Court Opinion

ID: 3572418
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:25:39.266693+00
Date Added: 2024-06-11T13:46:00.804825
License: Public Domain

We have come to a cross-roads of opinion because of distinct differences of view as to the respective functions of the trial court and of the Supreme Court as a court of review, merely.
The majority have found the trial court in error as to the important matter of consideration for the deeds to the real property involved. They say that whatever may be said concerning the rule in Retsch v. Renehan, "We are committed to the doctrine that payment of a pre-existing debt is a valuable and adequate consideration for the transfer of property."
That the trial court was not motivated by this declared principle is apparent by its refusal to make defendant's requested finding of fact as follows: "That on the said *Page 352 
31st day of January, 1939, and for a long time prior thereto the defendant was a creditor of the said May McGraw and the said May McGraw executed said conveyance in payment of indebtedness due the defendant."
And by giving the finding of fact No. 16 requested by the plaintiff, to wit: "That there was no consideration paid by the said Michael J. Grant for the conveyance to him of the aforesaid premises; that there was no cancellation by said defendant of any written security given by the said May McGraw, or any written release by said defendant of any unsecured claim held by him against the said May McGraw." (Emphasis supplied.)
The record shows abundantly that the defendant was entitled to the finding quoted, and we should not assume that the trial court did not believe the testimony offered by the defendant in view of the fact that the court apparently refused the finding for the reason advanced by the plaintiff that a pre-existing or antecedent debt, the extinguishment of which would constitute consideration for a conveyance could not be proved by parol evidence but must be proved by a writing of some sort, which writing must be produced and canceled and surrendered at the time of the conveyance.
There is some language in support of that view in a quotation from the writings of Mr. Pomeroy employed by this court in Retsch v. Renehan, 16 N.M. 541, 120 P. 897, relied upon by the plaintiff, but as the majority say, this is not the law in this state. But, say the majority, having found the court in a substantial error they will nevertheless proceed to investigate and determine whether there is substantial evidence to support the court's further finding that the grantor and grantee in the deeds were guilty of fraud independently of the question of consideration (if that be a finding of fact as distinguished from a conclusion of law). This the majority do and give an affirmative answer after employing what seemed to be certain badges of fraud such as absence of change of possession of the property conveyed, financial difficulties of the grantor, pendency of a lawsuit against her and certain declarations said to have been made by her. I do not find any evidence that the grantee knew anything about the grantor's alleged intention to hinder and delay her creditors except that he did know that the grantor was being sued and made inquiry of her about such suit, and when the grantor told him that it was none of his business, he failed to press the inquiry further. Whether further inquiry would have disclosed to the grantee that the grantor made the conveyance to him with the intent to hinder and delay her creditors instead of being done in a good faith effort to prefer the grantor as a creditor in consideration of obligations and promises made many years prior to the law suit, is problematical.
It is true that ordinarily, badges of fraud if convincing may afford the evidence of fraud, but it is a recognized rule *Page 353 
that where there exists a consideration for the transfer, the badges of fraud are repelled. See Moore on Fraudulent Conveyances, Sec. 21; 37 C.J.S., Fraudulent Conveyances, § 98; 27 C.J. p. 497, note 86; Shealy v. Edwards, 75 Ala. 411; Terrell v. Green, 11 Ala. 207; Goetter v. Norman, 107 Ala. 585, 19 So. 56; Quealy Land 
Live Stock Co. v. George, 36 Wyo. 268, 254 P. 130.
It is my view that having found the court in error as to so vital a matter, the cause should be remanded to the trial court for further findings and conclusions, consistent with the enlightening view of the law as declared by this court in the majority opinion. We would thus avoid the precarious assumption that the trial court's judgment would have been the same, notwithstanding the error committed. If the trial court had found the conveyance to have been made for an adequate consideration instead of finding that there was no consideration, I have no way of knowing whether his general finding (or conclusion) of fraud would have been the same or whether the fact is that the court found fraud because he had first found that there was no consideration for the transfer. I greatly doubt whether the court would have found fraud, at least on the part of the grantee, if he had not previously found that the conveyance had been made and received without consideration. In any event, the primary duty of deciding cases rests upon the trial court and it should be given the opportunity to do so in this case after being advised as to the controlling legal principles governing the elements of consideration.
For the reasons stated, I dissent.