Monaghan & Murphy Bank v. Davis

• Decision Date: 27 March 1925
• Docket Number: Civil 2223
• Citation: 234 P. 818,27 Ariz. 532
• Parties: MONAGHAN AND MURPHY BANK, a Corporation, Appellant, v. MAY DAVIS, and MAY DAVIS as Administratrix of the Estate of GEORGE W. DAVIS, Deceased, Appellees
• Court: Arizona Supreme Court

234 P. 818

27 Ariz. 532

MONAGHAN AND MURPHY BANK, a Corporation, Appellant, v. MAY DAVIS, and MAY DAVIS as Administratrix of the Estate of GEORGE W. DAVIS, Deceased, Appellees

Civil No. 2223

Supreme Court of Arizona

March 27, 1925

APPEAL from a judgment of the Superior Court of the County of Mohave. J. E. Jones, Judge. Judgment reversed and cause remanded.

Mr. C W. Herndon, for Appellant.

Mr Louis L. Wallace, for Appellees.

OPINION

LOCKWOOD, J.

In February, 1921, S. N. Graves and wife were indebted to Monaghan & Murphy Bank, a corporation, hereinafter called the plaintiff, in the sum of $4,600. This indebtedness was secured by a chattel mortgage on certain cattle in Mohave county Arizona. Graves sold the cattle to George W. Davis, and the latter desired to make arrangements with plaintiff to assume the indebtedness of the graves.'

Plaintiff is a California corporation, with its principal place of business in Needles, California, and about February 23d Davis went to Needles to see plaintiff about the assumption of the indebtedness. While there the matter was discussed, and, according to all the witnesses who testified, an agreement was reached between plaintiff and Davis that he should assume the Graves' indebtedness, and that new papers would be prepared to that effect.

A few days later an agent of plaintiff brought a new note and chattel mortgage, covering the terms of the agreement, to Kingman, Arizona, where they were executed by Davis and his wife, and the mortgage properly filed, after which the note and mortgage were delivered to plaintiff in Needles. The note was dated and made payable at Needles, California.

Some time later Davis died, and May Davis, his wife, hereinafter called the defendant, was duly appointed administratrix of his estate. Thereafter plaintiff brought suit in replevin to recover possession of the property covered by the mortgage, on the ground that the note was overdue; there being the usual provision in the mortgage permitting such action.

Defendant answered, admitting the execution of the note and mortgage and failure to pay, but claiming they were void under paragraph 2228, Revised Statutes of Arizona of 1913, for failure on the part of plaintiff, as a foreign corporation, to comply with the Arizona law, and asking for damages for a wrongful replevin in the sum of $25,000.

The case was tried to a jury, which returned a verdict for defendant, and fixed the value of the property at the sum of $23,450. Plaintiff moved in arrest of judgment, which motion was denied, and judgment was rendered on the verdict; defendant electing to take the assessed value of the property.

Motion for new trial was made and overruled, and plaintiff appealed from the order denying the motion in arrest of judgment, from the order overruling the motion for a new trial, and from the judgment.

We are met in the first place with a motion to dismiss the appeal, on the ground of insufficiency of the appeal bond. Counsel for defendant has urged this proposition with much zeal, but, without determining whether or not the bond on appeal is, as it reads, correct in form, we are of the opinion that paragraph 1253, Revised Statutes of Arizona of 1913, applies to bonds of this character, and, no objection having been raised to the bond in the manner prescribed in said paragraph, it is effective as an appeal bond.

This brings us to a consideration of the real defense, which may be summed up syllogistically as follows: (1) The act of any foreign corporation doing business in Arizona, done therein before it complies with paragraph 2228, supra, is utterly void; (2) plaintiff was such a corporation, and the note was an Arizona contract; (3) therefore the note in question was void.

A defense thus summed up can only be met by denying either the major or minor premise. Plaintiff admits the major premise, but denies it comes within the definition of the minor, in that it was not "doing business in Arizona," nor was the act in question "done therein" within the meaning of the statute, and it is upon these two propositions that the case hinges.

It was, of course, necessary for defendant to prove affirmatively that plaintiff was engaged in business in Arizona, within the meaning of our statute, and also that the particular act claimed to be void was done therein.

The question of what is meant by "carry on, do, or transact any business" was discussed by us in Babbitt v Field, 6 Ariz. 6, 52 P. 775; Martin v. Bankers' Trust Co., 18 Ariz. 55, Ann. Cas. 1918E, 1240, 156 P. 87; Nicolai v. Sugarman Iron & Metal Co., 23 Ariz. 230, 202 P. 1075. The consensus of these three cases is that, to come within the statute, a corporation must be engaged in an enterprise of some permanence and durability, and must transact within the state some substantial part of its ordinary business, and not merely a single act. The only course of business contended by defendant to have been conducted by plaintiff in Arizona is the loaning of money, and the particular act which is claimed to be void is the transaction whereby defendant and her decedent assumed the Graves' indebtedness. Defendant was therefore required to prove a general course of loaning money by plaintiff in Arizona to an extent...