Wright v. Shimek

• Decision Date: 13 October 1898
• Citation: 55 P. 464,8 Kan.App. 350
• Parties: WRIGHT v. SHIMEK et al.
• Court: Kansas Court of Appeals

55 P. 464

8 Kan.App. 350

WRIGHT v. SHIMEK et al.

Court of Appeals of Kansas, Northern Department, Central Division

October 13, 1898

Syllabus by the Court.

The syllabus in the case of Chapman v. Steiner (Kan App.) 48 P. 607, is adopted as the syllabus in this case.

Error from district court, Republic county; F. W. Sturges, Judge.

Action by Nancy Wright against J. J. Shimek and others. Judgment for defendants, and plaintiff brings error. Reversed.

Bradford & Huron and Jay F. Close, for plaintiff in error.

Angevine & Cubbison, T. M. Noble, and W. F. Dillon, for defendants in error.

Opinion

McELROY, J.

This action was brought by Nancy Wright against Joseph J. Shimek, Barbab Shimek, Winzel Kasha, Vincel Kasha, the Mutual Benefit Life Insurance Company, and Bartlett Bros. The plaintiff alleged (1) that the defendants Joseph Shimek and Barbab Shimek, on May 1, 1886, executed and delivered to W. J. Neill a real-estate bond secured by mortgage on lands in Republic county, and thereby agreed to pay Neill, or order, $2,200, on the 1st day of May, 1891, with interest at 7 per cent, per annum, payable semiannually, according to the terms of 10 coupons thereto attached; (2) an assignment of the notes and mortgage by Neill to the plaintiff; (3) that Shimek and wife conveyed the lands to Kasha, who assumed payment of the indebtedness, note, and mortgage; (4) that other defendants had, or claimed to have, an interest in the real estate, which interest, if any they had, was inferior to the mortgage lien of the plaintiff. The defendants Shimek and wife and Kasha and wife pleaded (1) payment to the plaintiff; (2) payment to the payee without notice of the assignment. The defendants the Mutual Benefit Life Insurance Company and Bartlett Bros. Pleaded payment by the defendants Shimek and Kasha, and alleged that they had a valid and prior lien on the mortgaged premises on account of a loan of $1,500 made to the defendant Kasha, with which to pay off the claim of plaintiff. The plaintiff’s reply was, in substance, a general denial. A trial was had by the court without a jury, which resulted in findings and judgment for the plaintiff for $1,869.35, and foreclosure of the mortgage. The findings and judgment were not satisfactory to the plaintiff, nor to any one of the defendants. The plaintiff and all of the defendants filed motions for a new trial, which motions were overruled; and the case is presented to this court for review, upon a petition in error by the plaintiff, and cross petition by the defendants.

The plaintiff in error alleges that the trial court erred in its conclusions that the payment of the $700, on July 14, 1891, by Shimek and Kasha to the Western Farm-Mortgage Trust Company was a good and valid payment, for which the defendants should have credit. The record discloses the following facts: The Western Farm-Mortgage Company was a corporation at Lawrence, organized for the purpose of negotiating loans. The defendants Joseph Shimek and Barbab Shimek, May 1, 1886, procured a loan of $2,200, from the mortgage company, for which they executed and delivered their certain real-estate bond secured by a mortgage on land in Republic county, whereby they promised to pay to W. J. Neill, or order, the amount thereof on the 1st day of May, A.D. 1891, with interest at 7 per cent. per annum. W. J. Neill was a clerk in the employ of the mortgage company, and the loan was made by that company. The bond and mortgage were taken in the name of Neill, for the convenience of the mortgage company. Neill had no interest in the bond or mortgage at any time. The Western Farm-Mortgage Company sold the bond and mortgage, with others, to Kendall Bros., of Reading, Pa., and Neill transferred the same, by writing on the back of the bond the words: "For value received, I hereby assign and transfer the within bond, together with all my rights, title, and interest in the mortgage deed securing the same, to ___, or order. W. J. Neill." This assignment does not constitute a commercial indorsement.

After the execution of the bond and mortgage in question, the Western Farm-Mortgage Company transferred its business to Denver, Colo., where it was reorganized as the Western Farm-Mortgage Trust Company. The Western Farm-Mortgage Trust Company thereupon succeeded to all the business of the Western Farm-Mortgage Company. Shimek paid to the mortgage company and to its successor, the trust company, each coupon as it became due, and received in return the coupons. The note and mortgage became due and payable May 1, 1891. Shimek and Kasha, on July 14, 1891, paid on the principal $700 to the trust company. Afterwards, on July 25, 1891, they paid the trust company $1,560.75, the remainder due of the principal, with interest from the maturity of the note.

The bond or note in question is not a negotiable instrument; it is something more than a promise to pay money. The following stipulations were written in the body of the bond: "It is further expressly agreed that in case of default of the payment of any installment of interest or any principal thereof for the space of 10 days after it becomes due and payable, or in case of breach of any of the covenants or conditions in the mortgage deed securing this bond contained, to which said deed reference is hereby made, and which is made a part of this contract, in either said case the principal sum, with accrued interest, shall, at the election of the legal holders hereof, at once become due and payable, without further notice, may be demanded and collected, anything herein contained to the contrary notwithstanding." This makes the mortgage and note one contract. Among the stipulations of the mortgage, which are thus made a part of the contract, are stipulations for the payment of the taxes, for the insurance of the property against strip or waste, and to keep improvements in repair. These provisions rendered the note nonnegotiable. Chapman v. Steiner (Kan. App.) 48 P. 607; Killam v. Schoeps, 26 Kan. 310.

The assignment of the mortgage from Neill to Wheeler was not acknowledged. It was therefore not entitled to record, and, if recorded, the record thereof would not impart constructive notice to the maker of the note and mortgage of such assignment. The recording of the unacknowledged assignment does not of itself give the notice that note and mortgage have been transferred. Chapman v. Steiner, supra; Briggs v. Latham, 36 Kan. 206, 13 P. 129; Fox v. Cipra (Kan. App.) 48 P. 452.

The trial court properly found that the $700 payment made July 14, 1891, to the Western Farm-Mortgage Trust Company, was a good payment on the bond and mortgage, and extinguished the indebtedness to that amount. The motion of the plaintiff in error for a new trial was properly overruled.

The defendants in error allege that the trial court erred (1) in finding that Sprengle was the agent of Shimek and Kasha, so that his knowledge of the assignment was their knowledge; (2) in finding that Sprengle had knowledge of the assignment of the mortgage prior to the final payment of the amount due on the principal and interest.

The record shows that Shimek and wife, on the ___ day of July 1891, sold and conveyed the...