General Acceptance Corp. of Roswell v. Hollis

• Decision Date: 15 November 1965
• Docket Number: No. 7685,7685
• Citation: 75 N.M. 553,408 P.2d 53,1965 NMSC 135
• Parties: GENERAL ACCEPTANCE CORPORATION OF ROSWELL, Plaintiff-Appellee, v. James HOLLIS and Erminda M. Hollis, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 53

408 P.2d 53

75 N.M. 553

GENERAL ACCEPTANCE CORPORATION OF ROSWELL, Plaintiff-Appellee, v. James HOLLIS and Erminda M. Hollis, Defendants-Appellants.

No. 7685.

Supreme Court of New Mexico.

Nov. 15, 1965.

Robert H. Wagner, Roswell, for appellants.

Harris & Norwood, Roswell, for appellee,

MOISE, Justice.

Plaintiff-appellee brought suit against defendants-appellants seeking judgment for the unpaid balance of a promissory note, together with interest and attorney fees. Defendants immediately filed what is denominated a 'Motion for Summary Judgment.' The motion was denied by the court. Thereupon, plaintiff filed its amended complaint, and defendants filed a 'First Amended and Supplemental Answers to Amemded Complaint,' together with a 'First Amended and Supplemental Counterclaim.' Plaintiff then filed 'Motion for Summary Judgment and Reply to Counterclaim.' This pleading also contains motions to strike certain portions of defendants' pleading, asserts that the amended answer fails to state defenses, and that the counterclaim fails to state claims upon which relief can be granted. After a hearing, the court struck the affirmative defenses, dismissed defendants' counterclaims and determined that plaintiff was entitled to judgment, with the issue as to the amount due and owing remaining to be established upon proof. The parties thereupon stipulated as to the amount which had been paid on the note, and judgment in favor of plaintiff was entered accordingly. Defendants appeal, and here advance three points relied on for reversal.

We first consider if the court correctly determined that the affirmative defenses should be stricken and the counterclaim dismissed. The first three affirmative defenses raised legal issues, whereas the fourth attempts to allege fraud, deception and misrepresentation. The two causes of action of the counterclaim are based on the same allegations asserted in the four affirmative defenses.

Defendants do not argue that the first three affirmative defenses had legal merit, but rather that they should not have been stricken without a trial. The court held that the legal positions advanced by the first three affirmative defenses were not good and we see no factual issue presented therein. Without considering the merits of the defenses, it is certainly clear that if they were not legally valid, defendant was not prejudiced by their being stricken. The same thing is true as to the first cause of action of the first amended and supplemental counterclaim. If the legal argument advanced as the basis for recovery is not meritorious, and we express no opinion on it, and if no issue of fact is present, no valid complaint can be made that a motion to dismiss for failure to state a cause of action or for summary judgment, was sustained. Pederson v. Lothman, 63 N.M. 364, 320 P.2d 378; Ades v. Supreme Lodge Order of Ahepa, 51 N.M. 164, 181 P.2d 161. We are clear that no factual issues requiring a trial were presented and that defendants' position to the contrary is without merit.

Defendants' fourth affirmative defense to the amended complaint and the second cause of action in their first amended and supplemental counterclaim allege fraud, deception, express and implied misrepresentation 'in regard to the details and purpose and consequences of the loan transaction' and reliance thereon to the injury of defendants. The basis for the claim is specified as acts and omissions which were 'calculated to and, in fact, did persuade the Defendants that the maximum interest charge for the $1,000.00 principal amount loaned to Defendants was only approximately $248.00, although Plaintiff knew from its business records on previous loans to these Defendants and on previous loans to other borrowers that Defendants would ordinarily in the due course of time actually pay an interest charge which wnen translated into dollars was a much greater sum that $248.00.' It was alleged that this was true because plaintiff had loaned defendants more money than they could repay on the dates it would be due whereupon plaintiffs took more interest than had been represented to be the maximum charged. It was claimed that $165.97 had been paid on the note, of which $103.31 was applied to interest.

We find in the matters alleged neither facts upon which to base a valid defense to the suit on the note, nor grounds for damages by way of counterclaim and it was accordingly not error for the court to strike the defense and grant summary judgment or sustain a motion to dismiss for failure of the counterclaim to state a cause of action. We...