Consolidated Placers, Inc. v. Grant

• Decision Date: 14 August 1944
• Docket Number: 4819.
• Parties: CONSOLIDATED PLACERS, Inc., v. GRANT.
• Court: New Mexico Supreme Court

151 P.2d 48

48 N.M. 340, 1944 -NMSC- 040

CONSOLIDATED PLACERS, Inc.,
v.
GRANT.

No. 4819.

Supreme Court of New Mexico

August 14, 1944

Appeal from District Court, Grant County; A. W. Marshall, Judge.

Creditor's suit by Consolidated Placers, Inc., against Michael J. Grant to set aside certain conveyances and subject the property to payment of a judgment. Judgment for plaintiff, and defendant appeals.

Affirmed.

In creditor's suit against debtor's transferee to set aside conveyance as fraudulent, refusing transferee's conclusion of law that burden was on creditor to establish existence of fraud and that existence of fraud must be proved distinctly and satisfactorily by clear and convincing evidence was not error although it was a correct statement of the law. [151 P.2d 49]

Alvan N. White and Clyde T. Bennett, both of Silver City, for appellant.

J. F. Woodbury and Ben Shantz, both of Silver City, for appellee.

THREET, Justice.

This is a creditor's suit brought by appellee against appellant to set aside certain conveyances made by one May McGraw to appellant, Michael J. Grant, and subject the property, described therein, to the payment of its judgment. From a judgment in favor of appellee, appellant appeals.

Facts, as found by the trial court, necessary to a decision on the questions raised by appellant, are:

"That plaintiff is a corporation, organized and existing under and by virtue of the laws of the State of Colorado and duly authorized to do business and doing business in the State of New Mexico. On or about the 14th day of September, 1936 plaintiff brought suit against May McGraw in the above entitled cause and recovered judgment in the sum of $2500.00, together with interest and costs on the 10th day of July, 1939. During the pendency of this suit and prior to final judgment May McGraw, without consideration and with intent to hinder, delay and defraud the plaintiff in the collection of its judgment, disposed of all her property in the following manner, to-wit: To Michael J Grant [151 P.2d 50] a chattel mortgage covering her personal property consisting of furniture, household effects and fixtures; and a warranty deed conveying all of her real estate located in Grant County, New Mexico, except 40 acres. To W. R. Goss bills of sale conveying a power shovel, all cattle and horses and a Pontiac car. The expressed purpose of May McGraw in making the transfers was to divest herself of the personal property so that plaintiff would be unable to satisfy its judgment therefrom; and that W. R. Goss held the personal property as a secret trustee for May McGraw, for her use and beneficial interest, and upon a subsequent sale of the power shovel and cattle May McGraw received the purchase price thereof.

"Prior to the stipulation for a judgment and the entry thereof against May McGraw, she closed out her checking account in the First National Bank at Silver City, New Mexico, and thereafter kept currency in a safety deposit box in the bank. That, after making all of the transfers and mortgage, May McGraw by stipulation of her attorney, allowed judgment to be entered against her without trial upon the merits. The conveyance, transfers and mortgage, aforesaid, operated to divest May McGraw of all legal title in any property out of which plaintiff's judgment could be satisfied, thereby causing her to be insolvent. After making the conveyance, transfers and mortgage, May McGraw had no other property of any kind out of which plaintiff's judgment could be satisfied; and from the date thereof until the date of her death she acquired title to no other property, either real or personal, in an amount sufficient to satisfy plaintiff's judgment; and to have caused execution to issue at any time during such period to satisfy the judgment would have been futile and ineffective.

"The court further found that the chattel mortgage and the warranty deed were accepted and received by the defendant, Michael J. Grant, with the knowledge of the fraudulent intent of May McGraw, and with the intent on his part to assist May McGraw in and for her fraudulent purpose, and to hold the real and personal property as a secret trust for her benefit.

"Subsequent to the entry of the judgment on July 11, 1939, it was discovered that a certain parcel of the May McGraw ranch had not been included in the deed of January 31, 1939; that a transcript of the plaintiff's judgment had, by that time, been filed for record and recorded in the office of the County Clerk of Grant County, New Mexico; that to avoid the lien of plaintiff's judgment and with the intent to further defraud plaintiff, May McGraw executed a so-called 'correction deed' to the defendant Michael J. Grant.

"That, after the conveyance of the real estate to her brother, Michael J. Grant, May McGraw retained possession, residing thereon and treating the premises, in all respects as her own, and Michael J. Grant never took possession nor resided upon the premises so conveyed.

"No consideration was paid by Michael J. Grant for the conveyance to him of the premises; that there was no cancellation by the defendant of any written security given by May McGraw, or any written release by the defendant of any unsecured claim held by him against May McGraw.

"On the 12th day of February, 1942, the defendant, Michael J. Grant, was appointed administrator of the estate of May McGraw, deceased, and in his petition for such administration, stated that the assets of the estate consisted solely of personal property of the probable value of $800.00. On the first day of June, 1942, plaintiff filed proof of claim based upon its judgment against May McGraw which was approved by the probate court as a claim against her estate in the sum of $2500.00, together with interest and costs.

"The court further found that plaintiff's claim against the estate of May McGraw, deceased, is wholly unsatisfied, and there is now due and owing to plaintiff the sum of $2512 with interest at the rate of 6% per annum, since July 10,1939. That plaintiff has been diligent in filing its case and there has been no substantial change in the value of the property or the relationship or the position of the parties since the rendition of the judgment in cause No. 9077. That the action was brought within a reasonable time."

Based upon these findings, the trial court concluded that the warranty deed executed on the 31st day of January, 1939, by May McGraw in favor of appellant, Michael J. Grant, and the correction deed executed on the 6th day of February, 1940, by May McGraw in favor of appellant, Michael J. Grant, were fraudulent and should be set aside; and that appellee was not guilty of laches in bringing its suit. [151 P.2d 51]

Appellant's forty-eight assignments of error are considered under seven points set forth in his brief in chief, the first of which is as follows: "One of the material issues in this case was the corporate existence of the appellee. There being no proof offered to establish the corporate existence of the appellee, the court erred in its third finding of fact."

The question here challenges the trial court's finding that appellee was a Colorado corporation, duly authorized to do business in the State of New Mexico; and the court's refusal to adopt appellant's first conclusion of law that the action should be dismissed for the reason that appellee failed to...