Nelson v. Southworth

Citations

• 93 Kan. 532
• 144 P. 835
• 1914 Kan. LEXIS 467

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Notes and Mortgages — Procured through Concealment and Misrepresentation — Cancellation Ordered. S. loaned to N. $2500, taking a principal note and mortgage for that amount and a note and mortgage for commissions. He transferred the principal securities to Mrs. W. but afterwards collected and transmitted to her the semiannual interest, until the last coupon was due. This was not paid, but he sent the amount to W. and held the coupon and the last annual installment on the commission note. Before the maturity of the debt, he notified N. that it would not be renewed but must be paid. Thereupon N. entered into negotiations with W. for an extension. Learning of this S. sent a check to W. for the full amount then due upon the principal note with a request that the papers be sent to him. Mrs. W. declined to accept the check and returned it. After sending the check and before its return, which was delayed by the absence of W. from home, S. prepared notes and mortgages for a renewal of the loan and presented them to N. and wife and told them that he had paid off the debt to W.; that W. had nothing to do with it; and that he (S.) had the papers in his possession and would return them on the execution of the prepared renewals. Relying upon these representations N. and wife signed and delivered the new notes and mortgages to S. for $2500 and $187.50 respectively. Learning that S. had not taken up and did not have the old papers, which were still held by Mrs. W., N. tendered payment of the coupon and installment note still held by S., and demanded the cancellation of the new notes and mortgages. It is held that the findings of the district court that the new securities were obtained by a concealment of facts and false representations amounting to fraud, and should be canceled, are sustained.</p> <p>2. Notes and Mortgage — Plaintiff Not an Innocent Holder. The holders of the new securities to whom S. had transferred them are held to have no bet