Williams v. Hanston State Bank

• Decision Date: 06 October 1934
• Docket Number: 31794.
• Citation: 36 P.2d 84,140 Kan. 260
• Parties: WILLIAMS et al. v. HANSTON STATE BANK.
• Court: Kansas Supreme Court

36 P.2d 84

140 Kan. 260

WILLIAMS et al. v. HANSTON STATE BANK.

No. 31794.

Supreme Court of Kansas

October 6, 1934

Syllabus by the Court.

Where lessee remitted delay rentals on oil lease to depository bank in name of former owner who had sold land, evidence established that bank had knowledge of facts sufficient to require inquiry which would have disclosed change of ownership, and therefore bank had no authority to apply such rentals to former owner's indebtedness to bank.

The proceedings considered in a case where, pursuant to agreement, delay rentals on oil and gas leases were sent to a depository bank for payment to the owner of the land, but were remitted by the lessees to the depository bank in the name of a former owner who had sold the land to another, and held, the circumstances reviewed constituted sufficient evidence that the bank had knowledge of facts sufficient to require inquiry upon its part and that making of such inquiry would have resulted in actual knowledge of the change of ownership, and held further, the depository bank had no authority to apply the money so received to an indebtedness due it from the former owner of the land.

Appeal from District Court, Hodgeman County; Roscoe H. Wilson Judge.

Action by F. M. Williams and others against the Hanston State Bank. Judgment for plaintiffs, and defendant appeals.

O. A Wilson, of Jetmore, for appellant.

Roscoe E. Peterson, of Larned, for appellees.

JOHNSTON Chief Justice.

This action was brought to recover $160 for delay rentals on oil and gas leases which had been secured on land belonging to F M. Williams and Jessie M. Williams. The land, two quarter sections, had been leased to the Texas Oil Company and the Skelly Oil Company, and the rentals for the delay in operation of the leases were $80 on each quarter section, and the delay rentals for the ensuing year did not become due until May 29, 1931. The land had been owned by Sarah J. Van Meter, and was sold by her without reservations to the Williams, and the deed of transfer was filed for record on April 23, 1931. The delay rental on both quarter sections was sent to the Hanston State Bank by one of the lessees, the Texas Company, on May 1, 1931, and was received by the bank on May 4, 1931, the bank which had been designated in the leases as the depository for such payment. Lloyd Olson was the cashier of the bank and its managing officer, and he had been the original lessee of the lands, which he had subsequently assigned. On May 18, 1931, the bank held a note for a considerable amount against Mrs. Van Meter, and the cashier, Olson, placed the $160 to the credit of Mrs. Van Meter on that note and retained the money. Personally, Mrs. Van Meter had nothing to do with the deposit, and made no directions with reference to it. It was transmitted by the oil company to be paid to the owner of the land.

It appears that there is a publication in that section of the country called the Southwest Credit Association, a publication taken by the bank, and it appeared that the issue of May 12 contained a publication of the transfer of the land by warranty deed from Mrs. Van Meter to the Williams. Then on May 18, as we have seen, Olson made an entry applying the delay rental to the note of Mrs. Van Meter. About two weeks later Williams applied to the oil company for the money, and learned that it had been sent to the depository bank about the first of the month. He then went to the bank to get it, and was told by the cashier that he had not been advised to deposit the money to any one other than Mrs. Van Meter, and that she was owing the bank and he had taken and applied the money on that debt. When Williams requested payment from the bank, Olson replied, "I appreciate Mr. Williams that you should not be made the goat, that the money rightfully belongs to you," but declined to pay it to him. He stated that he had not been advised to pay the money to any one other than Mrs. Van Meter, and that, as she was owing the bank, he had taken and applied it on that debt.

The demand not being paid, action was brought, and the verdict of the jury and the judgment of the court were in favor of plaintiffs. The bank appeals and complains, first, of the instructions, and, second, the failure to set aside special findings of the jury, and the refusal to grant its motion for a new trial.

The court gave the jury instructions 3 and 4, which are as follows:

"3. The burden is upon the plaintiff in this action to prove by a preponderance of the evidence that prior to the time the defendant applied the $160.00 on the indebtedness due to it from Sarah J. Van Meter, the defendant had knowledge of the conveyance of said land to the plaintiffs, or had notice or knowledge of such facts as would have caused an ordinarily prudent person to have made inquiry, and that the making of such inquiry would have resulted in knowledge of the conveyance of said land by Sarah J. Van Meter to the plaintiffs. If the plaintiffs have so proven, then you should return a verdict herein for the plaintiffs in the sum of $160.00, but if the plaintiffs have not so proven, or if the evidence offered by the defendant is sufficient to show that it did not have such notice or knowledge then you should return a verdict herein for the defendant.

"4. Under the evidence in this case, the plaintiffs were the owners of the land in question at the time the delay rentals were applied to the indebtedness of Sarah J. Van Meter to the bank, and the bank is liable to the plaintiffs therefor, in the event that the bank, prior to the time it applied such money to the indebtedness of Sarah J. Van Meter, had knowledge of the conveyance of the land to the plaintiffs, or notice of such facts as would have caused an ordinarily prudent person to make inquiry, which inquiry would have disclosed the fact that plaintiffs were the owners of the land."

The contention of the defendant is that the instructions are indefinite and misleading and that there is a difference in payments in property and payments of money. The complaints of the instructions were not made when they were given, and in fact not raised until this appeal was taken. No other or different instructions were requested by defendant. It was satisfied to go to the jury on the instructions given by the court without objection or offer of other instructions.

In Hamilton v. Railway Co., 95 Kan. 353, 148 P. 648, L.R.A. 1915E, 455, it was said: "A judgment will not be reversed because of complaint that the court did not properly, correctly, and fully instruct the jury, where the instructions given correctly stated the law, and no request was made for other or additional instructions." Syl. 4.

In Foley v. Crawford, 125 Kan. 252, 264 P. 59, 64, it was said: "From the abstract of the defendant, it may reasonably be inferred that the instructions were in writing. The defendant had the right to see them before they were read to the jury and could have seen them if a request had been made for permission to do so. The defendant could then have stated to the court wherein modification was desired and could have requested other or additional instructions. What the defendant desired to have in the instructions should have been made known to the court either by a request for a modification of the instructions given or by submitting to the court special instructions with the request that they be given."

In Master Sales Company v. Sytsma, 114 Kan. 120, 217 P 291, 293, it was said: "The instructions given were correct so far as they went, but they should have...