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short-time rates.” According to the express terms of the foregoing stipulation the plaintiff had no right to cancel the policies until he paid the premium notes; but still if the amount which he had already paid was in excess of the “short rates, and all expenses incurred in taking the risk,” it would be immaterial whether he paid the premium notes before demanding the cancellation of his policies or not; for he would not be compelled to do the foolish thing of paying the amount of the premium notes to the company, when it would be the duty of the company to immediately return the same to him. But, under any circumstances, before the plaintiff could cancel his policies it would be necessary that he should pay to the insurance company an amount of money equal to the “short rates” stipulated for, and all the reasonable expenses incurred by the company in taking the risk. The question then arises, did he do this? In the court below it was held that he did, and that he paid $43.41 more than that amount; and judgment was rendered in his favor and against the company for $43.41. The court below instructed the jury in substance that the “short rates” included all the expenses incurred in taking the risk, and that the company was not entitled to retain more than simply the amount of the “short rates.” The question then arises, was this instruction correct? Does the amount of the “short rates” include the commission paid to the general agent, the commission paid to the local agent, and the taxes paid to the state? If it does, then the instruction of the court below is correct; but if it does not, then such instruction is erroneous. There was evidence introduced on the trial tending to show both that these items of expense are not included in the amount of short rates and that they are; but the stipulation itself would seem to indicate they are not; for the words “short rates” can hardly be construed to mean the same thing as the words “short rates, and all expenses incurred in taking the risk.” There is some reason, however, for holding as the court below did; for, construing the foregoing stipulation as the defendant does, and allowing the defendant all the items which it claims it is entitled to, would seem to render the contract between the parties, in case of cancellation, very unjust and manifestly unconscionable. One hundred and eighty-nine dollars and fifty-three cents is certainly an enormous amount of money to pay for the insurance, a little over three months, of a farm-house, the furniture therein, stock, etc., valued in the aggregate at $8,115. Prudent men might hesitate to insure in a company whose premiums, at short-time rates, must necessarily be so enormous, or which incurs such great expenses in taking risks. While the evidence on the trial tended to show that this company pays its local agents 30 per cent. of the premium paid by the assured, and receives nothing back in case of a cancellation of the policy, other companies pay their local agents only 15 per cent. of the premium, and, in case of a cancellation of the policy, receive back a pro rata share of the agent's commission corresponding with the unearned portion of the premium, and with that portion which the company pays back to the policy-holder. But while this contract between the assured and the company seems to be unconscionable, if construed as the company desires to have it construed, yet if such is
the proper construction thereof it must be so enforced. Contracts are made to be enforced, and if men persist in making foolish con
tracts they must be bound by them. Whether such contracts should
be prohibited or not is a question for the legislature, and not for the
courts. But even with the company's construction of the contract it
does not follow that the company is entitled to retain all that it claims.
As before stated, if the amount already paid by the plaintiff is suf
ficient to cover the “short rates, and all expenses incurred in taking
the risk,” the plaintiff will not be required, before cancelling his pol
icy, or having it canceled, to pay the premium notes or any interest thereon; and if on the trial it be found as a fact that 30 per cent. of the premium is an unreasonably large commission to be paid to the company's local agent, the company will not be allowed to retain that amount; and the same with respect to the other items of alleged ex
pense. It cannot be supposed that the plaintiff, when he agreed to the stipulation that the company might, on cancellation of the policy at
his instance, retain “short rates, and all expenses incurred in taking the risk,” understood that the company should pay or incur more than
reasonable expenses in taking the risk, and this is all that he is liable
for; therefore, the company, in addition to “short rates,” will be al
lowed to retain only an amount equal to the reasonable expenses which it might have incurred in taking the risk; and not even that
amount, unless it has actually paid or incurred the same, and unless
the same are not included in the “short-rates” item stipulated for;
in other words, the company is not entitled to retain as expenses more than its actual and reasonable expenses in taking the risk, and these
only once, whether they are included in the “short-rates” item or not. If they are included in the “short-rates” item, and there al
lowed, then they cannot again be allowed. What the reasonable and actual expenses are, and whether they, or portions thereof, are in
cluded in the item designated as “short rates,” are proper questions of fact to be submitted to the jury under proper instructions. The court below, however, decided them as questions of law, and for this error its judgment must be reversed, and cause remanded for a new trial.
(All the justices concurring.)
(34 Kan. 223)
Filed October 9, 1885. PROMISSORY NOTE–WRITTEN Assign MENT—DEFENSE OF MAKER. A writing upon the back of a promissory note, transferred before maturity, in these words: “State of Arkansas, County of Washington—ss.: I, James C. Rodgers, do hereby assign the within note to Charles B. Hatch, of Osage county, Kansas. Said assignment is made without recourse on me, either in law or equity. “J. C. RODGERS. “Signed in the presence of “H. F. RAYMOND, Clerk Co. Court, Washington County, Arkansas.”
—Is not an indorsement in a commercial sense, and such writing must be treated as an assignment of the note only, and will not cut off the defenses of the maker.
Error from Osage county.
Action commenced December 16, 1881, by Philip Barrett and Lucretia Barrett against James Hogden, J. C. Rodgers and James Rodgers, Charles B. Hatch, and W. E. McCrary, to have a mortgage on certain real estate in Osage county declared void and canceled, on the ground and for the reason that the same had been procured by duress, and gross abuse of the criminal process of the state. James Hogden, one of the defendants, filed his answer disclaiming any interest in the mortgage, or the pretended debt secured thereby, and the action as to him was dismissed. The other defendants filed their answer, containing—First, a general denial; and, second, by way of defense and cross-petition, alleging that Charles B. Hatch was the owner and holder of the mortgage, and the note secured thereby, by assignment in writing thereon, in good faith, for value, and without any notice whatever of any defense on the part of the makers thereof; that default had been made in the payment of the taxes; and asked for judgment on the note and foreclosure of the mortgage. To this answer the plaintiffs filed their separate replies. Trial had at the October term of the court for 1883, before the court, without a jury. The court made and filed in writing the following findings of fact:
(1) That the plaintiffs are now, and for more than 15 years last past continuously have been, husband and wife, and during all the time aforesaid plaintiff Philip Barrett was the owner of 120 acres of farming land situated in Osage county, Kansas, described as follows: All of the N.W. of section 2, township 18, range 16 E. of sixth principal meridian, except the 40 acres out of the southeast corner of said quartersection belonging to George Hill;—and that during all the time aforesaid the same was occupied as a residence and homestead by said plaintiffs and their children, and at the time of the execution of the mortgage hereinafter mentioned said land was so occupied and claimed as a residence and homestead by said plaintiffs and their family, consisting of eight children.
(2) That prior to the third day of January, A. D. 1881, the plaintiff Philip Barrett and the defendant J. C. Rodgers had been interested in a lot of cattle as partners, held and fed by said Philip Barrett at the farm aforesaid; and on said third day of January, 1881, it was claimed by said J. C. Rodgers
that said Philip Barrett owed him the sum of $550, growing out of the sale of his interest in said cattle by said Barrett, while it was claimed by said Barrett that he only owed said Rodgers the sum of three hundred dollars. (3) That on said third day of January, 1881, said J. C. Rodgers employed one Alexander Blake, an attorney at law, as his attorney to obtain a settlement of his said claim, and as such attorney said Blake drew the complaint set out in plaintiffs’ petition, and thereupon the said J. C. Rodgers subscribed and swore to said complaint before, and filed the same with, R. H. WINNE, a justice of the peace, duly qualified and acting as such in Osage county, Kansas, and caused said justice of the peace to issue a warrant thereon in due form of law, directed to the sheriff of Osage county, Kansas, commanding him to arrest said Philip Barrett for the alleged crime charged in said complaint, which warrant was thereupon delivered by said justice of the peace to said Blake as such attorney; that thereupon said J. C. Rodgers went to one J. T. Underwood, one of the deputy-Sheriffs of Osage county, Kansas, and employed his services for that day, and agreed to pay him therefor the sum of ten dollars; that thereupon, and after dark of said day, said J. C. Rodgers, his attorney, Alexander Blake, said deputy-sheriff, and one Henry Hughes, went to the residence and home of plaintiffs aforesaid, and there, in the presence of the wife and children of said plaintiff Philip Barrett, said Alexander Blake, as such attorney, informed said Philip Barrett that they had come for a settlement of the said claim of the said Rodgers; that they had a warrant for his arrest for embezzlement of the amount so claimed by said Rodgers, which said warrant was in the possession of said Blake, and said Blake thereupon further informed said Philip Barrett at that time that unless he executed a note and mortgage for said amount, and also for the additional amount and sum of $20 attorney’s fees for said Blake, $10 for the services of Sheriff Underwood, and $2 for R. H. WINNE, the justice of the peace issuing such warrant, and secured the same by the execution of a mortgage upon his said homestead by himself and wife, that he would be arrested and taken to jail for said alleged embezzlement; that said Philip Barrett and his wife refused to execute said note and mortgage, and thereupon said Blake took said warrant from his pocket and handed the same to said deputy-sheriff and told him to read it to said plaintiffs, which the said deputy-sheriff then did in the presence of the children, when said Blake, as such attorney, told said sheriff not to lay hands just yet on said Philip Barrett until they, the plaintiffs, had a little more time to execute said note and mortgage, and gave the plaintiffs just 10 minutes so to do, at the same time threatened them that unless said note and mortgage were signed within 10 minutes, said Philip Barrett should be arrested on said warrant by said sheriff and taken to jail; that the plaintiffs were alarmed and frightened by the threats of said Blake and the conduct of said parties, and the wife was in tears, and the children of the said plaintiff, alarmed and frightened, were in tears, and believing that said threats would be carried into execution and their father taken from home and to jail, besought their mother, who had refused to incumber her and her children's homestead with such mortgage, to execute the same and save their father from going to jail; that thereupon, induced solely by the threats aforesaid, and believing that they would be carried out, and said plaintiff Philip Barrett would be taken from his home and family and put in prison, and believing that unless said note and mortgage were signed said threats would be carried out and said Philip Barrett arrested as commanded by said warrant, these plaintiffs at last yielded, and executed the note for $582, and the mortgage described in the pleadings in this action; that as soon as said note and mortgage were executed, the said parties, to-wit, Rodgers, Blake, and Underwood, and Hughes, left the home of the plaintiffs; that said warrant was never returned; that no record was ever made in the docket of said justice of the peace of said criminal prosecution; that said Philip Barrett never was arrested upon said criminal charge, and said criminal prosecution was thereupon dropped, and no further proceedings have been ever had therein. (4) That the sole and only object and purpose on the part of Said J. C. Rodgers, and his attorney, Alexander Blake, in filing said complaint and obtaining said warrant, was to make use of the criminal process of the said court to obtain a settlement of said alleged claim of said Rodgers against said Philip Barrett, and by reason thereof to force the said Philip Barrett to execute said note, and he and his wife to execute the said mortgage. (5) That afterwards, and on the twenty-third day of July, A. D. 1881, said defendant J. C. Rodgers, by an assignment in writing placed on the back of said note, and in words and figures as follows, to-wit:
“State of Arkansas, County of Washington—ss. : I, James C. Rodgers, do hereby assign the within note to Charles B. Hatch, of Osage county, Kansas. Said assignment is made without recourse on me, either in law or equity. “J. C. RODGERS. “Signed in the presence of “H. F. RAYMOND, Clerk Co. Court, Washington County, Arkansas.”
–Assigned and transferred said note to the defendant Charles B. Hatch, in consideration of the sum of $300 thereupon paid by said Hatch to said Rodgers, and that at the time of said assignment, said Hatch had no notice or knowledge of the facts herein found attending the execution of the note and mortgage, except such notice as would be implied by law by reason of his taking said note by assignment as aforesaid; and had no notice of any defense, or claim of defense, on the part of the maker of said note and mortgage, except only such notice as would be implied by law from his taking the same by assignment. (6) That the taxes on said land for the year 1881 were not paid by the said plaintiffs, or either of them, when the same became due; and in default of such payment said land was sold at the tax sale of September, 1882, and purchased by said defendant Charles B. Hatch, and afterwards, and on default of plaintiffs in the payment of the tax thereon for the year 1882, also paid the tax on said land for 1882, and had the same indorsed on the tax-Sale certificate received by him at the tax sale, 1882. And that afterwards, on the third day of October, 1883, said plaintiff Philip Barrett redeemed said land from tax sale, and paid all the taxes due on said land and unpaid thereon, including the charges and penalties prescribed by law. (7) That no part of said promissory note has ever been paid.
And thereon the court made the following conclusions of law:
“That the note and mortgage are void; that the same were obtained from said plaintiffs by duress and by an abuse of the criminal process of the courts of this state; that the plaintiffs are entitled to judgment against said defendants, adjudging and decreeing that said note and mortgage are void; that the same be surrendered up to be canceled within ten days from the date of the judgment in this case; that, unless the same are so surrendered up and canceled, said decree shall stand as a full and complete discharge and cancellation thereof; that said defendants, and each of them, and any and all claiming and to claim by, through, or under them beforever debarred, foreclosed, and enjoined from asserting any right, title, or interest in or to said note or mortgage, or in or to said real estate, or any part thereof, under and by virtue of said note and mortgage, or either of them, and that the plaintiffs recover their COStS in this Suit, to be taxed at $ .”
Charles B. Hatch filed his motion for a new trial for the following T€8 SOIlS :