Adams v. Bear, 6570

• Decision Date: 10 February 1960
• Docket Number: No. 6570,6570
• Parties: Joe ADAMS and Belle J. Adams, husband and wife, Appellants, v. M. A. BEAR, Appellee.
• Court: Arizona Supreme Court

Page 184

349 P.2d 184

87 Ariz. 172

Joe ADAMS and Belle J. Adams, husband and wife, Appellants, v. M. A. BEAR, Appellee.

No. 6570.

Supreme Court of Arizona.

Feb. 10, 1960.

Rehearing Denied March 15, 1960.

Moore & Moore, Phoenix, for appellants.

Cunningham, Carson & Messinger and Keith W. Ragen, Phoenix, for appellee.

JOHNSON, Justice.

Joe Adams and Belle J Adams, his wife, on December 6, 1955, filed an action in the Navajo County Superior Court against M. A. Bear and J. Hal Adams and Louise R. Adams, his wife. This cause was heard by the Honorable R. C. Stanford, Jr., and resulted in a declaratory judgment bearing date of October 8, 1956, and is referred to herein as Cause No. 7751.

The declaratory judgment established that a certain promissory note in the principal amount of $12,000 was owned and held by M. A. Bear, hereinafter referred to as Bear; that Joe Adams, husband of Belle J. Adams, hereinafter referred to as Adams, on June 19, 1954, executed said note of $12,000 to Bear and that Adams owned a certain promissory note in the principal amount of $20,500 and realty mortgage securing the same and that Bear held the said mortgage of $20,500 as security for the payment of the $12,000 note; and that upon payment by Adams to Bear of the balance due on the $12,000 note Bear's security interest in the $20,500 note and mortgage would be cancelled and annulled.

On December 6, 1957, after Adams had defaulted in payment to Bear on the balance due on the $12,000 note, as established under the declaratory judgment and to enforce his rights thereunder Bear filed a complaint in the same county which is referred to herein as cause No. 8060, against Adams. The trial of this cause was assigned to the Honorable Henry S. Stevens, who later rendered the judgment appealed from herein.

In the complaint in cause No. 8060 Bear alleged his rights as established in the declaratory judgment as above mentioned and the refusal of Adams to pay the balance due him on the $12,000 note. Bear prayed for judgment on the $12,000 note in accordance with the findings of the court in cause No. 7751 and for foreclosure of his security interest on the $20,500 note and mortgage.

Adams answered the complaint but did not deny any of the allegations thereof, he did however, allege three defenses: (1) that the complaint failed to state facts upon which relief could be granted (2) that Adams had previously brought suit against Bear on the same loan transaction referred in the complaint, that Bear had not counterclaimed on the note in such suit, being cause No. 7751, although under Rule 13(a), Rules of Civil Procedure, 16 A.R.S., he was required to do so and that cause No. 8060 was therefore barred and (3) that the $12,000 note had been cancelled in accordance with the agreement of the parties when Bear exercised his option to buy into the partnership composed of the makers of the note.

Bear thereafter moved for summary judgment and Adams also moved for summary judgment in their favor on their defenses numbered 1 and 2 above, and each party relied upon the pleadings and records of cause No. 7751. Bear in opposition to the first two defenses of the answer of the Adams and in support of his own motion contended he was entitled to the relief prayed for as supplemental relief based upon the declaratory judgment in cause No. 7751. A.R.S. § 12-1838, which reads as follows:

'Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper. The application therefor shall be by complaint or appropriate pleading to a court having jurisdiction to grant the relief. If the application be deemed sufficient, the court shall, on reasonable notice, require any adverse party whose rights have been adjudicated by the declaratory judgment or decree, to show cause why further relief should not be granted forthwith.'

was relied upon as authority under which the court should enter judgment as asked for in cause No. 8060.

The trial court on June 24, 1957, rendered a written order for judgment, stating in detail its findings and conclusions and entered judgment granting the motion of Adams for summary judgment, inter alia,

'It Is Ordered granting the defendants' motion for summary judgment as herein specified.

'It Is Further Ordered that upon payment of the judgment fee the Clerk is directed to enter judgment as follows:

'1. That the plaintiff's complaint be dismissed without prejudice; that the plaintiff recover nothing by this action; and that the defendants recover their costs.

'2. That the judgment so entered be without prejudice to the rights, if any, of M. A. Bear to further proceed in cause No. 7751 in the Superior Court in Navajo County in relation to the $12,000 note and in relation to securing absolute title to the real estate mortgage and the note thereby secured, and

'3. That the judgment so entered be without prejudice to the rights,...