The Illinois Title & Trust Company v. McCoy
| Decision Date | 09 March 1912 |
| Docket Number | 16,941 and 17,539 |
| Citation | 86 Kan. 588,121 P. 1090 |
| Court | Kansas Supreme Court |
| Parties | THE ILLINOIS TITLE & TRUST COMPANY, Appellant, v. P. H. MCCOY et al. JAMES S. GRIGGS, Intervenor, Appellee; HATTIE ARMSTRONG et al., Appellants |
Decided January, 1912.
Appeal from Finney district court.
Judgment reversed and cause remanded.
SYLLABUS BY THE COURT.
1. PROMISSORY NOTE--Patent Right--Collateral Security--Consideration. On motion of the defendant in an action brought by an indorsee of two promissory notes against the maker thereof the payee of the notes was made a party and filed an answer that the notes sued upon had been transferred by him to the plaintiff as collateral security for his own notes, which had been obtained from him without consideration and through fraud upon false representations upon a pretended sale of a right under letters patent. The court submitted to the jury the question whether the principal notes were given without consideration, and directed that if the jury so found the verdict should be for the intervenor for the amount due upon the collateral notes otherwise that the verdict for the same amount should be for the plaintiff, and instructed the jury (as the fact was), that there was no evidence of any fraudulent representations respecting the patent right. It was shown that the right had been conveyed as agreed in consideration for the principal notes, and there was no evidence that it was invalid or worthless. It is held that a verdict and judgment for the intervenor for the amount of the collateral notes sued upon can not be sustained.
2. JUDGMENT--On Principal Notes--Conclusive as to Collateral. A suit was commenced in Illinois, where the three notes given for the patent right above referred to were made payable, in a court of competent jurisdiction, by the payee thereof, for the amount due upon two of them which had not been transferred, and also for the amount due upon the other note which had been returned to the payee by the indorsee thereof for collection and accounting of the proceeds, and which was secured by the endorsement and transfer of the collateral notes sued upon in this action. A judgment was duly rendered in that action against the maker of the principal notes for the full amount thereof. These are the same notes alleged in the answer of the maker thereof--the intervenor in this action--to have been obtained by fraud and without consideration. It is held that the Illinois judgment is a final determination of the validity of the principal notes.
3. ORDER OF REVIVOR-- Affirmed. Pending an appeal taken by the plaintiff the principal defendant died, and a motion was made to revive the action against certain persons to whom, it was alleged in the motion, the deceased had transferred money and property, to prevent the plaintiff from collecting its claim in this action. A revivor was not asked against the personal representatives of the deceased nor does it appear that any had been appointed. A revivor was ordered against the heirs of the deceased, including the alleged trustees, who were also heirs. On appeal by the alleged trustees or holders of the funds and property referred to, the order of revivor is affirmed.
4. REVIVOR--Against Personal Representatives--When Unnecessary. The liability of the principal defendant having been admitted and established by the judgment referred to in the second paragraph, and the only issue being the question to whom the liability is due, that issue may be determined without a revivor against the personal representatives of the defendant who died after the judgment was rendered.
5. JUDGMENT--Satisfaction--Reversal. A transcript of a release of the judgment in favor of the intervenor against P. H. McCoy, given and filed by the intervenor after the appeal therefrom had been taken, having been filed in this court and this judgment being reversed, it is held that upon a proper issue to be made and proof of such satisfaction the intervenor should be adjudged to pay the amount of such judgment to the plaintiff.
W. R. Hopkins, and R. J. Hopkins, for appellants Hattie Armstrong et al.
W. B. Lowrance, Chauncey Brown, and Milton Brown, for appellant Illinois Trust Company.
A. Hoskinson, and R. W. Hoskinson, for appellee James S. Griggs.
In this action the plaintiff trust company, the indorsee of two promissory notes, sought recovery from the defendant, McCoy, the maker of the notes. The answer of McCoy alleged that the notes had been transferred by the payee, J. S. Griggs, to the Wm. R. White Co., as collateral security for notes given by the payee to that company for an interest in a patent right, which transaction Griggs had discovered to be fraudulent. The answer further alleged that judgment had been recovered in a circuit court of Illinois by the White company against Griggs on the notes given for the patent right, which judgment was still in force, but that the trust company still held the collateral notes upon which this action was brought. On this answer, McCoy asked that Griggs and the White company be made parties to the action. A general denial was filed in reply to this answer, and a motion was made by the trust company for judgment on the pleadings, which was overruled, and the motion of McCoy to bring in the new parties was sustained. Thereupon Griggs appeared voluntarily but the White company did not appear, and no further steps were taken against it. Griggs answered that he had given three promissory notes for $ 500 each to the White company, of Bloomington, Ill., "without consideration and through fraud," the company having pretended to sell to him certain territory and right to sell a patent gate in Texas, and that there was no consideration for the notes, and that he had indorsed the McCoy notes in suit to the White company as collateral security only for his own notes. He also pleaded that the White company had obtained a judgment against him on the three notes he had so given for the patent right for $ 1500 and interest, and "that upon the rendition of said judgment . . . he was entitled to the possession of the (McCoy) notes." An amendment to this answer stated that the White company represented that they were engaged in the manufacture and sale of the patented gate, which was a new and novel article; that they were making large sales of territory and of gates; that these representations were false; and that he was induced thereby to give his own notes and to transfer the collateral notes. The prayer was for the possession of the collateral notes sued upon and for judgment against McCoy thereon. A motion to strike out this answer was overruled. A reply was filed thereto and the cause was tried, the appellant voluntarily assuming the affirmative.
The only issue was upon the answer of the intervenor, Griggs, to determine whether he or the trust company should recover against McCoy, who, made no defense. It appeared from the evidence that the White company was engaged in manufacturing and selling a gate at Bloomington, Ill., under letters patent from the United States. Griggs negotiated with that company at Bloomington for an interest in the patent, but did not then buy it. A representative of the company joined him on his return to Kansas, and at Newton he signed the three notes before referred to, bearing date at Bloomington, Ill., and payable there. He then went with the agent to Garden City, where the agent examined the mortgage security which had been given to secure the McCoy notes, then held by Griggs, which notes were offered as collateral security to his own notes. The agent then left with the papers, and later the White company, having accepted the notes of Griggs with the McCoy notes as collateral security and accompanying real-estate mortgage...
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