Toll v. McKenzie

• Decision Date: 27 April 1931
• Docket Number: 12391,12392.
• Citation: 88 Colo. 582,299 P. 14
• Parties: TOLL v. McKENZIE et al. SAME v. PECK, Public Trustee, et al.
• Court: Colorado Supreme Court

299 P. 14

88 Colo. 582

TOLL v. McKENZIE et al.

SAME v. PECK, Public Trustee, et al.

Nos. 12391, 12392.

Supreme Court of Colorado

April 27, 1931

Rehearing Denied May 18, 1931.

In Department.

Error to County Court, City and County of Denver; George A Luxford, Judge.

Error to District Court, City and County of Denver; Charles C Sackmann, Judge.

Proceeding by Oliver W. Toll against Kathryn M. McKenzie, individually and as executrix of the estate of Charles D. McKenzie deceased, and also as guardian of Kathryn Ann McKenzie and another, minors, and against such minors, and a separate action by the same plaintiff against Wheeler S. Peck, as Public Trustee in and for the City and County of Denver, and another. To review an adverse judgment in each case plaintiff brings error.

Each judgment modified and affirmed, and the second case remanded, with directions.

John H. Denison, Fred R. Wright, and Chadwick J. Perry, all of Denver, for plaintiff in error.

Ewing & Arnold, of Denver, for defendants in error.

BURKE J.

Plaintiff in error is hereinafter referred to as Toll, and defendants in error George W. Casey as Casey, Kathryn M. McKenzie as the executrix or the guardian or Mrs. McKenzie, and Kathryn Ann McKenzie and Jeanne Ella McKenzie as the minors or the wards or the daughters. Charles D. McKenzie, the deceased husband of Mrs. McKenzie, is referred to as McKenzie.

Case No. 12391 was a probate proceeding which Toll sought to open after it had been long closed. Therein a demurrer was sustained to his reply. He thereupon stood and brought error.

Case No. 12392 was brought by Toll to enjoin the foreclosure of a trust deed on his home. To review a judgment entered against him therein he brings error. The property in question is lots 13 and 14, block 7, of Fisher's Cheeseman Park addition to the city of Denver. It is hereinafter designated as 820, that being the number, on Detroit street, of the residence thereon located.

In 1919 the title to 820 was in one Owens. She conveyed by warranty deed to McKenzie. That deed was never recorded. McKenzie borrowed $8,000, of the purchase price of $8,200, from Casey, a close friend, and secured the loan by a trust deed which was recorded. McKenzie died October 23, 1922, after having reduced his debt to $5,000. He left a will dated in 1918, by the terms of which all his estate passed to Mrs. McKenzie, and left as his heirs his widow, and two daughters born in 1920 and 1921, respectively. Casey, examining the papers of deceased in an effort to aid the widow, found the unrecorded warranty deed and the will. Convinced that if the estate took the usual course in probate nothing would be realized for the minors, he conceived the idea of saving time, trouble, and expense by getting a new warranty deed from Owens direct to Mrs. McKenzie, dated back to the time of the McKenzie purchase, and destroying the old. This was done and the new deed recorded. Casey then released to Mrs. McKenzie his trust deed and took from her, and recorded, a new one securing the unpaid balance. Thus the record title to 820 was made to appear in Mrs. McKenzie, and the minors, the real owners of an undivided one-half thereof, were eliminated. Thereupon Mrs. McKenzie, as sole owner, entered into a contract to sell 820 to Toll for $11,000 and convey merchantable title. As per that contract Toll paid to Mrs. McKenzie the purchase price, above the Casey incumbrance, and received from her a warranty deed subject thereto. Thereafter he made a payment of interest to Casey, and October 10, 1923, paid him $1,000 on principal. In a general conversation that followed Casey disclosed to Toll the former ownership of McKenzie and the clever method of its obliteration. Here for the first time Toll learned that the minors were in fact owners of an undivided one-half of 820. At this time Toll was in possession of the premises and had made extensive improvements. There had been neither probate nor guardianship proceedings. Mrs. McKenzie was apparently unable to refund the purchase money and the restoration of the parties to their original status seemed impossible.

Mrs. McKenzie and Casey now entered into a new contract, hereinafter referred to as 'A,' whereby they agreed with Toll to probate the McKenzie will, institute guardianship proceedings for the minors, give to the court all the essential facts of the transaction, cause the interest of the minors in the property to be sold to Toll in the guardianship action (if in the judgment of the court such a sale were proper), furnish Toll the funds to purchase thereat, and pay all costs and expenses of said proceedings, including Toll's attorneys' fees. It was further therein stipulated: 'The steps and proceedings described in the preceding paragraphs of this contract are not to be taken as limiting the obligations of the parties of the first part, (Mrs. McKenzie and Casey) but it is understood that they are descriptive merely, and if additional steps or proceedings should be required in order to perfect the title of said Oliver W. Toll with regard to the aforesaid McKenzie interests such additional steps and proceedings are to be taken at the expense of the parties of the first part.' In other words, this was a contract by which Mrs. McKenzie and Casey undertook, by appropriate court proceedings and all other necessary acts, to perfect Toll's title to 820 without expense to him. They say they did so. If they are right, the judgments must be affirmed. Toll maintains they did not and assigns certain specific reasons for his position. If he is correct, the judgments must be reversed.

In pursuance of 'A' the McKenzie will was probated and Mrs. McKenzie, as executrix, for good reasons set out in her application, obtained an order for the sale of 820, and reported that she had sold it to Toll subject to the incumbrance and received the purchase price. Guardianship proceedings were instituted, and Mrs. McKenzie, having executed and filed the required bond, receipted as guardian to herself as executrix for the minors' share of the reported sale price. All these proceedings were regular on their face, and in each instance the proper orders were entered by the probate court approving the action of executrix and guardian.

Nineteen months after the executrix had filed her final report and was discharged, and the day before the trial of 12392 began in the district court, Toll filed, in the probate proceedings, a so-called 'disclaimer,' wherein, after reciting certain facts of the transaction and putting his construction thereon, he prayed that all the proceedings relating to the sale be set aside. The executrix answered and Toll replied. A general demurrer to that reply was sustained. We need not here detail the specific allegations of these pleadings. Suffice it to say that, taken together, they apprised the probate court of every incident, material or otherwise, of the entire transaction, and set forth the conclusions of the respective parties with reference thereto.

Toll,...