Page 863 Page Woodner-McGaugh, Pennington v. (Okl.)... 875 Wynnewood Cotton Oil Co. v. Moore (Okl.) 633 Yarnell, Poor v. (Cal. App.)... 976 Yolo Water & Power Co. v. Superior Court in and for Lake County (Cal. App.).... 394 Young, B. O. Schucking & Co. v. (Or.). 803 Young v. Martin (Kan.)... 743 W. P. Fuller & Co., J. M. Brown., Inc., v. (Cal. App.). 960 Wupperman v. Lyon (Ariz.) 422 York v. Dalton (Or.). Wyatt, Bette v. (Cal.). 949 Wynn, St. Louis & S. F. R. Co. v. (Okl.)..1156 Zima, Rezac v. (Kan.)..... 542 60 500 REHEARINGS DENIED [Cases in which rehearings have been denied, without the rendition of a written opinion, since the publication of the original opinions in previous volumes of this Reporter.] ARIZONA. Copper Queen Consol. Min. Co. v. Stratton, 149 KANSAS. Alexander v. Clarkson, 150 P. 576. State v. Mollier, 152 P. 771. NEVADA. State v. Scott, 142 P. 1053. Torp v. Clemons, 142 P. 1115. OKLAHOMA. Foral v. Bogle (Sup.) 146 P. 706. OREGON. Barnum v. Lockhart, 146 P. 975. Bridal Veil Lumbering Co. v. Pacific Coast Casualty Co., 145 P. 671. Byron v. First Nat. Bank of Roseburg, 146 P. 516. Clarke-Woodward Drug Co. v. Hot Lake Sanitorium Co., 146 P. 135. Coe v. Coe, 145 P. 674. Cooley v. Snake River Dist. Imp. Co., 152 P. Field v. Hood River Orchard Land Co., 146 First Nat. Bank of Ontario v. Seaweard, 152 P. Haines Commercial Co. v. Grabill, 152 P. 877. Rugenstein v. Ottenheimer, 152 P. 215. す THE PACIFIC REPORTER VOLUME 153 (88 Wash. 348) SHEDDEN v. SYLVESTER et al. (No. 12513.) corporation misplaced their trust, not having been coerced, could not be recovered back. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 1763–1771; Dec. Dig. ~ 434.] Department 1. Appeal from Superior Court, Yakima County; Thos. E Grady, Judge. (Supreme Court of Washington. Dec. 1, 1915.) 1. VENUE 80-LOCAL ACTIONS-STIPULATIONS FOR CHANGE OF VENUE. While a local action must be begun in the proper county, and if it is not so begun it will be transferred to the proper county, and while a judgment taken in the wrong county by default or over the protest of a defendant is taken without jurisdiction, and will be set aside upon direct attack, where the venue of an action to foreclose a mortgage of real property was transferred to a county other than in which the real property was situated, by a stipulation of the parties, the court to which it was trans-lant. Edward V. Lockhart, of North Yakima, Van Nuys & Hunter, of Seattle, for appelferred had jurisdiction to enter a decree. [Ed. Note.-For other cases, see Venue, Cent. for respondent. Dig. $ 132-135; Dec. Dig. 80.] 2. CORPORATIONS 476- MORTGAGES-CON SIDERATION-ASSIGNMENT. F. owned certain arid lands on which were two pumping plants. He gave an option to purchase to S., who contracted to sell the land and caused the pumping plants to be conveyed to an irrigation company organized by him, and also contracted with the purchasers of the land for irrigating, etc. He caused notes for $4,000 and $6,000 to be executed to F., and the irrigation company executed a mortgage for $10,000 to secure both notes. The irrigation company defaulted and F. and S. gave the purchasers in the East, because of the bad affairs of the scheme, credits on the contracts of purchase, and had the pumping plants conveyed to the C. company, a corporation formed by such purchasers, which paid debts of the scheme aggregating some $15.000, including claims due F. F. canceled the $4,000 note, gave a credit of $1,000 on the other note, and represented that plaintiff owned the balance of that note, but could be settled with for a small sum. Immediately afterwards he assigned that note and the mortgage to plaintiff, who demanded payment in full, and the C. company agreed to pay the amount in installments, and did pay part of the note. Plaintiff claimed a commission for introducing F. to S., and sued to fore close the mortgage. Held, that where the evidence, though contradictory, indicated that plaintiff had no real interest in the note, the transfer to plaintiff was without consideration, and he could not recover; it appearing that he knew all the facts and was not a purchaser in good faith. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 1856-1864; Dec. Dig. 476.] 3. BILLS AND NOTES 434-PAYMENT-RECOVERY BACK-VOLUNTARY PAYMENTS. The payments on the agreement by the C. company to pay plaintiff, though made because the buyers of the land and the officers of their Action by John S. Shedden against T. Harry Sylvester and others. From a judgment for plaintiff, the defendant Co-Operative Orchards Company appeals. Reversed and remanded, with instructions. CHADWICK, J. [1] The first question presented in this case is one of jurisdiction. The action was brought to foreclose a mortgage upon real property in Benton county. When the issues had been made up the parties stipulated that the case be transferred to the county of Yakima, the ground for the change being to serve the convenience of witnesses. After the case had been transferred to Yakima county and a decree entered, the attorneys who had appeared for the defendant withdrew from the case, and present counsel were substituted. An objection was then made to the jurisdiction of the court. This was overruled. It is contended that under the decisions of this court (McMaster v. Advance Thresher Co., 10 Wash. 147, 38 Pac, 760: J. E. Hammel v. Fidelity Aid Association, 42 Wash. 448, 85 Pac. 35; A. J. West v. John Martin, 47 Wash. 417, 92 Pac. 334; Whitman County v. U. S. Fidelity & Guaranty Co., 49 Wash. 150, 94 Pac. 906; A. B. Richman v. Wenaha Co., 74 Wash. 371, 133 Pac. 467) the court had no jurisdiction to enter the decree. We think that counsel are inclined to give to the decisions relied on a meaning they will not bear. It is true that a local action must be begun in the proper county, and if it is not so begun, a court will, as directed by statute, transfer it to the proper county. This court has also held that, if a judgment be taken in the wrong county, either by default or over the protest of a defendant, it is taken without For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 153 P.-1 jurisdiction, and will be set aside upon di- purchased lands from Sylvester. The notes rect attack. The statute fixing the venue of an action must be construed with reference to all other statutes affecting procedure. In State ex rel. Howell v. Superior Court, 82 Wash. 356, 144 Pac. 291, this court conceded, for the sake of argument, that the action there sought to be controlled by mandamus was local to King county, but held that the court was not without power to change the venue to Chelan county, where the convenience of witnesses and the ends of justice demanded such change, saying: of $6,000 and $4,000 had been made payable to, and it is said that they were to be held by, Forsyth, the owner of the land, as trustee of the parties mentioned. At the meeting in the East, Forsyth voluntarily canceled and surrendered the note for $4,000, and caused a credit to be made of $1,000 upon the $6,000 note. Whereupon the owners, acting through their corporation, agreed to pay, and did pay, other debts aggregating some $15,000 and agreed to settle with the respondent. We think it is clear that For"It is plain from these provisions [Rem. & syth, the original owner of the property, who Bal. Code, §§ 209, 215] of the statute that, held the note as a trustee for the corporawhere these causes exist [being causes of a tion, gave assurance to the eastern people change of venue], in either a local or transitory that the Shedden note could be settled for an action, the change may be made; and the statute expressly provides that the cause shall inconsequential sum. Almost immediately be tried in the county to which the change is after the meeting in the East Forsyth assignmade. That court necessarily must have juris-ed to respondent the $6,000 note and the $10, Idiction of the case." 000 mortgage. Respondent soon thereafter demanded payment of the note in full. After considerable correspondence the Co-operative Orchards Company agreed that it would pay respondent $1,000 down and $100 each month thereafter. Under this agreement the company paid $2,138.96, together with interest up to October 1, 1912. This action is brought as an ordinary suit in foreclosure. The defenses which are material at this time are that there was no consideration for the $6,000 note and the $10,000 mortgage; that the mortgages were given to secure a purchase price and all sums due and owing on account of the cost of the pumping plant, either in law or in equity, had been discharged by the issuance of stock in the River Front Power & Irrigation Company to Forsyth; that fraud was practiced upon the individuals who formed themselves into appellant corporation by concealing the true facts; that such fraud was not discovered until after the payments had been made under the subsequent agreement to pay, and when discovered that it refused to pay further; and finally, that respondent is not a purchaser for value. [2] One Forsyth was the owner of certain arid lands in Benton county, upon which were two pumping plants. Respondent introduced one Sylvester to him as a prospective purchaser of his property. After some negotiation Sylvester took an option upon the | land at $180 an acre. This included the pumping plants. It was Sylvester's purpose to sell the land to parties in the East. This he did by making contracts of sale, taking in payment $75 in cash and promises to pay the balance in installments. Sylvester formed a corporation called River Front Power & Irrigation Company, and caused the title to the two pumping plants to be conveyed to the corporation. He also contracted with the several purchasers of the subdivided tracts to pay $75 an acre per year for four years for planting, irrigating, and caring for the tracts until the trees to be planted thereon came to maturity. He caused to be executed a note for $6,000 (November 30, 1909) upon one plant, and $4,000 (February 11, 1910) upon the other, each to Forsyth. It is now insisted that Sylvester was the owner of onehalf of each note and respondent the owner of one-half of each note, respondent's interest being therefore $5,000, which it is contended was to be paid him as a commission for introducing Sylvester to the owner of the land. The $6,000 was secured by a mortgage of even date. The River Front Power & Irrigation Company had no funds and defaulted in their obligation to the buyers of the tracts. On December 14, 1910, the River Front Power & Irrigation Company executed a mortgage for $10,000 to Forsyth to secure both notes. After notice of the situation | Forsyth and others. In other words, was had been brought home to the purchasers, they met Forsyth and Sylvester in New Jersey in January, 1911. After taking account of the bad affairs of the scheme, a voluntary credit was made upon the contracts of purchase of so much an acre. The titles to the two pumping plants were conveyed to another corporation, the Co-operative Orchards Com We have found this case to be one of exceeding difficulty, for it cannot be denied that respondent has a paper case which has been sustained by the findings and decree of the trial judge. We think the only question available to appellant is whether the $6,000 note was a valid, subsisting indebtedness at the time appellant took title to the pumping plants and agreed to pay certain existing debts against the Power & Irrigation Company held by there at the time, or had there been, a consideration for the mortgage? Taking the case by its four corners, we are satisfied that the withholding of title to the power tracts and the contracts, permitting the water users to eventually purchase them at the sum of $6,000 and $4,000, respectively, and the giving of the notes, was clearly a manipulation on respondent had either no interest, or a knowl- and work. But that respondent had any inedge of all that was done. Forsyth, to whom the mortgage and notes were made, is not at all clear in his testimony. Any one of several findings might be made from it. It might be found that he was a trustee for Shedden and Sylvester, or it might be found that the mortgage and notes had been executed to him for the purchase price; that the minutes of the corporation show that a meeting was called to issue stock for the purchase price; that the stock was issued in Forsyth's name; or that he took them to protect himself and keep the whole thing in his own hands. It may be that Forsyth had an original purpose to protect himself when he took the two notes and the $10,000 mortgage in his own name, but it is not likely. In fact the conclusion seems to be compelling that he had no other interest than that of a trustee to protect Sylvester in a purpose which was ultimately consummated; that is to sell the pumping plants at his own price under the pretense that there was a valid lien upon them. The fact that Sylvester never treated the mortgage as a lien as between the parties, and the further fact that Forsyth, in a letter of date January 28, 1910, disclaimed all interest in the enterprise, casts a fog of uncertainty and doubt over their testimony, and tends to impugn the whole transaction. terest in the notes at the time they were executed we do not believe. When Forsyth and Sylvester were in the East and consulting with the stricken stockholders who seemed to have had faith in them, it was represented to appellant that respondent owned the $6,000 note after the endorsement of the $1,000; that it was a valid subsisting lien. Forsyth was respondent's trustee holding the note. He had personal claims of great amount against the purchasers, or rather against the scheme. He was interested in collecting his own, and he did. As an inducement to a statement that made him whole on his unsecured claims, he admits that he represented to them, when asked if he did not say that respondent would take a nominal sum, and that he would probably be liberal in his settlement, that: "I didn't say that exactly, or that in subcould get a very satisfactory settlement out stance. I did tell them that I believed they of Mr. Shedden by offering him a gross sum to be paid speedily, because Shedden needed the money. I advanced the further idea that Shedthe service he had rendered, and that would den had received very large compensation for probably put him in a humor to be more liberal on the amount. I didn't specify any exact sum that I thought he would take." undertaking to collect it, as he was in moral right bound to do, he transferred the note at the first opportunity to respondent, who set about to coerce the payment of it in full. If, as we have found, respondent had no real interest in the note, and it was given either to secure Forsyth for the purchase price which had been paid in stock, or to fix an apparent value under which the buyers of the tracts could not go if they exercised their option to organize a corporation among themselves to purchase the water plants, it follows that a transfer of the note to respondent was without consideration, and he cannot recover. He knew all the facts, and is not a purchaser in good faith. He held both notes at the time, but discovered only one of them, $4,000, which was canceled because, as we believe, it would not Taking the case of Sylvester: He was the stand the light of equity, but concealed the purchaser of the whole enterprise, including $6,000 note under the pretense that respondthe pumping plants. His corporation, with ent had a real interest in it; that it was the exception of five shares sold to a man given to pay his commission, although we named Benny and one share given to a man have no doubt that he had as much authornamed Kramer, so as to have three incor-ity to cancel the one as the other of the porators, was Sylvester. He was its dominat- notes, and that it was his duty to do so. ing spirit and controlled it. With the legal At any rate, instead of holding the note and title in his hands, or so completely under his control, it were folly to make a mortgage to himself or to his own trustee, unless it was to serve some ulterior purpose. If it were done to protect the payments to Sylvester for the purchase price, and respondent for his commission, the testimony does not ring true, for that would leave Forsyth security for only half of the purchase price according to the testimony of all the witnesses. We think the truth is clear that the $4,000 note and the $6,000 note represented the pretended purchase price for the two tracts from Forsyth, and that the $10,000 mortgage was put on with intent to save something to Sylvester out of the wreck, after it had become apparent that Sylvester's side corporation was insolvent and could not carry out its agreements, and when it was certain that its negligence had caused the purchasers of the subdivided tracts great loss. It may be that Sylvester or Forsyth-they are all mixed up in their account of the transaction-had promised to pay respond. ent a commission for introducing him to Forsyth. In one place Forsyth's testimony will bear the construction that something was due from him as a commission for other services [3] Appellant contends that it should recover the sums voluntarily paid under a misunderstanding of the facts. To sustain such a recovery we would have to find that the payments were coerced. The testimony is hardly sufficient to sustain that finding. The buyers and the officers of the appellant seem to have misplaced their trust, but they were not coerced in a legal sense. As much as they can claim is that the mortgage be discharged as a lien for the balance due at the time it was repudiated. Respondent, |