Hill v. Favour

• Decision Date: 28 November 1938
• Docket Number: Civil 3993
• Citation: 52 Ariz. 561,84 P.2d 575
• Parties: HARRY W. HILL, Receiver of INTERMOUNTAIN BUILDING & LOAN ASSOCIATION, a Utah Corporation, Appellant, v. A. H. FAVOUR and A. G. BAKER, Appellees
• Court: Arizona Supreme Court

84 P.2d 575

52 Ariz. 561

HARRY W. HILL, Receiver of INTERMOUNTAIN BUILDING & LOAN ASSOCIATION, a Utah Corporation, Appellant, v. A. H. FAVOUR and A. G. BAKER, Appellees

Civil No. 3993

Supreme Court of Arizona

November 28, 1938

APPEAL from a judgment of the Superior Court of the County of Yavapai. John P. Clark, Judge. Judgment reversed and cause remanded with directions that judgment be entered for the appellant.

Messrs Baker & Whitney and Mr. Lawrence L. Howe, for Appellant.

Messrs Favour & Baker and Mr. A. M. Crawford, for Appellees.

OPINION

ROSS, J.

On or about November 28, 1930, Thomas R. Short and Catharina Short his wife, gave their promissory note for $5,163, secured by mortgage on real estate situate in Prescott, Yavapai county, Arizona, to the Intermountain Building & Loan Association, a Utah corporation, and hereafter referred to as the Association.

On June 2, 1936, the Shorts filed their complaint in interpleader in the superior court of said Yavapai county naming R. O. Barrett, A. H. Favour, A. G. Baker, and H. S. McCluskey, the Receiver of the Association, and the Association, as conflicting claimants of the note and mortgage and praying that they be compelled to interplead and litigate their several claims among themselves. In due course defendants Barrett, Favour and Baker filed an answer in said cause, in which Favour and Bakerclaimed to be the owners of said note and mortgage through a purchase by Barrett at a judicial sale by the sheriff of said Yavapai county, made under and pursuant to an order and judgment of said court in the case of Margaret Cobb v. Intermountain Building & Loan Association foreclosing an attachment lien on

"all of the right, title, claim and interest of the within named defendant... Association... in, of and to that certain real estate mortgage made and executed by Thomas Short and Catharina Short... to... Association"

to pay an indebtedness of the Association to said Cobb. They alleged that a bill of sale of said mortgage was given to Barrett by the sheriff and that Barrett duly assigned the same to Favour and Baker. It is alleged that the attachment in the Cobb case was made on or about January 9, 1934, by serving a copy of the writ and levy upon the Shorts and by recording the levy in the county recorder's office; that the trial of the cause was had on April 4, 1934, and that judgment was given for $1,000 in favor of Cobb and the attachment foreclosed and the property sold as above stated.

The receiver of the Association filed an answer raising questions of law solely. He asserts in his answer that the Short note and mortgage were and are assets of the Association, because (1) the attachment did not purport to be levied upon the note but only upon the mortgage; (2) the attaching officer did not take possession of the note and mortgage, or either of them, at the time of the purported levy, or at all, such personal property being in the possession of the Association or its agents in Maricopa county; (3) debts evidenced in writing may not be reached by attachment process but must be reached by garnishment process, if at all. The receiver further asserts in his answer that the assets of the Association, including the Short note and mortgage, at the time of the proceedings in the Cobb case were in the constructive possession of the United States District Court of Arizona by virtue of an action theretofore filed therein, in which process had been issued and served, the Association being during all such time insolvent.

It is further alleged in the answer of the receiver that the judge who tried the Cobb case was a visiting judge from Navajo county and that the judgment in the case was void and of no effect because the statutes as to the manner and times of entering judgments by an outside judge were not followed.

These were the issues made by the conflicting claimants. The interpleaders at the time of the filing of their complaint paid into the court $3,000, which, together with payments theretofore made, they estimated to be enough to satisfy the note, but stated that if the court found they owed any more they were ready, able and willing to meet it. They further alleged they had no interest in the matter other than to ascertain, as between the conflicting claimants, which was entitled to the proceeds of the note. It was stipulated by Favour and Baker that they would claim no interest from the time of the tender of the $3,000 into court.

The court found the note and mortgage belonged to Favour and Baker and entered decree accordingly. In other words, the court held that the attachment proceeding in the Cobb case, including the sale of the mortgage thereunder, was legal and passed title to Barrett at such sale, and that Favour and Baker, the assignees of Barrett, were the owners of the note and mortgage. The receiver of the Association, Harry W. Hill, who had been in the meantime substituted for McCluskey, prosecutes an appeal from the judgment.

The appellees make the point that Thomas R. Short and Catharina Short and R. O. Barrett should have been made parties to this appeal and that because the bond on appeal did not run to them the appeal should be dismissed. They accordingly make a motion to that effect.

From the statement of the case it is quite clear that Barrett disposed of all interest he may have acquired in the note and mortgage to the appellees and that he can have no further interest in the action. The only reason suggested why the Shorts should be made parties is that their tender into court was less than claimed by both sets of defendants.

This action was begun under section 4327 of Revised Code of 1928.It cannot be maintained if the interpleader asserts any right or interest whatever against the conflicting claimants. Kenney v. Bank of Miami, 19 Ariz. 338, 170 P. 866; 15 R.C.L. 229, sec. 12. He is a stakeholder for the other parties, ready and willing to abide by any decision of the court as to how he shall perform his obligation or any portion thereof. In the complaint apparently it was not convenient for the interpleaders to ascertain the exact amount owing on the note and mortgage and for that reason they could not tender the exact amount. They accordingly offered to perform the contract as the court might direct, which seemed to be satisfactory to the conflicting claimants.

The motion to dismiss is denied.

The appellees invoke the rule of this court that in the absence of all the evidence we will presume that it was sufficient to support the judgment of the trial court. They assert that all the evidence taken at the trial is not before us. The case comes here on a bill of exceptions. It is said by counsel for the receiver that the evidence was stenographically reported but that they were unable to get the court reporter to transcribe it because the reporter stated he could not find his notes. This is not disputed. However, the statute (sec. 3870, Id.) provides that "in lieu of the statement of facts or transcript of the reporter's notes" a party may "file a bill of exceptions." It is provided that no particular form of words shall be required and that only so much of the evidence as may be necessary to explain the exceptions will be sufficient. Other provisions of the statute are, that a bill of exceptions shall be served upon the adverse party, which it appears was done in this case, and that such party may suggest any amendments that he deems necessary, in which case the court settles the bill of exceptions allowing or rejecting objections. Sections 3865, 3866, Id. In this case appellees did file objections and such objections were in part incorporated in the bill of exceptions and approved by the court. It appears that the statutes were followed and that the appellees had an opportunity to cause any evidence omitted to be inserted in the bill of exceptions had they thought it necessary. There is in the trial of every case a great deal of matter introduced in evidence that becomes immaterial in the hearing before the Supreme Court on appeal, and the elimination from the bill of exceptions of such useless matter is very desirable. The rule seems to be not to include unnecessary evidence in bills of exceptions. 4 C.J.S., Appeal and Error, 1306, § 819; Bancroft's Practice, vol. 8, p. 8948, sec. 6573.

We shall now consider the respective claims of the parties.

The Short note originally belonged to the Association. It paid the consideration for it and was named the payee. The mortgage was an incident to the note and inseparable therefrom. If the Association has lost its title to the note and mortgage or the debt they represent, it was through the proceedings had in the case of Margaret Cobb v. Intermountain Building & Loan Association, which was an action for debt. The plaintiff in that action not only asked judgment for the debt owing her but, to aid her in collecting any judgment obtained, sued out a writ of attachment and caused the same to be levied on the Short "real estate mortgage." The lien, if any, created by such levy was subsequently foreclosed and under a special execution or order of sale the property was sold to appellees' assignor Barrett. It will be observed that the note was not levied upon. The levy was limited to the mortgage as were also the foreclosure and the sale. If appellee bought anything, it was the mortgage. Does such a purchase cover the debt secured by the mortgage or the note -- the evidence of the debt? The law seems to be well settled that the mortgage is a mere incident to the debt and that its transfer or assignment does not transfer or assign the debt or the note. The mortgage goes with the note. If the latter is transferred or assigned, the mortgage automatically goes along with the assignment...