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MacRae v. Betts

Supreme Court of Arizona

September 17, 1932

KATHERINE V. MacRAE, Appellant,
JOHN H. BETTS, Jr., Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. Joseph S. Jenckes, Judge. Judgment affirmed.

Messrs. Moore & Shimmel, for Appellant.

Mr. Frank, H. Lyman, for Appellee.



This is an action by plaintiff, Katherine V. MacRae, against John H. Betts, Jr., for damages for breach of contract. The allegations of the complaint, in short, are: That plaintiff, being the owner in fee simple of lots 1, 2, 5 and 6, section 24, township 5 south, range 7 east, Gila and Salt River Base and Meridian, Pinal county, Arizona, on September 6, 1922, conveyed the legal title thereof to defendant in trust to enable him to exchange the same for real property in Los Angeles or vicinity, taking the title in plaintiff's name, with the agreement that, if defendant was not able to make an exchange satisfactory to plaintiff within a reasonable time, he would upon plaintiff's demand reconvey the property to her. It is alleged that defendant did not exchange the property, and [40 Ariz. 455] that, although plaintiff has repeatedly demanded of him a reconveyance thereof to her, he has declined to do so; that by reason thereof she has lost her title and ownership to her damage in the sum of $30,000, for which she asks judgment.

The defendant's answer to the complaint was that the matters and things therein set out between the same parties, involving the same subject matter, had theretofore been formally and finally adjudicated against the plaintiff. In support of his plea of res judicata, defendant offered in evidence the record in cause No. 3859, in the superior court of Pinal county, in which the plaintiff here was plaintiff and John H. Betts, Jr., Edna D. Betts, his wife, and Thomas MacRae were defendants, and also the judgment and decision of the Supreme Court of the state dismissing plaintiff's appeal, and rested.

The plaintiff then offered to introduce evidence, but such offer was rejected, and judgment sustaining the plea of res judicata was duly entered. The plaintiff has appealed.

In the Pinal county case the actual dispute or controversy was between the two MacRaes, and involved the question as to which of them was the owner of the land. Each claimed it as his sole and separate property, and each asked the court to quiet his title against the other and against John H. Betts, Jr., and Edna D. Betts, his wife, who were made parties to the action because the MacRaes had theretofore by their joint deed conveyed to John H. Betts, Jr., the legal title thereto, with an agreement that he would reconvey upon demand. The Betts answer was a disclaimer. It admitted that the beneficial interest and title were in the MacRaes, or one of them, and expressed a willingness and desire to reconvey the land to the one the court should hold to be the owner. The evidence at the trial of that case disclosed that the land was patented to Thomas MacRae by the [40 Ariz. 456] United States as a desert entry and was his separate property; that he conveyed it to his wife, Katherine (plaintiff), for the purpose of defeating, delaying, and defrauding a creditor who had sued him for a considerable sum of money, and that thereafter the two of them joined in a deed

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conveying the land to defendant John H. Betts, Jr., in trust, for the same purpose and reason as against another creditor of Thomas MacRae. The trial court quieted the title in Thomas MacRae, and directed the Betts to convey the legal title to him. The plaintiff, Katherine V. MacRae, appealed, and in the Supreme Court, after a very full and careful consideration, it was decided the MacRaes were in pari delicto in the fraudulent conveyance to Betts, and that equity would not aid them, or either of them. We reversed the judgment and remanded the case to the lower court, with directions that it be dismissed. Concerning the transfer from the MacRaes to Betts, we said:

"Under our view of the law, the transfer to Betts is fraudulent on any theory, and both plaintiff and defendant were grantors therein. Had Betts stood on his deed, the trial court would necessarily have rendered judgment in his favor."

And concluded our opinion with the following comment and order:

"To ask a court of equity under these circumstances to determine in whom the equitable title is, and to lend its assistance to compel a transfer of the legal title, is to ask it to disregard the fundamental principles on which its jurisdiction is based. The parties will have to settle their difficulties among themselves without the aid of the equity jurisdiction of the courts of Arizona.

"The judgment of the trial court is reversed and the case remanded, with instructions to dismiss the action, each party to bear his own costs." MacRae v. MacRae,37 ...

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