Branner v. Nichols

The opinion of the court was delivered by Smech, J.: The first error assigned is the refusal of the court below to strike out certain parts of the reply. They charge fraudulent conduct by Branner in foreclosing a mortgage securing a note for $500, — 370 — belonging to the partnership estate on land in Wabaunsee county, obtaining title in his own name, selling the same, and failing to report the transaction to the probate court; and, again, that in 1877, there was in Branner’s hands, as administrator of the partnership estate, three promissory notes aggregating over $7000, secured by mortgage on lot 167 and the north twenty feet of lot 169 on Kansas avenue, in Topeka, and other real estate, which mortgage was subject to about $13,000 of prior mortgage liens; that Branner had'foreclosed this mortgage, bid in the property at the sheriff’s sale in his own name, and subsequently sold different pieces of real estate so obtained, and ever since January, 1879, has received, rents for the lots above described amounting to about $8000 per year, and that for the purpose of defrauding the plaintiff he purposely concealed the transaction, and in all his reports to the probate court failed to charge himself with, or account for, said sales or the rents received from said lots. These allegations in the reply, which defendant below sought to have eliminated, were designed to avoid the force and effect of the estoppel pleaded by Branner in the answer, and containing, as they do, direct charges of fraudulent concealment, tend to excuse the plaintiff in her delay (if any excuse be necessary) in bringing the action. It cannot be said that a side issue was imported into the case by these averments in the reply by which Branner was required to litigate a collateral matter. He set out in his amended answer conduct of the plaintiff constituting an estoppel. By way of avoidance, she alleged his fraudulent acts and their concealment. We can see no error in the ruling of the court below. Counsel for plaintiff in error reiterate the state — 371 — ment many times in their brief that the action was purely legal in its nature as distinguished from a suit in equity. We differ with them in this contention. The pleadings taken together show that the case is an equitable one. The plaintiff below asserts in the petition that she is the owner in fee simple of the property, but from the subsequent pleading it appears that the naked legal record title was in Branner and her title -was equitable. In the case of A. T. & S. F. Rld. Co. v. Pracht, 30 Kan. 66, 71, 1 Pac. 323, it was said: “ Perhaps, before proceeding further, it would be well to state that in Kansas an action in the nature of ejectment, or, in other words, an action for the recovery of real property, is equitable as well as legal; and that upon the trial in such an action either party may prove any kind of title which he may have, legal or equitable, and that judgment will be rendered in favor of the party holding the paramount title, whether such title be legal or equitable.” Under a claim of legal title we think a plaintiff may offer proof of an equitable one, and if such title be •paramount it will prevail. Defendant below asked the court to instruct the jury that in no event could a recovery be had against him for rent beyond a period three years prior to the commencement of the action. The request was refused. Authorities are cited holding that a cause of action for rents and profits, although joined with one in the nature of ejectment, is founded upon an implied contract, and that the three-year statute of limitations applies to such claims. The rule seated is not applicable to this case. Here the property which belonged to the heirs of Jacob Klein, subject only to the payment of debts, was sold without necessity for the payment of claims against the firm of Branner and — 372 — Klein. Other assets of the partnership sufficient in amount existed to pay such debts, but they were held by Branner in his own name, and their existence fraudulently concealed from the plaintiff below. (Young v. Whittenhall, 15 Kan. 579; Main v. Payne, 17 id. 608 ; Duffitt v. Tuhan, 28 id. 292.) The cause of action dating from the discovery of the fraud, it becomes immaterial to consider the effect of the plaintiff’s reaching her majority more than three years before the commencement of the suit. Branner was administrator of the partnership estate and also the guardian of Millie Nichols, the plaintiff below, until about two years before the.action was commenced, and it is alleged that the fraud was not discovered until after January 1, 1894. In Webb v. Branner, 59 Kan. 190, 52 Pac. 429, it was held that the sale of lot 165 in December, 1881, was absolutely void and fraudulent in law, and that Branner by his purchase got no title. Since that time he has placed improvements on the property, and the judgment below included the rents for such improvements. Plaintiff in error contends, if liable at all, he can only be charged with the rent of the lot in the condition it was in when he purchased it, in December, 1881. We think otherwise. Defendant below concedes in his amended* answer that he bought the lot at his own sale, and by this admission, viewed in the light of the decision in Webb v. Branner, supra, he confesses to a violation of the fiduciary relation and t.o “a great fraud in the eye of the law.” The jury found that Branner failed to report to the probate court in his final settlement the amount of $80,000 derived from rents and the sales of real estate, and that he failed to report real estate a.s surviving partner of the value of $75,000. It would be a denial of justice to forbid the Klein heirs to re — 373 — cover the rents and profits of improvements on their real estate erected with funds which, if properly accounted for, should have been paid to them long ago. (Austin v. Barret, 44 Iowa, 488.) Counsel for plaintiff in error insist that the purchase of the property by Branner, the administrator of the partnership estate,, at his own sale, is not void, but at most only voidable at the election of the heirs. This question was set at rest in Webb v. Branner, supra. The court below did not err in admitting in evidence the petition filed by the plaintiff below to set aside the final report and settlement of Branner. The order vacating the discharge was admissible without doubt, and the application on which it was made we think was proper to be introduced. It was in the nature of a pleading on which a judgment was rendered. (9 Encyc. Pl. & Pr. 625, and note). It was proper for the jury to have before them the issues on which the order was made. Nor do we think the admission in open court by counsel for defendant below that the final settlement was set aside prevented the adverse party from introducing formal proof of that fact. The alleged misconduct of counsel for plaintiff below in his remarks to the jury cannot be considered. There was no showing of such misconduct on the hearing of the motion for a new trial in the manner required by statute. ( Gen. Stat. 1897, ch. 95, § 319 ; Gen. Stat. 1899, § 4572; A. T. & S. F. Rld. Co. v. Rowan, 55 Kan. 270, 39 Pac. 1010.) The prominent feature of the case, to which all others are subordinate, involves the conduct of Branner, while he was administrator and surviving partner of the partnership estate of Branner & Klein, in selling the lot in question for the payment of partner — 374 — ship debts when there were other assets of the firm sufficient to pay the same which he fraudulently used for his own profit and advantage, concealing his acts from the plaintiff below and her sister. The payment to Mrs. Nichols of $3350.44 after the final report made to the probate court of the sale of lot 165 could work no estoppel against her if there were other assets of the partnership in the hands of Branner of which she was ignorant which ought to have been applied in discharge of partnership debts, with the resulting effect of rendering unnecessary a sale of the real estate in controversy. This controlling question was decided adversely to the plaintiff in error, and we cannot say that the verdict is not supported by abundant evidence. The issues made by the pleadings were well defined. They were determined by the jury in favor of the defendant in error, and the jury’s conclusions approved by the trial court. The judgment will be affirmed.