Fischer v. Hammons

• Decision Date: 19 September 1927
• Docket Number: Civil 2596
• Citation: 32 Ariz. 423,259 P. 676
• Parties: G. FISCHER, Appellant, v. A. T. HAMMONS, Superintendent of Banks of Arizona, as Receiver of THE BANK OF JEROME, an Arizona Corporation, Insolvent, Appellee
• Court: Arizona Supreme Court

259 P. 676

32 Ariz. 423

G. FISCHER, Appellant, v. A. T. HAMMONS, Superintendent of Banks of Arizona, as Receiver of THE BANK OF JEROME, an Arizona Corporation, Insolvent, Appellee

Civil No. 2596

Supreme Court of Arizona

September 19, 1927

APPEAL from an order of the Superior Court of the County of Yavapai. John J. Sweeney, Judge. Order reversed and cause remanded with instructions.

Mr. J Gardner Scott, for Appellant.

Mr John L. Sullivan and Mr. John A. McGuire, for Appellee.

OPINION

LOCKWOOD, J.

This is an appeal from an order denying the petition of G Fischer, hereinafter called appellant, to have certain promissory notes signed by him, and held by appellee, A. T. Hammons, superintendent of banks, as receiver of the Bank of Jerome, an insolvent banking corporation, hereinafter called the bank, declared void and of no effect as to him, and to have his signature thereon canceled.

The petition, after setting up the formal matters necessary, alleges, in substance, as follows: At the time the bank closed its doors, appellant was indebted to it on a note of his own in the sum of $1,000, but had deposited with the bank enough to pay said note and leave a balance of $3,048.88. The receiver also held three notes, payable to the bank, one for $7,500, signed by appellant and one John D. Johnson; one for $4,000, signed by appellant and F. A. Hemphill, Peter Gordon and Johnson; and a third for $1,391.62, signed by appellant, Gordon, and Johnson. Appellant presented his claim for the balance due on his deposit, with affidavits attached repudiating any liability on the notes, and alleging they were obtained by the bank through the fraud of its cashier, Paul Deming, which claim was by the receiver approved as an offset on the three notes above described. Thereafter appellant filed suit on the claim, requesting that the receiver be required to plead as an offset thereto the three notes. The receiver refused in said suit to plead the notes or to make any claim or demand therein that they be paid. Judgment was rendered for the sum of $3,048.88 in favor of appellant against the receiver, and it was ordered that the judgment be recognized as a general claim against the assets of the bank and paid as other general claims. Thereafter appellant demanded that the receiver cancel his name on the three notes and acknowledge that he was not liable thereon, and, this demand being refused, brought this action.

There was an allegation that the uncancelled notes in the hands of the receiver were a menace to appellant, and that his signatures thereto were void for the reasons set forth in the affidavits, and a prayer that the court order them canceled, so far as appellant was concerned. The receiver was cited to appear and answer the petition and a demurrer was filed by him, setting up five objections to the petition. Appellant moved to strike the demurrers, and the two matters were argued together and submitted. It does not appear from the record whether they were ever formally disposed of, but some months later a minute order was made denying the petition, and it is from this order the appeal was taken.

So far as the record before us shows, we are unable to determine whether the ground of the court's action was a failure of appellant to amend his petition after the motion to strike was denied and the demurrer was sustained, or whether there was an answer filed and a hearing on the merits. Both parties in their briefs have presented the case on the former theory, and we have therefore assumed such to be the fact. There are some six assignments of error, which we will consider in accordance with the legal questions raised. The first is that since the initial document filed by appellant, though entitled a "petition," is in reality a motion and duly verified, no demurrer lies thereto and as no verified answer was filed, the trial court should have accepted the facts therein set up as true, under paragraph 477, Revised Statutes of Arizona 1913, Civil Code.

Whatever the so-called petition may have been technically, it was apparently treated as a complaint by both parties in the trial court, and the case was presented and disposed on the theory that it was such. Appellant cannot for the first time in this court urge that it was a mere motion. Tevis v. Ryan, 13 Ariz. 120, 108 P. 461; affirmed 233 U.S. 273, 58 L.Ed. 957, 34 S.Ct. 481. It was therefore proper to raise by means of a demurrer any objections appearing on the face of the petition, and, of course, it is never necessary or even proper to verify a demurrer.

The demurrer presents five specific grounds, and if any one of them be well taken the action of the trial court would ordinarily be upheld. The first four, however, are formal in their nature, and since both parties have requested, both in their briefs and on oral argument, that the appeal be determined on its merits so as to minimize further litigation, we will dispose of the matter on the fifth, which is that the complaint does not state facts sufficient to constitute a cause of action. Assuming for the purpose of the demurrer, therefore, that appellant had the right in this form of proceeding, and without the consent of court or making the other signers of the notes involved parties thereto, to have determined whether or not such notes should be canceled as to him, we have two questions to answer. The first may be thus stated:

"Has appellant properly pleaded a judgment of such a nature as to establish conclusively that by such judgment appellee is barred from a recovery on the notes in question?"

The petition on this point reads as follows:

"That thereupon, and in good season, to wit, May 15th, 1926, and leave of court having been first obtained, petitioner filed action in the above-entitled court upon said claim; and requested that said receiver, in the event he believed petitioner to be liable upon said notes, or either of them, to plead the same defense of his said action as an offset thereto, that said issue might be determined therein; but, that notwithstanding said request, said receiver did not interpose said notes, or either of them, in defense of petitioner's said claim, . . . that said defendant did not put in an appearance until June 26th, 1926, and that upon making such appearance failed to set up said notes, or either of them, or to make any claim or demand whatsoever thereon. . . . That thereafter . . . your petitioner secured judgment against said receiver in said action, . . . which judgment is docketed in . . . the records of this court . . . wherein it was adjudicated and decided that said sum of $3,048.88 is justly due your petitioner, and ordered, adjudged, and decreed that petitioner have . . . judgment against said receiver in said sum; and . . . that said judgment be recognized as a general claim against the assets . . . of said bank . . . and that the same be paid as is, or may be, other general claims."

It is the claim of appellant that appellee, having had the right to litigate in said suit the question of the liability of appellant on said notes and having failed to do so, cannot in another action maintain that he is liable thereon. Appellee, on the other hand, while admitting that a judgment is, as to the particular action in which it is rendered, a bar not only as to every question litigated, but as to all which could have been litigated, contends that where suit is later brought on an entirely different cause of action, the judgment is merely an estoppel as to the matters actually litigated, and not as to those which could have been made issues, but which were not.

We are of the opinion that the true rule is well stated as follows:

"The rule is often stated in general terms that a judgment is conclusive not only upon the questions actually contested and determined, but upon all matters which might have been litigated and decided in that suit; and this is undoubtedly true of all matters properly belonging to the subject of the controversy and within the scope of the issues, so that each party must make the most of his case or defense, bringing forward all his facts, grounds, reasons, or evidence in support of it, on pain of being barred from showing such omitted...