Schiltz v. Wokal

Decision Date24 January 1942
Docket Number35372.
Citation154 Kan. 678,121 P.2d 240
PartiesSCHILTZ v. WOKAL et al.
CourtKansas Supreme Court

Syllabus by the Court.

Where bank sold note secured by mortgage to plaintiff who left it with bank's officer for collection, and subsequently maker sold part of mortgaged land to third party who executed purchase-money note, and upon plaintiff's refusal to accept third party's note as payment on the maker's note the maker instructed the bank's officer to keep third party's note and credit payments thereon on the maker's note, the maker's indorsement of third party's note "without recourse" did not constitute a binding contract between maker and plaintiff to the effect that amount of third party's note should be credited on maker's note at time of the indorsement.

Where bank sold note secured by mortgage to plaintiff who left note with bank's officer for collection and subsequently maker sold part of mortgaged land to third party who executed purchase-money note and upon plaintiff's refusal to accept third party's note as payment on maker's note the maker instructed bank's officer to keep third party's note and credit payments thereon on the maker's note, the officer became the maker's "agent" for collection and application of the sums collected on the third party's note, notwithstanding that the officer was also plaintiff's agent for purpose of collecting from maker.

The rule that application of proceeds of pledge securities in partial extinguishment of debt for which securities were pledged does not constitute "part payment" which will toll running of limitation does not apply when pledgee of the collateral is constituted the agent of the pledgor with instructions to collect the collateral and pay it on the principal obligation.

Where bank sold note secured by mortgage to plaintiff who left note with bank's officer for collection and subsequently maker sold part of the mortgaged land to third party who executed purchase-money note, and upon plaintiff's refusal to accept third party's note as payment on the maker's note, the maker instructed bank's officer to keep third party's note and credit payments thereon on the maker's note, payments subsequently collected by the bank's officer and applied on the maker's note constituted "part payments" which tolled running of 5-year statute of limitations on the maker's note. Gen.St.1935, 60-306, subd. 1.

Charles Wokal executed his note for $3,600 to a bank and secured the same by a mortgage on real estate. The bank sold the note and assigned the mortgage to plaintiff, who left the papers with an officer of the bank for collection. Later Wokal received from one Chopp a note for $1,600 secured by a mortgage. He endorsed the note "without recourse" and assigned the mortgage in blank and sent them to the officer of the bank. Plaintiff declined to accept the Chopp note as a payment upon Wokal's note. On being informed of this Wokal instructed the official of the bank to hold the Chopp note and as payments were made upon it to have them credited upon his note owned by plaintiff. Held: (1) Wokal's endorsement of the Chopp note "without recourse" did not constitute a binding contract between him and plaintiff to the effect that it should be credited upon his note as of the date of the endorsement, since plaintiff refused to accept it as such. (2) Wokal made the official of the bank his agent to collect from Chopp and apply the collections as made upon his note held by plaintiff. (3) The collections from Chopp so made by the officer of the bank and applied upon Wokal's note held by plaintiff were payments voluntarily made by Wokal and tolled the running of the statute of limitations.

Appeal from District Court, Republic County; Charles A. Walsh Judge.

Action by Frank H. Schiltz against Charles Wokal, also known as Charles L. Wokal, and others, wherein petition in interpleader was filed by George Swiercinsky. Upon appointment of Charles L. Wokal as administrator of the estate of Charles Wokal, deceased, the administrator was made a party defendant. From an adverse judgment, the administrator, and others appeal.

Frank G. Spurney, of Belleville, for appellants.

W. D Vance, Fred Emery, and Perry Owsley, all of Belleville, and Frank H. Meek, of Clay Center, for appellee.

HARVEY Justice.

This was an action to determine the balance due on a promissory note and to foreclose a mortgage given to secure it. The defense was the five-year statute of limitations. G.S.1935 60-306, first clause. A trial by the court resulted in a judgment and decree for plaintiff. Defendants have appealed.

On April 1, 1932, Charles Wokal executed a note to the Farmers State Bank at Clay Center for $3,600 due January 14, 1934 and secured the same by a mortgage on four pieces of real property known in the record as tracts A, B, C and D, being a first mortgage on tract A and a second mortgage on the other tracts. In June, 1932, the bank sold the note and mortgage to plaintiff, who has continued to own them. The instruments appear to have been left with Mr. C. A. Hammel, an officer of the bank. Later Charles Wokal sold tract D to Henry Chopp and took from him a note for $1,600, dated March 1, 1934, secured by a mortgage on the tract sold. The deed to Chopp was recorded January 15, 1935, and Chopp's mortgage to Charles Wokal was recorded January 17, 1935. About January 22, 1935, Wokal endorsed the $1,600 note without recourse and assigned to plaintiff the mortgage given by Chopp to secure it, and mailed the same to C. A. Hammel of Clay Center. Hammel made a penciled notation on the back of the $3,600 note which had been executed by Wokal as follows "$3600--1600 Chopp Mar. 1-34." On being informed of this plaintiff declined to accept Chopp's $1,600 note as a payment on Wokal's $3,600 note. Hammel advised Wokal of that fact and Wokal told Hammel then just to keep the Chopp note and mortgage and as Chopp made payments of interest thereon to credit them on his $3,600 note. Chopp paid interest to Wokal on his note of $1,600 on October 22, 1934, of $103.59, and on August 8, 1935, $44. This last payment appears to have been forwarded to Hammel, who received it on August 29, 1935, and who applied the same upon the note held by plaintiff, and on October 30, 1935, Wokal paid Hammel for plaintiff $126.40. This, together with the $44 paid the day before, made the $170.40, the interest for one year on the $3,600 note, and paid the interest to July 14, 1934. Thereafter Chopp...

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