Daggs v. Phoenix National Bank

This cause embraces three suits brought by the Phoenix National Bank against A. J. and R. E. Daggs, defendants in error. They were respectively numbered 2554, 2555, and 2556, and were consolidated by stipulations of the parties.

They were brought to recover on three promissory notes, aggregating the sum of $9,741.73 signed by A. J. Daggs, one of the appellants. Each note was dated November 1, 1894, and payable on or before one year from date, with interest at the rate of 10 per cent per annum. Also, to foreclose certain mortgages executed to secure the notes:-one executed by R. E. Daggs on the 28th of November, 1894, on certain real estate in Maricopa county, Arizona, and on four water rights of the Consolidated Canal Company, represented by certificates; two executed by A. J. Daggs on same day, on certain other real estate situate in the same county.

The answers were substantially the same in all of the cases.

They admitted the making of the notes and mortgages, but alleged that the interest charge was usurious, and in violation of §§ 5197 and 5198 of the Revised Statutes of the United States.

As a counterclaim it was alleged that the plaintiff (appellee) was indebted to the defendant (appellant) upon a certain promissory note executed by W. A. Daggs and P. P. Daggs as copartners and as individuals, and delivered to Thomas Armstrong, Jr., and assigned by him to the plaintiff in blank, and by the latter, on the 28th of November, 1894, for a valuable consideration, to the defendant, A. J. Daggs, at which time the makers were, and ever since have been, notoriously insolvent, all of which the plaintiff knew.

The note was as follows, marked 'Exhibit A,' and made part of the counterclaim:

No. 1340. Due Sept. 1st.

Phoenix, Arizona, July 1st, 1893.

$5,000.00.

On the 1st day of September, 1893, without grace, we or     either of us, for value received, promise to pay to Thos. Armstrong, Jr., at the Phoenix National Bank, at their office     in Phoenix, Arizona, five thousand dollars ($5,000) in United      States gold coin, with interest, at the rate of 1 and 1/4 per      cent per month, until paid. In case of legal proceedings     hereon, we or either of us agree to pay 10 per cent of amount      due hereon as attorney's fees.

W. A. and P. P. Daggs.

Secured by chattel mortgage of even date herewith.

W. A. Daggs.

P. P. Daggs.

It was also alleged that no part of the note was paid, and that there was due thereon the sum of $7,076.91. And judgment was prayed for the amount and interest.

For another defense it was alleged that at the time of the execution of the three promissory notes sued on, the plaintiff (appellee) and the defendant, A. J. Daggs, entered into a contract in writing (a copy of which is attached to the answer, marked Exhibit 'B') wherein the plaintiff as part of the consideration for the said three notes, sold and assigned and expressly stipulated that the three notes should be received in payment for all its rights, title, and interest in and to that certain right in action wherein Hugh McCrum was plaintiff and W. A. and P. A. Daggs were defendants, and plaintiff was intervener, over that certain $5,000 note marked 'Exhibit A' herein, and the mortgage securing the same.

That at said time the makers of said note were actually insolvent, which plaintiff knew, and it was agreed that plaintiff should carry on the said litigation in its name until the cause of action should be determined and settled, and pay all costs accruing prior to November 1, 1894, and the defendant to pay those accruing thereafter. And it was alleged that the defendant paid out large sums of money in the prosecution of said suit, to wit, $45.65 as transcript fee from the court below, and $500 as costs, and expended work and labor of the reasonable value of $500, and has performed all the conditions of said contract, but that plaintiff (appellant) has failed to perform the conditions on its part to the damage of defendant in the sum $10,122.55.

For another defense, it was alleged that the defendant pledged certain water stock in the Tempe Irrigating Canal as security for said promissory notes, which was reasonably worth $4,000, and that the plaintiff (appellee) has converted it to its own use, to defendant's damage in the sum of $4,000; wherefore defendant prayed that he be relieved lieved from the payment of interest on said notes, for his expenditures in said suit; the amount of said $5,000 note, for $4,000 value of the water stock pledged, and for $2,000 damages.

In case No. 2555 the defendants filed a plea in abatement on account of the pendency of case No. 2554, and a like plea in case No. 2556. The pleas were overruled.

And in case No. 2555 A. J. Daggs moved for judgment upon his counterclaim on the ground that it was confessed, because no reply was made to it.

A similar motion was made in case No. 2556.

Testimony was taken and judgment was entered for the plaintiff, the Phoenix National Bank, against the defendant, A. J. Daggs, for the principal of the three notes and interest, and decreeing a foreclosure of the mortgages and the sale of the property mortgaged. A motion for a new trial was made and denied. On writ of error to the supreme court of the territory the judgment was affirmed (53 Pac. 201), and an appeal was then taken to this court.

In passing on the case the supreme court of the territory said:

'At the outset we are compelled to call attention to the omission of counsel to comply with the statute and the rules of this court on the subject of assignments of error.

'These are imperative and must be observed. It is not our business to search the record if perchance we may find reversible error. It is our duty to examine into such alleged errors, and only such, as are distinctly pointed out in the record. The assignments made by plaintiffs in error in their brief are, for the most part, so general in character and so wanting in definiteness that they cannot be considered. Although defective as assignments, we have, by liberal construction, found that two of them present questions for our review.

'The first of these reads as follows:

"The court erred in not giving judgment for plaintiffs in error on their pleas in bar of the recovery of any interest for the reason that the contract with the national bank for 10 per cent interest is ultra vires.'



'The second assignment of error as made by plaintiffs in error, reads: 'The court erred in overruling the plaintiffs' in error motion for judgment on the pleadings for the reason that there was no reply to plaintiffs' in error verified counterclaims."

No statement of facts in the nature of a special verdict being certified with the record, the plaintiffs in error moved for and obtained from this court a certiorari to supply the defect, and in response thereto a statement of facts, which had been made by the supreme court of the territory, was certified to this court, in which was recited act No. 71 of the territory, regulating appeals and writs of error to the supreme court, the judgment of foreclosure and sale, the assignments of error of appellants, and concluded as follows:

'Under the assignments of error thus made and presented in the record this court could and did make no determination of the facts of the case, except such as appeared in the pleadings and judgment, for the reason that such of the assignments as were sufficient in form to raise any question presented none for our consideration which necessitated the further finding of facts in the case. We are unable to determine from the record presented in this court, in the absence of a bill of exceptions and a statement of facts, what the facts were which were put in evidence on the trial in the court below, further than as they are shown by the transcript of the reporter's notes, and form such review of the record the judgment of the district court was affirmed as follows:

"In the Supreme Court of the Territory of Arizona.

"R. E. Daggs and A. J. Daggs, Plaintiffs in Error, v.

Phoenix National Bank, a Corporation, Defendants in Error.

"This cause having been heretofore submitted and by the court     taken under consideration, and the court having considered      the same and being fully advised in the premises, it is      ordered that the judgment of the district court herein be,      and the same is hereby, affirmed.

"It is further ordered and adjudged that the defendant in     error herein do have and recover of and from the plaintiffs      in error, R. E. Daggs and A. J. Daggs, as principals, and R.      F. Doll, W. M. Billups, and the London Company, as sureties,      on cost bond, its costs in this court, taxed at forty-three      and 10-100 ($43.10) dollars.

'By the court:

Webster Street, C. J.

Richard E. Sloan, A. J.

Fletcher M. Doan, C. J.