90 Kan. 583 | Kan. | 1913
The opinion of the court was delivered by
This appeal is from a j udgment setting aside a conveyance made under a power of attorney fraudulently obtained from the plaintiif. The defendant refused to make a reconveyance, upon the claim that he was an innocent purchaser not chargeable with notice of the fraud.
J. Herbert Peairs made a proposition to the plaintiif to negotiate sales of lots in an addition to the city of Winfield owned by her, and she verbally agreed that he might do so at a net price to her of $150 per lot for one part and $100 per lot for another part of the addition, sales to be made upon an installment plan, Peairs to receive the first payment down of $10 per lot, and fur
About four months after signing the contracts the plaintiff learned that Peairs had sold some of the lots. She then called upon him and he informed her that the money received — $150—was only the first installment of the consideration, and induced her to take his note for the amount collected. Soon afterwards she learned the fact that the sale had been made for that price and that a power of attorney purporting to be signed by her was on record. Soon.afterwards she informed the defendant of the facts, tendered the amount of the money he had paid to Peairs, presented a quit-claim deed for his signature, and demanded a reconveyance, which was refused.
When the defendant was informed of the facts he said to the plaintiff’s representative that he had been advised that it was necessary that the power should be recorded- and that he suspected there was something
The plaintiff’s evidence tended to prove that the lots were worth $150 apiece. The evidence offered by the defendant tended to prove their value from $25 to $50 each. In the advertisement the price was stated at $150, and that was the price first asked by Peairs in negotiating with the defendant. The evidence of the circumstances under which the signature of the plaintiff to the several papers was obtained was undisputed, and it is a reasonable inference that at the same time her signature was fraudulently obtained to the power. This conclusion is not disputed, but the argument is that the defendant should be protected as an innocent purchaser for value without knowledge of the facts. Actual knowledge is not necessary; knowledge of circumstances sufficient to excite the suspicions of a prudent person and put him upon inquiry is as a general proposition equivalent to knowledge of the facts which a diligent inquiry would have disclosed. (Phillips v. Reitz, 16 Kan. 396; McDonald v. Gaunt, 30 Kan. 693, 2 Pac. 871; Morse v. Ryland, 58 Kan. 250, 48 Pac. 957.)
The principle was applied, in the cases cited, to sales made in fraud of creditors, but it is equally applicable to sales made in fraud of the owner, under a power or otherwise. (Baldridge v. Scott, 48 Tex. 178.) Purchasers in good faith, however, under a power apparently sufficient will be protected; participation in the fraud or notice of it by the purchaser must appear. (Wolfe v. Hines, 93 Ga. 329, 20 S. E. 322; 31 Cyc. 1151.)
If the facts concerning the defendant’s knowledge were such as would prompt a prudent man to inquire concerning Peairs’ authority to sell and make conveyance, then he is chargeable with notice of the fraud, for an inquiry of the owner would have disclosed the absence of such authority. Whether the circumstances were sufficient for this purpose was a question of fact,
Without holding that inadequacy of consideration alone would avoid the conveyance, it is a circumstance that should be considered, along with the suspicions aroused in the defendant’s mind by the agent’s conduct; and the fact that the power was withheld from the record contrary to promise and to the statutory requirement, the fictitious consideration, and acceptance ©f an offer so far below the price named, are among the circumstances which the court must have considered, together with the appearance and conduct of the witnesses, and it can not be held that the finding that the defendant was chargeable with notice of the fraud is not sustained by competent evidence.
The defendant made no expenditure upon the property before the demand for reconveyance and offer to return the consideration. In good conscience he ought to have complied with the demand.
The judgment is affirmed.