Clayton v. Communications Capital Corp.

• Decision Date: 02 May 1968
• Docket Number: CA-CIV,No. 2,2
• Citation: 440 P.2d 330,7 Ariz.App. 449
• Parties: L. B. CLAYTON and Era A. Clayton, husband and wife, Appellants, v. COMMUNICATIONS CAPITAL CORPORATION, a corporation, Don G. Owsley and Otilie E. Owsley, husband and wife, Appellees. 448.
• Court: Arizona Court of Appeals

Page 330

440 P.2d 330

7 Ariz.App. 449

L. B. CLAYTON and Era A. Clayton, husband and wife, Appellants, v. COMMUNICATIONS CAPITAL CORPORATION, a corporation, Don G. Owsley and Otilie E. Owsley, husband and wife, Appellees.

No. 2 CA-CIV 448.

Court of Appeals of Arizona.

May 2, 1968.

Boyle, Bilby, Thompson & Shoenhair, by Richard M. Bilby, Tucson, for appellants. Bernard Weinstein, Tucson, for appellees.

MOLLOY, Judge.

This appeal presents procedural problems relevant to the manner of the submission of a case to a trial judge for decision and substantive law questions involving the construction of a contract pertaining to the sale of a radio broadcasting business. The procedural problems must be resolved first in order to determine the posture of the case on appeal.

The suit is upon a promissory note in the original sum of $100,000 with an alleged unpaid balance of $50,000. The note was given in connection with the purchase of Radio Station KMOP at Tucson, Arizona. The sales agreement was between Bamray Broadcasting Company as seller, and the defendant L. B. Clayton, as buyer.

In accordance with an option given him in the agreement, the defendant Clayton caused a corporation formed by him to execute the promissory note in question, and the note was accepted by the seller at the time of closing. Subsequently, the note was assigned to plaintiffs by Bamray. The complaint asked, Inter alia, for judgment against the defendant Clayton and against his wife, alleging that was acting as an agent of the community of himself and wife. The answer denied any individual obligation and also the allegation pertaining to the community. At pretrial, it was indicated the 'issues to be tried,' insofar as the parties on appeal are concerned, were:

'1. Is Deft. Clayton personally liable on the promissory note, or is only Pima Broadcasting (maker of the note upon which suit is brought) liable?

* * *

* * *

'5. Are Pltfs. entitled to recover attorney's fees from Clayton?

'6. What is the contract covering the rights of the parties? (NOTE: Two of the parties have each submitted slightly different versions of the contract.)'

There was no issue expressed as to community liability. At the pretrial conference, the court allowed the complaint to be amended to add an allegation that Pima Broadcasting Company was the alter ego of the defendant Clayton but no additional issue of fact was noted in the pretrial order. The case was set down for trial without a jury on May 26, 1966.

On May 26, 1966, the record shows that counsel were present and each counsel made a 'Statement' to the court. There was filed in court a stipulation which commences with the ambivalent statement:

'That a trial to determine the facts in this action (is) may be unnecessary in that the following are to be considered as agreed facts. * * *'

The original stipulation filed and signed by both the counsel for the plaintiffs and defendants used the word 'is' in that portion, quoted above, placed in brackets. This word was stricken out in ink and the words 'may be' written above the deletion, but this change is initialed by only one of the counsel of record, though other changes were initialed by both counsel. After detailing various facts which have bearing upon the substantive law questions presented in this appeal, the stipulation ended with the statement:

'2. That the date set for trial be utilized by the Court for a hearing wherein counsel will submit legal memoranda and oral argument to the Court upon the following issues:

'a) Whether the defendant L. B. Clayton is personally liable to the plaintiffs;'

The only other issue proposed to be submitted in the original typing is stricken out in ink and initialed by counsel for all of the stipulating parties.

At the conclusion of the proceedings on May 26, 1966, the record shows an order '* * * that further hearing on the matter is continued, subject to call.' On June 6, 1966, the defendant Clayton (without any mention being made of his wife) moved the court for summary judgment. On June 17, 1966, there is a minute entry showing that counsel were present before the court to argue and that the '(m)atter (the case) is taken under advisement.'

On December 19, 1966, there is a minute entry directing plaintiffs' counsel to prepare and submit findings of fact, conclusions of law and a judgment against both Clayton and wife. Such were filed and written objections thereto were made. Oral argument on 'All Pending Matters' occurred on January 25, 1967, at which time the '(m)atters' were taken under advisement.

On March 8, 1967, the defendant's objections to the plaintiffs' proposed findings of fact and conclusions of law were 'denied' and it was further ordered:

'* * * that the Plaintiffs' Proposed Form of Judgment shall be signed at the expiration of five days from date, unless within said five day period the defendants shall file with the Court an Affidavit or Affidavits by persons having personal knowledge and which said Affidavit denies that the following facts are true, and specifically in what way the same are not true:

'1. That the defendant, Era A. Clayton, was the wife of defendant, L. B. Clayton, on April 16, 1959 (date of the sales contract);

'2. That the Agreement dated April 16, 1959 for the sale of K-MOP Radio Station was prepared by the attorneys for the defendants, L. B. Clayton and Era A. Clayton;

'3. That the plaintiffs have received payments from the Bankruptcy Proceeding of Pima Broadcasting Company since the institution of this action to the extent that the original principal balance of $50,000.00 has now been reduced to $18,081.03, together with accrued interest thereon in the sum of $6,150.00 as of January 4, 1967; and

'4. That the plaintiffs have duly received by assignment all the right, title and interest of Bamray Broadcasting Company in and to the contract entered into with the defendant, L. B. Clayton, dated April 16, 1959, together with the security running with said contract.

'IT IS FURTHER ORDERED that in the event such Affidavit be filed, then upon request of either party the matter to be set down for Oral Argument, otherwise the matter be deemed taken under advisement.'

Affidavits on behalf of the defendants Clayton were filed which stated, Inter alia, that on April 16, 1959, and at all other times material to this action, the Claytons were residents of the State of Oklahoma, which is not a community-property state; that Mrs. Clayton had not participated in any way in the agreement for the purchase of KMOP; that the agreement of April 16, 1959, had not been prepared by attorneys for the defendants Clayton but by the attorneys for both parties, and that the agent of the seller, Bamray, had been informed that Clayton did not intend to be personally obligated on the note to be given and that Bamray had agreed to sell under those terms.

There was a request for oral argument by the defendants Clayton and on March 30, 1967, the court ordered:

'* * * that the evidence be reviewed on the matters referred to in the Defendants' AFFIDAVIT filed herein, and the matter is set for hearing on Wednesday, April 5, 1967. * * *'

On April 5, there is a minute entry indicating counsel for the parties were present and that the plaintiffs' counsel made a statement to the court '* * * regarding putting on evidence at this time.' The defendants' counsel argued '* * * his objections to the putting on of evidence at this time,' and the court granted plaintiffs' request to put on evidence. At this time, the minute entry of March 30, 1967, was amended to substitute the word 'received' for the word 'reviewed' and one witness was sworn and testified. Minute entries indicating the normal procedure of a court trial were not recorded. This court does not have a transcript of the testimony taken. At the conclusion of this testimony, the court reserved ruling on three offers of evidence and ordered that the '(m)atter is taken under Advisement.' There was never a ruling on the offers of evidence, Thereafter the court rendered its own findings of fact and conclusions of law, which, Inter alia, ordered (1) that the motion of the defendant Clayton for summary judgment be denied; (2) found that the defendant Clayton acted individually and as the agent of the community of himself and wife in connection with the contract of April 16, 1959; (3) found that the beneficial interests of Bamray in this contract had been duly assigned to the plaintiffs; and (4) found that it was '* * * the manifest intent * * *' of the parties that the defendant Clayton be liable for the debt owed and that the execution and delivery of the promissory note in the sum of $100,000 was not accepted as payment of the sales price. On the basis of the facts sound, the court concluded that the defendant Clayton was liable upon '* * * an integrated unambiguous contract * * *' and that he and '* * * the community estate belonging to himself and his wife * * * are liable for the balance of the purchase price * * *' On the basis of this conclusion a judgment against both Claytons was entered from which an appeal is taken here.

The 'findings of fact, conclusions of law' rendered by the trial court commence with the statement:

'This matter came on for hearing before the Court, sitting without a jury, Upon the express stipulation of the parties that a trial to determine the facts in this action was unnecessary, based upon a stipulated set of facts and the interpretation of a written agreement, all of which was submitted to the Court by the parties. * * *' (Emphasis ours.)

In their opening brief, the appellants-defendants state:

'The controversy was submitted to the lower court upon limited agreed facts.'

The appellees-plaintiffs in their brief do not directly contest this statement but variously take the position that the case went off on summary judgment in their favor (thus ignoring the record denial of their motion) or that the defendants Clayton were given...