Morris v. Waring Et Ux.

• Decision Date: 30 August 1916
• Docket Number: No. 1865.,1865.
• Citation: 159 P. 1002,22 N.M. 175
• Parties: MORRISv.WARING ET UX.
• Court: New Mexico Supreme Court

22 N.M. 175

159 P. 1002

MORRIS

v.WARING ET UX.

No. 1865.

Supreme Court of New Mexico.

Aug. 30, 1916.

Syllabus by the Court.

Sections 2757, 2758, 2759, 2762, 2764, 2765, Code 1915, interpreted, and held that property purchased by a married woman with money borrowed upon her own personal credit, and which money is repaid out of her separate estate, is her separate property.

Appeal from District Court, McKinley County; Herbert F. Raynolds, Judge.

Action by W. H. Morris against T. A. Waring and Lelia W. Waring. From a judgment for defendants, plaintiff appeals. Affirmed.

Under Code 1915, §§ 2757-2759, 2762, 2764, and 2765, creditors of a debtor husband cannot reach his property, which was purchased by the wife with money borrowed on her personal credit, and which was repaid out of her separate estate.

Marron & Wood, of Albuquerque, for appellant.

A. T. Hannett, of Gallup, for appellees.

PARKER, J.

The plaintiff, appellant here, brought an action against the defendant, T. A. Waring, one of the appellees, to recover the sum of $3,859.07 in the district court of McKinley county, and recovered judgment for the amount. Execution was issued and returned nulla bona. At the time of the incurring of the debt, the recovery of the judgment, and the issuance and return of the execution, the said defendant and Lelia W. Waring were husband and wife. When the debt was contracted the defendant T. A. Waring was the owner of certain property in the town site of Gallup. Thereafter he conveyed to his wife the said property for the sum of $80, and thereafter had no other property upon which execution could be levied. It was alleged that this conveyance was without valuable consideration, and was for the purpose of hindering, delaying, and defrauding the plaintiff and other creditors of the defendant T. A. Waring, and was accepted by the defendant Lelia W. Waring with full knowledge of that purpose. It was further alleged that the defendants purchased with the funds of the marriage community certain other property described in the complaint, and that all of said property was properly applicable to the payment of the plaintiff's judgment, and that the defendant T. A. Waring was insolvent, except for his interest in said community property. The plaintiff prayed that the deed from the defendant T. A. Waring to his wife, be declared null and void as against the plaintiff, and that all of the property be held subject to the payment of the plaintiff's judgment.

The answer admitted that the defendant T. A. Waring gave the note described in the complaint, but denied that it was a community debt, and alleged that it was the separate debt of the said Waring. It admits that the said Waring, when the debt was contracted, was the owner of the property first mentioned, and that he conveyed the same to his wife by two deeds, and that he had no other property standing in his name. It denies that said transfer to his wife was made for the purpose of hindering, delaying, or defrauding the plaintiff or other creditors, and alleged that said deeds were made from the defendant Waring to his wife, for a good, sufficient, and valuable consideration, to wit, $80. It alleged that all of the other property hereinbefore mentioned was either inherited by the defendant Lelia W. Waring, or was purchased with her separate property and money which was bequeathed to her by her first husband, or with money derived by her from the estate of deceased ancestors. It denied that any of the property described in the complaint was community property, and alleged that it was the sole and separate estate of the defendant Lelia W. Waring. At the conclusion of the trial the plaintiff made requests for findings, which were denied, and the court, of its own motion, found as follows: That the plaintiff recovered the judgment against the defendant Waring, as alleged in the complaint, and that execution was issued and returned nulla bona as alleged therein; that said judgment was recovered upon a debt which was a community debt of the marriage community of the two defendants, but it was not the individual debt of the defendant Lelia W. Waring, nor a debt upon which her separate property might be taken or sold, and that the judgment still remains unpaid and unsatisfied; when the debt was incurred the property, afterwards conveyed to the wife, stood in the name of the defendant T. A. Waring; and that the value of these lots as unimproved was about $100 in the year 1910; that a dwelling and other permanent improvements were made upon this property during the year 1911 to the amount of $1,200, which improvements and the taxes on the property were paid for by the defendant Lelia W. Waring, and that the value of the lots as improved was substantially $1,900; that it was not alleged in the pleadings nor was there any proof of an agreement between the defendant T. A. Waring and his wife concerning the payment to her of the moneys paid by her upon these improvements, nor was there any claim or proof that it was to be paid; that after the improvements were made, and while the debt of plaintiff existed, the defendant T. A. Waring conveyed this property to his wife for a consideration of $80, and at the time of such conveyance this was the only property standing in defendant's name, subject to the payment of the plaintiff's debt; that the defendant, Lelia W. Waring, inherited from her former husband, who died in 1895, personal property to the amount of approximately $2,000, which she then loaned to her father, and which was repaid to her in different amounts, but had been fully repaid from 12 to 15 years ago, and when repaid was used, in whole or in part, as an investment in a partnership formed between her and her brothers to carry on a trading business at Gallup; that she likewise inherited from her former husband a house and lot which sold for $3,800, a thousand of which was paid in cash and the balance in notes bearing 8 per cent. interest; the interest of these notes was paid semiannually, and the principal of the notes was not paid until the year 1914; that about the year 1908 her brother, with whom she had engaged in the partnership business, died, and out of her share of that business she received substantially $2,500; that with a portion of this money she bought and still owns a half interest in a trading partnership known as the Ft. Wingate Trading Company, and other portions she loaned out on notes at interest; that the defendants were married in the year 1900; that thereafter in 1903, 1910, 1911, and 1913, the defendant Lelia W. Waring purchased certain property mentioned in the finding for the sum of $6,625, and that part of the purchase price for the sum was borrowed by her from third persons upon her individual unsecured note, the property then being deeded and conveyed to her; that when some of these notes became due she paid them with money borrowed from other persons, giving them in turn her unsecured promissory note; that these notes were paid by Mrs. Waring out of moneys which were either interest received by her on the loans of the money derived from her former husband's estate, or the proceeds or profit of her investment of her separate funds in the partnership transaction with her brothers, or rents received from the property so purchased by her, or moneys paid to her from roomers whom she took into her house, or from some or all of these sources, and none of the personal earnings of the defendant T. A. Waring, nor the proceeds of the business conducted by him, were used in the payment of the said notes; that just how much of these notes or debts were paid by rents of the property, how much with interest derived from loans of Mrs. Waring's separate estate, and how much with room rent, the evidence failed to disclose, but it was all paid from the combined sources mentioned.

The court concluded, as a matter of law, that the judgment in favor of plaintiff against the defendant T. A. Waring was a judgment and debt of the community, and for which community property may be seized and applied in payment; that the conveyance to the defendant Lelia W. Waring by her husband, above recited, was not fraudulent or void as against creditors; that the property purchased by the wife during the existence of the marriage community with money borrowed by her on her separate individual, unsecured note, and property conveyed to her as a result of said transaction, did not become community property, but became and remains the sole and separate property of the defendant Lelia W. Waring, and not subject to the payment of the community debt; that her partnership interest in the Ft. Wingate Trading Company is likewise her separate property under the facts found; that the defendants are entitled to judgment dismissing the complaint upon the merits. Whereupon, a judgment of dismissal upon the merits was entered by the court, and the plaintiff appeals.

1. The principal proposition relied upon by counsel for appellant is that property purchased by the wife with money borrowed on unsecured notes during the existence of the marriage community becomes community property, and its status is not changed because the debt or notes are afterwards paid, in whole or in part, by her separate property. The proposition turns upon a proper interpretation of our statutes. The pertinent provisions are as follows:

“Sec. 2757. All property of the wife owned by her before marriage and that acquired afterwards by gift, bequest, devise or descent, with the rents, issues and profits thereof is her separate property. The wife may without the consent of her husband convey her separate property.

Sec. 2758. All property owned by the husband before marriage, and that acquired afterwards by gift, bequest, devise or descent, with the rents, issues and profits thereof is his separate property.

Sec. 2759. The earnings of the wife are not liable for the debts of the husband.”

“Sec. 2762. The separate...