(dissenting).
I respectfully dissent. The majority opinion approves a determination, made by the trial court upon defendants’ motion to dismiss, that plaintiff “does not own the rights sought to be enforced.” The defendants moved to dismiss, alleging that if the transfer to plaintiff’s brother had not been made in 1970, “plaintiff defrauded his creditors in a subsequent bankruptcy proceedings and such creditors are the holders of the beneficial interest in said land.” Plaintiff’s deposition and some records of the 1970 bankruptcy case were accepted by the court in support of the motion at the hearing, and the motion was granted. This, of course converted the hearing to one for summary judgment. Shriners Hosp. v. Kirby Cattle Co., 89 N.M. 169, 548, P.2d 449 (1976).
A motion to dismiss is an admission by defendants of all material facts well pleaded. Runyan v. Jaramillo, 90 N.M. 629, 567 P.2d 478 (1977). It may not be granted unless it appears that plaintiffs cannot recover under any state of facts provable under the claim being made. Eldridge v. Sandoval County, 92 N.M. 152, 584 P.2d 199 (Ct.App.1978). Plaintiff’s complaint, alleging a fraudulent scheme by defendants and forgery of a conveyance from plaintiff, states a claim for relief. Obviously the motion was not considered as a motion to dismiss.
I cannot agree that questions of the real party in interest or whether fraud existed in plaintiff’s prior conduct — both of which properly are affirmative defenses to be pleaded as such — are correctly decided by motion, whether termed a motion to dismiss or, as happened here, it becomes a motion for summary judgment, when the party moved against has not been afforded the period of notice mandated by Rule 56, N.M. R.Civ.P., N.M.S.A. 1978.
The majority opinion recognizes defendants’ motion as one “to be treated as a motion for summary judgment,” and the error of treating “a motion to dismiss as a motion for summary judgment without permitting the adverse party a reasonable opportunity to present pertinent material” in opposition. Rule 12(b) says more: the motion shall also “be treated . . . and disposed of as provided in Rule 56.” “Reasonable opportunity” need not be construed to be less than ten days, as the majority seems willing to suggest; Rule 56 is not at all ambiguous regarding the time limit of the “opportunity” to be afforded the one moved against. Plaintiff received “notice” that the motion would be treated as a summary judgment motion when matters outside the record were presented and relied on by the movant on the morning the motion was heard. He was entitled, therefore, “as provided in Rule 56,” to ten days thereafter within which to meet the arguments raised and the evidence received.
The majority avoids discussing the error it allegedly recognizes, however, by holding that the first eight pages of plaintiff’s argument in his Brief-in-Chief, all of which is directed to the procedural defects of the hearing and the trial court’s decision immediately following the hearing, do not “properly” raise the issue of inadequate notice on appeal. It is apparent at page 3 of the Answer Brief, and contrary to the statement of the majority opinion, that appellees recognized one of plaintiff’s grievances to be his dissatisfaction with conversion of a motion to dismiss on the morning of trial to one for summary judgment, and an immediate decision thereon. Plaintiff’s brief unequivocally argues his surprise with, and the impropriety of, permitting defendants “to present their evidence in support of their affirmative defense [of lack of real party in interest] and we have been denied the opportunity to present any evidence to establish our prima facie case and to refute the defense [specified in the motion.]” This language clearly conveys to me a discernible argument that presentation of evidence outside the pleadings by the movant, on a factual question not raised in the motion, must be allowed only when the party moved against has been afforded the opportunity to anticipate the use of such evidence in order to be prepared to meet it with answering evidence of his own.
To say that the arguments in either the Brief-in-Chief or the Reply Brief do not clearly formulate a protest against inadequate notice of the nature of the motion is not accurate. Plaintiff again and again urges that the motion alleged failure to join the real party in interest. A resolution of that defense at the hearing should have resulted in allowing joinder or substitution under R.Civ.P. 17(a), N.M.S.A. 1978 — not in a determination that because defendant had committed a bankruptcy fraud he had lost his right to bring suit. If the briefs of plaintiff were not written as precisely as the majority would prefer concerning notice, the protestations against receipt of outside evidence on a motion to dismiss, without opportunity given to rebut that evidence, is nevertheless pervasive throughout plaintiff’s arguments. A consideration of the substance, not the form, of the matter brought for review, should always govern the duty of an appellate court in reaching a decision upon the merits of an appeal. See Tomson v. County of Dona Ana, 93 N.M. 173, 598 P.2d 216 (Ct.App.1979); Westbrook v. Lea General Hospital, 85 N.M. 191, 510 P.2d 515 (Ct.App.1973) (per Lopez, J., Wood, C. J., and Sutin, J. concurring).
The “facts” recited in the majority opinion are not complete, nor are they, in my opinion, completely accurate. The opinion refers persistently to “concealment” and “intentional concealment” and “fraudulent concealment” of an asset in the bankruptcy court. The documents from the bankruptcy records introduced by defendants include an original petition in bankruptcy filed by plaintiff. It discloses a claim of ownership in 75 acres of land at Costilla (the supposedly concealed asset), subject to a judgment lien for water rent. Subsequently, a first amended petition was filed alleging that the Costilla land had been transferred to petitioner’s brother because petitioner had not been able to repay $1,500 advanced by his brother to pay off a mortgage on the land. The amended petition asked only that the question contained in the bankruptcy form, which inquired about transfer of property during the year immediately preceding the filing of the original petition, bé amended to reflect the transfer mentioned above. It did not request or suggest that the land be removed from Schedule B-l of the original bankruptcy petition, where that asset was listed under “Real Estate .. . owned by debtor. .. . ”
About three weeks later, the trustee in bankruptcy petitioned the Bankruptcy Court for authorization to abandon as an asset the Costilla land, stating in his petition that “[a]fter investigating, it is the trustee’s opinion that any possible recovery from these assets [sic] would be more than offset by the expense involved in converting them [sic] into cash.” The court not only “authorized,” but “directed,” the trustee to abandon the land as an asset of the bankruptcy estate.
These documents refute any characterization of plaintiff’s conduct in the bankruptcy proceeding as a “concealment” of assets. The trustee, too, had an obligation to protect creditors and, “after investigating” the asset listed by plaintiff, he officially and on the record expressed his opinion that the land was not a distributable asset. Plaintiff should not have been foreclosed from presenting controverting evidence or affidavits on an issue determined by the court to be his ineligibility to pursue this suit because he had defrauded his creditors. To reach that conclusion, the trial court had to decide that creditors, had indeed been defrauded by plaintiff’s conduct in the bankruptcy action. In order to make that decision, the court necessarily resolved conflicts in plaintiff’s deposition testimony regarding his knowledge about false statements of valuation in the bankruptcy petition, advice from his attorney at that time to so evaluate it, the uncertain status of the land, and the trustee’s signed pleadings regarding its value and his request for authority to abandon the very asset which defendants claim was not listed and the majority describes as “concealed.”
Whether or not plaintiff defrauded his creditors so as to call into effect the rule cited by the majority opinion, of forfeiting the right to maintain a later claim to omitted property, is a factual question. Conflicts in the evidence on material issues which may have legal consequences may not be decided by summary judgment. Young v. Thomas, 93 N.M. 677, 604 P.2d 370 (1979); see also, Gallegos v. Wallace, 74 N.M. 760, 398 P.2d 982 (1964). None of the cases relied on by the majority determined that plaintiff was barred from maintaining his action because of fraud on his creditors, without a full-blown trial on the claim of fraud. Moreover, the rule is not uniformly applied. Several jurisdictions have reached an opposite result and permitted the bankrupt to assert a claim of ownership in an unadministered bankruptcy asset. See Philbrick v. Burbank, 101 N.H. 311, 141 A.2d 888 (1958); Stripe v. Jefferson, 192 Minn. 504, 257 N.W. 99 (1934); In re Webb, 54 F.2d 1065 (4th Cir. 1932). I do not approve the application of the rule espoused by my colleagues under the facts of this case, even if fraud were proven at trial, when it serves to benefit not the allegedly defrauded creditors but absolute strangers to the bankruptcy action.
The trial court abused its discretion in ruling on the motion at the conclusion of the hearing. Georgia S. & F.R. Co. v. Atlantic C.L.R. Co., 373 F.2d 493 (5th Cir. 1967), cert. den. 389 U.S. 851, 88 S.Ct. 69, 19 L.Ed.2d 120 (1967).
The judgment should be reversed and remanded either for a proper hearing on defendants’ motion and notice for summary judgment; or the defense of plaintiff’s forfeiture of the right to maintain this action by reason of the bankruptcy proceedings should be fully litigated at trial and presented to a jury for decision. See Suetter v. A. E. Kern & Co., 146 Or. 96, 29 P.2d 534 (1934); Watson v. Motley, 201 Ala. 25, 75 So. 147 (1917). Even the Laster decision, cited and quoted by the majority, was reached only after a full trial on the fraudulency of plaintiff’s prior conduct in the bankruptcy proceeding.