CASES

IN THE

SUPREME COURT

OF

KANSAS.

HANRION v. HANRION.

[73 Kan. 25, 84 Pac. 381.]

RESULTING TRUST, Statute Abolishing Applies Only to Personal Property.-The statute declaring that when a conveyance for a valuable consideration is made to one person and the consideration therefor is paid by another, no use or trust shall result in favor of the latter, does not apply to transactions concerning personal property. (p. 455.)

RESULTING TRUSTS.-A Mortgage of Real Estate is not a conveyance within the meaning of a statute which provides that when a conveyance is made to one person upon a consideration paid by another, no use or trust shall result in favor of the latter, but the title shall vest in the former. (p. 455.)

MORTGAGE, Title to, is in him who furnishes the money, though another is named as payee. If À loans his money, receiving and retaining therefor a note and mortgage in which B is designated as the payee, the latter acquires no interest therein, and if A has died, the title to the note is in his estate. (p. 456.)

Getty, Hutchings & Dean, for the plaintiff in error.

J. M. Mason, for the defendants in error.

25 MASON, J. Basile Hanrion died intestate leaving a widow, Harriet F. Hanrion, and four sons. There was some disagreement among the heirs as to the proper distribution of the estate, but they all finally entered into a written contract adjusting the matter. One of the sons, however, Louis B. Hanrion, became dissatisfied and brought a suit against the widow and the other heirs to have the settlement set aside as having been wrongfully procured, and to have the property distributed 26 according to the legal rights of the persons interested. He alleged in his petition that he was

the real owner of some of the property which had been treated as assets of the estate, in virtue of its being the proceeds of trust funds placed in the hands of his father by his grandfather for investment for his benefit. He also made a claim that the estate was indebted to him upon an account for services rendered. Issues were joined and the case was tried before a referee, who found that the contract of settlement should be set aside, but that the plaintiff was not a creditor of the estate or the beneficial owner of any of the property involved, and that it should all be distributed among the heirs. The court approved the report of the referee and rendered judgment accordingly. Harriet F. Hanrion began proceedings in error, but later abandoned them. The present hearing is upon a cross-petition in error filed by the plaintiff below, Louis B. Hanrion.

Various assignments of error have been made and argued, but, except for one matter which will be specially noted, they all come under one general head-that the findings of the referee are not supported by the evidence. The record is voluminous, comprising thirteen hundred and seventy pages. To review the evidence in detail would serve no useful purpose. Upon this branch of the case it is enough to say that the judgment could not be reversed without invading the province of the referee and reviewing his conclusions. upon the credibility of the witnesses, the weight of their testimony, and the inferences to be drawn from the facts established.

The one contention of the cross-petitioner in error that involves the determination of a debatable proposition of law dissociated from any question of fact is based upon the circumstance that the property which the trial court held to be assets of the estate included a number of real estate mortgages in which Louis B. Hanrion was named as mortgagee, although they were 27 made to secure loans made by Basile Hanrion. The argument is made that such a transaction was the conveyance to one person upon a consideration paid by another within the meaning of section 6 of the statute of trusts and powers, and therefore no use or trust resulted in favor of Basile Hanrion, but the title vested absolutely in Louis B. Hanrion. The section reads: "When a conveyance for a valuable consideration is made to one person and the consideration thereof paid by another, no use or trust shall result in favor of the latter; but the title shall vest in the

former, subject to the provisions of the next two sections": Gen. Stats. 1901, sec. 7880.

It is obvious from the context, if not from the language quoted, that the section is intended to apply only to transactions concerning real property, and not to transfers of personalty: Baker v. Terrell, 8 Minn. 195. In the case of Robbins v. Robbins, 89 N. Y. 251, the question whether such a statute had application to the execution of a real estate mortgage to one person, where the consideration was paid by another, was involved, discussed, and decided, although the result reached was also justified upon other grounds. The view of the court upon this matter is indicated by the conclusion of the first paragraph of the syllabus: "Held, that the provision of the statute of uses and trusts . . . . declaring that where a grant is made to one person, the consideration being paid by another, no use or trust shall result in favor of the latter, but title shall vest in the former, had no application; that plaintiff, by operation of law, took the bond and mortgage as trustee for defendant, and those securities being personal property the statute had no application."

In the opinion it was said: "Although the bond and mortgage, in form, ran to the plaintiff, he took as trustee for the defendant, by implication of law, if not by agreement. Those securities were personal property only and had no relation to the statute": Page 258.

28 An attempt is made in the brief of the cross-petitioner in error to distinguish that case from the one at bar upon the ground that our statute, although otherwise substantially the same as the one there interpreted, reads "conveyance" instead of "grant." It is manifest, however, that the words are employed interchangeably in the New York statute, for the section following the one referred to begins, "Every such conveyance," etc.

In the case of Meier v. Bell, 119 Wis. 482, 97 N. W. 186, cited in 2 Current Law, 1933, note 4, the supreme court of Wisconsin held that under this statute where one takes a note and mortgage in the name of another the title vests in the person named as mortgagee, but the decision is made without discussion, upon the authority of three earlier cases. Two of these relate wholly to absolute transfers of title. The third has no connection with the subject and is obviously cited by mistake, the case intended being probably the

one immediately preceding it in the report, which contains an allusion to the statute but is barren of any reference to a mortgage.

It is true that the words "grant" and "conveyance" are sometimes construed to include a mortgage, even in jurisdictions where, as in Kansas, such an instrument passes no estate in the land. For various reasons that are unassailable, but which are peculiar to each of the several classes of cases, such interpretation has been adopted in the construction of statutes relating to the homestead right, to the alienation of public lands by a settler before acquiring title, to the registration of instruments affecting real estate, and to other matters. These reasons have no application here. A mortgage is but an incident to the note it secures. It inures to the benefit of the owner of the debt without formal assignment, and is incapable of assignment as a separate and independent right. It is extinguished by the payment of the indebtedness. The possession 29 of the note, as well as the designation of the payee, is evidence of its ownership, and the inapplicability of the statute is illustrated by the consideration that here the note was delivered to, and retained by, the person who made the loan. If the note had been unsecured it would hardly be contended that the beneficial title vested in Louis B. Hanrion because it was made payable to his order. The circumstance that its payment was guaranteed by the pledge of a tract of land does not alter the essential character of the transaction so as to bring it within the operation of the act in question. The judgment is affirmed.

All the justices concurring.

Porter, J., not sitting, having served as referee in the court below.

A Trust Resulted at the common law when one person paid money for land and the conveyance was taken to another, but under the statutes of some of the states no trust now results under such circumstances, except where the grantee takes the conveyance in his own name without knowledge of the person paying the consideration, or when, in violation of some trust, he purchases land with money belonging to another: Leary v. Corvin, 181 N. Y. 222, 106 Am. St. Rep. 542, and cases cited in the cross-reference note thereto.

VOSS v. GOSS.

[73 Kan. 120, 84 Pac. 564.]

EXEMPTIONS-Feed for Exempt Stock.-A statute that exempts to the head of a family the necessary food for the support of his exempt stock does not entitle him to claim an exemption in grain which he does not intend to feed his animals but which he intends to sell in order to obtain other grain for their food. (p. 460.)

Dale & Amidon, for the plaintiffs in error.

Adams & Adams, for the defendant in error.

120 PORTER, J. W. O. Goss brought this action against Thomas Voss, marshal of the city court of Wichita, and the State Bank of Goddard, to recover damages for the conversion of a crop of wheat levied upon in attachment proceedings in the city court in an action in which the bank was plaintiff and he was defendant. The action is based upon the claim that the wheat was exempt from seizure and sale. Goss' interest in the crop of wheat was a three-fifths share, the remainder belonging to the owner of the land. There was a trial before the court and a jury, which resulted in a verdict for plaintiff in the sum of one hundred and eightythree dollars and eighty-five cents. A motion for judgment upon the special findings was denied, as was the motion for a new trial, and defendants bring error.

Several errors are assigned, but it will not be necessary to consider all of them. Plaintiff is the head of a family, and claims that the wheat in controversy was 121 exempt to him under section 3018 of the General Statutes of 1901, for the reason that he owned a team of horses and that the wheat was necessary as food for their support. That part of section 3018 which must be considered reads as follows: "Every person residing in this state, and being the head of a family, shall have exempt from seizure and sale upon any attachment, execution or other process issued from any court in this state, the following articles of personal property: .... Sixth. The necessary food for the support of the stock mentioned in this section for one year, either provided or growing, or both, as the debtor may choose; also, one wagon, cart or dray, two plows, one drag, and other farming utensils, including harness and tackle for teams, not exceeding in value three hundred dollars."