Hershey v. Banta

• Decision Date: 12 February 1940
• Docket Number: Civil 4124
• Parties: H. B. HERSHEY, Liquidating Receiver for MISSISSIPPI VALLEY LIFE INSURANCE COMPANY, Appellant, v. E. H. BANTA, M. J. DOUGHERTY, ALLAN D. SANFORD, A. O. PELSUE, and REPUBLIC LIFE INSURANCE COMPANY OF DALLAS, TEXAS, a Corporation, Appellees
• Court: Arizona Supreme Court

99 P.2d 81

55 Ariz. 93

H. B. HERSHEY, Liquidating Receiver for MISSISSIPPI VALLEY LIFE INSURANCE COMPANY, Appellant, v. E. H. BANTA, M. J. DOUGHERTY, ALLAN D. SANFORD, A. O. PELSUE, and REPUBLIC LIFE INSURANCE COMPANY OF DALLAS, TEXAS, a Corporation, Appellees

Civil No. 4124

Supreme Court of Arizona

February 12, 1940

APPEAL from a judgment of the Superior Court of the County of Maricopa. E. G. Frazier, Judge. Judgment affirmed.

Messrs Townsend, Jenckes & Wildman, of Phoenix, Arizona, and Mr. J D. Smith and Mr. Fred C. Knollenberg, of El Paso, Texas, for Appellants.

Messrs Silverthorne & Silverthorne, for Appellees.

OPINION

LOCKWOOD, J.

H. B. Hershey, as liquidating receiver for the Mississippi Valley Life Insurance Company, hereinafter called plaintiff, brought suit in the superior court of Maricopa county, in action No. 45161-5, against E. H. Banta, M. J. Dougherty, Allan D. Sanford, A. O. Pelsue, and Republic Life Insurance Company of Dallas, Texas, a corporation, hereinafter called defendants, to set aside a judgment rendered in case No. 37332 in the same court, entitled M. J. Dougherty v. Mississippi Vally Life Insurance Company. At the same time he filed another action, being No. 45160-5, against the Republic Life Insurance Company, E. H. Banta, A. O. Pelsue, J. G. Vaughan, Norman W. Freestone, Dora Freestone, Albert Freestone and W. G. Proctor, seeking to quiet the title of plaintiff to certain lands situate in Maricopa county, Arizona.

Demurrers to the complaints in each case were filed. On April 22, 1938, upon motion of defendants, the two suits thus brought were, over the objection of plaintiff, ordered consolidated, under the provisions of section 3804, Revised Code of 1928, which reads as follows:

"Consolidation of actions; consolidation for trial. Whenever several actions are pending in the same court by the same plaintiff against the same defendant for causes of action which may be joined, or where several actions are pending in the same court by the same plaintiff against several defendants which may be joined, the court may in its discretion, order such action to be consolidated. Whenever several actions are pending by different plaintiffs against the same defendant, or by the same plaintiff against different defendants, arising out of the same transaction, the court may, in its discretion, order that any two or more of such actions be tried at the same time and before the same jury, and that separate verdicts be rendered and separate judgments be entered thereon."

The cases were than argued as consolidated, and the general demurrers to the complaints were finally sustained. Plaintiff failing to amend, judgment was rendered in favor of defendants, dismissing the actions, whereupon appeals were taken in each of the cases to this court.

The facts necessary for a determination of both appeals may be stated as follows: On June 11, 1932, M. J. Dougherty filed suit No. 37332, supra, against the Mississippi Valley Life Insurance Company, hereinafter called the company, of a claim alleged to be due him (a) as personal attorney's fees in the sum of $1,072.16, (b) on an assigned claim of James A. Walsh for $541.20, and (c) on an assigned claim of George H. Moore and William M. Fitch for $1,100. Application was made for the appointment of a receiver of the company to take charge of certain real estate belonging to it and situate in Maricopa county, the application setting up that the company was insolvent; that its property outside of Arizona was in the hands of receivers appointed in other states, and that the real estate above referred to was the only property to which its creditors in Arizona might look for satisfaction of their judgments. A citation was issued to the company, requiring it to appear on June 20, 1932, to show cause why a receiver should not be appointed, and it was ordered that service of the complaint, the affidavit in support thereof, the motion for a receiver, and the order to show cause, be served by registered mail. On June 27th an order was made reciting as follows:

"The court having heretofore upon the verified complaint and affidavit of the plaintiff, made and issued an order requiring the above named defendant to appear and show cause before this court in the City of Phoenix, County of Maricopa, State of Arizona, at 9:30 o'clock, A.M., on the 20th day of June, 1932, and the said defendant, appearing herein by Kibbey, Bennett, Gust, Smith and Rosenfeld, as attorneys for Alvin S. Keys, the duly appointed receiver for said defendant, having applied for and having been granted a continuance until 9:30 A.M. on this date, and the plaintiff appearing in person and by his attorney, James A. Walsh, and the defendant appearing by its attorneys, Kibbey, Bennett, Gust, Smith and Rosenfeld, as attorneys for Alvin A. Keys, the duly appointed receiver for said defendant, this matter came on regularly for hearing upon said verified complaint, said plaintiff's affidavit and the representation and statements of the parties and said attorneys; and it appearing to the court that due and proper notice of the time and place of this hearing has been in due and proper time served upon said defendant and that said defendant is represented by its attorneys,... "

The order further recited that the circuit court of Madison county, Illinois, had previously entered an order providing for the liquidation of the company, and appointing a receiver to take charge of its business, and that it was necessary that a receiver be appointed in Arizona for the property of the company within this state, and ordered as follows:

"That A. O. Pelsue, a resident and citizen of the State of Arizona, be and he is hereby appointed receiver of the above named defendant Mississippi Valley Life Insurance Company;...

"It is further ordered, adjudged and decreed that the said A. O. Pelsue, as receiver aforesaid, take immediate possession and charge of all property of the said Mississippi Valley Life Insurance Company, real, personal and mixed of whatsoever kind and description, within the State of Arizona, and to manage, operate, conduct and control said assets subject to the orders of this court."

The receiver duly qualified and took possession of the real estate. On August 22, 1932, judgment was rendered in favor of Dougherty against the company. This judgment recited as follows:

"... the plaintiff appearing in person and by his attorney, James A. Walsh and the defendant, heretofore served by registered mail with a copy of the Summons issued in this cause to which as attached a true and correct copy of the Complaint on file herein, and the said defendant and its Receivers, Alvin S. Keys, Joseph B. Thompson and William E. Caulfield by their attorney, Fred W. Rosenfeld, having appeared herein generally but having failed to file their answers in this cause within the time allowed by law or at all and the default of the said defendant and its Receivers having been duly entered according to law, and a jury having been expressly waived, the cause was tried to the Court without a jury.

"Whereupon witnesses were duly sworn and examined and documentary evidence introduced and the evidence being closed, the cause was submitted to the court for consideration and decision and from the evidence given in support of plaintiff's complaint and the record herein, the court finds:

"1. That the defendant was regularly served with process in this cause by registered mail and that said defendant and its receivers appeared generally in this cause but failed to file their answers herein jointly or severally or at all within the time required by law, and that the default of said defendant and its receivers has been duly entered according to law."

-- and judgment was rendered accordingly for the amount prayed for. On the same day, E. H. Banta filed in the superior court a petition for leave to file a suit to quiet title against Pelsue, the receiver appointed by the court, which petition was granted, and immediately suit No. 37799 B-1 was filed by Banta against Pelsue as receiver, seeking to quiet title to the N 1/2 of the NE 1/4 and the SE 1/4 of section 19, Township 1 North, Range 6 East, G. & S. R. Base and Meridian. The receiver answered, admitting that he claimed title as such receiver to the property above mentioned, but making no further defense. The case was then heard by the court, witnesses being sworn and documentary evidence introduced, and voluminous findings were made tracing the title of the land in question from the company to plaintiff, and rendering judgment quieting the title to the premises in fee simple in plaintiff Banta. All these proceedings were on August 22, 1932. Dougherty much later acknowledged satisfaction of his judgment, which was duly filed March 27, 1937.

It is the position of the defendants that the real purpose of the present suit and its companion No....