Зображення сторінки
PDF
ePub

(— Okla. —, 179 Pac. 42.) defendants the Prudential InsurPrudential Insurance Company of America and the Deming Investment Company, frankly admits that he understood, as a matter of law, the payment of the purchase price partly in property, contrary to the statutes, and the order of the Guardian and ward-sale of court would render land-collusion the sale void. That such a sale would be void against the parties to the transaction can hardly be controverted.

-effect.

To connect the acts of the original interested parties subsequent to the bidding in of the property at public sale with their prior acts in bringing about the sale causes us to conclude that if a specific intent to defraud were not formed in the beginning of the negotiation, it is reasonably clear that it was intended to secure title to the lands of these minors by undue influence and for less than its value, resulting detrimentally to the minors. We therefore hold that the finding of the court on this issue is contrary to both the preponderance and weight of the evidence.

The only other question necessary to be determined is, Were the facts and circumstances such as to give notice or impute knowledge to the defendants the Prudential Insurance Company of America, the Deming Investment Company, and Jennie C. Estus? The weight of authority unquestionably is that under such circumstances, where parties claim to be innocent bona fide purchasers for value,

Evidence

burden of proof -bona fides of purchase.

the burden rests on them to show themselves to be such. Clark v. Sayers, 55 W. Va. 512, 47 S. E. 312; Bowman v. Griffith, 35 Neb. 361, 53 N. W. 140; Berry v. Whitney, 40 Mich. 65.

[blocks in formation]

effect admitted that this state of facts existed, but Mr. McNeal, the attorney, attempts to excuse any further investigation by showing he propounded a question to Mr. Cash, the guardian of the minors, eliciting an answer to the effect that the Oklahoma City property which was being conveyed to the guardian was a private deal between him and Mr. McDonald. Cash being an interested party and one of the main conspirators to defraud his wards, and the party apparently reaping the greater benefit from the transaction than anyone else, it seems the answer to this question would naturally invite a further inquiry rather than to have the effect to satisfy and remove any suspicion or doubt. The uncontradicted testimony shows that the conveyance of this Oklahoma City property, under an agreement of all parties, was placed with Mr. McNeal, with the other conveyances, and was not to be delivered until all the conditions had been complied with and at the time the other conveyances were to be delivered. This, in itself, would suggest that it was so intimately linked with the conveyance of the minors' land and formed a part of the same transac- Noticetion, to be delivered knowledge of only only when the transaction was fully completed, would not only suggest, but would require, a further investigation to ascertain the true facts. Overall v. Taylor, 99 Ala. 12, 11 So. 738; Pom. Eq. Jur. § 601. Under the law in this jurisdiction as construed by

this court such in

attorney.

-intention to

formation to an put upon interested party is inquiry. equivalent to knowledge on all facts which could be ascertained from a reasonable investigation. Cooper

v. Flesner, 24 Okla. 57, 23 L.R.A. (N.S.) 1180, 103 Pac. 1016, 20 Ann. Cas. 29; Nute v. Nute, 41 N. H. 60; Schnavely v. Bishop, 8 Kan. App. 301, 55 Pac. 667; Goree v. Goree, 22 Tex. Civ. App. 470, 54 S. W. 1036; Fischer v. Lee, 98 Va. 159, 35 S. E.

441; Manasses v. Dent, 89 Ala. 565, 8 So. 108.

It is contended, however, that Mr. McNeal was not the attorney for the defendant Jennie C. Estus, and she must be held to be an innocent purchaser. To this contention we are unable to give our consent. We are of the opinion that the more reasonable rule would be that where a purchaser, under such circumstances as here, elects to rely upon the investigation and the opinion of the attorney for the loan company, who examined the title for the purpose of making a to the purloan to the chaser, for all in

-examination of title.

tents and purposes he should be held to be the attorney for such purchaser, and charged with knowledge of all matters, facts, and circumstances entering into or connected with the negotiation tending to affect the title to such property. There was nothing inconsistent in Mr. McNeal, as attorney for the loan companies, to also represent the purchaser and the borrower; and, if she was willing to intrust to him the duty of passing upon the title for her, based upon facts which he acquired in passing upon the title for the loan company, he would be her attorney no less than if he was employed separately and subsequently to the passing on the title for the loan companies. Gardner v. Early, 72 Iowa, 518, 34 N. W. 311; Griffin v. Franklin, 224 Mo. 667, 123 S. W. 1092; Baldwin v. Root, Tex. Civ. App. -, 38 S. W. 630.

-

[blocks in formation]

contrary to.

the preponderance of the testimony, but to the weight Evidencethereof, and that in judgment rendering a general judgment for the defendants, prejudicial error was committed. The plaintiffs admit that they are not entitled to retain the $15,000 secured by the loan on the land in question, and at the same time secure a decree of court canceling the instruments sought to be canceled by this proceeding.

holding the conveyances void on acOwing to the conclusion reached, count of the fraud practised, it is unnecessary to determine whether this is a direct or collateral attack upon the judgment appealed from. Sockey v. Winstock, 43 Okla. 758, 144 Pac. 372; Wimberly v. Winstock, 46 Okla. 645, 149 Pac. 238.

It is not charged, and neither do the facts show, that the defendant the Prudential Insurance Company actively participated in any of the fraud affecting the title to the land in question, but we only hold that it had such knowledge or notice sufficient to put it upon inquiry, that, if reasonable diligence had been used, it could and would have acquired full knowledge of the fraud of the other defendants sufficient to prevent it from being an innocent encumbrancer. The judgment of the trial court will be reversed, with directions to enter a decree canceling each and all of the conveyances sought to be canceled by this proceeding, and restoring the title to the lands involved unencumbered to the minor plaintiffs, conditioned upon the payment by the guardian of the sum of $15,000 to the court clerk, with further directions to the court to ascertain the actual and necessary cost and expense to the minors in the prosecution of this suit, including a reasonable at torney fee, which shall be deducted from the amount of $15,000 so deposited, and the balance of said amount shall be paid to the defendant the Prudential Insurance Company of America.

(- Okla. -, 179 Pac. 42.)

It is hereby recommended that such decree be entered.

Per Curiam:
Adopted in whole.

A petition for rehearing having been granted, the following Per Curiam response was handed down on March 18, 1919:

After a careful examination of the record upon rehearing, the court is convinced that the opinion prepared by Mr. Commissioner Linn is in the main correct, and that, with the slight modification hereinafter pointed out, it should be approved. We are of the opinion that Mrs. Estus was not only bound by the notice and knowledge acquired by McNeal, but, like McNeal, she came

Vendor and purchaserbona fide purchaser-notice.

into possession of facts sufficient to put a prudent per

son upon inquiry. She knew the transaction involved the transfer of the allotted lands of Indian minors, and that a sale by the guardian must be for cash. She also knew that the delivery of the guardian's deed to McDonald was in some way dependent upon the consummation of the deal between herself and McDonald, and she knew, or could have known by slight inquiry, that the land she conveyed to McDonald in exchange for the minors' lands was to be immediately transferred to Cash, the guardian, either for his own benefit or for the benefit of his wards, and that the money she borrowed from the Prudential Company was to be used in payment of a portion of the purchase price bid for the minors' lands, at the guardian's sale. Indeed the whole transaction between McDonald and his associates, and Cash, which was largely enacted in the presence and hearing of McNeal and Mrs. Estus, bore so many of the familiar earmarks of a conspiracy to defraud these Indian minors of their estates, that it seems incredible to us that neither of them made

any greater effort to ascertain the true condition of affairs than is disclosed by this record.

We note the motion of the prevailing parties to modify the opinion of the learned commissioner by striking therefrom the condition that plaintiff in error shall pay the clerk of the court the sum of $15,000, and substituting therefor a condition that plaintiff in error shall pay into court such portion of said sum as may remain undisposed of. As this portion of the decree was entered in pursuance of admissions made by counsel for the movant, both in open court and in their briefs, that such a condition would be equitable in case they prevailed, and as we believe it is an equitable condition of recovery, we decline to make the modification prayed for.

Objection is also made in the petition for rehearing to that part of Commissioner Linn's opinion which directs the trial court to award the plaintiff in error a reasonable attorney's fee, to be deducted from the "$15,000 so deposited." As the question whether the plaintiffs in error would be entitled to recover attorney fees, in case they prevailed, has not been passed upon by the trial court, we will not pass upon it now, but will leave it open for original consideration below, if either party desires to raise it. To this extent the opinion is modified.

For the reasons stated the opinion of Mr. Commissioner Linn, as hereby supplemented and modified, is adopted and approved as the opinion of the court.

All the Justices concur.

NOTE.

The general question of the imputation of the knowledge of an attorney to his client which is considered in the reported case (PYEATT v. ESTUS, ante, 1570) is discussed in the note post, 1592.

A. E. HESS (C. F. HARDER and S. C. HOLMES, Appts.)

[blocks in formation]

1. Knowledge by an attorney for the holder of a certificate of purchase of land sold at a judicial sale, of a contract which he had negotiated between the purchaser and the landowner, relating to redemption, and of the payment of money which came into his hands, by way of redemption according to the contract, will be imputed to an assignee of the certificate, who soon afterward employed the same attorney to represent his interests, when the knowledge was present in the mind of the attorney throughout his second employment.

[See note on this question beginning on page 1592.]

- knowledge of agent -payment of

[blocks in formation]

hearing of a motion filed by the attor ney on behalf of the certificate holder to require the sheriff to execute a deed. The only substantial issues were those involving the professional conduct of the attorney, who was a witness, and who conducted the proceedings as an attorney. Held, the court was authorized to exercise its disciplinary power over the attorney as one of the results of the investigation.

[See 2 R. C. L. 1026.]

On Petition for Rehearing. Courts jurisdiction-power of leg. islature.

6. The case of Re Burnette, 73 Kan. 609, 85 Pac. 575, so far as it points out the distinction between original and appellate jurisdiction and the lack of power on the part of the legislature to confer original jurisdiction on this court, followed.

Appeal trial of facts constitutionality.

7. Section 580 of the Civil Code (Gen. Stat. 1909, § 6175) providing that in all cases except those triable by jury, as a matter of right, this court may, on appeal, receive further testimony and adopt such procedure as may be necessary or expedient for a full and final hearing and determination of the cause, would be unconstitutional, if construed to authorize a prolongation or renewal of the trial of issues of fact in this court on appeal.

[See 7 R. C. L. 1073.]

[blocks in formation]

(92 Kan. 787, 142 Pac. 253.) authorizing

appellate court to try facts.

8. To save the section from unconstitutionality, it must be interpreted merely as providing this court with adequate means for exercising its true appellate jurisdiction. The nature of the court's function is not changed, and the scope of its original jurisdiction is not enlarged, but the exercise of its appellate jurisdiction is facilitated by giving it command of aids to review, supplemental to the strict record of the cause and sufficient to meet the exigencies of any case.

Appeal extrinsic evidence.

9. Without the aid of a statute this court may, in the exercise of its appellate jurisdiction, avail itself of authentic evidence outside the record to prevent a miscarriage of justice, to avoid a useless circuity of proceeding, to protect its jurisdiction, to protect itself against imposition where the controversy has been settled, or, for other reason, no longer, in fact, exists, and perhaps under other peculiar and extraordinary circumstances. -power to hear.

10. In this case a trial of the issues

of fact occurred in the district court in August, 1912. A rehearing was granted, and another trial occurred in February, 1913, when the parties extended their evidence to their own satisfaction. Evidence which was available then, and which merely supplements the proof offered in the district court, is now tendered to this court. Held, the court is not authorized by § 580 of the Civil Code to receive and consider the evidence, and no occasion exists for departing from the rule that, after the district court, which is created and equipped for that purpose, has made a final determination of the issues of fact in a cause, original investigation of such issues is closed.

Attorney discipline - procedure.

11. The form of procedure which results in an exercise of the disciplinary power of a court over one of its attorneys is not material to the validity of the order, so long as the essentials of fair notice and opportunity to be heard are observed, and in this case it is held that every requirement of due process of law was satisfied.

[See 2 R. C. L. 1028.]

APPEALS by the certificate holder and his attorney from rulings of the District Court for Woodson County, rendered in an action brought to recover upon a promissory note and for the foreclosure of a mortgage given to secure its payment, the former appealing from a judgment denying his motion to require the sheriff to execute a deed of the premises, and the attorney appealing from an order requiring him to pay certain money into court. Affirmed.

The facts are stated in the opinion of the court.
Messrs. C. W. Shinn and S. C.
Holmes, for appellants:

The court erred in overruling appellant's motion for an order for a deed, for the reason that the uncontradicted evidence showed that the period of redemption had expired, and that the land had not been redeemed from judicial sale.

Stewart v. Park College, 68 Kan. 465, 75 Pac. 491; Clark v. Nichols, 79 Kan. 612, 100 Pac. 626.

Jurisdiction of the person of a defendant is essential to the validity of a judgment against him.

Hargis v. Morse, 7 Kan. 415.

There cannot be a valid personal judgment without notice. To sustain such a judgment there must be due service of legal process.

Kansas P. R. Co. v. Streeter, 8 Kan.

133; Moore v. Wade, 8 Kan. 380; Foreman v. Carter, 9 Kan. 674; Henson v. Wolcott, 19 Kan. 207; McNeill v. Edie, 24 Kan. 110; Reynolds v. Fleming, 30 Kan. 106, 46 Am. Rep. 86, 1 Pac. 61; Crapster v. Taylor, 74 Kan. 774, 87 Pac. 1138.

A judgment of a court, even upon a subject of litigation within its jurisdiction, but not brought before it by any statement or claim of the parties, is null and void.

Gille v. Emmons, 58 Kan. 118, 62 Am. St. Rep. 609, 48 Pac. 569; Whitmore v. Stewart, 61 Kan. 254, 59 Pac. 261; Shurtleff v. Chase County, 63 Kan. 645, 66 Pac. 654; Shaffer v. Austin, 68 Kan. 234, 74 Pac. 1118; Bowman v. Hazen, 69 Kan. 682, 77 Pac. 589; Wood v. Nicholson, 43 Kan. 461, 23 Pac. 587.

« НазадПродовжити »