Rafter v. Hurd

• Decision Date: 09 July 1932
• Docket Number: 30694.
• Citation: 12 P.2d 837,136 Kan. 127
• Parties: RAFTER v. HURD et al. [*]
• Court: Kansas Supreme Court

12 P.2d 837

136 Kan. 127

RAFTER v. HURD et al. ^[*]

No. 30694.

Supreme Court of Kansas

July 9, 1932

Syllabus by the Court.

Where cause of action is for money had and received, in favor of principal against agent, statute of limitations does not commence until discovery of wrong.

Supreme Court will not weigh conflicting evidence, nor will it overturn finding of fact sustained by substantial evidence.

1. Where an action is one for money had and received brought by a principal against her agent, the statute of limitations does not begin to run until the discovery of the wrong of the agent by the principal.

2. In an action for the recovery of money, the pleadings and record are examined, and it is held that there is substantial evidence to sustain the findings of fact, and that the findings of fact sustain the judgment.

Appeal from District Court, Jackson County; Horace T. Phinney Judge.

Action by Amy O. Rafter against Robert J. Hurd and others. From the judgment rendered, both plaintiff and the defendants appeal.

See also, 133 Kan. 505, 300 P. 1079.

Frank G. Drenning and Oscar Raines, both of Topeka, and E. D Woodburn, of Holton, for appellant.

Bender & Banks, of Holton, for appellees.

SMITH J.

This was an action to recover money. It was in seven counts. Judgment was for plaintiff on the first count, and for defendants on the second, third, fourth, sixth, and seventh counts. The fifth count was dismissed. Both parties appeal.

The action grows out of the operations of the Rafter Farm Mortgage Company and the sale of a share of the assets and stock of this company to James T. Rafter and Robert J. Hurd by Amy O. Rafter, the widow of De Vere Rafter.

Count one is an action to recover for alleged fraud and misrepresentation on the part of Robert J. Hurd and James T. Rafter in the sale of a farm belonging to Amy O. Rafter.

In counts two, three, and six plaintiff seeks to recover for assets concealed by defendants in the purchase of the capital stock and assets of the Rafter Farm Mortgage Company from plaintiff on August 27, 1919.

Counts four and seven are to recover on second mortgages alleged to have been sold and warranted to plaintiff by defendants as good and collectible mortgages, but which turned out to be of no value.

We will notice count one first. This count alleges that in September, 1919, plaintiff owned a farm; that she made a written contract with Robert Hurd, whereby Hurd was to secure a purchaser for this farm; that Hurd did find a purchaser for the land, and on behalf of plaintiff entered into a contract with this purchaser for the sale of the farm on terms that were satisfactory to her; that in order to carry out the terms of this contract she conveyed the farm to the Rafter Farm Mortgage Company; that before the terms of this contract were carried out, defendants, without her consent or knowledge, made a different contract with the buyer of the land whereby they conveyed the land to him; he borrowed money on it, and gave plaintiff a second mortgage. The count alleged that the receipts of the mortgage placed on the land by the buyer were paid to the Rafter Farm Mortgage Company, and that after this company paid off a prior mortgage of a small amount the balance of this money was converted by defendants to their own uses. It was alleged that defendants delivered to plaintiff a mortgage known as the Law Higley mortgage; and that the land covered by this mortgage was already covered by a mortgage for all that the land was worth. The petition alleged also that plaintiff tendered back the Law Higley mortgage. The petition alleged that plaintiff did not discover that defendants had appropriated this money to their own use till 1929.

The answer of defendants to this count was a general denial and a statement that Amy Rafter was advised and informed as to every step in all the transaction. The defense of the statute of limitations was also pleaded. Trial was to the court. The following findings of fact were made:

"That on and prior to the 25th day of September, 1919, the plaintiff was the owner of the West 100 acres of the Southeast Quarter (S. E. 1/4) of Section Nine (9), in Township Six (6), of Range Fourteen (14) in Jackson County, Kansas. That at said time there was a first mortgage lien on said real estate payable to Trevett, Mattis & Baker, and interest thereon in the sum of $600.00; that the defendant, Robert J. Hurd, secured a purchaser, one L. H. Cashman, for said 100 acres of land and informed the plaintiff thereof, whereupon the plaintiff appointed, constituted and directed said Robert J. Hurd to sell said lands and directed him in her behalf to enter into a written contract of sale with said purchaser which he did, signing said contract, 'Amy O. Rafter by R. J. Hurd.' That said contract provided among other things that the purchaser was to pay to the plaintiff $9000.00 for said lands, as follows: $500.00 in cash, $500.00 January 1, 1920; $500.00 March 1, 1920; and $500.00 annually until $4,500.00 was paid, and that upon the payment of $4,500.00 by the purchaser to said Amy O. Rafter, the said Amy O. Rafter would execute a deed of conveyance to the purchaser whereupon the purchaser would execute to the said Amy O. Rafter a first mortgage lien on said real estate in the sum of $4,000.00, the balance of the purchase price for said land.

"That after said contract referred to in finding number ten was made and $l, 500.00 paid thereunder by L. H. Cashman, the purchaser concluded that he would not comply with the terms of said contract, whereupon said L. H. Cashman and the defendant, Roberr J. Hurd, entered into another contract concerning the sale to said L. H. Cashman of said lands and the purchase price therefor to be said sum of $9,000.00 and to be paid as follows: $1500.00 cash; heretofore paid; an application by the purchaser to the Bartlett Brothers Land & Loan Company of St. Joseph, Missouri, for $3,500.00 and the execution of a second mortgage lien on said land by the purchaser to Amy O. Rafter, in the sum of $4,000.00. That said loan was made to Cashman by the Bartlett Brothers Land & Loan Company in the sum of $3,500.00 less $52.00 expense; the remittance thereof was made to the defendants by said Bartlett Brothers Land & Loan Company and the defendants out of said remittance of $3,477.50 paid $615.00 to Trevett, Mattis & Baker to satisfy the first mortgage lien on said real estate and placed the balance of said remittance from said loan to their credit.

"That to satisfy Amy O. Rafter for the full purchase price of said lands in the sum of $9,000.00 she had received $1,500.00 cash, the payment of the first mortgage lien in the sum of $615.00, a second mortgage lien in the sum of $4,000.00 on said lands and a second mortgage on other land in the sum of $3,000.00 known as the Law Higley mortgage.

"At all times hereinbefore mentioned in this finding, the defendants and said Robert J. Hurd were the confidential advisers and agents of the plaintiff. The defendants, nor any of them made known to the plaintiff in an understandable explanation the change of the original contract.

"The defendants received from Bartlett Brothers by virtue of the mortgage executed by L. H. Cashman and wife, $3,447.50 and out of said sum paid to Trevett, Mattis & Raker on their first mortgage lien, $615.00 leaving a balance in the hands of the defendants which has not been accounted for to the plaintiff, and that the plaintiff, Amy O. Rafter never at any time accepted the Law Higley second mortgage lien as a part of the purchase price for her land and that the plaintiff is entitled to recover from the defendants, the sum of $2,832.00 with interest at 6% from March 1, 1929."

On these findings judgment was rendered for plaintiff in the amount of $2,832.50. From that judgment, defendants appeal. They urge as error that the claim is barred by the statute of limitations. It is argued that the action is to recover on a tort that the statute begins to run when the tort is committed. Nashville, C. & St. L. Railway Co. v. Dale, 68 Kan. 108, 74 P. 596, and Becker v. Porter, 119 Kan. 626, 240 P. 584.

They also argue that if the action should be construed to be on a contract express or implied then it is still barred by the statute. They cite Atchison, T. & S. F. Railway Co. v. Grain Co., 68 Kan. 585, 75 P. 1051, 1 Ann.Cas. 639. There the court said: "The action accrues when the contract is violated, and not at the time when the plaintiff learns that it has been violated. In the absence of a statute making concealment an exception to the statute of limitations, the courts cannot create one, however harsh and inequitable the enforcement of the statute may be." Page 591 of 68 Kan., 75 P. 1051, 1053.

The findings of fact of the trial court bring this case within the rule laid down in Guernsey v. Davis, 67 Kan 378, 73 P. 101. In that case, two agents retained money that had been intrusted to them for the purpose of releasing certain liens. Suit was brought by the loan company to recover this money. The defense of the statute of limitations was made. It was argued that in order for the statute not to bar the action it must be for relief on the ground of fraud, and that the allegations of the petition were insufficient to warrant relief on that theory. The court said: "It was not necessary that the action be regarded as for relief on the ground of fraud, and the petition contains a statement, in ordinary and concise language, of facts sufficient to constitute a cause of action as for money had and received. Since the money was received by Millikan as agent of the company, the statute of limitations did not commence to run until the principal had knowledge of the agent's wrong. Perry v. Smith, 31 Kan. 423, 2...