87 Kan. 411 | Kan. | 1912
The opinion of the court was delivered by
In 1906 J. T. Royston organized the Marquette Roller Mill Company, having a capital stock of $40,000. Only one share stood in his name, but his wife, for whom he acted as agent, owned a considerable •amount of stock. He was general manager of the business until December, 1907, when he and his wife sold their stock to various persons, William Ferguson being the purchaser of twenty shares. A written agree
The new manager of the company testified that he had. examined into the various claims that were made against the company by reason of the manner in which the business had been conducted under the former management, found that they were meritorious, and
A more difficult question is whether the fact that the corporation paid the claims is prima facie evidence that they were.valid. The contract of Royston in selling the stock was in effect a warranty that there were no outstanding valid claims against the company not shown by the books, and the defendant’s answer in effect asks damages for the breach of that warranty. The grantee of a warranty deed who without being sued buys in an Outstanding title or pays off a claim, is required to prove its validity in order to have recourse against his grantor; and by the weight of authority a judgment against him is not even prima facie evidence against a grantor who had no notice of the action, although there are some decisions to the contrary, and Mr. Freeman says that the question has not been'carefully considered. (1 Freeman on Judgments, 4th ed., § 187; 8 A. & E.- Encycl. of L. 98; 2 Devlin on Real Estate, Deeds, 3d ed., §§ 918, 919, 925, 926; 2 Black on Judgments, §§567, 571.) Here the claims were paid without notice to the warrantor. They were not paid, however, by the person to whom the warranty was made, but by the corporation, over whose action
The defendant asks that judgment in his favor be directed by . this court. We think, however, that the ends of justice will be better served by a new trial. The trial court in effect sustained a demurrer to the defendant’s evidence. The parties should have a further opportunity to introduce evidence.
The judgment is reversed and a hew trial ordered.