Wistrand v. Parker

• Decision Date: 01 January 1898
• Docket Number: 203
• Citation: 52 P. 59,7 Kan.App. 562
• Parties: G. E. OSCAR WISTRAND v. W. C. PARKER
• Court: Kansas Court of Appeals

52 P. 59

7 Kan.App. 562

G. E. OSCAR WISTRAND v. W. C. PARKER

No. 203

Court of Appeals of Kansas, Southern Department, Central Division

January 1, 1898

Opinion Filed February 14, 1898.

Error from McPherson district court; LUCIEN EARLE, judge. Affirmed.

Judgment affirmed.

Milliken & Galle, for plaintiff in error.

Slonecker Wheeler & Switzer, for defendant in error.

OPINION

MILTON, J.:

In this action Parker, as plaintiff, asked for judgment upon eight promissory notes for twenty-seven dollars each, dated October 1, 1888, and for the foreclosure of a real-estate mortgage of the same date securing the notes, which had been executed and delivered by Wistrand to Parker's assignor. The notes called for interest after maturity. One fell due April 1, 1890, and one each six months thereafter. Wistrand pleaded that the said notes were given for a part of the interest thereafter to accrue upon a note which was given by him, secured by a first mortgage on the real estate described in the petition; that the last-named note was negotiable, and had been transferred by indorsement to an innocent holder; that under the terms of the note and mortgage, upon failure to pay any part of the interest due thereon, or to pay the taxes levied on the mortgaged premises, or to keep the buildings on the same insured, the whole sum immediately became due and payable and drew twelve per cent. interest per annum, and that such default had occurred and then existed. He also averred that the judgment asked for upon the eight notes would be wholly usurious and in excess of twelve per cent. interest per annum upon the $ 1800 note. Each note contained the following provision:

"This note is secured by a mortgage on real estate. This note may become due and payable at once by reason of the failure to comply with the conditions of the accompanying mortgage, which is made a part hereof."

The mortgage provided:

"If the said party of the first part shall pay said notes and the interest thereon when due, and shall pay all taxes and assessments levied against said premises before the same become delinquent, then this deed shall become void, and shall be released at the cost of the party of the first part. But should said first party fail to pay said notes or interest, or any part thereof, when due, according to the tenor and effect of said notes, or fail to pay all taxes and assessments before the same become delinquent, then all said notes become immediately due and payable, at the option of the party of the second part or the legal holder of such notes, without notice, and shall draw interest at the rate of twelve per cent. per annum from the date of said note until fully paid."

On the trial, counsel for defendant stated that he would rest his defense upon the proposition that the notes were non-negotiable instruments, for the reason that under their terms the mortgage became a part of each. The court held the notes to be negotiable, to which ruling the defendant excepted. Thereupon the jury was directed to return a verdict for the plaintiff, and upon the verdict the court entered judgment for the plaintiff in the sum of $ 300.

Defendant in error admits that the mortgage is to be read as a part of each note. So reading it, we find that the failure to pay the taxes upon a tract of land affects the maturity of the several notes. Such a provision appears to be wholly foreign to the nature of a negotiable instrument. In Killam v. Schoeps, 26 Kan. 310, BREWER, J., used the following language:

"We conclude, then, that whenever any stipulation concerning other matters than the payment of money is incorporated in one instrument with a promise to pay money, such double contract will not be adjudged negotiable paper."

This case was followed in Iron Works v. Paddock, 37 Kan. 510, 15 P. 574. In Lockrow v. Cline, 4 Kan.App. 716, 46 P. 720, it was held that by reason of a provision in a note very similar to that in the note we are considering the mortgage became a part of the note, and that in consequence the note was non-negotiable. While that mortgage contained provisions not found in the mortgage in question, we think the latter, when read as a part of the notes, has the effect to make them nonnegotiable.

The provision that failure to pay taxes and assessments before they became delinquent shall cause all the notes to become immediately due and payable is certainly extraneous to the essential nature of a negotiable promissory note. While many cour...