Taylor v. Betts, Civil 4447

• Decision Date: 20 April 1942
• Docket Number: Civil 4447
• Citation: 59 Ariz. 172,124 P.2d 764
• Parties: ELLA TAYLOR, Appellant, v. AMOS A. BETTS, WILSON T. WRIGHT, and WILLIAM M. COX, and FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a Corporation, and FIDELITY & CASUALTY COMPANY OF NEW YORK, a Corporation, Appellees
• Court: Arizona Supreme Court

124 P.2d 764

59 Ariz. 172

ELLA TAYLOR, Appellant, v. AMOS A. BETTS, WILSON T. WRIGHT, and WILLIAM M. COX, and FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a Corporation, and FIDELITY & CASUALTY COMPANY OF NEW YORK, a Corporation, Appellees

Civil No. 4447

Supreme Court of Arizona

April 20, 1942

APPEAL from a judgment of the Superior Court of the County of Maricopa. Arthur T. LaPrade, Judge. Judgment affirmed.

Messrs Struckmeyer & Struckmeyer, and Mr. H. S. McCluskey, for Appellant.

Mr. Joe Conway, Attorney General, and Mr. W. E. Polley, Assistant Attorney General, for Appellees Betts, Wright and Cox.

Messrs Baker & Whitney, and Mr. Lawrence L. Howe, for Appellees Cox and Fidelity and Deposit Company of Maryland.

Mr Riney B. Salmon, for Appellees Wright and Fidelity & Casualty Company of New York.

Messrs Perry, Silverthorne & Johnson, for Appellee Fidelity and Deposit Company of Maryland.

Messrs. Stockton & Karam, for Appellee Betts.

OPINION

LOCKWOOD, C.J.

Ella Taylor, plaintiff, on December 21, 1938, filed suit against Charles R. Howe and five other members and ex-members of the corporation commission and their bondsmen, defendants, alleging, in substance, that they had willfully and unlawfully issued certificates authorizing the Union Reserve Life Insurance Company, called the company, to transact business in the State of Arizona without its having first complied with the laws of Arizona, and had renewed such certificates from time to time, when said company, as a matter of fact, was insolvent, all of which facts defendants knew, or by reasonable diligence in the discharge of their official duties should have known, and that they had willfully concealed from the legislature and the general public the true condition of said company; that plaintiff's husband, the insured, in 1933 had secured a life insurance policy from the company, relying upon the fact that defendants had issued certificates of authority to it to do business, and had died in 1937, but that the company, because of its insolvency, failed to pay said insurance policy according to its terms. It was further alleged that the insured would not have purchased the policy had he known the true condition of the company but would have purchased insurance from a solvent company authorized to do business in Arizona, and that he had no knowledge at any time of the company's true condition, but relied upon the acts of defendants in licensing it as an assurance that it was at all times solvent.

Defendants demurred to the complaint on several grounds, among them being that there was a defect of parties defendant and a misjoinder of parties defendant, and that the causes of action set up in the complaint were barred by the statute of limitations. The court sustained the demurrer both on the ground of misjoinder and statute of limitations, granting leave to plaintiff to amend, but she stood upon her complaint and judgment was rendered in favor of defendants.

The case came before us on appeal, together with another case in which Alice Bankhead was plaintiff and the defendants in the Taylor case were defendants, wherein an almost identical state of facts was set up, and the trial court made the same ruling as in the Taylor case. It was agreed that the same rules of law applied to both cases, and that the same judgment might be rendered in both of them by this court based upon one opinion. In the Bankhead v. Howe case, 56 Ariz. 257, 107 P.2d 198, 201, 131 A.L.R. 269, after setting up the facts, we said:

"We have held, in the case of Button v. Nevin, 44 Ariz. 247, 36 P.2d 568, that a state superintendent of banks who willfully and knowingly neglects or fails to perform his official duties is liable upon his bond for any damages suffered to parties through such neglect and failure, and that when he allows a bank to engage in business without having fulfilled the conditions specifically required by law, he and his bondsmen are liable for damages to any private parties sustained through the subsequent insolvency of the bank. We think, in reason, the same rule applies if the officers charged with the supervision of insurance companies permit them to engage in the business of selling insurance in Arizona when such officers know, or with reasonable diligence in the discharge of their official duties should have known, that the companies have failed to comply with the specific prerequisites set up by the law as a condition to their engaging in business." But we further held that there was an improper joinder of parties defendant for reasons set forth in the opinion, and stated:

"Since the demurrer was properly sustained on the ground of misjoinder and judgment rendered thereafter, it is unnecessary for us to consider the effect of the statutes of limitation and the other questions raised by the briefs not discussed herein. We expressly reserve them.

The judgment of the lower court is affirmed."

Plaintiff, for some reason, had filed this suit, involving the same policy and based on the same allegations but with only three of the defendants in the previous case, on July 26, 1939. This case was held in abeyance in the trial court, awaiting decision of the case above referred to in this court, and after a decision was rendered by us, as aforesaid, the trial court in the instant case held that the judgment in the first case was a full and complete bar to the prosecution of this action, in that the matters and things complained of in the present action were res adjudicata, and further, that this action was barred by subdivision 3 of section 29-201, Arizona Code 1939, and rendered judgment dismissing the complaint. Thereafter this appeal was taken.

This questions before us are (a) was the judgment in the previous case res adjudicata as to all the material issues raised in the present case, and (b) if not, does plaintiff's complaint show on its face that it is barred by subdivision 3, supra. We consider first the question of res adjudicata.

If will be noted that in affirming the judgment of the lower court in the previous case, we expressly reserved every question except those specifically decided, and mentioned the statute of limitations among those which were not decided. It is claimed by plaintiff that this left the question of the statute of limitations an open one and that the judgment was not res adjudicata as to it, but only as to the joinder of the parties defendant. It is the position of defendants that notwithstanding the language used in the opinion reserving this question, the fact that we affirmed the judgment of the lower court was necessarily an affirmance of its action in all respects and that the judgment is res adjudicata not only as to the issues which we expressly decided, but as to all issues which were or could have been litigated on the record in the trial court.

There can be no question that as a general matter a judgment is res adjudicata as to every point decided therein and also as to every point raised by the record which could have been decided, the presumption being that all such points have been decided in support of the judgment rendered. Miller v. Kearnes, 45 Ariz. 548, 46 P.2d 638; Fischer v. Hammons, 32 Ariz. 423, 259 P. 676. But it is contended by plaintiff that when the court which renders the judgment expressly states that it is not deciding certain points which were raised and might have been decided, the judgment is not res adjudicata as to the points reserved. Both plaintiff and defendants agree that this is undoubtedly the law so far as a judgment rendered by a trial court is concerned, and that if it, in its judgment, reserves any points, they will not be considered as res adjudicata in another proceeding between the parties. Ahlers v. Smiley, 11 Cal.App. 343, 104 P. 997; Faler v. Culver, 94 Kan. 123, 146 P. 333; 34 C.J. 797 and cases cited.

But defendants contend that this rule does not apply when an appeal is taken from the judgment rendered by the trial court, and even though the Supreme Court, in rendering judgment, may expressly reserve certain points presented to and determined by the trial court, and bases affirmance or reversal of the judgment on other specified points alone, that the affirmance of the judgment affirms every ruling of the trial court, notwithstanding the express reservation by the Supreme Court.

Neither counsel has cited to us any case that is in point on the precise question involved, nor have we been able to find one by independent research. Whether this be because the question has never arisen previously in an appellate court, or whether it has been taken for granted that if a trial court has this power, certainly a higher court has the same, we do not know. But in all reason it would certainly appear that the greater includes the lesser, and that if this may be done by a trial court, much more may it be done by a court which has the power either to approve or overrule the decisions of the trial court in all respects. We hold, therefore, that with an appellate court, as with a trial court, when certain points of law...