Edwards v. Van Voorhis

463 P.2d 111, 11 Ariz. App. 216, 1970 Ariz. App. LEXIS 458
CourtCourt of Appeals of Arizona
DecidedJanuary 6, 1970
Docket1 CA-CIV 786
StatusPublished
Cited by8 cases

This text of 463 P.2d 111 (Edwards v. Van Voorhis) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Edwards v. Van Voorhis, 463 P.2d 111, 11 Ariz. App. 216, 1970 Ariz. App. LEXIS 458 (Ark. Ct. App. 1970).

Opinion

HAIRE, Judge.

Plaintiffs Morris C. Van Voorhis and. his wife (appellees herein) commenced a foreclosure action against numerous defendants including Paul A. Edwards and Murle Edwards (appellants herein), who< were the makers of the two notes secured' by the mortgages being foreclosed. The-executed notes and mortgages traveled through many hands and were eventually assigned, in 1963, to another of the defendants, Amscon Development Company. At this point there is some conflict as to-which route these notes took in their further travels, it being plaintiffs’ contention that the route taken leads to plaintiffs’ door and that plaintiffs acquired ownership of the notes and mortgages prior to the commencement of this litigation, while the defendant mortgagors contend that the defendant Amscon still owned the notes and mortgages at the time this litigation was commenced, subject to an assignment for security purposes to the defend *219 ant Reliance Small Business Investment ■Corporation. The defendant mortgagors further contend that subsequent to the commencement of this action they succeeded to the interests of Amscon and Reliance in the notes and mortgages, and that therefore the trial court erred in finding that plaintiffs were the owners of the notes and ■entitled to foreclose the mortgages.

It is important to note that the ■defendants Amscon and Reliance did not raise in this litigation any claim that they owned these notes and mortgages. Rather, the claim of ownership in Amscon and Reliance was raised at the trial by the defendant mortgagors, Paul and Murle Ed■wards. Although the defendants Amscon and Reliance were duly served, they did not file an answer or.make any appearance in this action. In fact, their defaults were duly entered, judgment was taken against them, and that judgment had become final prior to trial. One of the provisions of this default judgment against Amscon and Reliance specifically held that plaintiffs were the owners and holders of these notes •and mortgages. In accordance with the notice of Us pendens recorded by plaintiffs ■at the commencement of the foreclosure action, the judgment further barred all persons claiming through Amscon and Reliance from and after the date of the recording of the lis pendens from claiming any right, title or interest in the mortgaged property adverse to the plaintiffs. The notice of lis pendens was recorded on February 16, 1965, the date the ■complaint was filed. Some six months thereafter, on September 9, 1965, the defendant mortgagors purported to purchase the subject notes and mortgages from the •defendants Amscon and Reliance. The purchase price for these notes and mortgages was the issuance by the defendant mortgagors of a new note in the principal amount of $11,025.00 1 secured by a new mortgage on the subject premises. However, provision was made in this new note and mortgage that no payment would ever become due unless the defendant mortgagors were successful in defending against plaintiffs in this action. Thus, the inference is raised that the motives of the defendant mortgagors in questioning plaintiffs’ title was not to protect themselves from the possibility of double liability, but rather was an attempt to create a situation where they might be able to settle their obligations at less than fifty (50%) per cent of the balance owing thereon.

In our opinion almost all of the factual and legal controversies which consumed a large part of the trial court’s time related to the rights of the defendants Amscon and Reliance, and these had been conclusively determined in plaintiffs’ favor by the default judgment against Amscon and Reliance prior to the commencement of the trial. The default judgment complied with the requirements of Rule 54(b), Rules of Civil Procedure, 16 A.R.S., and therefore was a final adjudication. The principle is well established that a judgment by default is as conclusive an adjudication of the issues as a judgment rendered after a trial on the merits. 3 Barron & Holtzoff, Federal Practice and Procedure Sec. 1216 (Rules ed. 1958) ; 6 Moore’s Federal Practice Sec. 55.07 at 1822 (2d ed. 1953); 30A Am.Jur. Judgments Sec. 222 at 295 (1958).

Notwithstanding this adjudication, the defendant mortgagors contend that they proved that ownership of the notes and mortgages was not validly transferred from the defendants Amscon and Reliance to plaintiff, 2 and that this proof inured to the benefit of the defaulting defendants, citing 30A, Am.Jur. Judgments Sec. 204 (1958). Based upon this contention, the defendant mortgagors then argue that since this defense inures to the benefit of the defaulting defendants, Amscon and Reliance, the default judg *220 ment must be set aside. As stated in the above cited Sec. 204, the question of whether a successful defense by some of several codefendants may inure to the benefit of a defaulting defendant, is dependent upon the nature, scope, and extent of the defense interposed by the answering defendant and the nature and extent of the right asserted. Here, there was no right asserted jointly against the defendant mortgagors and the defendants Amscon and Reliance. The defendant mortgagors’ liability under the notes as makers was completely independent and separate from the claims asserted by plaintiffs against the defendants Amscon and Reliance. In all the cases coming to the court’s attention which have allowed a subsequently established defense to inure to the benefit of a defaulting defendant, there has been an element of joint or vicarious liability involved which would make a judgment previously entered by default completely inconsistent with the subsequent finding of nonliability against the nondefaulting defendant. Here, there was no question concerning the validity of the notes and mortgages, that the defendant mortgagors were in default and liable to the rightful owners of the notes and mortgages. A judgment adjudicating rights among persons in the chain of title concerning these notes and mortgages would not be inconsistent in any way with any subsequent judgment against these defendant mortgagors adjudicating their liability or nonliability as makers of the notes. Undoubtedly the defendant mortgagors had the right to insist that plaintiffs show ownership of the notes and mortgages, but in our opinion this does not give defendant mortgagors the right to show ownership in third parties when those third parties, who were before the court, failed to assert such ownership in themselves, and allowed a default judgment to be entered against them.

The defendant mortgagors next contend that the default judgment against the defendants Amscon and Reliance is invalid because the defendant mortgagors were given no notice of plaintiffs’ application therefor, citing Rule 58(d), Rules of Civil Procedure, 16 A.R.S., and Phoenix Metals Corp. v. Roth, 79 Ariz. 106, 284 P.2d 645 (1955).

Rule 58(d) requires that certain judgments shall not be signed by the judge until

“ * * * the expiration of five days after the proposed form thereof has-been served upon opposing counsel unless the opposite party or his counsel endorses on the judgment an approval as. to form. This subdivision shall not apply to parties in default.” 3

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Bluebook (online)
463 P.2d 111, 11 Ariz. App. 216, 1970 Ariz. App. LEXIS 458, Counsel Stack Legal Research, https://law.counselstack.com/opinion/edwards-v-van-voorhis-arizctapp-1970.