400 F.2d 487 (10th Cir. 1968), 9145, Raulie v. United States

Docket Nº:9145.
Citation:400 F.2d 487
Party Name:Carra A. RAULIE, William W. Raulie and Irene F. Raulie, husband and wife, Appellants, v. UNITED STATES of America and John Foster Clingingsmith and Kathryn Evelyn Clingingsmith, husband and wife, Appellees.
Case Date:August 02, 1968
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 487

400 F.2d 487 (10th Cir. 1968)

Carra A. RAULIE, William W. Raulie and Irene F. Raulie, husband and wife, Appellants,

v.

UNITED STATES of America and John Foster Clingingsmith and Kathryn Evelyn Clingingsmith, husband and wife, Appellees.

No. 9145.

United States Court of Appeals, Tenth Circuit.

Aug. 2, 1968

Page 488

Charles C. Spann, Albuquerque, N.M. (Grantham, Spann, Sanchez & Rager, Albuquerque, N.M., and Lynell F. Skarda, Clovis, N.M., were with him on the brief) for appellants.

Page 489

Esther L. Smith, Clovis (Botts, Botts & Mauney, Albuquerque, N.M., and Blanchette, Smith & Shelton, Dallas, Tex., were with her on the brief), for appellees.

Before MURRAH, Chief Judge, BREITENSTEIN, Circuit Judge, and DELEHANT, Senior District Judge. [*]

DELEHANT, Senior District Judge.

The rather unusual course which this litigation has heretofore taken appears to justify, even possible to suggest, a recollection, more than ordinarily exhaustive, of the sequence in which the pleadings were filed in the trial court, and of their respective averments. An instance is here presented in which the original plaintiff, unsuccessful in the trial court, is not a real and active participant in the submission of the case to this court on appeal.

This action was instituted on July 1, 1963, in the United States District Court for the District of New Mexico, by United States of America, as plaintiff, against Carra A. Raulie, a single man, William W. Raulie and Irene F. Raulie, husband and wife; and John Foster Clingingsmith and Kathryn Evelyn Clingingsmith, husband and wife; and also against one Ben H. Fletcher and the John Hancock Mutual Life Insurance Company, all as defendants. Jurisdiction, therefore, was claimed for, and existed in, this court, under 28 U.S.C. § 1345, because of the status as plaintiff of the United States of America. Responsive to separate, and somewhat early, motions of United States of America, and by individual orders of the trial court, the case was dismissed on September 17, 1964 as to the defendant, the John Hancock Mutual Life Insurance Company, and on September 21, 1965 as to the defendant, Ben H. Fletcher. Neither of them is a participant in the present submission, or in this appellate case.

As plaintiff, the United States of America tendered its original complaint in two counts which (regard being had to the instant status of United States of America in the litigation, infra) are now only briefly recalled. In its first count, the United States of America, after a statement of the nature and general objective of the action and the identification of the then several parties defendant, alleged the incurring by the defendant Carra A. Raulie, during the years 1933 through 1940, of indebtedness to the United States; the reduction of such indebtedness to judgment on January 31, 1962, in Civil Action No. 4923, in the United States District Court for the District of New Mexico, in which United States of America was the sole plaintiff and Carra A. Raulie was the only defendant, wherein, on the date last identified, United States of America was awarded a judgment for $3, 148.88, with costs of $82.20, against the defendant Carra A. Raulie; the residence together of Carra A. Raulie, William W. Raulie and Irene F. Raulie on a farm allegedly then owned of record by the defendant Carra A. Raulie and described as:

Lots 5 and 6 and the Southwest quarter of section 3, Township 2 North, Range 37, East, and the East half of the Southeast quarter of section 4, Township 2 North, Range 37 East, in Curry County, New Mexico;

the relationship as brothers between Carra A. Raulie and William W. Raulie, and timely knowledge by William W. Raulie that repeated demands for the payment of such indebtedness had been made by the United States of America upon Carra A. Raulie; the mailing on October 4, 1961 by the United States Attorney for the District of New Mexico to Carra A. Raulie of a demand letter for the payment of his indebtedness to the United States; and the execution, and filing for record, both on October 11, 1961, and recording in Deed Record Book 108 at page 224, in the office of the County Clerk of Curry County, New Mexico, of a Warranty Deed by Carra A. Raulie to William W. Raulie, conveying

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to William W. Raulie the real estate already herein described; and further alleged that the deed last described did not represent a bona fide transaction; that no consideration was given for it; that after such execution, Carra A. Raulie continued to occupy, and to exercise dominion and control over, the real estate described in such deed; that William W. Raulie accepted such deed for the purpose of applying for a real estate loan from Farmers Home Administration in order to help Carra A. Raulie refinance his (Carra A. Raulie's) indebtedness, and for the purpose of evading the levy upon such land of any execution against Carra A. Raulie; that William W. Raulie did not become the owner of such land by virtue of such deed, but, rather, held title thereto in trust for the benefit of Carra A. Raulie and his creditors; and that William W. Raulie and Irene F. Raulie, his wife, knew the terms and conditions of such alleged constructive trust. Let it be remembered that the deed between the Raulie brothers was executed, filed for record, and recorded on October 11, 1961, three months twenty days before the entry on January 31, 1962 of plaintiff's judgment against Carra A. Raulie, supra.

In that first count of its complaint, the United States of America further alleged that, after the entry of the judgment in its favor against the defendant, Carra A. Raulie, on January 31, 1962, supra, an execution upon such judgment was issued; that on March 28, 1962 the United States Marshal attempted, in pursuance of such execution, to levy on the real estate hereinbefore described; that Carra A. Raulie and William W. Raulie concealed from the United States Marshal the 'fact, ' (meaning obviously the contention in that respect of the United States) that Carra A. Raulie was the true owner of the land and William W. Raulie merely held the title to it in trust, and by such concealment and deception misled the United States Marshal into refraining from levying upon, or selling, the land under such execution, but without alleging how or in what manner such 'concealment' or 'deception, ' if any, was effected or practiced, unless, and except, insofar as, such 'concealment' or 'deception, ' or both, be attributed to the state of the then public record, supra, of the title to said land; that, on May 10, 1962, the defendants, William W. Raulie and Irene F. Raulie, executed a warranty deed of the foregoing land to the defendant John Foster Clingingsmith which, on June 6, 1962, was filed for record and recorded in Deed Record Book 111 at page 149, in the office of the County Clerk of Curry County, New Mexico, and, 'on information and belief, that Clingingsmith knew, when he accepted such deed, that William W. Raulie was not the true owner of the land thereby conveyed, but merely held title to it in trust for the defendant, Carra A. Raulie and his creditors; and that such deed to John Foster Clingingsmith was given and accepted in lieu of a mortgage, and for the purpose of securing certain loans of money from Clingingsmith to Carra A. Raulie, and there was no bona fide sale and transfer of such land;' that on July 1, 1962, John Foster Clingingsmith and Kathryn Evelyn Clingingsmith, his wife, executed a mortgage deed of and respecting said real estate to defendant, John Hancock Mutual Life Insurance Company in the principal sum of $30, 000, which on July 5, 1962 was filed for record and recorded in Mortgage Deed Book 145 at page 12 of the records of the County Clerk of Curry County, New Mexico; and, again 'on information and belief, ' that the defendant John Hancock Mutual Life Insurance Company knew that Carra A. Raulie was indebted to the United States, that demand had been made upon him for payment, that judgment had been rendered against him; and that he had deeded the land (in trust) to William W. Raulie for the purpose of evading his creditors; and also knew that, when William W. Raulie and Irene F. Raulie deeded such land to Clingingsmith, William W. Raulie was not the true owner thereof, and that the deed from

Page 491

William W. Raulie and Irene F. Raulie to Clingingsmith was, in effect, a mortgage.

And, concluding the first count of its complaint, the United States of America prayed, alternatively, for judgment, either:

'(1) Cancelling and setting aside the deed from Carra A. Raulie to William W. Raulie, dated October 11, 1961, and filed for record in Book 108, page 224 of the records of the County Clerk's Office in Curry County, New Mexico, which purported to convey Lots 5 and 6, and the SW 1/4 of Section 3 and the E1/2 SE1/4 of Section 4, Township 2 North, Range 37 East; or,

'(2) for judgment holding that the foregoing described deed merely created a constructive trust whereby William W. Raulie held title to the land for the benefit of Carra A. Raulie and his creditors; and,

'(3) for judgment impressing upon this land the lien of plaintiff for $3, 148.88 principal and $82.20 costs, obtained as a judgment in Civil Action No. 4923, as of the date when the United States Marshal attempted to levy the execution in Civil Action No. 4923, which date is March 28, 1962; and,

'(4) for judgment holding that the deed from William W. Raulie and Irene F. Raulie to John Foster Clingingsmith and the title transferred thereby, is subject to and inferior to the judgment lien of plaintiff for $3, 148.88 and $82.20 costs; and,

'(5) for judgment holding that the mortgage deed given by John Foster Clingingsmith and Kathryn Evelyn Clingingsmith to the John...

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