Trujillo v. Padilla

• Decision Date: 03 June 1968
• Docket Number: No. 8332,8332
• Citation: 1968 NMSC 90,79 N.M. 245,442 P.2d 203
• Parties: Rosarito TRUJILLO, Plaintiff-Appellant, v. Miguel Patricio PADILLA, Bernardo Padilla, Jr. and Nellie C. De Baca Rael, Individually and as Administratrix with the Will Annexed of the Estate of Bernardo Padilla, Sr., Deceased, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 203

442 P.2d 203

79 N.M. 245

Rosarito TRUJILLO, Plaintiff-Appellant, v. Miguel Patricio PADILLA, Bernardo Padilla, Jr. and Nellie C.

De Baca Rael, Individually and as Administratrix with the

Will Annexed of the Estate of Bernardo Padilla, Sr.,

Deceased, Defendants-Appellees.

No. 8332.

Supreme Court of New Mexico.

June 3, 1968.

Rehearing Denied July 10, 1968.

Florenceruth J. Brown, Santa Fe, for appellant

Ernest E. Valdez, Santa Fe, for appellees.

PER CURIAM:

Upon consideration of motion for rehearing, the original opinion is withdrawn and the following is substituted therefor.

OPINION

COMPTON, Justice.

This is a declaratory judgment action by the plaintiff, formerly the wife of Bernardo Padilla, Sr., now deceased, to set aside a conveyance to him of her interest in community porperty on the ground that she did not have independent legal counsel to advise her regarding such conveyance. From an adverse judgment, she appeals.

The primary and principal questions are (a) whether the conveyance was fraudulent, and (b) was appellant's cause of action barred by the statute of limitations. The former question requires an affirmative answer, the latter a negative answer. The appellant and Padilla were married in 1934. In 1942, they acquired as community property a lot at 115 Jimenez Street in Santa Fe, upon which they constructed a dwelling house. In February, 1955, Padilla employed an attorney, Marcelino P. Gutierrez, to obtain a divorce for him. At the request of Gutierrez appellant went to his office where she executed three documents, an appearance and waiver in the divorce action; a warranty deed to Padilla of the Jimenez Street property, both dated February 11, 1955; and an agreement of the spouses not to bother one another, dated February 12, 1955. The complaint filed February 12, 1955 alleged that 'the parties have not acquired any community property for distribution in this cause.' The decree entered March 25, 1955 contains the same recital.

The trial court found that the lot in question was community property and that appellant did you have independent legal counsel when she executed the deed, but further found:

'4. In February, 1955, the plaintiff knew that she had certain community property rights in the house and lot at 115 Jimenez, Santa Fe, New Mexico, and she asserted same to the late Bernardo Padilla.

'5. Plaintiff failed to assert her rights by suit until ten years and one month after her execution of the warranty deed conveying the house and lot known as 115 Jimenez Street, Santa Fe, New Mexico, and she is guilty of laches.

'7. Plaintiff failed to produce the corroborating evidence required by Section 20--2--5, N.M.S.A., 1953 Compilation (pocket supplement).

'8. Bernardo Padilla, deceased, and his successors have paid all taxes on the house and lot known as 115 Jimenez Street, Santa Fe, New Mexico, and their possession thereof has been open, hostile, exculsive, continuous, adverse, notorious, in good faith, peaceable and under color of title since February, 1955.

'9. Plaintiff has failed to prove fraud by clear and convincing evidence.'

The court then concluded that the action was a collateral attack upon the final decree in the divorce action, and that appellant's action was barred by her laches and by the statute of limitations.

It is obvious that neither the property rights of the parties nor the validity of the conveyance of the property was litigated in the divorce proceeding. Consequently, the divorce decree is not a bar to the wife's independent action to set aside the conveyance. Hollingsworth v. Hicks, 57 N.M. 336, 258 P.2d 724; Cornell v. Cornell 57 N.M. 170, 256 P.2d 534. See, also, Sidebotham v. Robison, 216 F.2d 816 (9th Cir. 1954), and Sande v. Sande, 83 Idaho 233, 360 P.2d 998.

Where one party secures an advantage over the other in a fidiciary relationship such as shown here, the transaction is presumptively fraudulent. Beals v. Ares, 25 N.M. 459, 185 P. 780. See, also, Curtis v. Curtis, 56 N.M. 695, 248 P.2d 683. The husband was the moving party; the appellant was unable to read or write English; she had no independent counsel; and the husband threatened to kill her if she ever came upon the premises. We think it is clear that the husband had and took an advantage in the matters surrounding the conveyance of the property to him.

The burden was on appellees to overcome the presumption of fraud. They were required to show (a) payment of an adequate consideration; (b) full disclosure to the wife as to her rights and the value and extent of the community property; and (c) that the wife had competent and independent advice in conferring the benefits upon her husband. Beals v. Ares, supra. The appellees have failed to overcome this burden. As to element (a), the testimony of both appellant and Gutierrez failed to show that any consideration had passed to appellant for the conveyance of the community property. As to element (b), Gutierrez testified that he had been informed by Padilla that the property was purchased with separate funds, and Gutierrez repeated that information to appellant. This reveals an apparent conscious effort of the husband to conceal the status and full value of the community property.

It is the appellees' contention, however, that even if appellant's interest had been acquired by the fraud of Padilla, she was divested of title by adverse possession and is barred from maintaining the action by laches and the four year statute of limitations. We find this contention without merit.

The applicable adverse possession statute, § 23--1--22, N.M.S.A.1953, requires that one 'shall have had adverse possession continuously and in good faith under color of title for a period of ten (10) years.' Failure of the appellees to overcome the presumption of fraud in acquiring the title prevents them from meeting the 'good faith' requirement of the statute. Apodaca v. Hernandez, 61 N.M. 449, 302 P.2d 177; Thurmond v. Espalin, 50 N.M. 109, 171 P.2d 325. See, also, Palmer v. Denver & Rio Grande Western Railroad Co., 75 N.M. 737, 410 P.2d 956. Adverse possession is defined in the statute as being 'an actual and visible appropriation of the land, commenced and continued under a color of title and claim of right inconsistent with and hostile to the claim of another.'

Appellees seek to invoke the four-year statute of limitations, § 23--1--4, N.M.S.A.1953, as a bar to the relief sought. That statute has reference to actions brought for relief on the ground of fraud. In Lotspeich v. Dean, 53 N.M. 488, 211 P.2d 979, we said:

'* * * This statute has application to the ordinary action based upon fraud, such as suits to rescind contracts brought about by false representations of the defendnat. It has no application to suits of this kind, in which the fraud charged was a collateral matter. * * *'

Here, because of the relationship of husband and wife, a presumption is raised against the validity of the transaction in which the wife did not have competent and independent legal advice in conferring benefits upon the husband. Primus v. Clark, 48 N.M. 240, 149 P.2d 535; Beals v. Ares, supra. Where such a fiduciary relationship exists, 3 Pomeroy, Equity Jurisprudence, § 956, states the rule thusly:

'* * * We are now to view fiduciary relations under an entirely different asspect; there is no intentional concealment, no misrepresentation, no actual fraud. The doctrine to be examined arises from the very conception and existence of a fiduciary relation. While equity does not deny the possibility of valid transactions between the two parties, yet because every fiduciary relation implies a condition of superiority held by one of the parties over the other, in every transaction between them by which the superior party obtains a possible benefit, equity raises a presumption against its validity, and casts upon that party the burden of proving affirmatively its compliance with equitable requisites, and of thereby overcoming the presumption.'

Thus, under the circumstances here, fraud is only an incident to the cause of action. In such case, the statute is not applicable.

Laches is an equitable defense and, unlike limitations, is not necessarily a matter of time, but is a question of the inequity of permitting the claim to be enforced. Algodones Land & Town Co. v. Frank, 21 N.M. 82, 153 P. 1032; Yates v. American Republics Corp., 163 F.2d 178 (10th Cir. 1947); and Sidebotham v. Robison, supra. No inequities caused by any delay of appellant are shown in the record.

Appellees contend that appellant is barred by failure to request a finding attacking the divorce decree, or a conclusion that the doctrine of res judicata or estoppel by judgment was not applicable. We find the contention without merit. The divorce decree made no determination concerning the property of the parties.

Appellees complain that appellant failed to request findings of constructive fraud. This contention is answered by pointing out that appellant requested findings of a number of facts which are those necessary for the application of the doctrine announced in Beals v. Area, supra, which were denied by the court.

The appellees claim that appellant failed to request findings that there was corroboration of her testimony under the so-called Dead Man Statute, § 20--2--5, N.M.S.A.1953. Such request was not essential as the conveyance to Padilla is admitted. As to the facts not admitted by appellees, there was sufficient corroboration to raise the presumption of fraud.

Appellees argue that appellant failed to request findings in opposition to the court's finding of adverse possession. On the contrary, appellant did request findings that there was never an ouster of her by Padilla and that the property remained in community, which findings were refused.

Appellees finally assert that appellant failed to request a finding in opposition to the finding of laches. Appellant, however, did request a conclusion of law that...