Continental Bank & Trust Co. v. Cunningham

353 P.2d 168, 10 Utah 2d 329, 1960 Utah LEXIS 181

• Court: Utah Supreme Court
• Decided: June 9, 1960
• Docket: 9138
• Status: Published

Opinions

HENRIOD, Justice.

Appeal from summary judgment dismissing defendants’ counterclaim. Affirmed. Costs to plaintiff.

Plaintiff sued on a note secured by a second mortgage, executed to obtain funds to improve defendants’ motel property. The motel was encumbered by a first mortgage held by another bank.

The counterclaim historized financial difficulties incident to operation of the motel, and as to defendants’ inability to collect from their vendees on a time contract. The contract contained a provision to clear off encumbrances. The pleading then concluded that on January 8, 1958, plaintiff “entered into a fraudulent and corrupt conspiracy agreement” with one Hancock, where an assignment of the note and mortgage was made so that Hancock could redeem the motel and preclude defendants from receiving the money coming to them from the purchasers. Use of discovery procedure under the rules demonstrated that such conclusion was not borne out in fact.

Facts developed indicated that the first mortgage had been foreclosed and that the note held by plaintiff was past due. On the last day to redeem, January 8, 1958, Hancock, stranger to plaintiff bank, represented that he wanted to redeem the property. Pie offered his personal note payable on January 20, for the amount due plaintiff, in exchange for an assignment by the latter of its note and mortgage. The bargain was consummated, the bank retaining the note and mortgage but delivering the written assignment to Hancock,¹ with the understanding that if Hancock were unsuccessful in redeeming the property, a reversal exchange of the instruments would be effected. Hancock’s plan did not materialize. On January 31, 1958, defendants offered to pay off the note and mortgage, because the first mortgagee had given them a chance for a limited time beyond the redemption period to retrieve the motel, by paying the then extinguished first mortgage debt, and conditioned on elimination of the second mortgage note, but were advised of the previous assignment to Hancock. After defendants made their offer to pay on January 31, no renewal thereof was ever made. Plaintiff finally recovered the note from Hancock and returned his to him.

It seems that instead of being a defrauder or conspirator, plaintiff used good business sense by peddling what appeared to be a worthless note and collateral in an eleventh hour chance to recoup a probable loss by exchanging its paper for a note that may have prevented such loss.

That the .counterclaim’s allegations were inconsistent with the facts developed under the discovery process did not impel a finding that there was a fact issue that must have been presented to an arbiter of the facts. Under Rule 56(c), Utah Rules of Civil Procedure, having to do with summary judgment, the facts pleaded in the counterclaim created a situation something akin to a presumption that disappears on production of indisputable or admitted antithetical facts. The rule permits an excursion beyond the pleading. If facts discovered in the journey irrefutably disprove facts pleaded, summary judgment is appropriate on motion therefor. The rule has been interpreted more articulately by eminent authorities on the subject² who suggest that the rule permits us to pierce the pleading, resulting in a summary judgment, if an examination of facts developed under the discovery procedure, by affidavit, deposition, admission and the like, makes it appear that no genuine issue of fact is presentable. To- travel beyond that point would be a waste of time, energy and cost. The rule designedly seeks to eliminate protraction, absent issues of fact, expediting litigation in an area where possible congested calendars point up the truism that justice delayed is justice denied.

WADE, McDONOUGH, and C ALLIS-TER, JJ., concur.

1 . Defendants’ argument that there was no negotiation of the note in accordance with the provisions of Title 44, Utah Code Annotated, 1953, may be true, but that would not prevent a legally effective transfer of rights under the note and mortgage by a separate instrument in writing.

2 . 3 Barron & Holtzoff, Fed.Prac. & Proc., Par. 56.04(1) pp. 2028-30. Sec. 1231, p. 96 et seq.; 6 Moore, Fed.Prac.