Case ID: kan_49/html/0104-01.html
Source: Caselaw Access Project
Author: {"author": "Simpson, C.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James Walsh & Co. et al. v. H. H. Campbell.
    
      Moetgaoe — Foreclosure—Fraudulent Conveyance — Demurrer to Evidence. In an action on a promissory note and to foreclose a mortgage, wherein judgment creditors, who are made defendants, file a verified answer, containing a denial of all the material allegations of the petition, except as specially admitted, and then allege that the note and mortgage were executed with the intent to cover up property and defraud creditors, and the mortgagee had notice and knowledge of such fraudulent intent, and that the plaintiff in the foreclosure suit, to whom the note and mortgage had been transferred, took said note and mortgage with knowledge of said intent, and at the trial the note and mortgage are introduced, and the plaintiff below rests, and the defendants below demur to the evidence, the trial court properly overruled the demurrer.
    
      Error from Pratt District Court.
    
    The case is stated in the opinion.
    
      R. F. Me Crew, for plaintiffs in error:
    The court erred in not sustaining the demurrer of plaintiffs in error to the evidence of defendants in error. The only allegation as to the transfer of said note to said H. H. Campbell by said Maggie Carter is, that it was sold and transferred on August 20, 1888, and that a copy is attached. There is no indorsement of any kind thereon. The ownership of the note under these allegations would be put in issue by a denial not verified, and it would require proof of ownership. Washington v. Hobart, 17 Kas. 275; Pattie v. Wilson, 25 id. 330.
    But the answer of plaintiffs in error was verified, thereby putting in issue any attempt of allegation of indorsement, and east the burden on plaintiff below, now defendant in error, and no evidence being introduced, it was error to overrule the demurrer.
    No brief on file for defendant in error.
   Opinion by

Simpson, C.:

Frank Carter, on the 16th day of May, 1887, executed and delivered to his wife, Maggie Carter, a promissory note for $8,000, payable one year after date, with interest at 10 per cent, per annum from date. On the same day he executed and delivered a mortgage on a number of town lots in the city of Pratt to secure the payment of the note. On the 20th day of August, 1888, Maggie Carter made a written assignment of this mortgage to the defendant in error, H. II. Campbell. The assignment was recorded on the 21st day of August, 1888. Campbell commenced an action to foreclose the mortgage in the Pratt district court, and, among others, made James Walsh & Co. and Ferdinand "Westheimer & Sons, who were judgment creditors of Frank Carter, defendants in the foreclosure action. These judgment creditors filed verified answers, in which they denied every material allegation contained in the plaintiff’s petition not hereinafter specially admitted. They plead their judgments, and admit that Frank Carter executed the note and mortgage sued upon, and that Maggie Carter is the wife of Frank, but claim that this note and mortgage were executed by Frank Carter for the sole purpose of covering up and concealing said property from the payment of his just debts, and for the purpose of cheating and defrauding his creditors; that Maggie Carter had notice and knowledge of such fraudulent intent, and that the plaintiff herein took said note and mortgage with notice and knowledge of the foregoing facts stated in the answer. Campbell filed a general denial as a reply. The case was tried by the court on the 8th day of May, 1889, without a jury. The plaintiff introduced the note and mortgage and rested. The plaintiffs in error filed a demurrer to the evidence for the reason that it was not sufficient to entitle him to recover in this action, and it was overruled.

While the plaintiffs in error filed a verified answer, containing a general denial of all the allegations contained in the petition of the defendant in error “not hereinafter specially admitted,” they go on to state that the note and mortgage were executed; that they were so executed for the purpose of defraudingcreditors; that the mortgagee had notice and knowledge of this intent; and that the defendant in error took said note and mortgage with notice and knowledge of the fraudulent intent. The allegations in this answer narrow the issues in the case to the question of fraudulent intent on the part of the mortgagor, and the knowledge of the mortgagee and her assignee of this intent. The execution of the note and mortgage and their transfer to the defendant in error are admitted, and, in the absence of any evidence on the part of the defendants below (plaintiffs in error here), the plaintiff below would have been entitled to a judgment on the pleadings. The introduction of the note and mortgage was not necessáry, and the demurrer to the evidence when they were introduced was properly overruled, as they proved nothing but what was already admitted by the pleadings.

We recommend an affirmance of the judgment.

By the Court: It is so ordered.

All the Justices concurring.