Rogers v. Balduini

OPINION OP THE COURT

DAVIS, J.

At the close of plaintiff’s case in the trial court defendants moved for judgment on the ground that the proof was insufficient to authorize the relief asked, and this motion was granted. This was equivalent to a demurrer to the evidence which admits the truth of. the testimony, every conclusion which it tends to prove and every inference which may reasonably be drawn from it. Morrison v. First National Bank, 28 N. M. 129, 207 Pac. 62.

Appellant, plaintiff below, is the trustee of the estate of Isola Bambini, a bankrupt. He commenced this suit to set aside a warranty deed executed by.the bankrupt to Rafael Balduini, who subsequently died and whose heirs were made defendants and are appellees. This deed was dated April 1, 1916, acknowledged August 12, 1916, and recorded August 23, 1916. By its terms she conveyed to Balduini several parcels of real estate, wbicb constituted all of tbe property wbicb sbe owned. At tbat time sbe owed a considerable sum of money, but the value of her property moré than equaled her debts. Tbe real estate covered by the,.deed was worth at least $6,000. Tbe deed deeites a consideration of $1, and there was no proof of anything further. Her petition in bankruptcy was filed November 27, 1916, and the schedules showed no assets other than some personal effects 'which were claimed and allowed as exempt.

In the absence of any explanation do these circumstances show that this deed is fraudulent against creditors, and, at the outset of the inquiry, since lack or inadequacy of consideration is the foundation of appellant’s contention, is the recital in the deed of $1 as the consideration prima facie proof that this was the actual and only consideration?

Such a recital is an admission against interest. It is the statement of Mrs. Bambini, acquiesced in by Bal-duini, that she received $1 as the purchase price of this property. It is admissible in evidence against these parties to the same extent that any other relevant admission against interest would be. Its evidentiary value may be slight if contradicted or explained, but, standing by itself, it may not be disregarded, and affords prima facie proof of the actual consideration.

As to whether the transaction amounted to a valid conveyance as between Mrs. Bambini and Balduini, we need express no opinion. If valid, it was to all intents and purposes a gift. We are dealing only with the question as to the effect of this conveyance upon her creditors. On the date of the deed Mrs. Bambini owed about $5,000. She owned property worth at least $6,-000. She conveyed all of it for the consideration of $1. She paid none Of her creditors, and on November 27, 1916, filed her schedules in bankruptcy listing no available assets. The rule applicable to such a. situation is stated in Bump on Fraudulent Conveyances, § 244, as follows:

“The law stamps a man’s generosity with the name of fraud where it prevents him from acting fairly toward his creditors, and presumes fraud if he disables himself from paying- his debts. In such, cases the presumption of fraud arise arid may exist without the imputation of moral turpitude. The principle is that persons must be just before they can be generous, and that debts must be paid before gifts can be made.’’

The following authorities hold that a conveyance reciting the receipt' of a nominal consideration for the sale of valuable property is prima faeie fraudulent against creditors: Scoggin v. Schloath, 15 Or. 380, 15 Pac. 635; York v. Leverett, 159 Ala. 529, 48 South. 684, California Consolidated Mining Co. v. Manley, 10 Idaho, 786, 81 Pac. 50; O’Brien v. Cavanaugh, 36 Misc. Rep. 362, 73 N. Y. Supp. 558; Gunn v. Hardy, 130 Ala. 642, 31 South. 443.

The case turns on the question of consideration. Counsel for appellee argues that evidence of an adequate consideration, the payment by Balduini of $6,000 in cash, is found in a deposition of John M. Moore introduced by appellant. This deposition contains statements which, in connection with testimony as to such payment, might have some corroborative effect, but, taken by themselves, do not prove it. An examination of the testimony shows nothing which is actually contradictory of the recital in the deed.

The question presented is narrow. Possibly future developments in the case will show that our discussion is upon a fictitious issue. But we are compelled to pass upon the case as presented, and within the issues presented. Further than that we do not go. Under the facts of the present record, it is apparent that the proof in the court below, unexplained and undenied, made out a. prima facie case of a conveyance void as to creditors and was sufficient to put appellees upon their proof.

The judgment is reversed, and the cause remanded, with instructions to overrule the motion of defendant for judgment. They are entitled to proceed with their proofs.

PARKER, J., and LEAHY, District Judge, concur.