Western Coal & Mining Co. v. Hilvert

• Decision Date: 18 October 1943
• Docket Number: Civil 4551
• Citation: 142 P.2d 411,60 Ariz. 537
• Parties: WESTERN COAL & MINING COMPANY, Appellant, v. FRED G. HILVERT, Appellee
• Court: Arizona Supreme Court

142 P.2d 411

60 Ariz. 537

WESTERN COAL & MINING COMPANY, Appellant, v. FRED G. HILVERT, Appellee

Civil No. 4551

Supreme Court of Arizona

October 18, 1943

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment reversed and cause remanded for new trial.

Messrs Ellinwood & Ross, and Mr. Jos. S. Jenckes, Jr., for Appellant.

Messrs Armstrong, Kramer, Morrison & Roche, for Appellee.

OPINION

STANFORD, J.

Appellant sued to recover on three notes amounting to $237,833.97, together with interest and attorneys' fees, except the sum of $166.03 credited on said amount.

Appellee pleads the statute of limitations.

The notes, together with certain certificates of stock given as security, were sold and assigned to this appellant by the previous owner.

The notes were dated Cincinnati, December 10, 1932, Cincinnati, December 12, 1932, St. Louis, January 3, 1933, and the complaint, which was filed here September 25, 1941, alleged that on December 20, 1938, appellee, in writing, acknowledged the justness of the indebtedness and impliedly promised to pay the notes, and appellant submitted an exhibit in reference to the said promise in writing by appellee as follows:

"Exhibit 'D'

"December 20, 1938.

"Western Coal and Mining Company,

"Missouri Pacific Building,

"St. Louis, Missouri.

"Gentlemen:

"The undersigned, in consideration of your consenting and agreeing to the Plan of Reorganization proposed by The S.A. Gerrard Company submitted by that Company on or about July 25, 1938, to the Income Debenture holders and the Stockholders of said Company, does hereby agree that, upon Western Coal and Mining Company delivering to The S.A. Gerrard Company the certificates for the Common Stock of The S.A. Gerrard Company which Western Coal and Mining Company holds as security for the obligations of the undersigned, and others, to the Western Coal and Mining Company, for exchange for the new Common Stock of The S.A. Gerrard Company pursuant to the said Plan of Reorganization, to endorse, in blank, ready for transfer, the certificates for said new Common Stock issued in exchange for said deposited stock; such endorsement to be in, substantially, the same manner, and for the same purpose that said deposited Common Stock has been endorsed by the undersigned.

"Said new Common Stock, when so endorsed and when received by Western Coal and Mining Company, will be deemed substituted by Western Coal and Mining Company, as holder of the certain notes signed by the undersigned and other parties and without releasing or in anywise impairing the liability of the undersigned under said notes; and said new Common Stock so deposited under said notes shall be as fully subject to the lien of said notes as if specifically referred to and described in said notes.

"(Signed) Fred G. Hilvert."

By appellee's answer he admitted he execution of the notes and the execution of the Exhibit "D," but denied that he acknowledged the justness of his indebtedness to the plaintiff by the execution of the same. He also denied that he implied, or promised to pay he notes, and alleged that the notes were executed without the State of Arizona; that the $15,000 note dated December 10, 1932, accrued January 2, 1934; the note for $10,000 dated December 12, 1932, accrued January 2, 1934 and the note for $213,000 dated January 3, 1933, accrued January 3, 1934, and the action not having been commenced until more than four years thereafter, that they were barred by the provisions of Section 29-204 or 29-206, Arizona Code Annotated 1939.

Aside from the original pleadings above referred to, various pleadings were filed, but we think it sufficient for the case that we refer to the appellee's amended and supplemental answer by which the execution of the notes was again admitted. Limitations were pleaded by Sections 29-204, 29-205, 29-206, Arizona Code Annotated 1939. He also pleaded that there was no consideration for the transfer of the notes to the appellant and that the acquisition of the notes by appellant was ultra vires, inasmuch as the appellant was not qualified to conduct its corporate affairs in the State of Arizona. Appellant filed a reply to appellee's amended and supplemental answer wherein it admitted its lack of qualification in the state, and admitted appellee's allegations with respect to the time of accrual of the cause of actions on the notes and the time of filing suit, and denied all other allegations, and alleged, however, that the notes were executed in the State of Arizona and set forth appellee's absences from the state as tolling the statute of limitations. The court granted the appellee's motion then made to strike the affirmative allegations and for judgment on the pleadings, and judgment on the pleadings was entered.

Coming here on appeal the appellant complains, among other things, the court erred in denying appellant's motion for summary judgment for the reason that all material issues of fact -- the execution of the notes and letter of December 30, 1938, appellant's ownership of the notes, and the balance due thereon -- were admitted or established by affidavit, and said letter constituting an acknowledgment by appellee of his indebtedness under said notes and an implied promise to pay within four years prior to the commencement of the action, entitled appellant to judgment as a matter of law.

The appellant complains that appellee's alleged absences from the state tolled the statute of limitations and appellant had the right to plead such facts in its reply in avoidance of appellee's amended answer.

When the appellee on December 21, 1938, transmitted to the appellant original letter or document referred to as appellant's Exhibit "D," together with a similar one signed by his wife, he wrote George J. L. Wulff, President, Western Coal and Mining Company, 1400 Missouri Pacific Building, St. Louis, Missouri, as follows:

"Dear Mr. Wulff:

"We enclose herewith signed...