State Bank of Stella, Neb., v. Moritz

• Decision Date: 12 June 1937
• Docket Number: 33042.
• Citation: 69 P.2d 15,146 Kan. 23
• Parties: STATE BANK OF STELLA, NEB., v. MORITZ et al. [*]
• Court: Kansas Supreme Court

69 P.2d 15

146 Kan. 23

STATE BANK OF STELLA, NEB., v. MORITZ et al. ^[*]

No. 33042.

Supreme Court of Kansas

June 12, 1937

Syllabus by the Court.

Legal questions not fairly nor timely raised in trial court are not reviewable on appeal.

Debtor may legally pay one creditor, even if result is to leave debtor with insufficient assets to pay his obligations to other creditors.

Evidence was insufficient to sustain judgment setting aside debtor's conveyance of his undivided half interest in land to his adult children on ground that conveyance was made to hinder, delay, and defraud creditor.

1. Rule followed that legal questions not fairly nor timely raised in the trial court are not reviewable on appeal.

2. In an action to recover on a promissory note, ancillary proceedings were instituted to set aside a deed in which the defendant maker had conveyed his undivided half interest in a quarter section of land to his adult children on the ground that it was made to hinder, delay, and defraud the plaintiff. The record examined and held that the undisputed evidence and the controlling findings of fact entitled the interpleaders to judgment in their behalf.

Appeal from District Court, Finney County; Fred J. Evans, Judge.

Action by the State Bank of Stella, Neb., against Gust Moritz and others, wherein Opal Stella Moritz and another were permitted to interplead. Judgment for plaintiff, and the interpleaders appeal.

Judgment reversed and cause remanded, with instructions.

HUTCHISON J., dissenting.

T. M Lillard, O. B. Eidson, and Philip H. Lewis, all of Topeka and Henry F. Schepman, of Falls City, Neb., for appellants.

C. E Vance, Clifford R. Hope, and A. M. Fleming, all of Garden City, and Jean B. Cain, of Falls City, Neb., for appellee.

DAWSON Chief Justice.

This was an action by the State Bank of Stella, Neb., against the late Gust Moritz to recover judgment on a promissory note for $5,300, dated December 16, 1931.

The note had been secured by a second mortgage on the obligor's farm in Richardson county, Neb., and when the first mortgage on that farm was foreclosed this note was also reduced to judgment in a court of competent jurisdiction in that state.

Afterwards by leave of the Nebraska court this note was withdrawn for the purpose of being sued on in this action in the district court of Finney county, Kan.

Ancillary to the present action, plaintiff sued out an attachment on a quarter section of Finney county land which had been the property of Mary Moritz, wife of defendant, who died intestate in 1924, leaving as her statutory heirs her husband, Gust Moritz, and their three adult children, Jesse J. Moritz, Elmer A. Moritz, and May C. Moritz Steer. Mrs. Moritz also left 80 acres of land in Nebraska. Under Kansas law (Gen.St.1935, §§ 22-108, 22-118, 22-127) an undivided half of the Kansas land devolved on defendant and the remaining half devolved on his two sons and daughter, one-sixth to each. The Nebraska land devolved in much the same way, in proportions of one-third to defendant and two-thirds to the three children,--two-ninths to each.

Gust himself owned 160 acres of land in Nebraska on which he had resided for half a century. Until the last few years, he seems to have been a man of means; but apparently he was in financial difficulties about the time the incidents occurred which provoked this lawsuit.

There was no substantial dispute of fact touching the maker's liability on the note sued on. Nor was any issue of law raised on the ground that the note had been reduced to judgment in a Nebraska court and therefore it could no longer serve as a basis for a cause of action. See Price v. First Nat. Bank, 62 Kan. 735, 64 P. 637, 84 Am.St.Rep. 419; Hayes Bros. v. Waggener, 98 Kan. 740, 743, 161 P. 584; City of Topeka v. Ritchie, 102 Kan. 384, 387, 170 P. 1003; Exchange State Bank v. Central Trust Co., 127 Kan. 239, 243, 273 P. 477. But the rule is absolute that legal questions not fairly raised and clearly presented in the district court are not open to consideration on appeal. Kelly v. Central Union Fire Ins. Co., 101 Kan. 636, 168 P. 686, L.R.A.1918C, 1170; Koshka v. Missouri Pac. R. Co., 114 Kan. 126, 217 P. 293; Collis v. Kraft, 118 Kan. 531, 235 P. 862; Koury v. Rapalino, 124 Kan. 582, 261 P. 578; Clark v. Linley Motor Co., 126 Kan. 419, 422, 268 P. 860.

The matter which was stoutly contested in two trials in the court below, and which is still the principal subject of controversy in this appeal, arose out of a conveyance dated September 30, 1931, by Gust Moritz of his undivided one-half interest in the Finney county land to his two sons and daughter.

The plaintiff contended that the conveyance was made to hinder, delay, and defraud the bank. The two sons and the daughter of defendant were permitted to interplead, and their evidence tended to show that various substantial considerations moved from them collectively and separately to their father. One such consideration was that defendant had appropriated to his own use the children's shares of the rents of the property for eight years, from the death of Mrs. Moritz in 1924 until the date of the conveyance, September 30, 1931. The land was irrigated, and the gross rents for that period aggregated over $6,000. So far as concerned the evidence to show other substantial consideration on the part of the daughter for the interest conveyed to her, that matter was well established, irrespective of the fact that Gust had appropriated her share of the rent for eight years.

At the first trial the court found generally in favor of the interpleaders; but later it set aside its findings and judgment in favor of the two sons, Jesse and Elmer Moritz, and granted a new trial as to them. But the court's final holding was that the deed of September 30, 1931, was valid as between Gust Moritz and his daughter, May C. Moritz Steer. Neither of the parties appealed from that judgment, so the propriety of regarding the single instrument of conveyance as valid to the daughter but invalid as to her two brothers is not open to this review.

There was a change of judges before the second trial, and an advisory jury was called to assist the court.

It was shown in evidence that on January 24, 1931, Gust Moritz had made a property statement to plaintiff, under oath, in which he listed the Finney county land as his property, and the space for an answer to the question concerning any amount he owed relatives was in blank. The same statement also showed that he had personal property of the value of $4,220. His liabilities at that time were the first mortgage indebtedness on his Nebraska land, $15,000, and $4,975 due plaintiff, which with interest became the indebtedness of $5,300 evidenced by the note of December 16, 1931, sued on in this action.

It was also shown that in the summer of 1931 the plaintiff bank repeatedly requested settlement of his indebtedness to it. Not until December 16, 1931, did defendant execute to the bank the note sued on, at which time he gave a second mortgage on his own quarter section of Nebraska land and the 80 acres he and his children had inherited from his wife. The scrivener who drew the deed of September 30, 1931, which conveyed defendant's interest in the Finney county land to the interpleaders, testified that he inserted in the deed, as the consideration therefor, the words "one dollar and love and affection" without direction from anybody.

The advisory jury made findings of fact, the most significant of which read:

"Q. (3) After the death of Mary Moritz in April, 1924, was it the intention of the defendants, Elmer A. Moritz and Jesse J. Moritz, that their father, Gust Moritz, should collect all the rents that might come from the Finney County land without obligation on his part to subsequently account to them for their part of the same? A. No. ***

"Q. (9) Did Gust Moritz sign the property statement dated January 24, 1931? A. Yes. ***

"Q. (11) Did the plaintiff bank extend credit or grant an extension of time of payment relying upon the property statement of Gust Moritz dated January 24, 1931? A. Yes.

"Q. (12) Did the plaintiff request settlement of the indebtedness of Gust Moritz to such bank some time in the summer of 1931? A. Yes. ***

"Q. (15) Did the deed that was executed by Gust Moritz to his three children of September 30, 1931, conveying the Finney County quarter section, have the effect of delaying and hindering the plaintiff bank in the collection of the obligation of Gust Moritz to said bank? A. Yes.

"Q. (16) Was the deed of September 30, 1931, referred to in Question No. 15, executed and delivered with the intent on the part of Gust Moritz and his two sons of hindering, delaying or defrauding the plaintiff bank in the collection of its debt? A. No.

"Q. (17) What was the consideration for the deed executed by Gust Moritz to his sons Elmer and Jesse Moritz for the Finney County land? A. One Dollar ($1.00) love and affection.

"Q. (18) Was the deed for the Finney County land from Gust Moritz to his sons executed by him with the intention on his part to hinder, delay or defraud the plaintiff as one of his creditors? A. No.

"Q. (19) What do you find was the fair market value of the 240-acre Moritz farm in Richardson County, Nebraska, on September 30, 1931? A. $22,110.00."

The trial court approved these findings and added two others which read:

"1. That the interest of Gust Moritz in the property conveyed to his children by the quit claim deed was at the time of said conveyance of the value of $4,000.00.

"2. That at the time the deed was made Gust Moritz was in a failing condition and that the effect of the conveyance of his interest in the Finney County land was that it did not leave sufficient

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