Opposition Brief — United States National Bank v. Bartges

JAN 27 i950

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CROPL

Aupreme Court of the Gilised” states

October Term — 1949

No. 504

UNITED STATES NATIONAL BANK OF DENVER and

HILDRED L. DUGAN, as Executors of the Estate of George

P. Dickey, Deceased, Petitioners,

versus

RUBY DICKEY BARTGES, Respondent.

BRIEF OF RESPONDENT IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

GrorGE SIEFKIN,

Joun F. Esernarovr,

Of Wichita, Kansas,

\\ Max MeEtviLte,

20 January 1950 Of Denver, Colorado,

Counsel for Respondent.

Prairie Publishers, Inc., Wichita 2, Kansas

"S CCST Re Tan ae orgs a Ae

—

SUBJECT INDEX

PAGE

es mR TO ioc csssnsn case cccoancornigraenscedansapne l

ie aN NUE aidicsiheshiscindicssetlencoininisioceencasscanntbaadareecs 2

Hibs» SHU OE ON coo co scesccsseceescnens 3

D. Summary of Argument 2.00.00... ccccccccceceene 8

E. Argument and Authorities ..0.00.0.00000...cceccccccceoeee ee 9

I. The Decree Below Is Not Final Since

It Remands the Case to the District

Court For Judicial Determination of

Plaintiff's Damages .....0....0..cccccccccscessccecs. 9

II. The Colorado Supreme Court Did Not

Deny “Full Faith and Credit” to the

Kansas Divorce Decree ...0............ccccccccceceeees 14

iy SN cect ce 21

INDEX TO AUTHORITIES

Cases:

PAGE

Bruce v. Tobin, 245 U.S. 18, 62 L. ed. 123 ........ 11, 12

California National Bank v. Stateler, 171 U.S.

Wc MAM ks Hs WOMB Cabeceiaiile stains nk, nica cadioceaSeus 11

Catlin v. United States, 324 U.S. 229,89 L. ed. 911 11

Cessna v. Cessna, 155 Kan. 856, 130 P. (2d) 560... 19

Cummings v. Cummings, 138 Kan. 359, 26 P.

ee ee REE Sacha EE 19

Davis v. Crouch, 94 U.S. 514, 24 L. ed. 281 ........ 11, 13

19

—

INDEX TO AUTHORITIES (Cont’d.)

PAGE

Drake v. Kochersperger, 170 U.S. 303, 42 L.

S| PARC Real Cap leee ereiow one ieee ane too fan 1]

Folansbee v. Ballard Paving Co., 154 U.S. 651,

Be kc HR IO sia canccacvtndindomsecnienthcasaslbcialenetiones lI

Gospel Army v. Los Angeles, 331 U.S. 543, 91 L.

EE: Ba ey Rae Deans ae MITER RET I oNEO ER 9

Grant v. Life Ins. Co., 106 U.S. 429, 27 L. ed. 237 11

Hoard v. James, 119 Kan. 138, 237 Pac. 888 ............ 19

Holder v. Holder, 143 Kan. 79, 53 P. (2d) 806 .... 19, 20

Hullet v. Hullet, 133 Kan. 738, 3 P. (2d) 470 ........ 16

Hyde v. Hyde, 143 Kan. 660, 56 P. (2d) 437;

id., 147 Kan. 134, 75 P. (2d) 1023 .................... 15

Lacelede Gas Light Co. v. Public Service Comm.,

WG ST. Some Be Bas FI ais sss, I

Leach v. Leach, 46 Kan. 724, 27 Pac. 131 ................ l+

Leslie v Manufacturing Co., 102 Kan. 159, 169

ag ay yh RRR TD Satie kan hE Biter Ae Ee Reo eas Ren en He 15

Lodge v. Twell, 135 U.S. 232, 34 L. ed. 153 ............ I

Magnolia Petroleum Company v. Hunt, 320 U.S.

Ot On Ga ee hci eae 7

Mann v. Mann, 136 Kan. 331, 15 P. (2d) 478 ........ 2\)

Mann v. Mann, 135 Okla. 211, 275 Pac. 348 ............ 19

Martinez v. International Banking Corp., 220 U.S.

OG, 55 Big OU Se stesso I]

Mississippi Central Railroad Co. v. Smith, 295 U.

a wh oe | s Pee as ene ne eer II

yay

* pee Ge

ee aN ee ee ee SLED CRN ORLS IE PONE TPG BE TERI FO A Tig he CINE ES

<> 3.) E STE ‘ Sr ey 3%

—

INDEX TO AUTHORITIES (Cont’d.)

PAGE

Montgomery v. Anderson, 62 U.S. 386, 16 L. ed.

act nln EN ie. RA a, LER 1]

Newton v. Consolidated Gas Co., 265 U.S. 78,

SE arcs inn Leste. 13

North Carolina R. Co. y. Swasey, 90 U.S. 405,

ee Eat es | 11

Perkins v. Perkins, 154 Kan. 73, 114 P. (2d) 804... 15

Petty v. Petty, 147 Kan. 342. 76 Pp. (2d) 850; id.,

167 Kan. 510, 207 P. (ME) EB en cvscsssenase. 15, 16

Putnam v. Putnam. 102 Kan. 47, 177 Pac. 838... 19

Republic Natural Gd Co. y. Oklahoma, 334 U.S.

62, 92 L. ed. 1212

eth, Sa Soe RIL IORE 16

Shaffer v. Shaffer, 135 Kan. 35, 10 P. (2d) 17... 15, 19

Tobin v. Tobin, 89 Okla. 12, 213 Pac. 884... 19

Union Mutual Life Ins. Co. v. Kirchoff, 160 U.S.

rm ee OO 11

Washington ex rel. Grays H. L. Co. v. Superior

Court, 243 U.S. 251, 61 L. ed. a aL eae roe 11

Watson v. Watson, 104 Kan. 578, 180 Pac. 242 19

Statutes:

Title 28, United States Code, Section 1257 9

G. $. Kan. 1947 Supp., 60-1511 occ. 19

Aupreme Court of the United States

October Term — 1949

No. 504

UNITED STATES NATIONAL BANK OF DENVER and

| HILDRED L. DUGAN, as Executors of the Estate of George

P. Dickey, Deceased, Petitioners,

versus

RUBY DICKEY BARTGES, Respondent.

BRIEF OF RESPONDENT IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

k

} MAY IT PLEASE THE COURT:

» Your Respondent, Ruby Dickey Bartges, in opposi-

| tion to the petition for writ of certiorari and supporting

| brief, respectfully shows to this Honorable Court:

A.

OPINIONS BELOW

The opinion of the District Court of Denver, County,

» Colorado is shown at pages 73-95 of the Record. It is not

) teported.

The opinion of the Colorado Supreme Court, rendered

1¢ July 1949, is not yet officially reported. Unofficialiy

itis reported in 210 P. (2d) 600 (Advance Sheet), and

appears at pages 420-444 of the record herein. Per curiam

opinion denying petition for rehearing is unreported, but

appears at page 491 of the record.

B.

JURISDICTION

Petitioners seek to invoke this Court’s jurisdiction un-

der Title 28, United States Code, Section 1257 (3). The

decree of the Colorado Supreme Court was renc« ved on

14 July 1949. Timely petition for rehearing was denied

on 3 October 1949. Petition for writ of certiorari was filed

on 28 December 1949.

Cc.

STATEMENT OF THE CASE

This was an action by Respondent, Ruby Dickey Bart.

ges, against her divorced husband, George P. Dickey

(Petitioners’ predecessor), to recover damages sustained

by virtue of a property settlment contract, executed by

the parties during the pendency of their divorce suit,

under which she received a grossly inequitable division

of jointly accumulated marital property. Respondent

premised her right of recovery not only upon expres

fraud (affirmative misrepresentations by Mr. Dickey con-

cerning the extent and value of the marital property

which was the subject matter of the contractual nego-

tiations), but also upon constructive or “extrinsic” fraud

(nonperformance of her husband’s affirmative duty to

make full and complete disclosure to her of the extent

and value of the marital property)—-see, e. g., Colorado

Supreme Court opinion, R. 435-437. The basic facts ¢&

sential to an understanding of the controversy are as fol:

lows:

Respondent and George P. Dickey were married in

1924 (R. 73). She bore Dickey three children, one of

_

3

whom died, and also raised for Dickey another child of

his by a previous marriage (R. 73). Their marriage last-

ed approximately nineteen years—until 7 February 1944

(R. 9). Although Dickey was “an excessive drinker and

abusive in his conduct towards his wife” (R. 82), Respon-

dent was “a true and faithful wife up until a period

shortly before the institution of the divorce action” (R.

82).

At the time of their marriage Dickey had no property

of any value (R. 79). In fact, when their first child was

born in June, 1926 (R. 157), he was unable to discharge

the medical and hospital bills (R. 153). And in the spring

of 1927 friends “took up a collection to pay the gas, water

and light bills and buy some food, and also buy Mrs.

Dickey some clothes. She had two wash dresses” (R. 157).

By the time of their divorce, however, the marital part-

nership had accumulated assets worth between five and

six million dollars (R. 79). Under Kansas law Respond-

ent was entitled, in event of divorce, to a fair and equitable

division of this jointly accumulated property (e. g., see

Colorado Supreme Court opinion, R. 428-429).

Respondent instituted her suit for divorce in the Dis-

trict Court of Sedgwick County, Kansas, the state of the

parties’ residence, in October, 1943 (R. 73). Thereupon

her counsel, Mr. Foulston, met with Dickey’s counsel,

Messrs. Pringle and F leeson, in an attempt to negotiate

a property settlement (R. 170-171). By Kansas law Dick-

ey was obligated to exercise utmost good faith towards

Respondent in those negotiations and to make full and

complete disclosure to her of the extent and value of the

marital property (see e. g., Colorado Supreme Court

opinion, R. 438-439). At the first conference of attorneys

Mr. Foulston demanded a full disclosure by Dickey with

4

respect to the marital assets (R. 171), and Mr. Fleeson

agreed to furnish the requisite information (R. 171, 319).

Mr. Pringle then requested one Bonicamp, Dickey’s

accountant, to prepare such a statement for Mr. Foulston

(R. 319). Bonicamp did prepare certain “balance sheets"

(being Exhibit “B” to Respondent's instant complaint,

R. 17-24) pursuant to this request (R. 335-336, 357-358).

But those balance sheets did not identify any specific —

property cwned by Dickey. Moreover, they did not show

values; instead, they merely listed investment costs (R.

74). And this was the only disclosure made by Dickey

to Respondent regarding the extent and value of the

marital estate (R. 174, 216-217, 322-323, 334).

When Bonicamp handed the “balance sheets” to Dickey

and his attorneys he advised them that because of “dis-

covery and production” in the West Edmond, Okle-

homa, oil pool the books and “balance sheets” did not

reflect values, and he told them “they should explain that

to whom it (the ‘balance sheet’) was delivered to” (R.336-

337). No such explanation was ever made. Neither Res

pondent nor her counsel knew Dickey had any interest

in the West Edmond pool (e. g., R. 197, 198, 217, 219-

220, 234-235, 237), notwithstanding this pool was supply-

ing fifteen to twenty percent of Dickey’s income (R. 363-

364) and was constantly increasing in value (R. 257).

In short, there was no evidence adduced to show Res

pondent or her counsel knew or were given any inform:

tion regarding the extent and value of the Dickey mar

tal property; and there was an abundance of testimony

to show they did not possess this vical knowledge (ce. &

R. 175, 197, 198, 217, 219-220, 234-235, 237). In this

connection, when, at inception of the settlement negotia-

tions, Respondent’s counsel speculated that Dickey might

be worth approximately five million dollars, Dickey’

5

counsel Mr. Pringle asserted that figure was “clear

out of line” (R. 171) and that “maybe” Dickey was

worth as much as $2,500.00 (R. 173). Settlement was ne-

gotiated in reliance upon this statement by Dickey’s at-

torney (R. 224, 226, 229), and a property settlement

agreement was executed by both parties on 7 February

1944 (Exhibit “C” to instant complaint, R. 25-34). By

that agreement Respondent received $75,000 in cash

(most of which was required to discharge existing debts

—R. 166) and $250,000 in trust under an arrangement

providing for the payment of $550 per month to her for

her life, with the corpus Passing to the two children upon

her death (R. 74-75). At the same time, she forfeited all

interest in a prior $250,000 trust irrevocably established

for her in 1941 but which terminated in event of divorce

(R. 83,242; Abst. Ex. 41 ).

After the settlement was si gned, an abbreviated hearing

was held in the Kansas divorce court. Dickey withdrew

both his answer and his cross petition (R. 9), and Res-

pondent introduced evidence pertaining to, but only to,

her right to a divorce (R. 10, 179-180; see Colorado Su-

preme Court opinion, R. 424). Thereupon the settlement

contract was submitted to the court for its “approval”

(td). But there was no evidence whatever introduced

as to the extent or value of the Dickey’s marital estate,

80 the court had no possible means of considering or de-

termining whether the amount awarded to Respondent

by the contract was or was not “fair and equitable” (id.).

No issue of fraud, affirmative or constructive, was raised

by the pleadings or passed upon by the court (td.; also,

Colorado Supreme Court opinion, R. 430, 433). Finally, -

under Kansas law the agreement was absolutely binding

upor the divorce court absent any complaint there level-

led against it by the parties, and the court lacked juris-

ie

diction to disapprove or modify the contract (e. g., see

Colorado Supreme Court opinion, R. 430-433). At the

conclusion of the hearing the Kansas court granted Res-

pondent a divorce from Dickey and accorded its per-

functory, meaningless “approval” to the settlement agree-

ment (R. 9-17), the decree being rendered on 7 February

1944 (R. 9).

Almost immediately thereafter Respondent and Dick-

ey both left Kansas and took up permanent residences in

Colorado, she in Pueblo and Dickey in Denver. (R. 75).

Eight months later Stanolind Oil and Gas Company pur-

chased the stock of the Dickey Oil Company (part of

the marital property involved in the settlement agree-

ment) for $6,260,000 plus $300,000 escrowed to cover

income tax contingencies (Request No. 16 for Admissions,

R. 64; Answer No. 16, R. 70). Information concerning

such sale thereafter coming to Respondent’s attention (R.

255), and realizing she had been defrauded and unin-

formed at the time of her property settlement, Respond-

ent filed her instant action against Dickey in the District

Court of Denver County, Colorado, on 18 September

1945 (R. 2). Dickey died on 20 February 1946, during

the pendency of the action (R. 36), and Petitioners were

appointed executors of Dickey’s estate on 15 April 1946

and were substituted herein as parties defendant on 8

July 1946 (R. 41).

Respondent’s instant action did not attack the Kansas

divorce decree. Instead, it sought recovery of damages

caused by the fradulently induced property settlement

agreement—which agreement, as will hereinafter be |

demonstrated, was not adjudicated by and did not merge

into the decree of divorce (e. g., see Colorado Supreme

Court opinion, R. 430-433). Petitioners, however, assert-

ed throughout that to award Respondent relief herein

6

7

would constitute a denial of full faith and credit, under

Article IV of the federal constitution, to the Kansas

judgment (e. g., R. 59-60). The trial court rejected this

contention, found Dickey had been guilty of “extrinsic”

fraud, and ordered Petitioners to place in trust a sum

sufficient to pay Respondent $450.00 per month for life

(R. 73-95).

Petitioners and Respondent both appealed from this

decree to the Supreme Court of Colorado, Respondent

specifying, inter alia, that the trial court erred in not

awarding her an outright money judgment (Specification

5, R. 419) and in granting her a grossly inadequate

amount (Specification 7, R. 419-420).

The Colorado Supreme Court, after carefully review-

ing the pertinent Kansas decisions, determined that the

Kansas divorce decree posed no bar to maintenance of an

action such as Respondent's, either in Kansas or in Colo-

rado (R. 428-434). It determined, further, that by Kan-

sas law Dickey was, at the time of the property settlement

negotiations, obligated fully and completely to disclose

to Respondent the extent and value of the marital assets ;

also, that Kansas law raises a presumption of conceal-

ment and overreaching (“constructive fraud”) when a

property settlement agreement contains an inadequate al-

lowance to the wife. (R. 437-439). Finally, the Colorado

Supreme Court determined that there was an abundance

of evidence to support the trial court’s finding that

Dickey was guilty of the “constructive” or “extrinsic”

fraud of nondisclosure (R. 437, 439). Accordingly, it af-

firmed the decision of the trial court insofar, but only

insofar, as it sustained Respondent’s right to recover dam-

ages (R. 444). But it upheld Respondent’s contention

and reversed the decree below with respect to the relief

awarded, remanding the cause with two directions: (1)

a

that the trial court consider and determine the amount

of damages to which Respondent is entitled, and (2)

that it then render judgment for that amount in a lump

sum and not in trust:

8

“The cause is remanded with directions to enter

a money judgment for such sum as shall be deter-

mined by the court, from the evidence heard upon

the trial, as will result in a fair and equitable divis-

ion of property as required under Kansas law.”

It is this decree, nonfinal upon its face, which Pe-

titioners ask this Court to review upon certiorari.

D.

SUMMARY OF ARGUMENT

1. Respondent's right of recovery and the quantum

of damages to which she is entitled are inseparable, com-

ponent parts of her single cause of action. The decree of

the Colorado Supreme Court has not finally terminated

the litigation below because, although it adjudicates

plaintiff’s right of recovery, it remands the cause to the

district court for judicial determination of Respondent's

damages—no mere ministerial act. Manifestly, therefore,

the decree is not “final” within Section 1257 of the Code.

By the same token, certiorari may not issue.

2. Under Kansas law the settlement contract was ab-

solutely binding upon the Kansas divorce court since

neither litigant there pleaded or otherwise raised any is-

sue as to its validity. It could not have disapproved, set

aside, or modified the contract even had it so desired.

Accordingly, by Kansas law the court’s perfunctory ap-

proval thereof was no adjudication of its validity nor did

it cause the agreement to become merged in the divorce

decree. Again, no evidence was introduced before the

=

9

Kansas divorce court regarding the extent or value of

the Dickeys’ marital assets, so that court could not and

did not judicially inquire into, determine, or adjudicate

even the adequacy of the provision which the contract

made for Respondent. Finally, whether Dickey was guil-

ty of the constructive fraud of nondisclosure was neither

raised in nor determined by the Kansas court. It follows

that in permitting Respondent to maintain her instant ac-

tion to recover damages for constructive fraud the Colo-

rado court accorded to the Kansas divorce decree exactly

the same credit it would have received had this suit been

instituted in Kansas. The constitutional mandate of “full

faith and credit” has not, therefore, been transgressed.

E.

ARGUMENT AND AUTHORITIES

I,

The Decree Below Is Not Final Since It Remands the

Case to the District Court For Judicial Determination of

Plaintiff’s Damages.

Title 28, United States Code, Section 1257, invests

this Court with jurisdiction to review, by appeal or cer-

tiorari, only:

“Final judgments or decrees rendered by the high-

est court of a State in which a decision could be

nad...”

To be “final”, and, hence, reviewable by this Court,

a decree must fully terminate the litigation, determine

all rights of the parties, and leave nothing to be done ex-

cept the ministerial act of entering judgment in accord-

ance with the decree. For example, see Gospel Army v.

Los Angeles, 331 U. S. 543, 546, 91 L. ed. 1662, 1665:

10

“Under §237 of the Judicial Code, 28 USCA §344,

8 FCA Title 28, §344, only ‘final judgments’ of state

courts may be appealed to this court. And it fre-

quently has been said that for a judgment of an ap-

pellate court to be final and reviewable for this pur-

pose it must end the litigation by fully determining

the rights of the parties, so that nothing remains to

be done by the trial court ‘except the ministerial act

of entering the judgment which the appellate court

... directed.’ Department of Banking v. Pink, 317

US 264, 267, 62 L ed 123, 38 S Ct 7.”

The decree below cannot satisfy this rudimentarv test.

It does not end the litigation or determine all of Res-

pondent’s rights and Petitioners’ liability. Instead, it re-

quires the trial court to exercise its judicial discretion of

determining the amount of damages to which Respond-

ent is entitled. Unarguably this is no “mere ministerial

duty . . . to mathematically compute the amount to be

paid the Respondent” as Petitioners blandly assert (Pet.

for Cert. 49). The decree is not that Respondent be

awarded outright the same amount of money which the

Colorado trial court originally ordered to be placed in

trust. On the contrary, the trial court is ordered:

“ |. to enter a money judgment for such sum as

shall be [not for such sum as has been been] de-

termined by the court, from the evidence heard up-

on the trial, as will result in a fair and equitable di-

vision of property required under Kansas law.” (R.

444)

In fine, the trial court is directed to reconsider the

damage issue, to arrive at a judicial determination of a

fair and equitable award to Respondent, and then, and

only then, to enter judgment accordingly.

em

11

It is well settled that under these circumstances the

decree below, which does not resolve the damage issue,

is not “final”: Republic Natural Gas Co. v. Oklahoma,

334 U. S. 62, 92 L. ed. 1212; Catlin v. United States,

324, U.S. 229, 233, 89 L. ed. 91 1,916; Lacelede Gas Light

Co. v. Public Service Comm., 304 U. S. 398, 82 L. ed

1422; Mississippi Central Railroad Co. v. Smith, 295

U. S. 718, 79 L. ed. 167; Bruce v. Tobin, 245 U. S. 18,

62 L. ed. 123; Washington ex rel. Grays H. L. Co. v. Su-

perior Court, 243 U. S. 251, 61 L. ed. 702; Martinez v.

International Banking Corp., 220 U. S. 214, 55 L. ed.

438; California National Bank v. Stateler, 171 U. S. 447,

43 L. ed. 233; Drake v. Kochersperger, 170 U. S. 303,

42 L. ed. 1046; Union Mutual Life Ins. Co. v. Kirchoff,

160 U. S. 374, 40 L. ed. 461; Lodge v. Twell, 135 U. §.

232, 34 L. ed. 153; Grant v. Life Ins. Co., 106 U. S. 429,

27 L. ed. 237; Follansbee v. Ballard Paving Co., 154 U.

S. 651, 25 L. ed. 802; Davis v. Crouch, 94 U. S. 514, 24

L. ed. 281; North Carolina R. Co. v. Swasey, 90 U. S.

405, 23 L. ed. 136; Montgomery »v. Anderson, 62 U. S.

386, 16 L. ed. 160.

Strikingly illustrative of this Principle in Mississippi

Central Railroad Co. v. Smith, supra, 295, U.S. 718, one

of countless memorandum decisions by this Court apply-

ing the rule under consideration. There, Appellee brought

suit against Appellant railroad in a Mississippi state

court to recover damages sustained in a collision between

his automobile and Appellant’s train. Judgment was

tntered for Appellee upon a jury’s verdict which awarded

him $11,000. On appeal to the Mississippi Supreme

Court the railroad contended certain instructions to the

jury under the Mississippi “whistle and bell statute” vio-

lated the equal protection and due Process clauses of the

federal constitution. That court rejected the constitutio

nal

12

contention and affirmed the judgment save as to amount.

It ordered that judgment be entered for $7,000 if Ap-

pellee would accept a remittitur of $4,000; “otherwise,

it will be reversed . . . and the cause remanded for trial

on the question of the amount of damages only” (159

So. 562). An attempted appeal therefrom to this Court

was dismissed upon the ground that the Mississippi

Supreme Court decree was not “final” since it did not

determine the damage feature of the case.

There is no merit to instant Petitioners’ contention

(Pet. for Cert. 49) that because the “constitutional ques-

tion” has been adjudicated by the Colorado Supreme

Court its decree is final notwithstanding the fact that the

cause is remanded to the Colorado trial court for rede-

termination of the damage feature. Each of the authori-

ties immediately hereinbefore cited constitutes a com-

plete refutation of that position.

Thus, see Bruce v. Tobin, supra, 245 U. S. 18, a lead-

ing decision upon this very point, where an identical

contention was repudiated in these words:

“Jt may be indeed said that although the case was

remanded by the court below for a new trial, the

action of the court was in a sense final because

it determined the ultimate right of the father to re-

cover and the general principles by which that right

was to be measured. But that contention is not open

<a a

To the same effect is this Court’s recent, analogous

opinion in Republic Natural Gas Co. v. Oklahoma, supra,

334 U.S. 62, 68:

“Thus, the requirement of finality has not been

met merely because the major issues in a case have

been decided and only a few loose ends main to

13

be tied up—for example, where liability has been

determined and all that needs to be adjudicated is

the amount of damages.”

Finally, it is of no moment that the Colorado Supreme

Court decree taxed the costs of the appeal to Petitioners

(e. g., see Davis v. Crouch, supra, 94 U. S. 514). Were

the rule otherwise nearly all state supreme court decrees

—including, even, those disposing of appeals from mere

interlocutory rulings upon motions and demurrers—

would be final and reviewable inasmuch as appellate

decrees invariably assess the costs of the appeal to the

unsuccessful litigant.

Newton v. Consolidated Gas Co., 265 U. S. 78, 68 L.

ed. 909 (1924), the single authority adduced by Petition-

ers for their novel contention (Pet. for Cert. 50), is patent-

ly irrelevant. There, Appellee gas company secured an

injunction against enforcement of a New York statute

fixing, at a confiscatory rate, the price at which the com-

pany might supply gas to its private customers. There-

after a controversy arose in the district court with res-

pect to costs. The district court assessed to Appellant the

cost ($76,086.50) paid by Appellee gas company to a

surety company for bonds to secure repayment of money

impounded with a special master during the trial of the

injunction suit. Appeal to this Court was perfected from,

and only from, the final order taxing such costs to Ap-

pellant.

The primary issue posed by the Newton case was not

whether a judgment assessing costs is final, but whether a

final judgment assessing costs is appealable. And on the

former issue the order was considered final not because

it related to “costs”, but because it terminated the liti-

gation, leaving nothing further to be decided:

14

“Tf the subject-matter is appealable at all, there

would seem to be no doubt that the decree has all

the characteristics of finality. An execution can is-

sue at once to collect the costs as taxed, including the

item here complained of.” (265 U. S. at 82; 68 L.

ed. at 910)

At all events assuredly this Court did not there hold

that a decree, otherwise nonfinal, intermediary, or inter-

locutory, must nevertheless be held “final” merely be-

cause it includes an order taxing appellate costs to one

of the litigants.

We submit that, beyond all doubt, the Colorado Sv-

preme Court decree is not “final” and that the petition

for certiorari must be dismissed.

Il.

The Colorado Supreme Court Did Not Deny “Full Faith

and Credit” to the Kansas Divorce Decree.

As hereinbefore pointed out, the issue of fraud (af-

firmative or constructive) in Dickey’s procurement of

the property settlement contract was not within the

pleadings filed in the Kansas divorce suit, and no such

issue was considered or adjudicated by the District Court

of Sedgwick County, Kansas, in the divorce action (R.

9-17, 179-180; see Colorado Supreme Court opinion, R.

430, 432). Therefore, unless Responcent’s rights with res-

pect to the Dickey marital property were adjudicated

by the divorce court so as to become merged in its decree,

unquestionably that decree constitutes no bar to main-

tenance of the instant proceeding.

Yet under Kansas law a property settlement agreement

effected by the parties to a divorce action is, unless it be

attacked in such action by the parties themselves, bind-

15

ing and conclusive upon the divorce court which lacks

jurisdiction to annul, modify, or disapprove the parties’

own contractual division of property: Petty v. Petty,

147 Kan. 342, 76 P. (2d) 850; Perkins v. Perkins, 154

Kan. 73, 114 P. (2d) 804; see Colorado Supreme Court

opinion, R. 430-433.

Necessarily, therefore, the Kansas divorce court’s per-

functory “approval” of the instant settlement did not

“adjudicate” the respective Property rights of the parties

or merge their contract into the decree of divorce—the

court’s nugatory approbation could not merge into its de-

cree a private agreement it lacked power to reject, alter,

or amend. Per contra, the parties by their contract with-

drew the property division issue from the consideration

of the divorce court and deprived it of all jurisdiction

to adjudicate such issue. After the divorce decree, precise-

ly as before, the property rights of the parties rested ex-

clusively upon their own agreement: Petty v. Petty, supra,

147 Kan. 342, 76 P. (2d) 850; td., 167 Kan. 510, 207

P. (2d) 428; Hyde v. Hyde, 143 Kan. 660, 56 P. (2d)

437; id., 147 Kan. 134,75 P. (2d) 1023; Shaffer v. Shaf-

fer, 135 Kan. 35, 39, 10 P. (2d) 17; see Colorado Su-

preme Court opinion, R. 430-423. The inefficacy of the

divorce court’s “approval” of tne settlement agreement

becomes especially apparent when it is remembered that

the court had before it no evidence regarding the ex-

tent or value of the Dickey’s marital property (R. 10,

179-180; Colorado Supreme Court opinion, R. 424), and,

therefore, could not possibly have determined whether

or not the contract awarded an equitable division of such

unknown property to Respondent. As Mr. Justice (later

Chief Justice) Dawson wrote, in Leslie v. Manufactur-

ing Co., 102 Kan. 159, 162, 169 Pac. 193, of a comparable

judicial “approval”:

16

“There was no judicial consideration of the matter

at all in the city court—-not even of the question whe-

ther the infant’s interests were being protected by

the agreement to which the city court was asked to

give its judicial sanction. There was in fect no judg-

ment in any proper sezse, but merely a mumery of

form in a vain endeavor to give some colorable ju-

dicial approval of the settlement.”

While Petitioners point hopefully to an old (1931)

Kansas decision in Hullet v. Hullet, 133 Kan. 738, 3 P.

(2d) 470, rendered before the rule hereinbefore discussed

had become crystallized in that state, and stress the fact

that in the second Petty v. Petty decision (supra, 167 Kan.

510, 207 P. 2d 428) the Hullet opinion was paid the

courtesy of sophistical distinction (instead of being un-

cereimoniously overruled), the fact remains that the [ul-

let decision has never since been followed in Kansas and

that the nonmerger rule laid down by the first Peity

opinion (supra, 76 P. 2d 850) has been applied without

exception by the Kansas courts and represents the law

of Kansas.

Since, as the foregoing authorities establish, any action

by Respondent to enforce her rights under the settle-

ment contract must have been brought upon that agree-

ment, not upon the divorce decree, it follows, converse-

ly, that her instant action to avoid the unconscionable ef-

fects of that contract for fraud in its procurement is,

perforce, an attack upon that agreement and not upon the

judgment of divorce. Accordingly, the full faith and

credit of that judgment was not involved in or denied

by the Colorado decree. Squarely in point is Schoonover

v. Schoonover, 172 F. (2d) 526 (C.C.A. 10).

In any event, it has already been demonstrated that

by Kansas law Respondent’s property rights did not merge

—

17

into the divorce decree. Inasmuch, therefore, as her pres-

ent cause of action premised upon constructive fraud has

never before been the subject of litigation in any court,

the aforementioned want of merger is fatal to Petitioners’

constitutional complaint—see Magnolia Petroleum Com-

pany v. Hunt, 320 U. S. 430, 439, 88 L. ed. 149:

“... the clear purpose of the full faith and credit

clause [is] to establish . . that a cause of action merg-

ed in a judgment in one state is likewise merged in

every other.”

The mere fact, incidentally, that the Kansas divorce

court chose to couple its ineffective “approval” of the

settlement agreement with an “injunction” against vio-

lation of its terms cannot alter the determinative fact

that Respondent’s property rights are contractual, not

decreed. The same want of jurisdiction to adjudicate the

property rights as embraced in the agreement vitiates

any attempt judicially to affect those private, contractual

rights by injunctive pronounciamento. Completely irre-

levant, too, is the doctrine (Pet. for Cert. 40-43) that

litigants are estopped to attack decrees to which they

have “consented”. Respondent is not attacking the Kan-

sas divorce decree; and the “consent decree” authorities

could possess pertinency here only upon the erroneous

assumption that by Kansas law Respondent’s property

rights became merged in the divorce decree and that

her only remedy was to ignore the extinguished agree-

ment and solicit vacation of the judgment. (It is, more-

over, fundamental that a litigant may attack a consent

decree if his consent was fraudulently obtained. In

none of Petitioners’ cited authorities did the unsuccess-

ful litigant seek to impeach his “consent” on the ground

of fraudulent procurement.)

18

In closing, it should be noted that Petitioners’ basic

error stems from the fallacious assumption that Respon-

dent by her instant complaint asked the District Court of

Denver County, Colorado, to redetermine the same issue

—adequacy of the property division—already considered

and adjudicated by the District Court of Sedgwick

County, Kansas, and that the Colorado decision is es-

sentially a finding that the Kansas court reached an in-

correct conclusion (e. g., Pet. for Cert. 26, 32, 47-48).

But we have hereinbefore demonstrated that the Kan-

sas court had no jurisdiction to and did not adjudicate

this issue; nor was it furnished with any evidence from

which it might have drawn a conclusion as to the fair-

ness of the property settlement.

Also, we are compelled to take issue with Petitioners’

assertion that the Colorado district court held merely

“that it is fraud in law for a man of the wealth of Mr.

Dickey to give his wife the sum which she did receive

under the property settlement” (ret. for Cert. 16), and

that the Colorado Supreme Court simply affirmed this

theory of recovery (Pet. for Cert. 16, 30, 43-46, 46-48)—

which, Petitioners suggest, is to convict Dickey of an

anomalous type of fraud unknown to law.

Even a cursory examination of the Colorado Supreme

Court opinion (R. 436-439) will reveal, however, that

the court, after studiously examining the Kansas decis-

ions, held Dickey guilty of the constructive (or “extrin-

sic’) fraud of failing to perform his bounden duty of

disclosing fully and completely the extent and vaiue of

the marital assets which the contract purports to di-

vide.

By Kansas law assets accumulated during the mari-

tal relationship are, in divorce actions, treated as a species

19

of community property in which the wife has an in-

violable interest: Cummings v. Cummings, 138 Kan. 359,

361, 26 P. (2d) 440; Putnam v. Putnam, 102 Kan. 47,

52-54, 177 Pac. 838; Tobin v. Tobin, 89 Okla. 12, 213

Pac. 884, 888-889. This rule is embodied in a statute

(G. S. Kan. 1947 Supp., 60-151 1, quoted in the Colorado

Supreme Court opinion, R. 428-429) which requires

that the wife be awarded “a fair and just division” of all

such marital property—regardless, even, of her fault:

Holder v. Holder, 143 Kan. 79, 53 P. (2d) 806; Davi-

son v. Davison, 125 Kan. 807, 266 Pac. 650; Leach v.

Leach, 46 Kan. 724, 27 Pac. 131.

A concomitant rule requires a husband, in negotiating

a property settlement with his wife, to exercise the ut-

most good faith and to inform her fully and completely

concerning the extent and value of the marital estate;

and if the contractual Provision made for the wife is

disproportionate to the means of the husband, the Kan-

sas law raises a presumption of fraudulent concealment -

and casts upon him the burden of Proving affirmatively

that he made the complete disclosure demanded of him

by law or of suffering the vitiating consequences of “con-

structive fraud”: Watson v. Watson, 104 Kan. 578, 180

Pac. 242, 244: Cessna v. Cessna, 155 Kan. 856, 130 P. (2d)

560, 563; Shaffer v. Shafer, 135 Kan. 35, 10 P. (2d) 17;

Pattison v. Pattison, 129 Kan. 558, 283 Pac. 483; Hoard

v. James, 119 Kan. 138, 237 Pac. 888. See, also, Mann v.

Mann, 135 Okla. 211, 275 Pac. 348, 351. (The Oklahoma

divorce statute—12 Okla. Stats. Ann. §1278, p. 179—is

copied verbatim from G. S. Kan. 1947 Supp., 60-1511,

supra, and Oklahoma and Kansas decisions construing

and applying this mutual property division statute are

interchangeably authoritative in both States, as was con-

_—

20

ceded by Petitioners at page 62 of their original brief

to the Colorado Supreme Court.)

Under Kansas law the award to Respondent of merely

$250,000 out of marital property then worth between five

and six million dollars (R. 79) was grossly inadequate

and disproportionate as an inexorable matter of law:

Holder v. Holder, 143 Kan. 79, 53 P. (2d) 806; Mann

v. Mann. 136 Kan. 331, 15 P. (2d) 478. Hence, the afore-

mentioned presumption of constructive fraud became

operative in the case at bar; and, since Petitioners failed

to demonstrate that Dickey made the requisite “full and

complete disclosure”, Dickey stands convicted by the in-

stant record of constructive fraud. Furthermore, in our

“Statement of the Case” we have hereinbefore demon-

strated there was abundant affirmative proof of the fact

that Dickey failed to make the full disclosure indispensa-

ble to defend the settlement contract against Respondent's

attack.

The foregoing are the precise rules of Kansas law upon

which the Colorado Supreme Court relied in concluding

that Dickey was guilty of constructive fraud (R. 428-429,

436-437, 437-439), and its decision upon this issue is not

only supported but compelled by the Kansas authorities.

Many additional arguments might be advanced to re-

but Petitioners’ assertion that the decision of the Colo-

rado Supreme Court withheld from the Kansas divorce

decree the faith and credit to which it was constitutionally

entitled. (Respondent’s briefs to the Colorado District

Court alone consumed 162 pages, most of them devoted to

this one point—R. 79.) In view, however, of the manifest

infinality of the decree below we refrain from pursuing

the issue further.

21

F.

CONCLUSION

It is submitted the decree of the Colorado Supreme

Court is not “final” within the requirement of Section

1257 of the Code, and that, in any event, it is not violative

of the full faith and credit mandate of the federal con-

stitution. For either or both of these reasons it is submit-

ted the petition for writ of certiorari should be denied.

Georce SIEFKIN,

Joun F. Esernarpr,

Of Wichita, Kansas,

Max Me vitte,

Of Denver, Colorado,

Counsel for Respondent.