In re Hartley's Estate

• Decision Date: 11 June 1938
• Docket Number: 33855.
• Citation: 80 P.2d 1,148 Kan. 82
• Parties: In re HARTLEY'S ESTATE. [*] v. HARTLEY et al. SECURITY SAVINGS & LOAN ASS'N
• Court: Kansas Supreme Court

80 P.2d 1

148 Kan. 82

In re HARTLEY'S ESTATE. ^[*]

SECURITY SAVINGS & LOAN ASS'N v. HARTLEY et al.

No. 33855.

Supreme Court of Kansas

June 11, 1938

Syllabus by the Court.

Administratrix was not bound to sell, and probate court would not compel her to sell, on mortgagee's demand, realty which was so heavily mortgaged and burdened with delinquent taxes that there was no equity in it above the debt it was given to secure, and mortgagee was properly remanded to court of general jurisdiction where foreclosure proceedings might be instituted and where right of redemption could be protected. Gen.St.1935, 22-801, 22-807, 22-824.

Where questions concerning mortgagee's claims to rents of mortgaged property were not raised in probate court, they were not before the district court on appeal.

Where rulings of probate court were appealed to the district court where the matter was pending undetermined, the matter was not open to appellate review in the Supreme Court.

1. Where real property was so heavily mortgaged and burdened with delinquent taxes that there was no equity in it above the debt it was given to secure, the administratrix was not bound to sell it, nor was the probate court required to order her to do so on the demand of the mortgagee. The latter was properly remanded to a court of general jurisdiction where foreclosure proceedings might be instituted, and where the adverse party's right of redemption could be protected.

2. Questions concerning a mortgagee's claims to rents of the mortgaged property which were not raised in the probate court were not before the district court on appeal, and where such claims were afterwards presented and ruled on by the probate court and appealed to the district court where the matter is now pending and undetermined, considered, and held not presently open to appellate review in the supreme court.

Appeal from District Court, Saline County; Roy A. Smith, Judge.

Judgment affirmed.

John Hamilton Wilson, of Salina, for appellant.

C. W Burch, B. I. Litowich, and LaRue Royce, all of Salina, for appellee Eberhardt Lumber Co.

W. B Crowther and Morris Johnson, both of Salina, for appellee Mary McConnell.

Alex H Miller, of Salina, for appellee Florence A. Hartley.

DAWSON Chief Justice.

This appeal presents the question whether the probate court must order an administratrix to sell mortgaged real estate on the insistent demand of the mortgagee.

The probate court ruled to the contrary and the district court sustained that ruling. Hence this appeal.

The pertinent facts were these: On September 8, 1936, the late Fred L. Hartley of Saline county died testate, naming his widow Florence A. Hartley as sole beneficiary of his estate. On October 24, 1936, the widow qualified as administratrix with the will annexed. The personal estate was inconsiderable and quite insufficient to pay the debts of the testator. Exclusive of the homestead, there were twelve separate pieces of Salina real property belonging to the estate, each of which was mortgaged so heavily that the equitable margins in them were negligible, and most of them were also encumbered with delinquent taxes.

The Security Savings & Loan Association held mortgages covering three separate pieces of property of Hartley's estate, viz.:

No. Mortgage Taxes Valuation Value of Equity

4 $3,200 $311.20 $2,650 0

9 3,250 308.13 2,750 0

10 650 142.14 300 0

These mortgages had been executed by the testator to secure certain of his promissory notes dated December 17, 1923, November 1, 1925, and January 20, 1926, respectively. All of these notes were long overdue and large sums of accrued interest were also due thereon.

Instead of instituting actions in a court of competent jurisdiction to reduce these notes to judgment and to foreclose the mortgages given to secure their payment, appellant filed in the probate court its petition and proof of demand against the estate. Attached to its petition as exhibits were copies of the notes and the related mortgages. The petition also alleged:

"The several debts above mentioned are by reason of the above-described mortgages the first liens respectfully in, to and upon the first, second and third parcels above mentioned and described and said debts are due and unpaid and there are not sufficient personal assets in the estate of said decedent to pay the same and said lands and tenements should be sold for the payment thereof, the proceeds of said sales respectfully first to be applied upon the debt owing to petitioner and claimant, and for the payment of any other debts and expenses of administration as are or shall otherwise not be paid.

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"Wherefore petitioner and claimant prays that its three claims aforesaid be allowed as debts of said estate secured as aforesaid and that the administratrix with the will annexed of said estate be required by an order of this Court to sell said lands and the proceeds of said sales apply respectfully upon petitioner's liens above set forth and further that she be required to sell such other lands and tenements of the decedent subject to the payment of debts as shall be necessary for the payment of petitioner's claims."

The probate court ordered that appellant's claims be allowed as of the fifth class (G.S.1935, 22-701), but declined to order the administratrix to sell the lands covered by its mortgages.

When the cause came on for review in the district court, extended findings of fact and conclusions of law were made. Among the latter were the following:

"1. A sale of the properties in the Probate Court upon this petition woul eliminate the equity of redemption in said properties, and the right to redeem the same, as provided by law, on behalf of the estate and the second lien holders. ***

"2. That the estate of said decedent could not benefit by the sale of said properties for the payment of said mortgage liens, for the reason that neither of said properties would sell for more than the amount of the first mortgages and taxes on such properties, and the administratrix should not be required to institute proceedings to sell said properties for the benefit of said mortgagee.

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"4. That there being no equity in said properties, the remedy of said mortgagee is by regular foreclosure proceedings, and that the action of the petitioner amounts to a short cut or a quick method of applying the proceeds of the mortgaged property to the payment of the mortgage liens, and is not authorized by law, and that the statute requiring the administratrix to sell real estate for the payment of debts of creditors applies to creditors generally, and does not require the said administratrix to select mortgaged properties and start proceedings in the Probate Court to sell the same for the payment of the mortgage debt, when the general creditors could in no wise be benefited from such proceedings, but would suffer an evident loss as a result therefrom."

It is of the judgment rendered in accordance with these conclusions that appellant now complains. It cites the statute relied on to force a sale of the mortgaged properties in the probate court, the pertinent provisions of which read:

"As soon as the executor or administrator shall ascertain that the personal estate in his hands will be insufficient to pay all the debts of the deceased and the charges of administering the estate, he shall apply to the probate court for authority to sell the real estate of the deceased, or any interest...