Markel v. Transamerica Title Insurance

435 P.2d 714, 6 Ariz. App. 585, 1968 Ariz. App. LEXIS 306
CourtCourt of Appeals of Arizona
DecidedJanuary 5, 1968
DocketNo. 1 CA-CIV 538
StatusPublished
Cited by2 cases

This text of 435 P.2d 714 (Markel v. Transamerica Title Insurance) 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
Markel v. Transamerica Title Insurance, 435 P.2d 714, 6 Ariz. App. 585, 1968 Ariz. App. LEXIS 306 (Ark. Ct. App. 1968).

Opinion

CAMERON, Chief Judge.

This is an appeal from an order of the Superior Court granting the motion of the defendant, Transamerica Title Insurance Company, previously Phoenix Title and Trust Company, for summary judgment. We are called upon to answer the following questions:

1. Is a judgment of a trial court, which is not stayed pending appeal, valid and enforceable until such time as it is reversed on appeal?
2. Could the appellant have enjoined or prevented the trustee, Transamerica Title, from disbursing funds in the trust pending determination of the matter on appeal?
3. Under the facts in this case was the appellee, Transamerica Title, a constructive trustee for the benefit of the appellant?
4. Was summary judgment properly granted ?

The facts necessary for a determination of this matter on appeal are as follows: The plaintiff-appellant, Edna Markel, was previously married to one Earl Van-Y, and the parties were divorced in December 1939 in Wichita, Kansas. In the property settlement agreement approved by the court in the Kansas divorce the husband agreed to give the plaintiff one-half interest in any funds that he might obtain through resale or disposal of some twenty acres of land. in Maricopa County, title to said land being in the name of the husband.

. The defendant, Virginia Van-Y, was married to Earl E. Van-Y from February 1941 until the time of his death in Wichita in April of 1959. Before Mr. Van-Y’s death, and after conveyances of the property from the husband through others to the defendant, the defendant entered into escrow instructions for the sale of the 20 acres wherein she was described as the “wife of Earl Van-Y dealing with her sole and separate property”. A trust agreement was also signed which provided that Virginia R. Van-Y was to be the first beneficiary and Phoenix Title the trustee. The sale of the property was for the amount of $25,000.

On 30 April 1959 plaintiff, Edna Markel, filed a complaint to impose a constructive trust on one-half of the proceeds of the sale of the property. At that time a temporary injunction was entered against Phoenix Title restraining it from paying any monies to Virginia R. Van-Y until such time as Phoenix Title had turned over to plaintiff approximately one-half of the sale price of the property plus interest. The defendant Virginia Van-Y answered and Phoenix Title and Trust Company was defaulted. Judgment was entered in favor of the defendant, Virginia Van-Y, on 11 October 1961 from which order the plaintiff, Edna Markel, appealed to the Supreme Court of the State of Arizona. The contest in the Supreme Court of Arizona was between Edna Markel and Virginia R. Van-Y, with Phoenix Title at most a nominal party. The Supreme Court of the State of Arizona in the matter titled Markel v. Phoenix Title and Trust Company, 100 Ariz. 53, 410 P.2d 662 (1966), reversed and remanded the cause for new trial stating:

“We believe the facts in this case brought out at trial create a prima facie case of constructive fraud, (citations omitted) .
“A constructive trust expresses the idea that a defendant is under an equitable, [587]*587duty to give the complainant the benefit of property held. A wrongful holding begs relief whether the type of injustice is old or new regardless of whether actual fraud exists.”

.'And:

“In that defendant never presented her case there must be a new trial consistent with this decision.” 100 Ariz. 57, 58, 410 P.2d 665.

Although a temporary injunction had been previously entered restraining Phoenix Title from disbursing the funds under the trust agreement, the judgment of the trial court quashed all restraining orders and injunctions. After notice of appeal by the plaintiff, no supersedeas bond or injunctive relief was requested by the plaintiff pending the appeal. We are concerned in this matter of what liability, if any, Phoenix Title, now Transamerica Title, has incurred because of the disbursal of all the funds out of the trust during the time the matter was on appeal, from 13 November 1961 when the notice of appeal was filed and the opinion of the Supreme Court on 2 February 1966.

Although the first trial was between Edna Markel and Virginia Van-Y with Phoenix Title at most a stakeholder, the trial upon remand was between Edna Markel, trying to impress a constructive trust upon Phoenix Title as constructive trustee, with Virginia Van-Y not participating, she having received all the money due as first beneficiary under the trust. Summary judgment was granted as to the defendant Transamerica Title, and from this judgment the plaintiff again appeals.

WAS THE JUDGMENT OF THE LOWER COURT VALID PENDING APPEAL?

Counsel have cited no Arizona cases exactly in point regarding the effect of the judgment from which an appeal is taken without supersedeas, although the two cases of Stuart v. Winslow Elementary School District #1, 100 Ariz. 375, 414 P.2d 976 (1966) and School District #1 of Navajo County v. Snowflake Union High School District, 100 Ariz. 389, 414 P.2d 985 (1966), as well as the U. S. District Court case of Zannaras v. Bagdad Copper Corp., 260 F.2d 575 (1958), would indicate that in Arizona persons or parties not restrained or enjoined by supersedeas or by way of other orders of the court may rely upon a judgment of a court until reversed by an appellate court.

The cases from other jurisdictions t are in conflict as to whether the pendency of an appeal affects the operation of a judgment as res judicata. See Annotation 9 A.L.R.2d 984 and 2 A.L.R.3rd 1384. We believe from the rationale of Arizona cases (op. cit.) that the rule in Arizona is:

“A judgment rendered by a court having jurisdiction of the parties and the subject matter' protects the parties acting under it before reversal or stay, and constitutes a sufficient justification for all acts done in its enforcement before it is reversed or set aside by competent authority. Acts done under such a judgment cannot be made the basis of an action for damages for tort. However, all proceedings taken under the judgment are dependent for their validity on the judgment being sustained—when it is reversed or set aside, the party to the record who has received the benefit thereof must make restitution to the other party of money or property received under it.” 5 Am.Jur.2d, Appeal and Error, § 997, page 424.

Although the defendant, Virginia Van-Y, might be liable to the plaintiff for the money she has received (the benefit of the judgment), we do not believe that the appellee, Transamercia Title, is liable for the disbursements made in reliance upon the judgment granted in favor of Virginia Van-Y in the lower court:

“The reversal of a judgment does not1 make void what has been done under it. (citations omitted) A judgment, even though later reversed, protects one who acts under it. What is lawful when done does not become unlawful by reason of [588]

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Related

Burch & Cracchiolo, P.A. v. Pugliani
697 P.2d 698 (Court of Appeals of Arizona, 1984)
Markel v. Transamerica Title Insurance Company
442 P.2d 97 (Arizona Supreme Court, 1968)

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Bluebook (online)
435 P.2d 714, 6 Ariz. App. 585, 1968 Ariz. App. LEXIS 306, Counsel Stack Legal Research, https://law.counselstack.com/opinion/markel-v-transamerica-title-insurance-arizctapp-1968.