Cook v. Donner

• Decision Date: 10 April 1937
• Docket Number: 33333.
• Citation: 145 Kan. 674,66 P.2d 587
• Parties: COOK et ux. v. DONNER et ux.
• Court: Kansas Supreme Court

66 P.2d 587

145 Kan. 674

COOK et ux. v. DONNER et ux.

No. 33333.

Supreme Court of Kansas

April 10, 1937

Syllabus by the Court.

In mortgage foreclosure action overruling of plaintiffs' motion for judgment on pleadings on ground that defendants' answer was not verified held not cause for reversal, where plaintiff had filed reply before filing motion and both defendants were sworn and testified in support of allegations in answer (Gen.St.1935, 60-729).

Agreement made by mortgagee, who executed to Home Owners' Loan Corporation release of all his claims against mortgagor and received less amount in bonds from Corporation, whereby mortgagor gave mortgagee note and second mortgage on the property to cover loss mortgagee had sustained in making release held against public policy, and to invalidate note and second mortgage, notwithstanding agreement was not secret and "Principal Attorney" of Home Owners' Loan Corporation allegedly ratified agreement by recognizing validity of note and second mortgage (Home Owners' Loan Act of 1933, as amended, 12 U.S.C.A. § 1431 et seq., § 1463(k).

1. In an action to recover on a note and to foreclose a mortgage securing the note, where the unverified answer and cross-petition admits the execution of the note and mortgage and the plaintiffs file a reply thereto in the nature of a general denial, and nearly two months later on the day the case is called for trial the plaintiffs file a motion for judgment on the pleadings because the answer was not verified as required by G.S.1935, 60-729 when the action was founded on written instruments for the unconditional payment of money, and the motion was overruled and upon the trial both defendants were sworn as witnesses and testified in support of the allegations and denials of their answer and cross-petition, it is held that the overruling of the motion was not such an error as to require a reversal.

2. Where a mortgagee at the same time or after he executes to the Home Owners' Loan Corporation a release of all his claims against his debtor, and receives a less amount in bonds from the corporation making the loan to the debtor agrees secretly or otherwise with the debtor that the debtor will give him a note and second mortgage on the property to cover the loss he has sustained in making the release, such agreement is in violation of the spirit of the act and rules under which the release was made, it denotes bad faith, is against public policy, and the note and mortgage so given are null and void.

Appeal from District Court, Sedgwick County, Division No. 1; Ross McCormick, Judge.

Action by Fred G. Cook and wife against Chance L. Donner and wife wherein defendants filed a cross-petition. Judgment for defendants, and plaintiffs appeal.

W. R Glass, Innis D. Harris, Jr., and W. J. Glass, all of Wichita, for appellants.

Rupert Teall, of Wichita, for appellees.

W. L. Cunningham, D. Arthur Walker, Fred G. Leach, and Wm. E. Cunningham, all of Arkansas City, amici curiae.

HUTCHISON Justice.

This was an action to recover on a promissory note and to foreclose a mortgage on real estate securing the note, where judgment was rendered for the defendants after the introduction of the evidence. Plaintiffs filed a motion for a new trial and after it was overruled they appealed to this court.

There are two questions involved in the appeal. The first is concerning the pleadings. The petition was in the usual form of one for the recovery upon a note and the foreclosure of a mortgage given to secure the payment of the note. An unverified answer was filed by the defendants consisting of a general denial, a special denial and a cross-petition. The execution of the note and mortgage was more than once admitted in the defendants' pleading. A reply in the form of a general denial was filed by the plaintiffs on July 1, 1936. The plaintiffs on August 27, 1936, when the case was called for trial, filed a motion for judgment for the plaintiffs on the pleadings because the answer was not verified as required by G.S.1935, 60-729, when the action was founded on written instruments for the unconditional payment of money. This motion was overruled and the court proceeded with the hearing of the testimony. The court found that the note and mortgage upon which the action was brought were null and void and that plaintiffs should not recover on their petition, and that the defendants should not recover a judgment for money on their cross-petition.

Appellants claim that no issue was before the trial court and the defendants were in default when their answer was not verified, citing Lukomske v. Harris, 143 Kan. 916, 57 P.2d 20; Hamson Lumber Co. v. Babbitt, 123 Kan. 32, 254 P. 332; Rose v. Boyer, 92 Kan. 892, 141 P. 1006, and Collis v. Kraft, 118 Kan. 531, 235 P. 862, in support of their position and insisting that the trial court committed error in overruling their motion for judgment, which definitely called attention to the want of verification of the answer. There can be no contention but that this action is founded on written instruments for the unconditional payment of money. In the first case above cited it was held that where the mortgage specifically prescribed that the taxes on the mortgaged real estate shall be paid by the mortgagor, it came under the provision of the above-cited statute as a written instrument for the unconditional payment of money, and an unverified answer constituted no defense to the action.

The defendants contend that the plaintiffs waived the right to urge that the answer was ineffectual by filing a reply thereto nearly two months before filing such motion on the day the trial commenced, and that the reply recognized the answer as a sufficient pleading to be met and its allegations denied. The Collis Case, supra, although holding that the unverified answer in such cases is not a sufficient pleading, yet it recognizes the matter of pleading over by filing a reply and later filing a motion raising the question of lack of verification of the answer. The motion in that case, however, was not clear. The motion in the case at bar was specific and left no doubt as to its purpose. The Hamson Case, supra, in addition to holding that the unverified answer raised no issue against a verified account held that the motion for judgment was not clear, but the attorney for defendant presented the defense in an opening statement to the jury and after the close of the plaintiff's testimony the defendant was sworn and testified, and it was held that all the purposes of the verified answer had been subserved. In the case at bar both defendants were sworn and testified in support of the allegations and denials of their answer and cross-petition. If the trial court had sustained the motion for judgment, doubtless the defendants would have asked leave to verify at that late date and leave would undoubtedly have been granted.

In 49 C.J. 841 it is said: "Pleading over or going to trial without objection, or both, waives the right to urge that a pleading was not subscribed, or verified, or that the verification was defective."

In State ex rel. v. Strevey, 138 Kan. 646, at page 648, 27 P.2d 253, 254, which was a bastardy case, a distinction was made in such matters between civil and criminal cases, and it was there said: "In a civil case where verification of a pleading is required to raise an issue, the want of such verification is waived if the adversary pleads over without first directing the court's attention to its technical insufficiency."

In the case of Emery v. Bennett, 97 Kan. 490, 155 P. 1075, Ann.Cas.1918D, 437, it was held: "Although section 110 of the Civil Code (Gen.St.1909, § 5703) requires that the answer to a petition in an action founded on a written instrument for the unconditional payment of money shall be verified, the verification is waived when the plaintiff joins issue on the answer, introduces evidence contradicting such defense, and asks instructions covering his theory of the law pertaining thereto." Syl. 1.

Not all these things were done in the case at bar, but the reply was filed before the motion was made, and thereafter both defendants were sworn and testified.

In the case of Livingston v. Lewis, 109 Kan. 298, 198 P. 952, there was an allegation of partnership followed by an unverified answer, and it was held that the existence of the partnership thereby stood admitted, but it was further held that the plaintiff can only take advantage of this rule by a timely objection, and if he replies to the unverified answer and goes to trial on the issues of fact and adduces his evidence thereon without making a showing of being surprised and being unprepared to meet such issue, it would not be error for the trial court to try out and determine the issue of partnership. Of course there is a difference between this case and the one at bar in that in the latter the plaintiffs did call to the court's attention the lack of verification.

In the case of Hill v. Republic County Com'rs, 99 Kan. 49, 160 P. 987, it was held in an action on an account duly verified, which must be taken as true unless denied under oath, that "the failure to deny the account under oath admits only its accuracy, and not its legality."

Appellants cite Hoxie State Bank v. Vaughn, 137 Kan. 648, 21 P.2d 356, which holds that the trial court has wide discretion in permitting filing and withdrawal...