Parkhurst v. Investors Syndicate

• Decision Date: 08 July 1933
• Docket Number: 30901.
• Citation: 23 P.2d 589,138 Kan. 7
• Parties: PARKHURST v. INVESTORS' SYNDICATE.
• Court: Kansas Supreme Court

23 P.2d 589

138 Kan. 7

PARKHURST v. INVESTORS' SYNDICATE.

No. 30901.

Supreme Court of Kansas

July 8, 1933

Syllabus by the Court.

Where defendant acquiesced in trial court's adverse ruling on its demurrer to petition and on motion to strike, and answer later filed showed defendant did not misconceive issues, no question of error as to ruling on pleadings was presented for appellate review (Rev. St. 1923, 60--704).

Where monetary certificates entitled assignee to have transfer recorded on maker's books on performance of certain conditions, maker could not impose additional condition that transfer would only be recorded on assignee's oral agreement permitting maker to stamp certificates "not transferable."

Where monetary certificates entitled assignee to have his name recorded in maker's books, maker's refusal to record transfer unless assignee would orally agree that maker might stamp certificates "not transferable" constituted election to call certificates in for liquidation according to maker's reserved privilege.

Where monetary certificates entitled assignee to have transfers to him recorded on maker's books, assignee's oral assent, required before maker would record transfer, that certificates assigned might be stamped "not transferable," held void under statute of frauds, and for want of consideration (Rev. St. 1923, 33--106).

In an action to construe the rights of the plaintiff holder of certain monetary certificates and the liability of defendant which had issued them, and to recover thereon, the pleadings the contract, and the findings of fact considered, and held:

(a) Where defendant acquiesced in the trial court's adverse ruling on its demurrer to plaintiff's petition and on its motion to strike, and where its answer later filed shows that defendant did not misconceive the issues tendered by the petition, no question of error is presented for appellate review.

(b) When plaintiff presented to defendant the certificates which had been lawfully assigned to him for the purpose of having them recorded in his name, together with the prescribed fee for that service, it was defendant's duty to record the transfers; it had no discretion to refuse nor to impose a condition that the transfers would only be recorded upon plaintiff's oral agreement that defendant might stamp the certificates "not transferable."

(c) Defendant's course of dealing with plaintiff's certificates was in effect an election to call them in for liquidation according to its reserved privilege to that effect--by repaying the total amount it had received on the certificates together with 5 1/2 percent. compounded annually for the time it had the use of the money.

(d) Under the circumstances stated in the opinion, plaintiff's oral assent that the certificates assigned to him might be stamped "not transferable" was void under the statute of frauds (R. S. 33--106), and likewise void for want of consideration.

Appeal from District Court, Allen County; Frank R. Forrest, Judge.

Action by John L. Parkhurst against the Investors' Syndicate. Judgment for plaintiff, and defendant appeals.

Bennett R. Wheeler, S. M. Brewster, John L. Hunt, Margaret McGurnaghan, and Ralph M. Hope, all of Topeka, for appellant.

Frederick G. Apt and A. R. Enfield, both of Iola, for appellee.

DAWSON Justice.

This was an action to construe and to recover on certain monetary obligations issued by defendant and designated "Accumulative Installment Certificates," of which plaintiff had become the owner by assignment from various former holders. Plaintiff presented the certificates to defendant for registration in his name together with the transfer fee prescribed for that service. Defendant registered the certificates in plaintiff's name, but also stamped them "not transferable" for the avowed purpose of preventing their further availability for sale, barter, or exchange by assignment.

The certificates were 94 in number. They had been serially issued, and were of varying tenor, and in denominations of $1,000, $1,500, $2,000, $2,500, and $5,000. Their value depended on stipulated conditions embodied in the instruments and upon the number of periodical installments the owner had paid thereon. The schedule attached to plaintiff's petition showed that on some of these certificates as many as 41 installments aggregating $1,717.88 had been paid by the holder and on others as little as 4 and 5 payments aggregating $154.30 and $192.90 had been credited.

Just what precise benefits the holders of these certificates would be entitled to if the installments were paid in full is not easy to state, but fortunately that matter does not require determination at this time. The terms of each certificate did provide for a cash surrender value after two years and tabulated values pertaining thereto were set out in the text of the instrument. Other provisions of present concern were these:

"11. Miscellaneous. No person has authority to alter or change the terms of this Certificate, or bind the Syndicate by any statement, written or oral not herein contained. ***

"The Syndicate shall have the right at any time at its option to call in this Certificate and take it up by paying the registered owner hereof the full amount paid thereon together with 5 1/2 percent interest, compounded annually for the time the Syndicate has had the use of the money. ***"

"9. Assignment. This Certificate if in force and uncancelled on the books of the company may be assigned, but the assignment or transfer hereof shall not be valid without the consent in writing endorsed hereon by the company and a transfer fee of $1.00 paid to the company."

Forms for use in assignment of each certificate were printed on the instrument together with the rule pertaining thereto which reads: "This Assignment will not be valid until approved by the Syndicate and entered upon its books and a transfer fee of $1.00 is paid."

Plaintiff's petition alleged his ownership of the certificates; that they had been properly assigned to him; that he had tendered the required transfer fee, but that defendant without right delayed and refused to record the assignments, although eventually defendant did register the transfer of the certificates and at the same time indorsed each of them with the words "not transferable." Plaintiff also alleged in substance that defendant had no right to place such indorsement on the certificates; that when issued they were assignable under their specific terms; that this act of defendant hindered and prevented their sale and transfer, and was in effect an election on the part of defendant to terminate the contract relation theretofore existing between it and the lawful owner, and constituted a calling in of those certificates under the contract provision which reserved to defendant that privilege upon its return of the total amount of installments paid on such certificates together with 5 1/2 percent. compounded annually.

This petition was unsuccessfully subjected to a demurrer and motion to strike; and defendant answered...