113 P.2d 127 | Kan. | 1941
The opinion of the court- was delivered by
This was an action to have it decreed that the principal defendants held in trust for plaintiff the title to certain real property, with a prayer in the alternative that plaintiff be subro-gated to the rights of a certain mortgagee. A trial by the court resulted in judgment for defendants. Plaintiff has appealed.
The petition was filed April 27, and the amended petition September 20, 1938. In this it was alleged that W. F. Ley died intestate in July or August, 1937; that his estate had not been administered upon and that he left as his sole heirs at law his widow, Docia Ley, and two sons, Harold Ley and Horace Ley; that plaintiff is the equitable owner of a certain described tract of farm land of 140 acres in Franklin county; that W. F. Ley, at the time of his death, was the apparent owner of the land, as shown by the public records, and upon his death his only heirs at law became the apparent owners, but in fact the ownership of W. F. Ley in his lifetime and of his heirs now was and is colorful only, and that W. F. Ley did not in his lifetime and his heirs at law do not now have any actual ownership in the land; that about December 17, 1931, through the agency of the Mansfield Land & Loan Company of Ottawa, he contracted to purchase the land for $8,500, the land being then encumbered by a mortgage for $3,500; that he paid $500 at the time the contract was entered into, and on January 6, 1932, paid an additional sum of
The prayer was for a decree against the heirs of W. F. Ley requiring them to convey the property to plaintiff, or that the decree act as such conveyance, and in the alternative that if the court should for any reason fail to find for plaintiff respecting his ownership of the property that plaintiff be subrogated to all the rights theretofore owned and possessed by G. S. McCurdy under the $3,500 note and mortgage hereinbefore mentioned, and for such other and further relief as is just and equitable.
The defendants, Docia Ley, Harold Ley and Horace Ley, answered, admitting the residence of plaintiff and the death of W. F. Ley and their heirship, as alleged, and denying all other allegations of the petition. G. S. McCurdy, made a party defendant, filed no answer or plea to the petition.
The facts disclosed by the evidence, which were stipulated at the trial or are not seriously controverted, may be summarized as follows: In 1920, and for some time prior thereto, plaintiff and his wife lived about six miles nqrth of Parsons, on a farm which he owned and operated. They had no children. His wife had a favorite brother, W. F. Ley, who with his wife and two sons resided at Pittsburg, and who was employed as a motorman on an electric interurban railroad. The families visited back and forth. Plaintiff’s wife died September 4, 1920. After her death plaintiff found it impracticable for him to attempt to operate his farm. He sold the farm and converted his personal property into cash, realizing a total of about $9,000. This was about 1922. He invested this money in building and loan shares, or deposited it in banks at various places — at Parsons, Kan., and in
“According to arrangements made when you were here and paid the balance due on the W. F. Ley mortgage, we have had same released of record and are enclosing you herewith the mortgage together with the coupon bond canceled to which is attached four interest coupons, all of which have been canceled.
“I trust that these will reach you safely and will ask that you please acknowledge receipt.”
On May 11,1935, plaintiff wrote the bank as follows:
“Dear Sir: Papers rec. but you claim they were made according to arrangement? but whoms arrangement. I did not ask you to cancel the Nots, did I? they were n'ot mentioned in my presents.”
Under date of May 13, 1935, Mr. Devilbiss, for the bank, wrote plaintiff as follows:
“We have yours of the 11th regarding the release and cancellation of notes which we sent you on May 8th, and I am sorry that this has not been handled satisfactorily for it was my understanding that as soon as your check which you made in payment was cleared, that the mortgage was to be released and sent to you. This, of course, carries with [it] the cancellation of the notes because the mortgage would not be of any benefit after having been released.
“You will remember that it was suggested in the presence of Mr. McCurdy that you could take a new mortgage in lieu of your having paid this one.
“I trust that this explanation will clear the matter for you.”
In the meantime and in 1934 W. F. Ley and wife had executed a second mortgage on the land to G. S. McCurdy to secure a note for
“Ottawa, Kans.
“Mr. John Katschor, Alma, Kans.
“Received your letter, will say I will be glad to have you come down some time to talk things over. Will talked a great deal to me before he left us. I did not1 have time when you were here last Aug. to talk shall be glad to do so whenever you can come. We have all worked hard this fall, had lots of debts to pay, have had to figure awfully close. Hope you are well.
“Sincerely, D. M. Ley.”
A few weeks thereafter plaintiff took his attorney with him and went to see Mrs. Ley. When she found plaintiff had an attorney with him she declined to talk with them and consulted her attorney, with the result that no agreement was reached, and this action was brought. Plaintiff testified that while he and W. E. Ley were present in Mansfield’s office when the contract was being prepared, Mr. Mansfield asked: “In whose name shall I make thei deed in?” and plaintiff replied; “Mr. Ley’s, he will hold it for me until I need it. He can give me a quitclaim deed.” On the point Mr. Casida testified:
“When we got ready to draw the deed we asked Mr. Ley and Mr. Katschor, they were both there, who the deed should be made to. Mr. Ley said that it would be made to him and Mr. Katschor said that was right. Then I asked them also if they had any papers they would want to make out or any agreement and they both said no, not at the present.”
Plaintiff further testified that Mr. McCurdy was at the bank when he made the last payment of $1,000 on the $3,500 note and mortgage, and “When I give them the check I wanted the rest of my papers. He said, ‘You can’t have them yet. The check may not be good.’
Considering defendants’ demurrer to the evidence, the court treated plaintiff’s case as though his petition contained two causes of action — one to impress a trust upon the land and the other to be subrogated to the rights of the mortgagee McCurdy. The court sustained the demurrer to the first of these propositions and overruled it as to the second.
The testimony of witnesses called by defendants, insofar as it relates to the purchase of the farm, the payments plaintiff made on the contract of purchase, and later on taxes and insurance, the $3,500 and the $500 second mortgage, his motives and purposes in doing so, and the oral agreement, if any, between plaintiff and W. F. Ley, may be summarized as follows: Allen Mansfield was present when the contract of purchase was written. Plaintiff and W. F. Ley were there. They said, “They would buy the farm and that Mr. Ley— the contract would be made to Mr. Ley — with Mr. Ley and the payment for it was made by Mr. Katschor.” Pressed as to what plaintiff said about the $3,500 note and mortgage mentioned in the contract, he answered: “Well, I just don’t recall . . . the exact conversation that was had about the $3,500.” W. W. White, engaged in the real estate business at Lawrence, showed three or more Douglas county farms to plaintiff and W. F. Ley in the fall of 1931, but sold none. He testified that while he was with them there was a joint conversation, the substance of which was that Mr. Katschor was paying for the farm and Mr. Ley was to have; the farm. The farm was to be the property of Mr. Ley after the deal was completed and Mr. Katschor was supposed to live with them whenever he felt like it, but he was not bound to stay there. Mrs. E. R. Warden, who at the time of the trial was living in Wichita, was a friend of the Leys, having lived with them in their home in Pittsburg from September, 1922, to October, 1923. While there she became acquainted with plaintiff, who visited the Leys several, times; that in her conversations with plaintiff she said he had been looking around at farms; that the farms in Oklahoma were not very good and that he wanted the Leys to have a farm; that he wanted to buy them a good farm; “if his wife had lived that she would have done a lot of things for the Ley boys and for Mr. Ley, and that he was buying the farm, or would buy the farm for Mr. Ley because his wife would have wanted him to had she lived;” that she met plaintiff again at the
Docia Ley, widow of W. F. Ley and principal defendant, testified she and her husband were married in 1905 and lived at Pittsburg, Kan., until the spring of 1932, when they moved on the farm in question; that she became acquainted with plaintiff a year or two after her marriage, and over the years saw him two or three times a year, sometimes oftener; that her husband had an ambition to have a farm and engage in farming, and this was discussed at various times over the years; that'after the death of plaintiff’s wife, about 1920, plaintiff was in Oklahoma and later in Illinois, but when in Kansas made his home with his sister at St. Paul. The first real talk with him about buying the farm was about February, 1930. Plaintiff spoke of having $6,000 invested in a building and loan association in Texas and talked of letting Mr. Ley have that money to use in purchasing a farm, but a little later said he had agreed to leave the money in Texas for another year, and no real effort was made to buy a farm until in the fall of 1931. In thei meantime the matter was talked over in the Ley home and at times with plaintiff, as would be natural with any other business matter; that plaintiff spoke of “investing” his money in a farm for Mr. Ley and his family. At other times he spoke of buying a farm, for Mr. Ley and his family. He was interested and wanted to be of help to Mr. Ley and' his family, and particularly wanted their two sons to have an opportunity on the farm. Beginning in September, 1931, plaintiff and Mr. Ley made several trips to look at farms. Plaintiff'wanted to buy a good farm, but no definite amount to be invested or to be used in the purchase of the farm was mentioned or discussed. Plaintiff was a believer in spiritualism, and consulted a medium of that faith in an
Harold Ley, 33 years of age, son of W. F. and Do.cia Ley, and one of the defendants, had been acquainted with plaintiff for many
Inez Drake, a sister of Docia Ley, testified by deposition. For many years she made trips with her husband, who traveled. She met the plaintiff at the home of her sister, Mrs. Ley, in Pittsburg in the fall of 1920, after his wife’s death. At that time plaintiff “said in substance that he wanted to invest the inheritance that his wife had received from her mother in the land for Will Ley; that was his wife’s desire.” About eight years, later she saw the plaintiff again at her sister’s home in Pittsburg and had a conservation with him in which “he said that he would like to see my brother-in-law's sons on a farm, and he asked Mr. Drake what he thought about him investing Mary Katschor’s inheritance money in land, and how he thought it would be to put the boys on a farm.” In the course of the conversation plaintiff said “that he wanted the deed made out to Will [W. F. Ley] because Mary wanted him to have the inheritance.” She met the plaintiff again in the spring of 1932 when she was visiting her sister, Mrs. Ley, at the farm in question. At that
Respecting the inheritance which his wife received from her mother, plaintiff testified that this amounted to about $1,800 at the time of the death of his wife; that the money was then invested, and as soon as he could get it, which was in 1922, he sent all of it to W. F. Ley; that at no time did he talk about investing that money in a farm. Docia Ley was examined on this point and said plaintiff had sent her husband money. She did not know whether it was $1,800 or some other amount; neither did she know whether it came from plaintiff’s wife’s inheritance or some' other source, nor when it was sent, and stated that she was unable to give the court any information about it.
On behalf of appellant it is argued there was sufficient evidence to have justified the trial court in granting the relief first suggested by plaintiff in the pray'er of his petition, namely, that the principal defendants hold the land in trust for plaintiff. This argument is predicated upon our statute (G. S. 1935, 67-406) which lays down the rule that “when a conveyance for a valuable consideration is made to one person and a consideration therefor paid by another, no use or trust shall result in favor of the latter”; and G. S. 1935, 67-408, which provides that this rule shall not extend to cases “where it shall be made to appear that by agreement and without any fraudulent intent the party to whom the conveyance was made, . . . was to hold the land ... in trust for the party paying the purchase money or some part thereof.” It is pointed out that the written contract for the purchase of this land called for a cash payment of $5,000, and the evidence discloses plaintiff paid at least that part of the purchase price. That he did so is conceded by defendants. Appellant points to the testimony of plaintiff that at the time he was not indebted to anyone, and that there was no fraudulent intent respecting the transaction on the part of anyone. This is not controverted. Appellant points also to the testimony of plaintiff that at the time the contract was being made, in answer to a question by Mr. Mansfield as to in whose name the deed was to be made, replied: “Mr. Ley’s, he will hold it for me until I need it. He can give me a quitclaim deed,” and the testimony of Mr. Casida that after the deed had been prepared he inquired of plaintiff and Mr. Ley if they desired any other papers or agreement made out,
In a written opinion filed after all evidence had been received the court makes it clear the evidence offered on behalf of defendants was considered by the court as a “defense to the whole claim of plaintiff.” In view of this situation counsel for appellant do not seriously contend the judgment of the trial court should be reversed with directions to enter a decree that the defendants, heirs of W. F. Ley, hold the land in trust for plaintiff, and we are of the opinion we would not be justified in reversing, on this ground.
It is argued on behalf of appellees that plaintiff, having contended in the prayer of his petition that he is entitled to a decree that the
On behalf of appellant it is argued that in any event plaintiff should have been subrogated to the rights of G. S. McCurdy under the $3,500 mortgage. There is much merit to this contention. In announcing its decision upon this branch of the case the court, among other things, said:
“It is true that subrogation is something that receives a good deal of attention but it requires an agreement and understanding of some kind. It requires some positive action on the part of the person who claims subrogation and a lapse of time and failure to do anything sometimes may be taken as evidence that he was satisfied with the way things were.”
On behalf of appellant it is argued the court erred in its view of the law that the application of the doctrine of subrogation “requires an agreement and understanding of some kind.” The point is well taken.
In 60 C. J. 807, under the title “Subrogation” and the subtitle “Third Persons Advancing Means to Discharge, or Discharging, Debt or Encumbrance Securing Such Debt,” the general rule is stated as follows:
“It always requires something more than the mere payment of the debt by a third person in order to entitle such person to be subsituted in place of the original creditor; it requires an assignment, legal or equitable, from the original creditor, or an agreement or understanding on the part of the party liable to pay that the person furnishing the money to pay the same shall in effect become the creditor, or the person furnishing the money must have done so be*583 cause he is liable as surety or other secondary capacity, or for the purpose of protecting some real or supposed right or interest of his own.”
This language is taken verbatim from the opinion of this court in Crippen v. Chappel, 35 Kan. 495, at page 499, 11 Pac. 453, where it continues as follows:
“But the right of subrogation or of equitable assignment is not founded upon contract aloije, nor upon the absence of contract, but is founded upon the facts and circumstances of the particular case and upon principles of natural justice; and generally, where it is equitable that a person furnishing money to pay a debt should be substituted for the creditor or in the place of the creditor, such person will be so substituted.”
On this point it is said, in 60 C. J. 700:
“The right of legal subrogation is not a matter of contract; it does not arise from any contractual relation between the parties, but takes place as a matter of equity, with or without- an agreement to that effect. It is not dependent on privity or founded on, or dependent on, contract or on the absence of contract, but is independent of any contractual relations between the parties. Nor does the right depend upon the act of the creditor, but may be independent of him and also of the debtor.”
In support of the text many authorities are cited, including from our own state: Crippen v. Chappel, supra; Lynds v. Van Valkenburgh, 77 Kan. 24, 93 Pac. 615; Olson v. Peterson, 88 Kan. 350, 128 Pac. 191; Breyfogle v. Jackson, 113 Kan. 373, 214 Pac. 779; Blitz v. Metzger, 119 Kan. 760, 241 Pac. 259; 120 Kan. 555, 245 Pac. 161; and Federal Land Bank v. Hanks, 123 Kan. 329, 254 Pac. 1040.
See, also: Deposit Co. v. City of Stafford, 93 Kan. 539, 144 Pac. 852; Waddle v. Bird, 126 Kan. 255, 267 Pac. 974; Spradling v. Hawk, 133 Kan. 545, 1 P. 2d 268.
In the recent case of Home Owners’ Loan Corporation v. Henson, (Ind.), 29 N. E. 2d 873, it was said:
“The right of ‘subrogation’ is not founded on contract, express or implied, but on principles of equity and justice, and includes every instance in which one party not a mere volunteer, pays a debt for another, primarily liable, and which, in good conscience, should have been paid by the other.”
To the same effect, see the late cases of People v. Phillip State Bank & Trust Co. (Ill. App.), 30 N. E. 2d 771; Netherton v. Farmers Exchange Bank, 228 Mo. App. 296, 63 S. W. 2d 156, and McCracken County v. Lakeview Country Club (Ky. App.), 70 S. W. 2d 938. Appellant stresses the portion of the texts above quoted authorizing subrogation when a person pays “for the purpose of protecting some real or supposed right or interest of his own.”
“Where subrogation is claimed on the ground that the payment was necessary to protect the interests of the subrogee, the extent or quantity of the interest which is in jeopardy is not material. If he has any palpable interest which will be protected by the extinguishment of the debt, he may pay the debt and be entitled to hold and enforce it just as the creditor could.”
In the recent case of Banks v. Cartwright (Tex. Civ. App.), 26 S. W. 2d 708, it was said:
“Oné paying debt.to protect his property or interest is not volunteer, as regards subrogation.”
And in Schuetz v. Schuetz (Wis.), 296 N. W. 70, it was held:
“Where a person, as a result of a mistake of law, supposes himself to have an interest in land, he- is treated- as having such ah interest for purposes of ‘sub-rogation’ and as being within the rulé entitling a person to subrogation in cases where he of necessity acts to protect his own interest.” ' ■ . ■■
Counsel for appellees cite no authorities on this branch of the case and in their brief say: ' - -
"We have no criticism of the abstract principles of subrogation which’are outlined in the brief of the appellant. The difficulty with them is that they are not applicable to the facts of this case. This is a ‘fact’ case. The court heard all of the evidence, and decided against the appellant, and that he was not entitled to this right of subrogation.”
This is followed with an argument that the evidence sustains the judgment of the court. On the point respecting plaintiff’s claim to subrogation the legal question for this court to determine is whether there is substantial competent evidence to support the judgment of the trial court. Appellees rely upon the parol testimony of witnesses called on their behalf. Hereinbefore we have summarized the testimony of each of these witnesses. Collectively it may be said to show that W. F. Ley was the favorite brother of plaintiff’s wife. Had she lived she would have helped him in some indefinite way. She wanted him to have, after her death, what she had inherited from her mother. There is no serious contention that the farm in question was purchased with the proceeds of that inheritance ; neither is there any competent evidence to sustain that view. Plaintiff thought well of W. F. Ley. Perhaps it is not going too far to say they thought well of each other and that each had confidence in the other. Plaintiff thought well also of the family of W. F. Ley, and having no children of his own, was particularly interested in the two Ley boys. After his wife’s death in 1920 plaintiff sold his farm and other property and lived for several years in Oklahoma
As it pertains to the purchase of the farm in question and the payments made thereon, reliance must be had almost exclusively on the written evidence. W. F. Ley, as purchaser, alone executed the contract of purchase, and the deed named him as the sole grantee. Since plaintiff could not produce evidence to sustain his allegation that he and Ley had an oral agreement to the effect Ley was to hold the title for him, no finding of that kind can be made,- and it must be held that the title to the land passed to W. F. Ley, even though plaintiff paid the cash consideration of $5,000. The note for $3,500 and the mortgage given to secure it were executed by W. F.
One who has no interest in mortgaged property, and who voluntarily pays the debt of another, secured by a mortgage thereon, is not entitled to subrogation. We think the evidence in this case will not support a holding that the payment of this mortgage by plaintiff was voluntary. On the contrary, it discloses that he paid intending to get a transfer or assignment of the mortgage. In his language, he wanted the papers turned over to him and not to have the mortgage canceled. More than that, from any view taken of the evidence, plaintiff had some interest in the mortgaged property. Even testimony on behalf of defendants indicates that he was to
Under the authorities above set out, and under the substantial, competent evidence we find in the record, we think the trial court erred in denying plaintiff the right of subrogation with respect to the payments he made on the $3,500 note and mortgage. We think, also, the suggestion that plaintiff is barred by his laches is not well taken. (See note in 103 A. L. R. 1182.)
The judgment of the court below is reversed with directions to the court below to enter judgment in harmony with the views herein expressed.