Green v. Kensinger

• Decision Date: 09 May 1964
• Docket Number: No. 43596,43596
• Parties: R. C. GREEN, Appellant, v. Hubert KENSINGER, Appellee.
• Court: Kansas Supreme Court

Page 122

392 P.2d 122

193 Kan. 33

R. C. GREEN, Appellant, v. Hubert KENSINGER, Appellee.

No. 43596.

Supreme Court of Kansas.

May 9, 1964.

Syllabus by the Court

1. Under a general denial any competent evidence is admissible which goes to refute or negative the plaintiff's cause of action.

2. Findings of fact which are supported by substantial competent evidence will not be disturbed on appeal.

3. A judgment must be within the issues submitted to a court for its decision.

4. On appeal, a litigant may not change the theory of his case from that on which it was presented to the trial court,

nor present matters not brought to the trial court's attention.

5. A judgment is not conclusive as to matters incidentally brought into a trial and not substantially in issue.

W. H. Coutts, III, El Dorado, argued the cause, W. H. Coutts, Jr., El Dorado, with him on the briefs, for appellant.

T. D. Hampson, Fredonia, argued the cause and was on the briefs for appellee.

FONTRON, Justice.

The plaintiff, R. C. Green, has appealed from a judgment rendered against him in an action to recover money allegedly loaned to the defendant, Hubert Kensinger. Plaintiff's petition contained two counts, the first alleging that in February, 1958, the parties entered into an oral agreement whereby plaintiff loaned defendant the sum of $6,666.60 by personal check; that defendant agreed to pay the same with interest, on demand; and that demand was made and payment refused. The check itself was payable to Arthur E. Freeman, but defendant admitted at the trial that it was applied to the payment of a trust deed on his own apartment property.

The second count alleged a subsequent similar oral agreement in which the plaintiff loaned $1,700.00 to the defendant, which the defendant agreed to repay with interest, on demand; and that demand was made and refused. The defendant conceded at the trial that this check was credited to his account at a Fredonia bank.

An answer was filed by the defendant generally denying all allegations except the residence and addresses of the parties. The answer further contained an allegation that plaintiff's claim is barred by the statute of limitations. The defense of the statute of limitations was apparently resolved in plaintiff's favor, as indicated in his brief, and no question concerning it is presented in this appeal.

The defendant also filed a cross petition alleging, in effect, that he and the plaintiff had been engaged, as partners, in the business of buying and selling trust deeds, in the operation of which business each partner was to maintain a trust deed account in his own name for the benefit of the partnership, and that upon request of either partner the accounts would be equalized and the profits, after equalization, divided equally. The defendant further alleged that he believed the plaintiff was indebted to him in excess of $12,000.00 and prayed for an accounting and for judgment for such amount as was shown due him. In a second count, the defendant sought to recover for damages sustained by his Thunderbird car while the same was in plaintiff's possession.

On the day of trial, the defendant orally moved to dismiss his cross petition. This motion was sustained and the case then proceeded to trial to the court on the petition and the answer. During trial the defendant was permitted, over plaintiff's objections, to introduce documentary and other evidence which tended to show an arrangement between the parties for the purchase and sale of trust deeds, with profits to be equally divided, and that the two checks in question were given to equalize the partners' accounts. In admitting such evidence, the trial court stated:

'I am going to receive it. Objection overruled. I might state for the benefit of counsel of both sides, as I understand the issues here is whether or not the two transactions in the two causes of action were loans from the plaintiff to the defendant. I think it is required that the court admit and hear whatever evidence may be bearing upon that question, and unless someone can convince me to the contrary, when I consider this evidence, it will be solely with that in mind, and if this case were being tried to a jury, I would contemplate so instructing the jury. * * *' At the conclusion of the trial, the following findings of fact and conclusions of law were entered by the court:

'Findings of Fact.

'1. At all times here material both parties were residents of the State of California.

'2. Sometime in the year 1957 plaintiff and defendant became associated in the business of buying and selling trust deeds. Such association continued during all the times material to this controversy. Each party deposited approximately $40,000.00 in cash or securities to his individual credit in the State Bank of Fredonia, at Fredonia, Kansas. Neither had authority to draw on the other's credit. Plaintiff did assert the right to exercise dominion over defendant's account by objecting to expenditures out of that account and defendant did satisfy plaintiff's objections. The business records were kept by defendant's wife and plaintiff directed the manner in which they should be kept; plaintiff saw the records regularly and at least some of them bore the heading 'Kensinger-Green.' The parties had printed and used, business cards reading 'Kensinger & Green'. Some of the transactions were consummated in plaintiff's name and some in defendant's. The parties jointly executed promissory notes connected with the business and they jointly guaranteed the trust deeds which they sold. No partnership tax return was ever filed by defendant, but there was an agreement that plaintiff and defendant would each report on his own income tax return one half of the other's trust deed income.

'3. Plaintiff has failed to establish by a preponderance of the evidence that the two transactions sued upon constituted loans from plaintiff to defendant. Those transactions were a part and parcel of the business of buying and selling trust deeds.

'4. There has never been any accounting between plaintiff and defendant.

'Conclusions of Law.

'1. At all times herein material plaintiff and defendant were partners.

'2. This is not a suit for an accounting, and in the absence of an accounting the court cannot determine whether one partner is indebted to the other.

'3. Questions pertaining to the applicability of statutes of limitation, whether they be Kansas or California statutes, are moot.

'4. Plaintiff is denied any relief and judgment will be entered against the plaintiff for costs.'

Motions to set aside the findings of fact and conclusions of law and to obtain a new trial were filed by plaintiff and, upon their being overruled, this appeal followed.

Three main contentions are advanced and argued by plaintiff on this appeal: First, that error was committed in admitting evidence concerning the alleged partnership and the transactions had in connection therewith, Second, that the findings of fact are inadequate and the conclusions of law erroneous and insufficient and, Third, that the trial court erred in not decreeing an accounting of the affairs of the partnership found to exist. These claims will be considered in order.

It is true that after the defendant withdrew his cross petition, there no longer remained any positive allegations of partnership. However, under the defendant's answer which denied the allegations of the plaintiff's petition, any competent evidence tending to negate or refute the cause of action alleged would be admissible.

In 41 Am.Jur., Pleading, § 366, p. 541, the rule is stated:

'A general denial puts in issue every material allegation of the complaint, except those admitted. It goes to the root of the cause of action and permits the introduction of any proper evidence tending to controvert the facts which the plaintiff must establish to sustain his case. Any fact which goes to destroy, not to avoid, the plaintiff's cause of action is provable under the general denial, including facts independent of those averred in the complaint, of an affirmative character, but which have a negative effect upon the issues. * * *'

Although receipt of the two checks is not disputed by the defendant, he does contend they do not evidence loans of money to him. His contention is, very simply, that the transactions evidenced by the checks were not loans, but were payments to him of funds due him to equalize his partnership account. Evidence to substantiate such a claim would clearly negative a cause of action to recover for money loaned.

The plaintiff cannot successfully maintain that defendant's evidence was in the nature of confession and avoidance, and thus admissible only under such a plea. In 41 Am.Jur., Pleading, § 158, p. 403, it is stated:

'A plea of confession and avoidance, as its name implies, admits the cause of action alleged by the plaintiff and sets up some matter in avoidance of the same. * * * The element of confession in such a plea is as essential as that in avoidance. * * *'

The evidence to which plaintiff makes objection did not admit, inferentially or otherwise, that plaintiff had loaned the defendant money or that the defendant was in anywise indebted to plaintiff for money borrowed. Quite to the contrary, the evidence offered met head-on the question of whether plaintiff had loaned the defendant money, rather than showing a reason for evading repayment of loans admittedly received. We believe the trial court's ruling to such effect was correct.

No good purpose would be served by summarizing here the quite voluminous evidence introduced at the trial. It is sufficient to say that from the appellant's own abstract it appears there was evidence to the effect that the checks involved in this action...