Opinion
No. 75-146
Decided February 13, 1976. Rehearing denied March 4, 1976. Certiorari granted May 24, 1976.
Action by administratrix of decedent's estate to recover a sum transferred to the defendant by the decedent on the ground that said conveyance was fraudulent. The defendant counterclaimed against the estate for moneys allegedly owed her by the decedent. Individual claim of the administratrix and counterclaim of the defendant were dismissed, and judgment was entered in favor of the estate. Defendant appealed.
Affirmed in Part, Reversed in Part.
1. EXECUTORS AND ADMINISTRATORS — Conveyance by Decedent — Action to Set Aside — Wife — Individually, and as Administratrix — No Basis Shown — Invalidation of Conveyance — Error. In action by wife, individually and as administratrix of husband's estate, to set aside husband's conveyance of certain funds to defendant, the wife, acting for the estate, failed to show husband made the conveyance with the intent to defraud, and since she had not obtained judgment against decedent in aborted divorce action, she could not set aside the conveyance as a subsequent creditor, nor did she pay any claim against the estate which would give her the status of a creditor, and finally, although the conveyance may have been fraudulent as to decedent's wife, her individual claim was dismissed and that dismissal was not appealed; hence, the trial court erred as a matter of law in invalidating the conveyance.
Appeal from the District Court of the City and County of Denver, Honorable George M. McNamara, Judge.
Edward A. Jersin, for plaintiff-appellee.
Tague, Goss, Schilken Beem, P. Arthur Tague, for defendant-appellant.
Division III.
Marcella C. Scavello, individually and as administratrix of the estate of Donald A. Scavello, brought this action against Beverly E. Scott to recover the sum of $40,000 transferred to defendant Scott by the decedent on the ground that the conveyance was in violation of § 38-10-117, C.R.S. 1973, and therefore void. Defendant, the niece of the decedent, denied that the transfer was fraudulent, claimed that the transfer was a partial repayment of a valid debt owed her by the decedent, and counterclaimed against the estate for the balance of the debt. After trial to the court, the claim of plaintiff individually and the counterclaim of defendant were dismissed, and a judgment for $40,000 was entered in favor of the estate. From that judgment, defendant appeals. We reverse in part and affirm in part.
At the outset, we note that no cross-appeal was filed on behalf of plaintiff individually or as administratrix. Defendant contends the court erred as a matter of law in rendering judgment against her in favor of the estate and in denying her motion to dismiss the complaint of plaintiff in her capacity as administratrix. We agree.
The trial court made findings of fact and concluded, as a matter of law, that:
"The conditional transfer of $40,000 from Donald Scavello to the defendant, Beverly E. Scott, was colorable and illusory and without consideration and in violation of [§ 38-10-117, C.R.S. 1973] and therefore void. . . ."
For a conveyance to be void under the statute, it must be "made with the intent to hinder, delay, or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts, or demands. . . ." Section 38-10-117, C.R.S. 1973. Here, however, the administratrix, acting for the estate, failed to show the decedent intended to defraud.
The trial court found that the decedent, at the time of the transfer on November 24, 1971, had "reason to believe a divorce action [by his wife] was a distinct probability." And, a divorce action was subsequently filed, but it was dismissed after decedent's death with no order for alimony or support having been entered. Thus, since Marcella Scavello had not obtained a judgment against decedent in the divorce action, she could not set aside her husband's conveyance as a subsequent creditor. See Fahey v. Fahey, 43 Colo. 354, 96 P. 251; Gregory v. Filbeck, 12 Colo. 379, 21 P. 489. Nor did Marcella Scavello pay any claim against her husband's estate which would give her the status of a creditor. See Linker v. Linker, 28 Colo. App. 136, 470 P.2d 882.
Also, the court did not find that Donald Scavello intended to defraud the creditors who filed claims against his estate. As noted, the court expressly found he was not conscious of impending death. Therefore, he could not have intended to defraud those creditors (the mortuary and cemetery) whose claims arose because of, and subsequent to, his death. Although he had incurred medical expenses prior to the conveyance (his only outstanding debts at the time) in the amount of approximately $325, the inventory of his estate totalled $2,285.
It is well established that a husband has a right to defeat the right of the wife to inherit by conveying his property to another, provided the transaction is not merely colorable. Moedy v. Moedy, 130 Colo. 464, 276 P.2d 563; Estate of Burton, 100 Colo. 567, 69 P.2d 307; Norris v. Bradshaw, 96 Colo. 594, 45 P.2d 638. And, regardless of the possibility of a claim for a widow's allowance, a wife "does not bear the relation of a creditor," and cannot claim the protection of § 38-10-117, C.R.S. 1973. Moedy v. Moedy, supra. Although the trial court expressly concluded that the conveyance was "colorable," a cause of action to set aside a conveyance by the husband belongs to the wife individually and not to the estate. See Moedy, supra, Burton, supra; Norris, supra; Hageman v. First National Bank of Denver, 32 Colo. App. 406, 514 P.2d 328. However, as noted above, the trial court dismissed the plaintiff's individual claim, and no cross-appeal was taken by plaintiff. Therefore, although the conveyance may have been fraudulent as to the wife, the judgment for the estate cannot be upheld on that basis.
[1] Accordingly, the court erred, as a matter of law, in concluding the transfer was in violation of § 38-10-117, C.R.S. 1973, and in rendering judgment for plaintiff-administratrix.
Appellant also contends the court erred in dismissing her counterclaim for the balance of the debt allegedly owed her by Donald Scavello. On conflicting evidence, the court made findings of fact adverse to defendant, and these findings are binding upon us. Broncucia v. McGee, 173 Colo. 22, 475 P.2d 336; Rubens v. Pember, 170 Colo. 182, 460 P.2d 803.
Judgment reversed in part, affirmed in part, and the cause remanded with directions to dismiss the complaint of Marcella Scavello, administratrix. Each party to pay her own costs.
JUDGE PIERCE and JUDGE SMITH concur.