Woodson v. Raynolds.

• Decision Date: 24 January 1938
• Docket Number: No. 4308.,4308.
• Parties: WOODSONv.RAYNOLDS.
• Court: New Mexico Supreme Court

42 N.M. 161

76 P.2d 34

WOODSON

v.RAYNOLDS.

No. 4308.

Supreme Court of New Mexico.

Jan. 24, 1938.

Appeal from District Court, Bernalillo County; Thomas J. Mabry, Judge.

Suit by Katherine McMillen Woodson against J. M. Raynolds to set aside a consent judgment allowing a claim of the First National Bank of Albuquerque, New Mexico, against the estate of Alonzo B. McMillen, deceased, which had been assigned to the defendant. Judgment for the defendant, and the plaintiff appeals.

Affirmed.

In transactions between a trustee and a beneficiary, it is not always necessary for beneficiary to have independent advice.

Mechem & Hannett, of Albuquerque, for appellant.

John F. Simms, J. R. Modrall, and A. T. Seymour, all of Albuquerque, for appellee.

HUDSPETH, Chief Justice.

Katherine McMillen Woodson, daughter and legatee of Alonzo B. McMillen, deceased, sued to set aside a consent judgment allowing a claim of the First National Bank of Albuquerque, N. M., against the estate of Alonzo B. McMillen, deceased, in the sum of $31,153.95. The judgment was assented to and approved by her, all the other heirs, and the executors some eight years before the filing of this suit. Appellee Raynolds bought the judgment in October, 1928, at face value from the bank when the comptroller objected to the judgment as a bank asset. The findings and judgment were in his favor, and plaintiff brings this appeal.

[1] The appellee challenges seven statements of fact made in appellant's brief. The learned trial judge filed an opinion to which appellant refers for support of certain statements of fact. Where there is a conflict. between an opinion and a finding of fact supported by substantial evidence the finding prevails. After carefully examining the record, we have decided that all facts found by the court at the request of appellee are supported by substantial evidence and that it will simplify the consideration of the issues raised by this appeal to set out said findings in full. They follow:

“1. A. B. McMillen died intestate in Bernalillo County, New Mexico on the 11th of August, 1927, leaving him surviving his widow, Florence O. McMillen, and three adult married daughters, to-wit: Eileen McMillen Lee, the wife of Laurence F. Lee, Dorothy McMillen Rodey, the wife of Pearce C. Rodey; Katherine McMillen Woodson, wife of Richard P. Woodson; Dorothy McMillen Rodey has since died, leaving her surviving Sheila McMillen Rodey and Alonzo McMillen Rodey, two minor children, whose legal guardian is Pearce C. Rodey, their father;

“2. The First Savings Bank and Trust Company of Albuquerque, New Mexico, was adjudged insolvent and placed in the hands of a receiver on the 7th day of September, 1933;

“3. In the year 1922 and for many years prior thereto A. B. McMillen was a director of and attorney for the First National Bank of Albuquerque and the First Savings Bank and Trust Company of Albuquerque, and the Defendant, J. M. Raynolds was in 1922 President of both institutions and a director in each and continued so until both banks closed in 1933, and the directors in both banks were the same.

“4. In the year 1922 and prior thereto for many years J. S. Raynolds, the father of the Defendant and the founder of the banks in question, and A. B. McMillen were close personal friends and business associates and occupied positions of trust and importance with both banks, the agents, officers and servants of which were accustomed to carry out their instructions.

“5. In the year 1922 A. B. McMillen directed Guy Rogers, Vice-President of the First National Bank of Albuquerque, to purchase the outstanding bonds and stock of the Central Printing Company, which operated the Albuquerque Evening Herald, a daily newspaper, which enjoyed a news-service franchise and which was then in financial difficulties, its stock having only a nominal value of approximately 10¢ a share and the bonds being purchasable at 50¢ on the dollar with interest in default.

“6. At the time Mr. McMillen directed the purchase of the stock and bonds of the Central Printing Company his purpose was to acquire and control the Herald, and, following his instructions, the First National Bank of Albuquerque bought all of the outstanding stock and bonds, delivered the stock to Mr. McMillen, and carried the bonds as a bank investment.

“7. At the time the bank bought the bonds and stock it was the understanding of the Defendant, J. M. Raynolds, that Mr. McMillen would protect the bank from loss in handling the transaction in the manner done, and Mr. Raynolds was justified from the facts and circumstances in understanding and believing that Mr. McMillen had agreed to protect the bank from loss.

“8. Mr. McMillen handled the Herald for several years at a loss around $80,000, after which the Central Printing Company went into the hands of a receiver and the amount of the claim in controversy here, to-wit, $31,153.95, represents the sum necessary to be repaid to the First National Bank of Albuquerque to protect it from loss in the transaction.

“9. After the amount of the loss was ascertained, conversations ensued between the Defendant and McMillen, from which the Defendant sought to get McMillen to give him a guarantee in writing on account of the requirements of the national bank examiner, but McMillen did not do so, and in the late winter and early spring of 1927, when Mr. McMillen was confined at home with his last illness, Mr. Raynolds made a written demand for a settlement of the matter, which Mr. McMillen refused in writing, claiming that he never guaranteed the payment of the bonds, or the bank's loss in relation thereto.

“10. Laurence F. Lee, who was a member of the Bar of New Mexico and son-in-law of McMillen, was his partner in the last two years of his life and handled his business matters for him, at least to the extent of contacting and dealing with persons who had business with Mr. McMillen and reporting such transactions to Mr. McMillen.

“11. In the spring of 1927, before Mr. McMillen died the following August, the Defendant, J. M. Raynolds, President of the First National Bank of Albuquerque, not being able to arrive at a settlement of the disputed claim for $31,153.95, consulted H. G. Coors, an attorney, and was advised by Coors that he could hold Mr. McMillen liable for paying the bank's claim, but Mr. Laurence F. Lee was of the opinion that, if the bank sued Mr. McMillen, the claim could be defeated.

“12. In the spring of 1927, after Mr. Raynolds had stated that he was obliged to sue Mr. McMillen and intended to do so, Mr. Lee called a family conference of Mrs. McMillen, Mrs. Lee, to meet in Lee's office, at which conference Raynolds, the Defendant, attended, stating that he had been advised by Coors that his claim was collectible by suit and he intended to bring suit on it; Mr. Lee stated at the meeting that he would “beat the socks off the claim”; Mrs. McMillen asked Raynolds in the open meeting what would be the consequence of their refusal to agree to allow the claim after Mr. McMillen's death and was told by Mr. Raynolds that he would be obliged to sue them; the conference finally determined and agreed that, if Raynolds would not sue and thus embitter the last days of Mr. McMillen, they would allow the claim against the estate.

“13. A few months after the death of Mr. McMillen, Laurence F. Lee moved to Raleigh, North Carolina, to take charge of the Occidental Life Insurance Company in the early fall of 1927, but was a member of the firm of McMillen, Lee, Ryan & Johnson, which firm represented the First National Bank, as its general legal counsel; the firm never handled the business of the McMillen estate, which was handled by Laurence F. Lee, individually, as a family matter and with no retainer to the firm nor compensation to it, and Laurence F. Lee never represented the First National Bank personally in any manner against the McMillen estate, the claim having been prepared by Bryan G. Johnson, as a courtesy to the First National Bank, which was his client, but making no charge for preparing the claim and judgment of allowance in the Probate Court.

“14. When the year for the presentation of claims had almost expired, Mr. Raynolds, as President of the First National Bank of Albuquerque, requested that a formal allowance of the claim be made and Mr. Johnson prepared the claim and a consent judgment of allowance; a meeting was held in Mr. Lee's office in Albuquerque, he having returned from Raleigh to attend to estate matters, and at the meeting on the 3rd of August, 1928, were present Mr. Lee and Mrs. Lee, Mrs. McMillen, Mr. and Mrs. Rodey, and Mr. Woodson, Mrs. Woodson being then in California; at this meeting the question of allowing the bank's claim came up and Mr. Laurence F. Lee explained in detail the facts and business transactions out of which the claim of the First National Bank of Albuquerque arose, after which Mr. Rodey expressed the opinion that it was not a legal claim but perhaps a moral one, and all parties present agreed that it should be allowed, provided that time be given so that the estate could meet other obligations and pay the bank's claim at a more convenient date, without interest for the first two years; at the time said agreement was reached Mr. Raynolds, on behalf of the First National Bank of Albuquerque, agreed to waive its claim against the estate of Mr. McMillen, on account of advanced payment for legal fees, in an amount of $2,964.27, which claim was waived by said bank and was never paid by said estate.

“15. Mr. Woodson left the city for California and arrived there on the 5th of August, 1928, and at about the same time Mrs. Woodson received a letter from Mr. Lee, advising her of the result of the conference about the claim and stating that the settlement would have to go through or the matter would have to be litigated, requesting her to talk with her husband about it and telling her that she was under no obligation to agree...