENT COMPANY v. CARRIE A. CORNELL et al
• Court: Kansas Supreme Court

56 P. 475

60 Kan. 282

NEOSHO VALLEY INVESTMENT COMPANY v. CARRIE A. CORNELL et al

No. 11106

Supreme Court of Kansas

March 11, 1899

Decided January, 1899.

Error from Bourbon district court; WALTER L. SIMONS, judge.

Judgment affirmed.

A. D Neale, for plaintiff in error.

W. C Perry, J. G. Slonecker, and Perry & Crain, for defendants in error.

SMITH J. All the Justices concurring.

OPINION

SMITH, J.:

On January 15, 1897, judgment was rendered in the district court of Bourbon county in favor of plaintiffs below, Carrie A. Cornell and others, against the Neosho Valley Investment Company, for the sum of $ 5665, with interest at the rate of ten per cent. per annum and costs, declaring the same to be a first lien upon certain real estate located in said county, and directing foreclosure. Upon the summons in the cause was indorsed the following return:

"Received this summons May 17, 1896; executed it by delivering to the Neosho Valley Investment Company, by delivering a true and certified copy of the within summons to L. M. Bedell, its cashier and treasurer; the president or other chief officer not found in my county. May 19, 1896. J. W. BENNETT,

Sheriff Labette County, Kansas."

The judgment was rendered by default, the investment company making no appearance. On April 19, 1897, the investment company filed its petition for a new trial of the foreclosure case, under section 606 of chapter 95, General Statutes of 1897 (Gen. Stat. 1889, P 4671), wherein it attacked the service of summons in the cause, and alleged that L. M. Bedell, mentioned in the return of the sheriff, was not during the month of May, 1896, nor had he ever been, the cashier of the company, and that the vice-president, secretary and treasurer of the company, during the month of May, 1896, had resided in the city of Chetopa, in Labette county, Kansas.

Coupled with this attack on the service was an allegation in the petition for a new trial in substance as follows: That in March, 1886, the land foreclosed was owned by one Heilman, who on that date gave L. M. Bedell his note for $ 5000, due in five years, and secured the same by a mortgage on the land described in the decree; that prior to February 29, 1892, and after said note matured, Bedell sold it, without recourse, to Cornell, Read, and Wood, who on January 1, 1892, entered into a contract with the Neosho Investment Company, whereby the latter, in consideration of the release by the former of a prior mortgage lien on the land, agreed to make all reasonable effort to sell the property on terms to be approved by Cornell, Read, and Wood, and to apply the proceeds, first, to the liquidation of the $ 5000 note of the company, and second, to the payment of the amount of the prior lien above referred to, the remainder, if any, to go to the investment company; that the company, in 1892, acting for Cornell and others, foreclosed the mortgage on the land given by Heilman in 1886 and took title from the sheriff in its own name, and since has had charge of it. It is admitted that the execution of the note and mortgage signed by it was the basis of the judgment rendered January 15, 1897, followed by an allegation that it was given solely for the purpose of showing that Cornell had a lien on the real estate to the amount of $ 5000, that Cornell and associates never advanced the company any money for the note, that it was not indebted to them, that the land was really owned by them, and that the company did not own it but held the legal title as a mere form. It was further alleged that the judgment was taken in fraud of the rights of the company, that the plaintiffs below knew all of the facts stated in the petition for a new trial, that the company was agent for Cornell and associates from 1891 to 1896, and that as such it rendered services and looked after the land for them and paid the taxes. An account showing the alleged result of the agency is attached. The statement follows that the company had paid Cornell interest on the note amounting to $ 953.50, that its president was a non-resident and absent from Kansas, except in the latter part of 1896, and that its other officers lived in this state, that the agreement touching the mortgage was entered into between the president and Cornell and others, and that the other officers knew nothing about it, and that when the summons was served on Bedell he was very ill, was compelled immediately to go to Colorado for his health, remaining away until the succeeding fall, and was therefore unable to give the cause any attention.

The petition for a new trial then avers that the president of the investment company and one Jillson, an agent of Cornell and others, made another agreement similar to that first set out that in consequence of Bedell's illness the company knew nothing about the action being merged into judgment until after the rendition of said judgment, that no other officer had any knowledge of the pendency of the action, and that the company believed it had a good defense. Then follows a tender of a deed in court, for the use of Cornell and others, to the property in question, to be delivered to them upon such terms and conditions as the court might impose. The petition was duly verified, as required by statute. A demurrer was filed and, on June 5, 1897, it was sustained by the court,...