Security State Bank v. Clarke

Citations

• 99 Kan. 18
• 160 P. 1149

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Promissory Note — Assignment to Maker — Reissued by Maker to New Obligee “Without Recourse”■ — Maker Released. Where a note secured by a mortgage is assigned before maturity to one of the makers, and reissued by him to a new obligee by means of an endorsement stating that the transfer is without recourse upon either of the makers individually, and that the assignee “assumes and agrees to pay the said note as between the makers thereof,” the makers are thereby relieved from personal liability to any subsequent holder of the note.</p> <p>2. Note — Fraud Practiced in Obtaining Note — Question Properly Litigated in Foreclosure Action. No error is committed in allowing the claim of the assignor of a note to recover it, because of fraud practiced in obtaining it from him, to be litigated upon proper pleadings in an action brought by a subsequent holder to foreclose a mortgage which it secures, where all the persons affected are parties, and the issue is submitted to a jury.</p> <p>3. Note — Fraudulently Obtained — Owner May Reclaim. The owner of a note who has been fraudulently deprived of it may reclaim it against one who acquired it after maturity from the perpetrator of the fraud (or from one who obtained it from him without a valuable consideration) without notice thereof, as security for a preexisting debt.</p>