Marchbanks v. Mccullough.

• Decision Date: 17 November 1942
• Docket Number: No. 4730.,4730.
• Citation: 132 P.2d 426,47 N.M. 13
• Parties: MARCHBANKSv.McCULLOUGH.
• Court: New Mexico Supreme Court

47 N.M. 13

132 P.2d 426

MARCHBANKS

v.McCULLOUGH.

No. 4730.

Supreme Court of New Mexico.

Nov. 17, 1942.Rehearing Denied Jan. 13, 1943.

Appeal from District Court, Chaves County; J. C. Compton, Judge.

Action to foreclose a mortgage by the National Bank of Roswell against W. C. McCullough, Addie McCullough, Opal Parker, and W. D. Marchbanks, wherein W. D. Marchbanks by answer and cross-complaint alleged that Addie M. McCullough held title to property involved for benefit of W. C. McCullough against whom cross-complainant had obtained a judgment and asked that his judgment lien against the property be foreclosed and held subject only to bank's mortgage, and wherein Addie McCullough in answer to cross-complaint denied she held title to property for W. C. McCullough, alleged title in herself, and by cross-complaint against W. D. Marchbanks asked that title be quieted in herself. The two cross-complainants abandoned their original action and defense as pleaded and tried the cause as one involving the question whether the transfer of the property involved by W. C. McCullough to Addie McCullough was for the purpose of hindering, delaying or defrauding creditors, particularly W. D Marchbanks. From an adverse judgment, W. D. Marchbanks appeals.

Judgment affirmed.

In action involving alleged fraudulent transfer, that alleged claim which transfer was made to satisfy was barred by limitations, that transfer was made to debtor's mother and covered all of debtor's property within the state, that transfer was made immediately after threatened litigation, and that deed was filed of record shortly after creditor's suit was filed, were not conclusive although they bent credulity almost to the breaking point.

Frazier & Quantius, of Roswell, for appellant.

E. E. Young, of Roswell, for appellee.

BRICE, Chief Justice.

This suit was initiated in the district court by the First National Bank of Roswell, by filing a complaint to foreclose a mortgage against the property in suit, alleging among other things that the defendants Addie McCullough (appellee here), Opal Parker and W. D. Marchbanks (appellant here) claimed some lien, right, title or interest in or to the property mentioned. The appellant answered alleging that appellee held title to the property for the benefit of defendant W. C. McCullough and that he (appellant) claimed a lien by reason of a judgment in the amount of $411.50, which was filed for record on December 23, 1940.

By cross-complaint against appellee and her son W. C. McCullough, appellant charged that appellee had no beneficial right, title or interest in said property. That it belonged to her son, W. C. McCullough, against whom he had recovered a judgment which had been duly filed in the office of the county clerk of Chaves County, by reason of which he held a judgment lien against said property. He prayed that his judgment lien be foreclosed and held to be subject only to the bank's mortgage, and that out of the proceeds of the sale of the property at foreclosure, the amount due appellant be paid with costs.

In her answer to appellant's cross-complaint appellee denied she held title to the property for W. C. McCullough and alleged title in herself. She denied that the judgment in question was a lien against the land in suit. By cross-complaint against appellant appellee sued to quiet title in herself.

We are here concerned only with the issues between appellant and appellee. These parties abandoned their original action and defense as pleaded, and tried the cause as one involving the question of whether the transfer of the property in question by W. C. McCullough to appellee was for the purpose of hindering, delaying or defrauding creditors of McCullough and particularly the appellant.

Appellee asserts that as the appellant's cross action was to foreclose a judgment lien, and hers to quiet title in herself to the property in question, that the question of whether that property had been transferred to hinder, delay and defraud McCullough's creditors is not in the case.

It is true that it was not originally in the case, and appellee might have rested her case after the introduction in evidence of her title papers. But not satisfied with such procedure, she introduced evidence to establish the bona fides of the transaction wherein her son W. C. McCullough transferred the real estate in question to her. By her own act she changed the cause of action, which was accepted by the appellant and acquiesced in by the trial court. The question tried with the acquiescense of the trial court was whether the property had been transferred to hinder, delay and defraud creditors, and particularly the appellant, and the trial court decided the case on that theory.

[1] Certainly no new cause of action could have been injected into this suit at the trial without an agreement of the parties (Hudson v. Herschbacher Drilling Co., 46 N.M. 330, 128 P.2d 1044), but if the parties, with the court acquiescing, desired and did substitute a different cause of action, we are not disposed to interfere on appeal, at the behest of one of them.

[2] The only question is whether a certain deed from W. C. McCullough to his mother, the appellee, was executed for the purpose of hindering, delaying and defrauding his creditors. If it was so executed it is void as to such creditors by the statutes of the 13th and 27th of Elizabeth, which were adopted with the common law in this state. If void then the judgment lien should have been foreclosed and the judgment satisfied out of the proceeds of the sale of the property. If not void then the decree of the district court should be affirmed.

The undisputed facts are as follows: The property in question was bought by McCullough in 1925. He leased a ranch from appellant and in July, 1940, was indebted to appellant for rent and for injuries to a well in the total sum of $400. On July 14th of that year appellant told W. C. McCullough, in the presence of appellee, that he wanted payment and threatened court action. On the next day McCullough executed a deed transferring the property (all he owned in New Mexico) to appellee. On August 12, 1940, appellant filed suit against appellee. On August 27, 1940, McCullough acknowledged the execution of the deed and on the next day filed it for record and paid the recording fee. In January, 1941, the McCulloughs moved from New Mexico and live now in Arizona.

The appellee testified substantially as follows: The defendant W. C. McCullough is her only son. Her husband died in 1937 and prior to his death gave the son the real estate in question; also, prior to his death he loaned the son $500. There were no papers executed to evidence this loan. Her husband built two rooms onto the house on the real estate in suit, which cost him substantially $600, and for which the defendant McCullough owed his father at the time of the latter's death. Appellee found a statement of the cost of the two rooms among her husband's papers, showing the expenditure of $472. This money was furnished as a loan. The defendant deeded the property to her because she was interested in it, and then “another thing, to keep his (defendant's) wife from coming in, you see; afraid maybe she would, and I wanted to clear the title between me and his wife.” They first discussed having the property turned over to appellee in 1937 and it just “drifted along.” The deed was made July 15, 1940, because “we just could not get to it earlier.” They lived out in the mountains. She knew that her son was having difficulty with appellant over a debt. On July 15, 1940, McCullough told his mother he was making the deed to her. It was returned to her from the county clerk's office after it was recorded in August. They had talked about having the deed made before Mr. Marchbanks filed suit against her son. She never rendered the property for taxation. Her son had been paying the taxes after his father died except “the last time.” She paid it out of the rent money. Her son has been collecting the money, but has been turning it over to her. He began this about two years ago. The rent money is sent by her agent to her. She received the rent before the deed was made. “Q. In other words, what you want you take and what your son needs he takes? A. Yes, that is the way we manage, and that is the way we have been doing.” Her son had no other property in New Mexico. The $500 was paid to him in cash. She helped to count it out. They kept it at home. They never...