Kitts v. Hill, 12430.

• Decision Date: 08 June 1931
• Docket Number: 12430.
• Citation: 300 P. 610,89 Colo. 186
• Parties: KITTS v. HILL.
• Court: Colorado Supreme Court

300 P. 610

89 Colo. 186

KITTS v. HILL.

No. 12430.

Supreme Court of Colorado, En Banc.

June 8, 1931

Error to District Court, Weld County; Robert G. Smith, Judge.

Action by Mollie E. Kitts, administratrix of the estate ofJesse E Kitts, deceased, against T. H. Hill. From a judgment for defendant, plaintiff brings error.

Affirmed.

L. C. Brodbeck, of Seattle, Wash., for plaintiff in error.

Walter E. Bliss and E. T. Snyder, both of Greeley, for defendant in error.

CAMPBELL J.

This action by Mollie E. Kitts, as the administratrix of the estate of her deceased husband, Jesse E. Kitts, against the defendant Hill, is to recover judgment on his promissory note to Jesse E. Kitts as payee, in the principal sum of $2,000. The defense in the answer in legal effect is payment, and the case upon a second trial to a jury was submitted upon that issue without objection. A verdict was rendered in favor of the plaintiff for a portion of the amount claimed to be due. The defendant filed a motion for a new trial upon the ground that the uncontradicted evidence in the case clearly established payment. The trial court sustained this motion, set aside the verdict, and granted a new trial, to which ruling the plaintiff excepted. Thereupon the record discloses the following:

'The plaintiff, by her counsel, wishes to state to the Court that since the Court is of the opinion the defendant's motion for a new trial should be allowed, and that the evidence is insufficient under the law, and that the plaintiff having tried this case twice, and having been awarded a verdict in her favor each time, and being unable to present and prove any better case than she has already made, plaintiff now elects to stand by her case, as it is now made, so that the necessity of another hearing may be avoided, and that the case as now made and as it now stands, may be reviewed in the Supreme Court, now asks that a final order of dismissal of said case be entered, in order that she may avail herself of that review by the Supreme Court.

'The Court: The plaintiff having elected to stand on her case as presented, and to have this case reviewed by the Supreme Court, it is therefore ordered that this cause be dismissed as of this date.

'To which ruling the plaintiff by her counsel, then and there excepted, as well as to the Court's granting the defendant's motion for a new trial.'

Though the record is silent as to the attitude of the defendant concerning this unusual procedure when it was suggested by plaintiff's counsel to the trial court, it is apparent that both parties must have considered the pending writ of error as one for a review of a final judgment of the district court based upon findings made by the trial judge, sitting as a trier of facts, with the approval of the parties themselves, and that the findings were made at plaintiff's request upon the same evidence that was produced at the second trial before a jury. This is the most favorable view that can be taken of plaintiff's right to any review at all by this court on the record now before us. It is only upon the assumption that this writ of error is to such final judgment of the district court on a third trial based upon findings of fact by the judge as trier of facts and upon the evidence which was produced at the second trial that our authority on this review can be upheld. If this conclusion is not sound, then plaintiff has no right whatever to be heard here upon this record. We are not now reviewing a judgment against plaintiff that was entered by the trial court on the second trial of the action and based upon the verdict there rendered in her favor; for that verdict has been set aside on the defendant's motion and could not be the basis of any judgment. The further proceeding below, if it culminated in a judgment at all, was, in effect, a third trial of the action upon the evidence produced at the second trial and the trier of the facts was not a jury but the presiding judge, and the judgment of the court was based upon the judge's own findings of fact.

We are of the opinion that the trial judge reached a correct conclusion upon his findings upon the evidence produced and in the judgment rendered in defendant's favor. The controlling facts, as testified to by disinterested witnesses for defendant, and they are not contradicted, are as follows: Jesse E. Kitts for some time was cashier and the sole manager of the First National Bank of Mead, Colo. He owned 58 shares of its capital stock. He was a dealer in live stock, buying, feeding, and selling the same. He desired to sell his bank stock and to retire from the banking business so that he might have more time to devote to his stock interests. The other shareholders were willing to have Kitts withdraw and desired to have some other person as cashier who would be willing to purchase the stock held by Kitts and to take active charge of the bank. To this end W. E. Letford, one of the directors, solicited the defendant Hill as a prospective purchaser and asked him to come to the bank for an interview with Kitts. He did so and at the first interview a tentative agreement, afterwards consummated, was made between Kitts and Hill whereby the latter was to purchase from Kitts his stock at the actual book value thereof, which was to be determined by Letford after making an examination of the books as to the assets and liabilities of the bank. Letford proceeded, in the presence of both Kitts and Hill, to examine the bank books to make this ascertainment, and inquired of Kitts as to the various securities and items of importance as he came to them in the examination, and determined from the data thus furnished by Kitts and by the records of the bank, as kept by Kitts, that the stock was worth $150 a share, and the defendant purchased the same from Kitts at that price and paid in cash $6,700, and for the balance of the purchase price gave to Kitts his promissory note for $2,000, which is the note sued upon by the administratrix in this action.

The defendant took charge of the bank in December, 1920. Soon thereafter he discovered discrepancies and irregularities in the books of the bank and that the chattel mortgages owned by the bank as part of its assets were padded so that the security for the loans to the mortgagors was insufficient. Defendant further discovered among the bank's certificates of time deposits one for $25,000 which the books of the bank showed bore 4 per cent. interest, which in fact carried interest at the rate of 7 per cent. per annum, and that the entry in the books had been so changed by Kitts between the 5th day of December and the 15th day of the same month and before Hill bought the stock. Kitts informed Letford and Hill at the time the examination was being made that this deposit would be renewed on its due date. The holder of the certificate, however, presented the same for payment to the bank a few days after the defendant took charge and it was paid. On its face the certificate called for interest at the rate of 7 per cent. per annum, instead of 4 per cent. which the false entry made by Kitts in the books of the bank showed. Hill also discovered that Kitts, after the bank had received 8 or 10 mortgages as security for loans made to the respective mortgagors, wrote into them, without the consent or knowledge of the mortgagors, additional items of property. Because of the discovery of these and other irregularities and...