Love v. Bracamonte

• Decision Date: 06 November 1925
• Docket Number: Civil 2317
• Citation: 29 Ariz. 227,240 P. 351
• Court: Arizona Supreme Court
• Parties: T. D. LOVE and SEVENTY-NINE MINING COMPANY, a Corporation, Appellants, v. Y. BRACAMONTE, Doing Business Under the Name and Style of "THE PHOENIX GROCERY & MEAT MARKET," SHELBY SHOE COMPANY, a Corporation, TEMPE MILLING COMPANY, a Corporation, C. F. COX, ALICE MCFADIN, NOWELL & RUSSELL, a Copartnership, DANIEL McVEIGH, O. H. WHITEMAN, Doing Business Under the Name and Style of "THE POPULAR MARKET," THOMAS QUARRELLI, Doing Business Under the Name and Style of "THE CHAMPION STORE," and FRANK REAGAN (Intervening Creditors Below), Appellees

240 P. 351

29 Ariz. 227

T. D. LOVE and SEVENTY-NINE MINING COMPANY, a Corporation, Appellants, v. Y. BRACAMONTE, Doing Business Under the Name and Style of "THE PHOENIX GROCERY & MEAT MARKET," SHELBY SHOE COMPANY, a Corporation, TEMPE MILLING COMPANY, a Corporation, C. F. COX, ALICE MCFADIN, NOWELL & RUSSELL, a Copartnership, DANIEL McVEIGH, O. H. WHITEMAN, Doing Business Under the Name and Style of "THE POPULAR MARKET," THOMAS QUARRELLI, Doing Business Under the Name and Style of "THE CHAMPION STORE," and FRANK REAGAN (Intervening Creditors Below), Appellees

Civil No. 2317

Supreme Court of Arizona

November 6, 1925

APPEAL from a judgment of the Superior Court of the County of Pima. W. R. Chambers, Judge. Affirmed.

Mr Selim M. Franklin and Mr. Gerald Jones, for Appellants.

Mr Alexander Murry and Mr. Frank E. Thomas, for Appellees.

OPINION

ROSS, J.

This suit was commenced by Thomas A. Harrison, a minority stockholder of the Continental Commission Company, suing on his own behalf to set aside and annul certain contracts entered into by such company with the defendants T. D. Love and A. O. Jahren relative to the sale by said company of certain options held by it for purchase of the Seventy-Nine group of mines. Thereafter Hugh H. Hanger and other minority stockholders and creditors of the Continental Commission Company intervened, alleging the same facts, and asking the same relief as plaintiff Harrison. Bracamonte and other creditors of the Continental Commission Company also intervened and, under stipulations by attorneys representing all parties, joined their claims in a single complaint and were permitted "by reference to incorporate in said complaint all of the allegations made in the complaint in intervention as originally made by H. H. Hanger and as amended in accordance with stipulation," and, in addition, each of such intervening creditors alleged an indebtedness to him from the Continental Commission Company and stated the amount. These creditors prayed judgment against the Continental Commission Company for their respective debts, and for no other relief, unless it be found they asked for other relief by the adoption of the allegations of the Hanger complaint.

After a trial, extending over a long period of time and in which much testimony was taken, the court entered a judgment the purport and effect of which we give in the language of the appellants' brief:

"The judgment of the court was that the intervening creditors have judgment against the Continental Commission Company for their respective claims; that if the Continental Commission Company, plaintiff, or any of the interveners, repaid to Love by August 1, 1922, the sum of some $70,000 expended by him under his contract and still unpaid to him, the Seventy-Nine Mining Company should execute a deed conveying the Seventy-Nine group of mines to the old company; that the Continental Commission Company should recover from the Jahren estate some $24,000; and that, in the event the $70,000 was not repaid to Love within the time limited, the title to the mines should remain in the Seventy-Nine Mining Company and be quieted as against any claims of the old company or any of the intervening stockholders, but in that event the intervening creditors should have judgment also against Love and the Seventy-Nine Mining Company for their respective debts."

This appeal is taken from that part of the judgment in favor of the intervening creditors and against Love and the Seventy-Nine Mining Company for their respective debts against the Continental Commission Company.

If it has not already been made to appear in the description of the court's judgment, we will, for clarity, say that the option held by the Continental Commission Company on the Seventy-Nine group of mines, and by it assigned to Love, was in turn assigned by Love to the Seventy-Nine Mining Company and whatever title the former company had was confirmed in the latter company by the judgment of the court.

We will take up and dispose of the several assignments generally in the order they are presented in appellants' brief. The first is as follows:

"The pleadings of said intervening creditors, appellees, do not state any cause of action against said defendants T. D. Love and Seventy-Nine Mining Company, or either of them, to support a judgment for the recovery of money, nor was any such judgment prayed for in said interveners' complaint or in any pleadings in said case, and the court erred in rendering any money judgment against these defendants, in this action."

It is obvious that, if the appellees wanted a judgment against the Continental Commission Company only, they would not have intervened in this equitable proceeding, but would have sued that company alone. The only purpose they could possibly have had in joining in this action was to assist the plaintiff and other interveners in preventing the assets of the Continental Commission Company from passing out of their reach, and to subject such assets in the hands of the transferees to the payment of their debts. This was fully recognized by appellants Love and the Seventy-Nine Mining Company, as we shall show later.

The complaint, now for the first time so strenuously objected to for lack of substance, was not as formal and explicit, perhaps, as it should have been. It, however, alleged a good cause of action against the original debtor and, in addition, with the stipulated consent of appellants, adopted all of the allegations of the complaint by Hanger, who, as a minority stockholder and also as a creditor of the Continental Commission Company, had attacked the sale of the latter company's option on the Seventy-Nine group of mines to appellants. But it is said the adoption of the allegations of the Hanger complaint in no way aided appellees' complaint because of the difference in the nature of the causes of action and the relief sought. Intervener Hanger's interests as a plaintiff against appellants were twofold: (1) To set aside the transfer of property to Love and the Seventy-Nine Mining Company which would inure to the benefit of the Continental Commission Company and to him as a stockholder; and (2) as a creditor, to collect his debt against that company out of assets in the hands of the transferees in case the sale was confirmed. In this latter respect his position was on all-fours with appellees, and the allegations of his complaint being sufficient to sustain a judgment for his debt against appellants, on the assumption that such assets were a trust fund for the benefit of creditors, and such alegations being adopted as a part of appellees' complaint, the latter must also be sufficient. Hanger, however, did not expressly pray for judgment against the transferee of property, and neither did appellees, and it is said in the absence of such a prayer no such judgment could be rendered. Hanger's complaint, among other prayers, prayed for "such other and further relief herein as to the court may seem meet and proper in equity."

It is significant that appellants, without demurring to appellees' complaint, interposed a general denial thereto and an answer to the effect that the Continental Commission Company had other effects to which appellees ought in equity be required to resort in satisfaction of their demands before seeking to subject the assets of the Continental Commission Company transferred to them to such debts. In other words appellants...