Title: Fitzhugh v. Plant

State: new-mexico

Issuer: New Mexico Supreme Court

Document:

255 P.2d 683 (1953) 57 N.M. 153 FITZHUGH v. PLANT et al. No. 5623. Supreme Court of New Mexico. April 6, 1953. *684 Garland & Sanders, Las Cruces, for appellant. J. Benson Newell, Las Cruces, for appellees. COMPTON, Justice. The appeal is from an order granting summary judgment. The questions presented are (a) whether a creditor may invoke equity without first reducing his claims to judgment, and (b) whether the court erred in denying a motion to amend the pleadings. Originally, appellant instituted this proceeding against James C. Plant alone in an action at law to recover damages sounding in tort. Thereafter, he filed an amended complaint to set aside a conveyance of real estate theretofore made from Plant to appellee, Grace Eldridge, on the ground that the same was made for the purpose of defrauding the creditors of the grantor, particularly appellant. The conveyance is admitted. All other material allegations are denied. Thereupon, appellee, Grace Eldridge, moved for summary judgment and from an order granting the same, appellant appeals. In Early Times Distillery Company v. Zeiger, 9 N.M. 31, 49 P. 723, this court in discussing the rights of general creditors to equitable relief said: Again in Grunsfeld Bros. v. Brownell, 12 N.M. 192, 76 P. 310, 311, it was held: Also see Fuqua v. Trego, 47 N.M. 34, 133 P.2d 344; Van Sickle v. Keck, 42 N.M. 450, 81 P.2d 707. Appellee relies strongly upon Talbott v. Randall, 3 N.M., Gild, 367, 5 P. 533, and Wolcott v. Ashenfelter, 5 N.M. 442, 23 P. 780, 8 L.R.A. 691, in support of the proposition that judgment creditors only may avail themselves of equitable relief. We do not understand the cases to so hold. From a reading of those cases it appears that grounds for equitable relief were not alleged. If these cases are not to be thus distinguished, clearly, they are overruled by the cases cited. Further, rule 18(b) our Rules of Civil Procedure, adopted from and identical with rule 18(b) of the Federal Rules, entitled "Joinder of Remedies-Fraudulent Conveyances", permits the joinder of both legal and equitable remedies. The rule, in part, reads: In construing its rule, the Federal Courts hold that a creditor may maintain an action to set aside a conveyance for fraud without first having obtained judgment. Keene v. Hale-Halsell Co., 5 Cir., 118 F.2d 332; Armour & Co. of Delaware v. B.F. Bailey, Inc., 5 Cir., 132 F.2d 386, 387. In the latter case the court says: Subsequent to the filing of the motion for summary judgment and prior to a ruling thereon, appellant moved the court for leave to amend the complaint by adding thereto section 7, which reads: The motion was denied and the ruling of the court is assigned as error. We think there was an abuse of discretion in denying appellant's motion. The proposed amendment also tendered grounds for equitable relief. The conveyance to appellee was without consideration and was made in contemplation of insolvency. In such case appellant is obviously without an adequate legal remedy. Rule 15(a) our rules, likewise adopted from the Federal Rules, says that liberality in amendments is encouraged and favored where no prejudice is suffered by the opposing party, and in this case we see none. Its concluding sentence reads, "leave shall be freely given when justice so requires." See McDowall v. Orr Felt & Blanket Co., 6 Cir., 146 F.2d 136, 137; Blair v. United States, for Use and Benefit of Gregory-Hogan, 8 Cir., 147 F.2d 840; Daniel v. City of Tucson, 52 Ariz. 142, 79 P.2d 516, 117 A.L.R. 1211. It follows from what has been said, that the court erred in granting summary judgment and denying the motion to amend. The judgment will be reversed with direction to the trial court to vacate the order granting summary judgment, enter an order allowing the amendment, and proceed in a manner not inconsistent herewith, and it is so ordered. SADLER, C.J., and McGHEE, COORS and LUJAN, JJ., concur.