John T. McWhirt v. John McKee, Receiver, etc.

Kansas Supreme Court1870-07

6 Kan. 412

Summary · law.co

Holding. The court affirmed the judgment, holding that oral testimony was properly admitted to establish the parol contract governing McWhirt's obligation to collect and remit the note's proceeds, that McWhirt's use of the note to pay his own debt rendered him liable to Carney & Stevens for the full amount, and that prior voluntary dismissals without prejudice did not bar the present action under the statute of limitations.

McWhirt received a note from Bray for collection purposes only, with an oral agreement that he would collect it and remit the proceeds. He never paid anything for the note and instead used it to satisfy his own debt to Bray. When Carney & Stevens (apparently creditors or assignees with claims against McWhirt) sought to recover the note's value from him, McWhirt defended on multiple grounds. The trial court ruled against McWhirt, and he appealed.

On appeal, McWhirt challenged the admissibility of oral testimony describing the collection-only nature of the assignment, arguing it contradicted the written assignment document. The court rejected this objection, finding that the oral agreement was a separate contract independent of the assignment itself, so oral evidence was properly admitted. McWhirt also argued that if the assignment was limited to collection purposes, Carney & Stevens should pursue Bray directly rather than him. The court dismissed this argument, holding that McWhirt's own treatment of the note as his property and his use of it to pay his debt made him directly liable to Carney & Stevens regardless of Bray's potential liability.

McWhirt further defended on statute of limitations grounds, arguing that voluntary dismissals of prior actions without prejudice should not restart the limitations period. The court disagreed, interpreting the relevant statute to preserve claims when a plaintiff has failed to succeed on the merits, which includes cases where a plaintiff voluntarily dismisses without prejudice.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether oral testimony may be admitted to prove a parol contract separate from a written assignment
Whether a party who receives property for collection but treats it as his own and applies it to his own debt incurs personal liability
Whether prior voluntary dismissals without prejudice constitute a 'failure' that saves a claim from the statute of limitations

Procedural posture

McWhirt appealed a judgment rendered against him in a suit brought by Carney & Stevens to recover the value of a note he had received for collection but applied to his own debt.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

The opinion of the court was delivered by

Eingman, O. J.:

The testimony showed that McWhirt received Bray’s note for collection; that he paid nothing for it, but did promise to account for and pay over the proceeds when collected; that the amount thereof was allowed him on the trial of his suit with Bray, whereby he obtained the full benefit of the value of the note, and that he had paid over nothing, and that Carney & Stevens knew nothing of McWhirt’s suit against Bray during its pendency, nor till long after it was decided; and that the note was regularly assigned to McWhirt for collection only.

I. It is insisted by plaintiff in error that it is inconsistent with the assignment of the note to permit oral evidence to be given that the assignment was only made for the purpose of collection; and in the argument and brief much learning and diligence is shown in the collection of authorities establishing the law that oral testimony will not be received to contradict a written contract. We do not propose a review of these authorities, for in the view we take of this case they are not instructive. The oral testimony does not contradict the assignment; does not vary it; does not even explain it. The contract was outside of the assignment, and was parol in its character, and therefore could be proven by oral testimony. The contract was, that MeWhirt was to take the note, collect it, and when collected, pay it over; and all this was in parol. The “ assignment” formed no part of the contract, and was only made to assist MeWhirt in the performance of the obligation he took upon himself by reason of the contract.

II. Another question raised by the plaintiff in error is, that if the note was assigned only for the purpose of collection, then Carney & Stevens have a risrht to a make the amount of the note off of Bray. When such a question arises we shall have no difficulty in deciding it; but in this case it is not presented. MeWhirt chose to consider the note as his own, and so treated it. It was used to pay his own debt. lie therefore is not in a position to raise the question. By his use of the note he made himself liable to Carney & Stevens for the money, and it is no matter to him whether Bray is also liable or not. It was his liability that the court was trying, not Bray’s. The proceeds of the note paid his debt to Bray. Why should not he account to Carney & Stevens for the money, as well under such circumstances, as if he had collected the note from Bray and used it to pay some other debt ? We cannot see wherein his liability is different in the one case from the other.

III. One of the grounds of defense is the statute of limitations. "We think the law on this point was as favorably presented to the jury for the plaintiir in error, as a fair construction of our statutes would authorize. The facts of the case show the commencement and dismissal of two actions for the same cause, before the commencement of the present action. It will be seen that the action accrued in favor of Carney & Stevens against MeWhirt, April 10, 1866, and that such action was barred unless it comes within the saving clauses of section 23 of the civil code. On this point it is claimed that a voluntary dismissal without prejudice, is not such a “ failure in the action’-’ as is contemplated by the section referred to; but we cannot see upon what grounds-we can give such a construction to the section without doing violence- to its language and its obvious intent. Where a plaintiff dismisses his action he “ fails in such action,” and the failure .is “ otherwise than upon the merits.” It is not necessary to inquire what caused the failure in the action — why it was dismissed. It is sufficient that he failed to obtain the object of his suit, and that his failure was not upon the merits. It is such cases as are intended to be saved by the section. Nor do any of the authorities referred to by the plaintiff in error authorize any other construction than we have given to it. The instructions of the court below having been in accordance with the views herein indicated were correct, and the judgment is affirmed.

All the Justices concurring.