Illinois Title & Trust Co. v. McCoy

121 P. 1090, 86 Kan. 588, 1912 Kan. LEXIS 348
CourtSupreme Court of Kansas
DecidedMarch 9, 1912
DocketNo. 16,941 and No. 17,539
StatusPublished

This text of 121 P. 1090 (Illinois Title & Trust Co. v. McCoy) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Illinois Title & Trust Co. v. McCoy, 121 P. 1090, 86 Kan. 588, 1912 Kan. LEXIS 348 (kan 1912).

Opinion

The opinion of the court was delivered by

Benson, J.:

In this action the plaintiff trust company, the indorsee of two promissory notes, sought recovery from the defendant, McCoy, the maker of the notes. The answer of McCoy alleged that the notes had been transferred by the payee, J. S. Griggs, to the Wm. R. White Co., ¿s collateral security for notes given by the payee to that company for an interest in a patent right, which transaction Griggs had discovered to be fraudulent. The answer further alleged that j udgment had been recovered in a circuit court of Illinois by the White company against Griggs on the notes given for the patent right, which judgment was still in force, but that the trust company still held the collateral notes upon which this action was brought. On this answer, McCoy asked that Griggs and the White company be made parties to the action. A general denial was filed in reply to this answer, and a motion was made by the trust company for judgment on the pleadings, which was overruled, and the motion of McCoy to bring in the new parties was sustained. Thereupon Griggs appeared voluntarily but the White company did not ap[591]*591pear, and no further steps were taken against it. Griggs answered that he had given three promissory-notes for $500 each to the White company, of Bloom-ington, Ill., “without consideration and through fraud,” the company having pretended to sell to him certain territory and right to sell a patent gate in Texas, and that there was no consideration for the notes, and that he had indorsed the McCoy notes in suit to the White company as collateral security only for his own notes. He also pleaded that the White company had obtained a judgment against him on the three notes he-had so given for the patent right for $1500 and interest, and “that upon the rendition of said judgment ... he was entitled to the possession of the (McCoy) notes.” An amendment to this answer stated that the White company represented that they were engaged in the manufacture and sale of the patented gate, which was a new and novel article; that they were making large sales -of territory and of gates; that these representations were false; and that he was induced thereby to give his own notes and to transfer the collateral notes. The prayer was for the possession of the collateral notes sued upon and for judgment against McCoy thereon. A motion to strike out this answer was overruled. A reply was filed thereto and the cause was-tried, the appellant voluntarily assuming the affirmative.

The only issue was upon the answer of the inter-venor, Griggs, to determine whether he or the trust company should recover against McCoy, who made no defense. It appeared from the evidence that the White company was engaged in manufacturing and selling a gate at Bloomington, Ill., under letters patent from the United States. Griggs negotiated with that company at Bloomington for an interest in the patent,- but did not then buy it. A representative of the company joined him on his return to Kansas, and at Newton he signed the three notes [592]*592before referred to, bearing date at Bloomington, Ill., and payable there. He then went with the agent to Garden City, where the agent examined the mortgage security which had been given to secure the McCoy notes, then held by Griggs, which notes were offered as collateral security to his own notes. The agent then left with the papers, and later the White company, having accepted the notes of Griggs' with the McCoy notes as collateral security and accompanying real-estate mortgage securing them, executed a conveyance to Griggs of the patent right for a county in Texas, as agreed upon, and sent it to him by mail. Afterward one of the Griggs notes was indorsed with the McCoy notes and mortgage as collateral security to the trust company, appellant. After the maturity of the other Griggs notes, in a correspondence and effort for settlement between an attorney for the White company and Griggs, it being- ascertained that the trust company held the other note, it was obtained by the attorney in order to effect a collection or settlement of the whole liability of Griggs upon the three notes, under an arrangement between the White company and the trust company that the latter should have a proportion of the amount collected. The proposed settlement failed, and thereupon an action was commenced by the White company upon the three notes in the circuit court of McLean county, Illinois, and judgment was rendered therein for the amount of the notes. This is the judgment pleaded by both McCoy and Griggs.

No evidence was offered of any false representations or fraud in the sale of the patent right. The conveyance of the right was received by Griggs, who testified that he attempted to make sales of gates and territory; that he learned from people he talked' with that the scheme was being denounced by the papers and he was unable to handle it; that he tried to sel-1 it but was not adapted to it; and that he was unable to handle it at all.

Representatives of the White company and of the [593]*593trust company testified to the transfer of the Griggs notes and the McCoy notes and mortgage, as collateral, to the trust company before maturity for a sufficient consideration. It is claimed that their cross-examination shows that the latter had knowledge of the transaction in which the Griggs notes were given, and is not an innocent purchaser.

The court instructed the jury that there was no evidence of fraud in the sale of the patent right, but still submitted to them the question whether there was any consideration for the Griggs notes given therefor, and directed that if it was found that there was no such consideration they should return a verdict for Griggs against McCoy for the amount of the McCoy notes sued upon, but if such consideration was found a verdict should be returned in favor of the trust company, the appellant, for that amount.

The verdict was for the plaintiff, and, pending a motion for a new trial, the amount was paid by McCoy and satisfaction of the judgment which was afterward rendered was filed by Griggs and entered upon the records of the court, as appears from a certified copy of the release filed in this court. Judgment was also rendered against the trust company for costs.

Passing by the question whether the court should have sustained the appellant’s motion for judgment against defendant McCoy on the pleadings, the recovery should have been for the appellant and not for intervenor Griggs. Upon his own answer pleading the Illinois judgment, the validity of the notes which he had given for the patent right had been finally adjudicated. That action was by the actual owner of two of the notes and the rightful holder of the other, and any defense thereto was either tried or might have been tried. He testified that the judgment had not been paid, and it is final. (Sanford v. Oberlin College, 50 Kan. 342, 31 Pac. 1089; McEntire v. Williamson, 63 Kan. 275, 65 Pac. 344; Stroup v. Pepper, 69 Kan. 241, [594]*59476 Pac. 825; Osage City Bank v. Jones, 51 Kan. 379, 32 Pac. 1096; Cromwell v. County of Sac, 94 U. S. 351; Leslie v. Bonte et al., 130 Ill. 498, 22 N. E. 594; Illinois Conference v. Plagge, 177 Ill. 431, 53 N. E. 76, 69 Am. St. Rep. 252.) The appellant ought also to have recovered without regard to the Illinois judgment. No defense to the Griggs notes was shown upon the trial.

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Related

Cromwell v. County of Sac
94 U.S. 351 (Supreme Court, 1877)
Leslie v. Bonte
6 L.R.A. 62 (Illinois Supreme Court, 1889)
Illinois Conference of Evangelical Ass'n of N. A. v. Plagge
53 N.E. 76 (Illinois Supreme Court, 1898)
Sanford v. Oberlin College
50 Kan. 342 (Supreme Court of Kansas, 1893)
Osage City Bank v. C. S. Jones & Bro.
51 Kan. 379 (Supreme Court of Kansas, 1893)
McEntire v. Williamson
65 P. 244 (Supreme Court of Kansas, 1901)
Stroup v. Pepper
76 P. 825 (Supreme Court of Kansas, 1904)

Cite This Page — Counsel Stack

Bluebook (online)
121 P. 1090, 86 Kan. 588, 1912 Kan. LEXIS 348, Counsel Stack Legal Research, https://law.counselstack.com/opinion/illinois-title-trust-co-v-mccoy-kan-1912.