Cessna Finance Corp. v. Mesilla Valley Flying Service, Inc.

462 P.2d 144, 81 N.M. 10
CourtNew Mexico Supreme Court
DecidedDecember 8, 1969
Docket8855
StatusPublished
Cited by14 cases

This text of 462 P.2d 144 (Cessna Finance Corp. v. Mesilla Valley Flying Service, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cessna Finance Corp. v. Mesilla Valley Flying Service, Inc., 462 P.2d 144, 81 N.M. 10 (N.M. 1969).

Opinion

OPINION

TACKETT, Justice.

This action was commenced in the District Court of Dona Ana County, New Mexico, for recovery on installment notes, related chattel mortgages and guarantee agreements. Plaintiff secured a. writ of replevin which was executed by the sheriff. Defendant answered and alleged a counterclaim for wrongful replevin. Both plaintiff and defendant filed motions for summary judgment, which was granted to plaintiff. Defendant appeals. Defendants Wallace Clair, Charles Knight and Howard Goddard were guarantors and arc not involved in these proceedings.

Defendant’s pertinent attacks on the granting of summary judgment are: (1) That defendant’s motion for summary judgment should have been granted because of plaintiff’s failure to reply to the counterclaim, and because the provisions of the mortgage allowing mortgagee’s local agent to take possession of the security upon default were void as a cognovit provision under § 21-9-16, N.M.S.A., 1953 Comp.; (2) that the plaintiff lacked the capacity to maintain the action because it was a foreign corporation doing business in New Mexico without authority; and (3) the award of the amount of damages was not established as a matter of law, since there were genuine issues of fact as to damages.

Appellant’s contentions under (1) above are without merit. Appellant’s counterclaim did not allege sufficient facts to warrant relief or necessitate a reply thereto. Rule 8(a), Rules of Civil Procedure (§ 21-1-1(8) (a), N.M.S.A., 1953 Comp.). Appellant merely alleged that the replevin action was not prosecuted with effect. Conclusions made by the pleader, which are not supported by a statement of facts, do not state a claim or necessitate a reply thereto. Marranzano v. Riggs Nat. Bank of Washington, 87 U.S.App.D.C. 195, 184 F.2d 349 (1950) ; see also, General Acceptance Corp. of Roswell v. Hollis, 75 N.M. 553, 408 P.2d 53 (1965). In addition, appellant was given notice of the mortgagee’s taking of possession by the replevin action itself, so that no resort was had to any such cognovit provisions of the mortgage. Ritchey v. Gerard, 48 N.M. 452, 152 P.2d 394 (1944).

As to (2) above, the record reveals that appellee was engaged in the business of financing aircraff purchases which were negotiated through independent dealers. The applications for financing were forwarded to appellee’s home office in Kansas, where the applications were either approved or disapproved. Can it be said that appellee was doing business in New Mexico without authority? We think not.

Appellee, a Kansas corporation, is a wholly owned subsidiary of Cessna Aircraft Company. It finances the purchase of Cessna airplanes for distributors, dealers and retail purchasers. There are five other Cessna dealers in New Mexico besides appellant. The distributor who sold to appellant is located in El Paso, Texas. Appellant admits that appellee does not solicit or procure orders, and that its activities in collecting debts and enforcing its rights in properties securing them is not transacting business. Appellant contends that appellee violates § 51-30-1, N.M.S.A., 1953 Comp. (Laws 1967, Ch. 81, § 103), by advertising in form letters; in leasing an advertising sign in 1964; in having a regular employee assigned to the territory who made irregular trips here to solicit business; in holding an instructional seminar of four Texas and New Mexico Cessna dealers in 1968; and in otherwise instructing Cessna dealers in the financing procedure. Appellant states that the security agreements were signed in Kansas at appellee’s home office by an agent for appellee, designated by a power of attorney executed in New Mexico; that negotiations were carried on by telephone from New Mexico; that the aircraft given as security are located in New Mexico; and that from 1965 to July 7, 196S, there have been seven such transactions. In two instances, guarantees of the installment payments were signed in New Mexico.

Appellant relies upon Walter E. Heller & Co. of Cal. v. Stephens, 79 N.M. 74, 439 P.2d 723 (1968), where we held that the leasing of a mill by the owner constituted doing business. Since appellant here complains only of a violation of § 51-30-1, supra, we look only to this statute for guidance. We deem it unnecessary to decide if it is applicable to transactions prior to its adoption. Heller, supra, is not helpful in this connection as it construes an Arizona statute which requires foreign corporations to qualify there “before entering upon, doing or transacting any business, conducting any enterprise, or engaging in any occupation.”

Paragraphs G and H of § 51-30-1, supra, provided that creating evidences of debt, mortgages, or liens on real or personal property, and securing or collecting debts or enforcing rights in property securing them, does not constitute transacting business in New Mexico. Appellee’s only business is financing the purchase of Cessna airplanes to aid sales by its parent corporation; toward this end it creates liens on personal property in New Mexico. Its other activities are incidental to and directly related to this permitted activity, and must necessarily be permitted if the principal activity is permitted. Southern New England Distrib. Corp. v. Berkeley Fin. Corp., 30 F.R.D. 43, (D.C.Conn.1962).

This court has held that activities similar to those of appellee do not constitute transacting business within this State. Abner Mfg. Co. of Wapakoneta, Ohio v. McLaughlin, 41 N.M. 97, 64 P.2d 387 (1937), in which it is stated “ * * * That this and like transactions are interstate commerce is held by all authority, * *

See cases therein cited.

A contract is made when, and not before, it has been executed or accepted by both parties, so as to become binding on both parties. Alexander Film Co. v. Pierce, 46 N.M. 110, 121 P.2d 940 (1942), which quoted with approval Restatement of the Law of Contracts, § 74 as follows:

“ 'A contract is made at the time when the last act necessary for'its formation is done, and at the place where that final act is done.’ ”

This point is ruled against appellant.

We now turn to the damage issue (3) above. This action was brought on written instruments. Appellant has failed to deny the execution of such instruments, but does assert lack of authority to execute in those who signed. The affidavit of Thomas R. Borst, president of Mesilla Valley Flying Service, Inc., in opposition to the motion for summary judgment made by appellee, states in part:

“2. MESILLA VALLEY FLYING SERVICE, INC. did receive a loan from National Aero Finance Company, Inc. [Cessna Finance Corporation] and the corporation was in the process of paying back the loan. * * * I was not involved at the time and have no knowledge of what took place.

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Bluebook (online)
462 P.2d 144, 81 N.M. 10, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cessna-finance-corp-v-mesilla-valley-flying-service-inc-nm-1969.