Gila Valley Elec., Gas & Water Co. v. Arizona Trust & Sav. Bank

• Court: Arizona Supreme Court
• Writing for the Court: LYMAN, J.
• Citation: Gila Valley Elec., Gas & Water Co. v. Arizona Trust & Sav. Bank, 215 P. 159, 25 Ariz. 177 (Ariz. 1923)
• Decision Date: 15 May 1923
• Docket Number: Civil 2045
• Parties: GILA VALLEY ELECTRIC, GAS & WATER COMPANY, a Corporation, Appellant, v. ARIZONA TRUST AND SAVINGS BANK, a Corporation, Appellee

215 P. 159

25 Ariz. 177

GILA VALLEY ELECTRIC, GAS & WATER COMPANY, a Corporation, Appellant, v. ARIZONA TRUST AND SAVINGS BANK, a Corporation, Appellee

Civil No. 2045

Supreme Court of Arizona

May 15, 1923

APPEAL from a judgment of the Superior Court of the County of Graham. Frank B. Laine, Judge. Judgment vacated.

Messrs Morris & Malott, for Appellant.

Mr. A R. Lynch and Mr. H. A. Elliott, for Appellee.

OPINION

LYMAN, J.

Two questions are raised by this appeal: First, is the judgment erroneous? and, second, has the appellant sought an appropriate remedy?

The judgment was entered by default against Gila Valley Electric Gas & Water Company, a corporation, appellant. The original complaint, based upon two causes of action, prayed for judgment in the sum of $16,266.32. Judgment was rendered upon an amended complaint, not served upon the defendant, in the sum of $57,154.57, made up of many causes of action including the two of the original complaint. The amendment consisted in adding new causes of action, not in changing the form of presenting the original causes -- a change of substance, and not of form. The judgment-roll seems to indicate that the summons issued upon the filing of the original complaint was served upon the appellant, or at least upon someone who is assumed to have been president of the appellant corporation. The question of service of summons does not seem to be raised in the argument. Nowhere in the judgment-roll is there any intimation that the amended complaint, which was filed upon the day of judgment, was ever served upon appellant. The recital in the judgment itself relative to service is as follows:

"This cause came on regularly to be heard this 19th day of October, 1921, the plaintiff appearing by its authorized officers and by A. R. Lynch, its attorney, and the defendant, Gila Valley Electric, Gas & Water Company, a corporation, had been duly and regularly served with process herein and had failed to appear and answer the complaint of the plaintiff on file herein, and no answer or demurrer upon behalf of said defendant appearing, it is ordered that the default of said defendant, Gila Valley Electric, Gas & Water Company, a corporation, be entered according to law."

There is no reference in the judgment to the amended complaint except this:

"Orders that judgment be entered herein in favor of the plaintiff and against the defendant, Gila Valley Electric, Gas & Water Company, a corporation, in accordance with the prayer of the amended complaint on file herein."

Default for failure to answer a complaint claiming judgment in the sum of $16,266.32 cannot legally result in a judgment for $57,154.57, based upon an amended complaint with added causes of action included in it, without some notice to the defendant of the increased demand. Rev. Stats. Ariz. (Civ. Code), par. 422; Witter v. Bachman, 117 Cal. 318, 49 P. 202; Watson v. Miller, 69 Tex. 175, 5 S.W. 680; Cole v. Roebling Construction Co., 156 Cal. 443, 105 P. 255.

The court having acquired jurisdiction of the defendant by service of the summons, the judgment rendered upon the amended complaint may not be void, but it violates the principle which underlies all judicial proceedings, that no one shall be deprived of property, life or liberty without an opportunity to be heard, and such a judgment will be promptly set aside when due and timely application to do so is made to the court. Stuart v. Palmer, 74 N.Y. 183, 30 Am. Rep. 289; Gallup v. Jeffery, 86 Conn. 308, 85 A. 374.

On November 28, 1921, little more than a month after this judgment was rendered, appellant moved to set aside the judgment for lack of service of the amended complaint. Evidence was taken for and against this motion. In the face of the judgment-roll, service of the amended complaint could hardly be established, but it was claimed, in support of the judgment, and there was some evidence tending to show, that the amended complaint was served upon one Jacobson, the receiver of the appellant corporation, or, if actual service was not made upon him, he at least knew that the amended complaint had been filed, and that in addition, knowing of the amended complaint, he had, as receiver, approved all of the claims against the appellant corporation which made up the several causes of action incorporated in the amended complaint. This approval by the receiver, it is claimed, is in effect equivalent to a confession of judgment on his part which is binding upon the appellant. The appointment of this receiver was ancillary to this action. The order for his appointment was made on December 1, 1920, contingent upon his filing of bond in the sum of $10,000. When, if ever, he qualified as receiver does not appear from the record. He was directed by the court to take charge of all property of the appellant found in Graham county, Arizona, and to carry on its business...