Donahue v. Babbitt

• Decision Date: 29 July 1924
• Docket Number: Civil 2105
• Citation: 26 Ariz. 542,227 P. 995
• Parties: J. J. DONAHUE, Appellant, v. DAVID BABBITT, PHILOMENA BABBITT, Administratrix of the Estate of GEORGE BABBITT, Deceased, CHARLES J. BABBITT, WILLIAM BABBITT, Copartners, and CHARLES PROCHNOW, Appellees
• Court: Arizona Supreme Court

227 P. 995

26 Ariz. 542

J. J. DONAHUE, Appellant, v. DAVID BABBITT, PHILOMENA BABBITT, Administratrix of the Estate of GEORGE BABBITT, Deceased, CHARLES J. BABBITT, WILLIAM BABBITT, Copartners, and CHARLES PROCHNOW, Appellees

Civil No. 2105

Supreme Court of Arizona

July 29, 1924

APPEAL from a judgment of the Superior Court of the County of Cococino. Joseph S. Jenckes, Judge. Affirmed.

Messrs Townsend, Stockton & Drake, for Appellant.

Messrs Armstrong, Lewis & Kramer, for Appellees.

OPINION

DARNELL, Superior Judge.

This is an action by plaintiff and appellant, J. J. Donahue against David Babbitt, Philomena Babbitt, as administratrix of the estate of George Babbitt, deceased, C. J. Babbitt William Babbitt and Charles Prochnow, to have a deed and bill of sale declared mortgages, and for an accounting and redemption.

The parties to the action entered into a written stipulation, whereby it was agreed that the pleas in bar raised by the defendants might be tried by the court without a jury; that all other questions preliminary to the question as to whether or not there should be an accounting might be entered in accordance with the determination of such issues; that the stipulation should in no degree prejudice the right of plaintiff to demand a trial by jury upon issues other than the pleas in bar or the right of defendants to oppose the demand for a jury trial; that, if the plaintiff's demand for a jury trial should be granted, and after trial it should be determined that the conveyances in question constituted mortgages and that the plaintiff was entitled to an accounting, then the jury should be dismissed and further proceedings should be had in the nature of an audit by an expert accountant and issues framed based upon the controverted items in the audit, and thereupon the case should be set down for further trial upon such controverted items. Thereafter the court decided in favor of plaintiff on all issues raised by defendants' pleadings, which by stipulation were to be determined by the court. In accordance with the plaintiff's demand for trial by jury of the remaining issues, and over the objection of opposing counsel, a jury was duly impaneled and sworn. The cause was tried before the jury upon issues of fact raised by plaintiff's third amended complaint and defendants' amended pleadings. After conclusion of the evidence and after denial of a motion by the defendants for a directed verdict, seven special interrogatories were submitted to the jury and answers thereto were returned.

Because of the fact that appellant has made only two assignments of error which raise but one question, namely, whether the verdict of a jury in an equity case is binding upon the court, we consider it unnecessary to do more than summarize the voluminous pleadings as they relate to the special verdict of the jury, the findings made by the trial judge, and the judgment entered in the action.

The third amended complaint, upon which the case was tried, contained allegations to the effect that a certain deed, bill of sale, and agreement, granting plaintiff the right to repurchase certain real and personal property, given on behalf of David Babbitt, George Babbitt, Charles J. Babbitt and William Babbitt, as copartners, were intended to, and actually did, constitute a real and personal property mortgage, and that Charles Prochnow, one of the appellees, claimed an interest in some of the property by reason of a contract to purchase the same from the Babbitts, entered into with full notice of appellants's rights. Appellant prayed that these instruments be declared mortgages, that an accounting be had, that he be given the right to redeem, and that his title be quieted as against Prochnow. To this third amended complaint the appellees filed a general demurrer and answer, alleging that the said instruments constituted a conditional sale, and also set up defenses of estoppel, laches, and the statute of limitations. To these defenses appellant filed a reply alleging waiver of the statute of limitations. To this reply appellees demurred. The trial judge overruled appellees' demurrers to the third amended complaint, and overruled their demurrer to appellant's reply. The controverted issues of fact were then tried before a jury, by which special findings in favor of appellant were made covering all the issues.

The jury found that a previous indebtedness to Babbitt Bros. was not paid by execution of the deed and bill of sale from appellant to Babbitt Bros.; that these instruments were intended to secure payment of an existing indebtedness; that Babbitt Bros. did not for a period of five years prior to the filing of the third amended complaint on August 26, 1920, continuously, openly and notoriously claim ownership and hold possession of the property described in the complaint adversely to any right asserted by appellant; that Charles Prochnow had knowledge prior to his contract of purchase that the appellant claimed that the interest of Babbitt Bros. in the property in question was held as security for an indebtedness due from appellant to Babbitt Bros.; that the appellant was not guilty of laches, as the court defined that term, in waiting until the twenty-sixth day of August, 1920, to file his third amended complaint; that David Babbitt between September, 1917, and January, 1918, promised and represented to appellant that the statutes of limitation would not be pleaded by Babbitt Bros. in any action brought by plaintiff founded upon the transaction resulting in the execution of the deed, bill of sale and contract; and that appellant believed such promises and relied upon the same until the appellees first pleaded the statutes of limitation after appellant had filed his third amended complaint. The trial judge held these findings to be advisory only, set them aside, and entered judgment in favor of the Babbitts and Prochnow.

From the action of the lower court Donahue appealed, and contends that the court erred in denying his motion for judgment in accordance with the special findings of the jury, and in setting aside those findings and entering judgment for the defendants-appellees.

Appellant urges that the findings of the jury were conclusive as between the parties as in a case at law, a jury trial of all controverted issues of fact in equity as well as in law being guaranteed by section 23, article 2, of the Constitution of Arizona, in connection with paragraphs 1389 and 1427, Revised Statutes of Arizona 1901.

Section 23, article 2, of the Constitution provides that "the right of trial by jury shall remain inviolate. . . . " Section 1389 of the 1901 Code provides:

" . . . In all cases, both at law and in equity, either party shall have the right to submit all issues of fact to a jury."

And section 1427 of the same Code provides for the submission of special interrogatories where more than one material issue of fact is joined, in all cases whether in law or in chancery.

Appellant argues that the Constitution keeps inviolate the right of trial by jury as voiced by section 1389 of the 1901 Code, and that this section made binding upon the trial judge the findings of the jury; in other words, that the right preserved was the right of trial by jury under the statute and not as it was known at common law. The learned trial judge based his right to enter judgment at variance with the special findings of the jury upon chapter 125 of the Session Laws of 1921, which is:

"Section 1. That paragraph 542, chapter XIV, part II, of title VI, Revised Statutes of Arizona, 1913, Civil Code, entitled 'Civil Procedure' be and the same is hereby amended to read as follows:

"542. In all actions where equitable relief is sought, if a jury be demanded by either party, and where more than one material issue of fact is joined, the court, in its discretion, may submit written interrogatories to the jury, covering all or part of the issues of fact, and such interrogatories shall be answered by the jury; provided, that such interrogatories shall be approved by the court, and each interrogatory shall be confined to a single question of fact and shall be so framed as to be answered by 'yes' or 'no,' and shall be so answered where 'yes' or 'no' is possible. In every such case the verdict of the jury shall be deemed advisory to the court in the determination of the action.

"Sec. 2. All acts and parts of acts in conflict with the provisions of this act are hereby repealed."

We think, without doubt, that the learned trial judge was correct in his conclusion that the foregoing amendment is constitutional. The constitutional guaranty concerned a plain, permanent right made almost sacred by years of recognition and usage. Section 1389 of the 1901 Code did not possess these qualities. In fact, this section did not provide for the verdict of the jury to be binding upon the court in equity cases. In the case of Dooley v. Burlington Gold Mining Co., 12 Ariz. 332, 100 P. 797, which was decided several years after paragraph 1389 of the 1901 Code was enacted, the court used this language:

"Appellant insists that this is an action at law, in which he is entitled to have the verdict of a jury. He further insists that, though it be regarded as an equitable action, the court erred in refusing to award him judgment on the verdict. This last contention is disposed of by Taggart Mercantile Co. v. Clack, 8 Ariz. 295, 71 P. 925, where we said: 'But, where a case is one of equitable jurisdiction solely, the court is not bound to submit any issues of fact to a jury, and if it does so, it is only for the purpose of "enlightening its conscience, and not to control its judgment." In such a case the court is at liberty to disregard the verdict and findings of the jury,...