Leigh v. Loyd

• Decision Date: 05 May 1952
• Docket Number: No. 5504,5504
• Citation: 244 P.2d 356,74 Ariz. 84
• Parties: LEIGH v. LOYD.
• Court: Arizona Supreme Court

Page 356

244 P.2d 356

74 Ariz. 84

LEIGH v.LOYD.

No. 5504.

Supreme Court of Arizona.

May 5, 1952.

Krucker & Evans, of Tucson, for appellant.

James M. Howsare, of Tucson, for appellee.

STANFORD, Justice.

Appellee, plaintiff below, brought this action to cancel and declare void a note and realty mortgage held by appellant.Appellee alleged appellant fraudulently procured said note and mortgage from appellee.The lower court renderd judgment in favor of appellee and ordered the note and mortgage cancelled.Appellant moved for a new trial and, upon the denial of the motion, now appeals from the judgment and the order denying a new trial.

Appellee, Minnie P. Loyd, was a widow owning certain improved real estate in Tucson, Arizona.The appellant, Joe Leigh, was a real estate broker doing business in Tucson, a stranger to appellee until recommended to her by friends, Ruby and Anthony C. Tappero.The Tapperos were endeavoring to start a hospital in Tucson on property owned by Leigh and others.Capital was needed to begin the operation of the hospital and the Tapperos were trying to interest appellee in the venture by making them a loan.Appellee agreed that if she could sell her duplex she would loan the Tapperos $3,000 from the proceeds of the sale.Thereupon appellee orally listed the property for sale with appellant's realty firm.A short time later, December 8, 1948, appellant and the Tapperos went to appellee's residence to discuss the proposed loan.At that time, appellee, believing she was signing an exclusive listing for the sale of her duplex, signed a $3,000 note, payable in six months to appellant, and a realty mortgage on the duplex securing the note.At that same time the Tapperos signed a promissory note payable to appellee in the sum of $3,000 which the parties agreed was not to become effective until the property was sold.

Six months later appellee first learned the true nature of the papers she had signed when appellant demanded payment of the note and threatened foreclosure of the mortgage.Appellee immediately brought this action to cancel the note and mortgage.

Upon the trial of the cause before the court sitting without a jury, a note and realty mortgage bearing appellee's signature and a cancelled check in the amount of $3,000 drawn by appellant, payable to appellee, and bearing appellee's endorsement, were admitted in evidence.The note executed by the Tapperos, payable to appellee, was also admitted.Testimony was introduced to the effect that after this transaction the Tapperos received $2,100 credit for rent in advance and $900 cash from appellant.Appellant contends he loaned the money to appellee, taking the mortgage as security, so that appellee could make the $3,000 loan to the Tapperos.To the date of the trial appellee's duplex had not been sold.

Appellant submits four assignments of error for our consideration.The first two assignments deal with the court's denial of appellant's motions to file a counterclaim praying for foreclosure of the mortgage and to amend his pleadings to conform to the evidence.

The record shows that appellant filed his counterclaim ten months after the answer was filed and five days before the trial of the cause.The lower court denied authority to file the counterclaim on the theory that it presented a different and separate issue requiring separate defenses.No reasons were advanced by appellant for his oversight, inadvertence, or neglect in not filing the counterclaim within the time prescribed by law.Appellant contends the counterclaim is a compulsory counterclaim as defined in 21-437, A.C.A. 1939, and should be allowed as a matter of right because the note was in default at the commencement of the action.We do not believe the assignment raises an issue requiring our determination at this time.If error was committed by the trial court it is at most harmless error.Appellant was not prejudiced by the court's denial of his motion.Had the counterclaim been admitted, the court would first have had to determine the allegations of fraud raised in appellee's complaint as was done at the trial of this cause.Error to warrant reversal must be prejudicial and we find no prejudicial error therein.Hagan v. Cowan, 35 Ariz. 334, 278 P....