Bank of Arizona v. Superior Court of Yavapai County

• Decision Date: 13 April 1926
• Docket Number: Civil 2509
• Citation: 245 P. 366,30 Ariz. 72
• Parties: BANK OF ARIZONA, a Corporation, GRANVILLE FAIN and W. WILKINS, Copartners Doing Business Under the Name and Style of FAIN & WILKINS, Relators, v. THE SUPERIOR COURT OF YAVAPAI COUNTY, STATE OF ARIZONA, and DUDLEY W. WINDES, Judge of the Superior Court of Maricopa County, Acting as Judge of the Superior Court of Yavapai County, State of Arizona, Respondents
• Court: Arizona Supreme Court

245 P. 366

30 Ariz. 72

BANK OF ARIZONA, a Corporation, GRANVILLE FAIN and W. WILKINS, Copartners Doing Business Under the Name and Style of FAIN & WILKINS, Relators, v. THE SUPERIOR COURT OF YAVAPAI COUNTY, STATE OF ARIZONA, and DUDLEY W. WINDES, Judge of the Superior Court of Maricopa County, Acting as Judge of the Superior Court of Yavapai County, State of Arizona, Respondents

Civil No. 2509

Supreme Court of Arizona

April 13, 1926

Original proceeding for Writ of Prohibition.

Alternative writ granted. Upon hearing to determine whether writ should be made absolute, writ quashed.

Messrs Favour & Baker and Messrs. O'Sullivan & Morgan, for Relators.

Messrs Armstrong, Lewis & Kramer, for Respondents.

OPINION

PER CURIAM

This is an original proceeding for a writ of prohibition directed to the Honorable DUDLEY W. WINDES, Judge of the superior court of Maricopa county, while presiding over the superior court of Yavapai county in the trial of an action numbered 9900, entitled "Diamond and a Half Land & Cattle Company, a Corporation, Plaintiff, v. Bank of Arizona, a Corporation, Granville Fain and W. Wilkins, copartners, Doing Business Under the Name and Style of Fain & Wilkins, Defendants."

It appears that Charles P. Mullen and Guy P. Schultz, stock growers, with cattle and ranges and lands situate in Yavapai county, Arizona, alleged to be worth to exceed $ 200,000, were largely indebted to the Bank of Arizona; such indebtedness being represented in part by a partially satisfied mortgage lien judgment and by a mortgage against and upon the debtors' cow outfit and ranges, including patented lands, and leases of state lands.

On the fifteenth day of November, 1922, the bank, as first party, Granville Fain and William Wilkins, as second parties, and Charles P. Mullen and Guy P. Schultz, as third parties, entered into an agreement concerning such indebtedness and property, all of said covenants and agreements being mutual, in effect as follows: The bank agreed to sell and Fain and Wilkins agreed to buy the debt owing the bank by Mullen and Schultz, for the consideration of $ 125,000, plus costs of an action of foreclosure and receivership amounting to $ 3,804.76, and to assign the unsatisfied judgment and mortgage to Fain & Wilkins, retaining, however, judgment and mortgage as security for the payment of the consideration above stated and until it was paid. In said agreement Fain & Wilkins optioned said unsatisfied judgment and mortgage to the judgment debtors, Mullen and Schultz, for $ 125,000, plus expenses of foreclosure and receivership, with interest thereon at six per cent and for operating expenses of outfit, with interest on latter amounts at eight per cent due credit to be given Mullen and Schultz for any sales of livestock made during the term of three years said option was to run. In said agreement Mullen and Schultz appointed and designated Fain & Wilkins as their attorneys in fact, for them, and in their name, place, and stead to manage, run, operate and control the cow outfit and real estate; it being recited that such appointment was coupled with an interest and irrevocable. The following paragraphs of the agreement we set out in full:

"(9) It is further understood and agreed that one of the purposes of this agreement is to allow and permit and help the third parties to work out of their present financial difficulties, to the end that they may eventually own the said Diamond and a Half cattle outfit, and that, in the event they do, within the said period of three years, exercise the option herein provided for and pay the above-mentioned sum of money to the second parties, then the first parties agree to release and satisfy the said Stephens mortgages and the unsatisfied judgment it will hold and own against said third parties, and the said second parties agree to give up, release, and relinquish their power of attorney and the management and control of the said Diamond and a Half outfit.

"(10) It is understood and agreed that between the parties hereto time is of the essence of this agreement, and that this option herein provided for shall expire three years from date hereof, and that upon the expiration of the said time without the third parties having exercised their option, and paid the sum provided for herein, the said second parties may forthwith advertise and sell said property under the unsatisfied judgment, and, if they deem it advisable, also proceed to the foreclosure of the said real and chattel mortgages known as the Stephens mortgages, or take such further or other action as may be advisable to obtain title in fee and unincumbered, and said second parties shall not be required to render any account to the third parties for the operation of the outfit aforesaid.

"(11) It is further understood and agreed that between the several parties hereto there shall be an endeavor to carry out, not only the letter, but the spirit of this agreement, and that they will co-operate with each other in the fulfillment of this contract. . . .

"(14) The second parties, in acting under the power of attorney herein provided, and in the control and management of the said cattle outfit, shall not be liable to the third parties except for gross mismanagement and willful neglect. And it is understood and agreed that the first party, upon sale of the various properties herein provided for to the second parties, shall have no ownership therein, and that this agreement contemplates an outright sale as between the first parties and the second parties and does not contemplate or constitute any agency, and that the first party shall not be liable for any act or deed of any other party hereto."

The other provisions of the contract are unnecessary for the purposes of this case, and we do not set them out.

Some time before April, 1925, the Diamond and a Half Land & Cattle Company, a corporation was organized for the purpose of taking over, and did take over, the Mullen and Schultz interest in the cow outfit and lands covered by said agreement, and, as the successor of Mullen and Schultz instituted said action numbered 9900, charging the defendants therein with several breaches of the contract, bad faith in refusing to aid Mullen and Schultz to work out of their financial difficulties, or to co-operate with them in carrying out the spirit of the agreement, to the plaintiff's damage in the sum of $ 100,000. In the action, the appointment of a receiver was asked for...