Somers v. O'Brien

• Decision Date: 09 November 1929
• Docket Number: 28,489
• Citation: 281 P. 888,129 Kan. 24
• Parties: FRANK SOMERS, Appellee, v. MAGDELINA O'BRIEN, THE FARMERS AND MERCHANTS STATE BANK OF TONGANOXIE, E. F. BOLLINGER, as Receiver, etc., Appellees; S. J. MCNAUGHTON, THE TONGANOXIE STATE BANK et al., Appellants
• Court: Kansas Supreme Court

281 P. 888

129 Kan. 24

FRANK SOMERS, Appellee, v. MAGDELINA O'BRIEN, THE FARMERS AND MERCHANTS STATE BANK OF TONGANOXIE, E. F. BOLLINGER, as Receiver, etc., Appellees;

S. J. MCNAUGHTON, THE TONGANOXIE STATE BANK et al., Appellants

No. 28,489

Supreme Court of Kansas

November 9, 1929

Decided July, 1929.

Appeal from Leavenworth district court, division No. 1; JAMES H WENDORFF, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. TRUSTS--Interests Acquired by Trustee--Passive Trusts. Where land is conveyed to a grantee, "as trustee for herself," but neither in the instrument of conveyance itself nor otherwise is any active duty imposed on the grantee, the trust is inoperative and the title passes to the grantee personally in conformity with the statute. (R. S. 67-413.)

2. ESTATES--Restrictions on Alienation--Essential Requisites. For a restriction upon the power of a grantee of real property to alienate it to be effective there must be some enforceable result or consequence for breach of the restriction. Following Hinshaw v. Wright, 124 Kan. 792, 262 P. 601; Wright v. Jenks, 124 Kan. 604, 261 P. 840.

3. BANKRUPTCY--Conclusiveness of Proceedings--Breaking Entailed Estate. Where the grantee of an estate tail becomes a bankrupt and initiates a proceeding before the referee in bankruptcy to determine whether her entailed property passes to the trustee in bankruptcy, and issues are joined thereon, and there is a decision of the referee that the entailed property is an asset of her bankrupt estate, and she acquiesces in that decision and suffers the property to be sold by the federal trustee to satisfy her debts, her entailed estate is extinguished as effectively as if she herself had broken the entailment by a conveyance.

4. ESTATES--Estates Tail--Right of Issue After Severance. The minor children, as "issue of the body" of a tenant in tail, have no standing to resist the foreclosure of a mortgage given by their mother when the entailment of the property covered by the mortgage had been effectively severed before the mortgage was executed.

S. J. McNaughton and M. N. McNaughton, both of Leavenworth, for the appellants.

W. W. Hooper and Benjamin F. Endres, both of Leavenworth, for appellees Magdelina O'Brien, W. J. O'Brien and O'Brien minors; Joseph J. Dawes and David W. Flynn, both of Leavenworth, for appellee Frank Somers.

OPINION

DAWSON, J.:

This was an action to foreclose a mortgage on a quarter section of land given to secure the payment of two promissory notes, one for $ 6,500 held by the appellee, and one for $ 1,500 held by the appellants. Money judgments were awarded in favor of appellee and appellants against the makers and other parties bound on the notes, but foreclosure of the mortgage was denied on the ground that the title of the mortgagors was not of a character which they could encumber. The trial court's findings of fact leading to that conclusion occupy many pages, which may be summarized as follows:

In 1916 Elizabeth Binder owned a quarter section of Leavenworth county land which she and her husband desired to devote to the use of their daughter Magdelina in some fashion so as to prevent its seizure for her debts, to make a provision for her during her lifetime, to devolve on her issue at her death, and to serve "as a barrier to any spendthrift tendencies on the part of herself and her husband." To that end Elizabeth and her husband, on July 25, 1916, executed a deed conveying the premises to Magdelina, with these recitals:

The first parties "grant, bargain, sell, remise, alien, convey and confirm" unto Magdelina--

"As trustee for herself, the use during her natural life, subject to the conditions and restrictions hereinafter set forth, and at her death in fee simple unto the issue of her body absolutely and forever, all of the following-described . . . parcel of land. . . .

"To have and to hold and to use said premises, the tract of land aforesaid, with the hereditaments and appurtenances thereof unto said Magdelina O'Brien as trustee for herself, during her natural life, and at her death in fee simple unto the issue of her body absolutely and forever, provided, that any interest or title thereby conveyed to said Magdelina O'Brien shall not be subject to alienation by her, nor liable for her debts or those of her husband, either on execution, attachment or otherwise. This conveyance is intended as a humane provision of mine to keep said Magdelina O'Brien from absolute want or becoming a public charge during her lifetime, and at her death to go to the issue of her body, absolutely, and as barrier to any spendthrift tendencies on the part of herself and her husband."

Pursuant to this conveyance Magdelina and her husband took and still hold possession of the property and have paid the taxes thereon. At the time the deed was executed Magdelina had two and now has four living children.

On September 12, 1921, five years after the execution and delivery of the deed, Magdelina was indebted to the Tonganoxie State Bank in the sum of $ 6,000 and on that day she filed a voluntary petition in bankruptcy. This quarter section under discussion was listed as a part of her bankrupt estate. She had practically no other property. On December 5, 1921, she received her discharge in bankruptcy. A petition in her behalf was filed before the federal referee in bankruptcy, setting up the deed from her mother and claiming that the property conveyed therein was not subject to be taken for her debts, and requesting the referee to "determine her title thereto and adjudge that the same was not subject to be taken for the payment of her debts." The referee required the trustee in bankruptcy to answer, which he did with appropriate traverses and by alleging that the bankrupt held the title in fee simple and that the property was subject to the payment of Magdelina's debts and was part of the bankrupt estate. Both parties filed motions for judgment; that of the bankrupt was denied; and that of the trustee was sustained. On April 2, 1923, judgment was entered to the same effect; and the property was sold by the trustee in bankruptcy to R. A. Phenicie for $ 6,475, $ 6,000 of which went to satisfy the claim of the Tonganoxie State Bank and the balance to pay fees. On the same day the trustee's deed conveying the property was executed and delivered to R. A. Phenicie; on the same day for a nominal consideration he conveyed the premises to Magdelina; and on the same day she and her husband executed the mortgage on the property to the Tonganoxie State Bank for $ 8,000 to secure the two notes for $ 6,000 and $ 1,500 which figure in this lawsuit. The consideration for the two notes aggregating $ 8,000 was "about $ 500 and some indebtedness of Magdelina O'Brien and [her husband] prior to said adjudication in bankruptcy."

Findings Nos. 20 and 21 read:

"20. All of the orders and decrees made by the referee in bankruptcy proceedings of Magdelina O'Brien were procured and obtained by agreement between Bert Harmon, the trustee, Magdelina O'Brien, the bankrupt, and her creditors, all of said parties applying therefor and consenting thereto, for the purpose of getting the title to said premises in said Magdalina O'Brien so that she could use the same to pay the creditors of herself and her husband, W. J. O'Brien.

"21. Prior to the execution and delivery of said deed set out in finding No. 2 above, said John Binder employed William P. Wettig, a lawyer in Leavenworth, Kansas, to prepare said deed, telling said Wettig that he, said Binder, and his wife desired to make a conveyance of the land in question which would give their daughter, Magdelina O'Brien, the use of said land during her life, and a fee title absolutely to her children forever; also prohibiting her from conveying her interest in the land or in anywise incumbering it, and preventing it from becoming liable or being taken for her debts or the debts of her husband. That he desired this done for the purpose of providing for his daughter during her life in order that she should not want or become a public charge, and that in pursuance of such instructions said William P. Wettig prepared the deed as set out in finding No. 2 above, and the same was duly executed by said Elizabeth Binder and John Binder, her husband, as stated in said finding No. 2."

One other fact not mentioned in the findings but which may have a bearing on this case should also be noted: On March 31, 1923, Elizabeth Binder, then a widow, made an unqualified quitclaim deed of the premises to Magdelina.

The trial court's conclusions of law, in part, read:

"3. Because of the conditions and restrictions contained in the deed set out in finding No. 2 above, the bankruptcy proceedings in re Magdelina O'Brien, bankrupt did not divest the said Magdelina O'Brien of any title or interest which she had in said real estate described in said deed, and the deed of the trustee in said proceedings conveyed nothing to said R. A. Phenicie, and he had no title...