Pankey v. Bank

• Decision Date: 21 November 1941
• Docket Number: No. 4628.,4628.
• Citation: 119 P.2d 636,46 N.M. 10
• Parties: PANKEYv.HOT SPRINGS NAT. BANK.
• Court: New Mexico Supreme Court

46 N.M. 10

119 P.2d 636

PANKEY

v.HOT SPRINGS NAT. BANK.

No. 4628.

Supreme Court of New Mexico.

Nov. 21, 1941.

Appeal from District Court, Sierra County; Irwin S. Moise, Judge.

Action by Joseph L. Pankey against the Hot Springs National Bank to enforce judgment theretofore secured against the First National Bank of Hot Springs. From a judgment for the defendant, plaintiff appeals.

Affirmed.

In creditor's action to enforce a judgment against new bank to which debtor bank transferred assets, finding “the Hot Springs National Bank is not a merged bank but a new entity” was a “conclusion of fact” and would be considered as such by reviewing court, notwithstanding that it was intermingled with conclusions of law.

See, also, 44 N.M. 59, 97 P.2d 391.

E. L. Medler, of Hot Springs, and Whatley, Garland & Weir, of Las Cruces, for appellant.

Edward D. Tittmann, of Hot Springs, and Mechem & Hannett, of Albuquerque, for appellee.

BRICE, Chief Justice.

This action was brought by the appellant to enforce against appellee a judgment which he had secured against the First National Bank of Hot Springs (hereinafter called First National Bank). The findings of fact made by the trial court are substantially as follows:

At the time this suit was brought (December 18, 1934) the appellant was a judgment creditor of the First National Bank in the sum of $10,370, together with interest thereon from December 4, 1928, at the rate of six per cent per annum. Execution was issued and returned nulla bona.

On the 18th of March, 1930, the appellee commenced business as a national banking corporation under a charter granted it by authority of the national banking laws of the United States. On said date it entered into a contract with the First National Bank, by the terms of which there was transferred to it all of the assets of said First National Bank, which were of the face value of $176,318.34 and the appellee assumed the “ledger liabilities” of said First National Bank. Appellant's judgment was not a ledger liability of said First National Bank, and was not assumed by appellant.

The assets were divided into two lots, one of $151,292.59 (which included the banking house) and were considered reasonably good, and another of $25,025.75 which were considered doubtful assets. The reasonably good assets were transferred outright to the appellee and the doubtful assets were transferred to it as collateral to secure the appellee against any loss that might occur in the handling of the assets transferred outright. A substituted contract was entered into between the two banks on May 24, 1930, but the terms were not substantially changed.

On the date the transactions occurred by which the assets of the First National Bank were transferred to appellee, the president, cashier and board of directors of the two banks were identical. But the owners of stock were different. Only two of appellee's stockholders were at said time stockholders of the First National Bank, and these owned but seven shares of the stock of the First National Bank, of the par value of $700. Prior to March 18, 1930, Hilmer James, president of the First National Bank, knew of the claim which appellant was making (afterwards reduced to judgment) against the First National Bank.

On May 24, 1930, the stockholders of the First National Bank, by resolution, provided for its liquidation and the appellee was named its liquidating agent. The doubtful assets of upward of $25,000 held by appellee as collateral were liquidated, or partially liquidated, by it. After paying the expenses of collections, and caring for the shrinkage in the so-called “reasonably good assets,” there remained on March 18, 1937, $32.76 as the only assets of the First National Bank, unless some of the “Doubtful assets” were turned back to it, regarding which the findings are silent.

The trial court concluded from these facts that the First National Bank was not merged with the appellee, but that the appellee was a “new entity;” that the appellee was not liable for any claim against the First National Bank not assumed by it; and thereupon dismissed appellant's action.

[1] Appellee charges error by an assignment attacking that part of the trial court's finding of fact No. 2, which reads, “Defendant (appellee) thereby assumed the ledger liabilities of the First National Bank.” It is asserted that it assumed all of the liabilities of the First National Bank. As the uncontradicted evidence shows, it assumed only the ledger liabilities, the court did not err in making this finding.

[2][3] Appellant excepted in the district court to the failure of the trial court to adopt his requested findings of fact numbered 1 to 6 inclusive, which exception was the subject of his assignment of error No. VII. This assignment of error was copied under Point I, but was not mentioned again in appellant's brief and was therefore waived. An assignment of error not supported by point, argument or citation of authority is waived. Robinson v. Mittry Bros., 43 N.M. 357, 94 P.2d 99.

The appellant has largely ignored the findings of fact made by the trial court and argued the testimony as the facts of the case.

[4] The findings of fact made by the trial court, unless set aside by the supreme court, are the facts upon which the case must rest in this court. In re White's Estate, 41 N.M. 631, 73 P.2d 316; Wells v. Gulf Refining Co., 42 N.M. 378, 79 P. 2d 921; Lopez v. Townsend, 42 N.M. 601, 82 P.2d 921; Burguete v. G. W. Bond, etc., Co., 43 N.M. 97, 85 P.2d 749; Krametbauer v. McDonald, 44 N.M. 473, 104 P.2d 900.

[5] We have not overlooked the fact that the trial court sustained appellee's demurrer to the evidence, made at the close of appellant's (plaintiff's) case. In ruling on such demurrer the trial court was required to accept as true all that portion of the testimony which supported plaintiff's case, together with all favorable inferences that could reasonably be deduced therefrom and to discard all unfavorable testimony and inferences. The effect of sustaining the demurrer was to hold that under this rule the appellee had not made a prima facie case. Sandoval County Board of Education v. Young, 43 N.M. 397, 94 P.2d 508; Telman v. Galles, 41 N.M. 56, 63 P. 2d 1049; Merchants Bank v. Dunn, 41 N. M. 432, 70 P.2d 760; Union Bank v. Mandeville, 25 N.M. 387, 183 P. 394; Mansfield v. Reserve Oil Co., 38 N.M. 187, 29 P.2d 491.

[6] The fact that the demurrer to the evidence was sustained, did not relieve the trial court of the duty of making findings of fact and conclusions of law based thereon, as required by rule 105-813 of Pleading, Practice and Procedure (formerly sec. 105-813, Sts.1929); but in doing so he is required to observe the rule stated, and make every essential finding of fact necessary to sustain plaintiff's case that has substantial support in any of the evidence, or in any reasonable inference that can be deduced therefrom. The evidence favorable to plaintiff's case must be accepted as true, the unfavorable discarded. Sandoval County Board of Education v. Young, supra.

[7] It must be assumed by us, in the absence of any successful attack upon the findings and in the absence of any error in refusing to make requested findings after sustaining a demurrer to the evidence, that the trial court's findings of fact are all of the essential ultimate facts that could be made from all of the favorable evidence and all favorable inferences that could be drawn therefrom. It is error for the trial court, under such circumstances, to refuse to make such findings.

[8][9] The findings of fact when made, following the sustaining of a demurrer to the evidence, have the same force and effect as findings made by the court after weighing the evidence in a case submitted for decision upon the testimony of both parties. If the findings are not successfully attacked and no point is made of the court's failure to adopt requested findings or such point is waived as in this case, the testimony is out of the case. We are bound by the court's findings. Mosley v. Magnolia Petroleum Co., 45 N.M. 230, 114 P.2d 740. We leave undetermined the question whether we will review an order sustaining a demurrer to the evidence in the absence of specific findings.

It follows that appellant's very able argument on the testimony as the facts of the case cannot be considered by us. It should have been, and no doubt was, presented to the district court on the matter of making findings of fact.

The question is, whether the appellee, under the facts found by the trial court, is liable to appellant for his debt against the First National Bank?

[10] The Tenth Circuit Court of Appeals (opinion by Judge Orie L. Phillips) has stated the rule, as we understand it to be, as follows:

“The general rule is that where one corporation sells or otherwise transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the transferor. ***

“To this general rule there are four well recognized exceptions, under which the purchasing corporation becomes liable for the debts and liabilities of the selling corporation. (1) Where the purchaser expressly or impliedly agrees to assume such debts; (2) where the transaction amounts to a consolidation or merger of the corporations; (3) where the purchasing corporation is merely a continuation of the selling corporation; and (4) where the transaction is entered into fraudulently in order to escape liability for such debts. ***” West Texas Refining & Development v. Commissioner of Int. Rev., 10 Cir., 68 F.2d 77, 81.

Also see: American Surety Co. v. M-B Ise Kream Co., Tex.Civ.App., 38 S.W.2d 118; Valley Bank v. Malcolm, 23 Ariz. 395, 204 P. 207; Oklahoma Title Co. v. Burrus, 172 Okl. 94, 44 P.2d 852; Pierce v. Riverside Mtg. Securities Co., 25 Cal. App.2d 248, 77 P.2d 226; Chase v. Michigan Tel. Co., 121 Mich. 631, 80 N.W. 717; Mercantile, etc., Trust Co. v. United States, 8 Cir., 96 F.2d...