JAMES B. BUTTON, Superintendent of Banks of Arizona and Ex-officio Receiver of the CITIZENS STATE BANK, a Banking Corporation, Appellant,
E. S. WAKELIN, Appellee
APPEAL from a judgment of the Superior Court of the County of Maricopa. Joseph S. Jenckes, Judge. Judgment reversed and cause remanded, with directions.
Mr. R. G. Langmade, for Appellant.
Mr. L. M. Laney, for Appellee.
[41 Ariz. 85] ROSS, J.
This suit is over the assets of the Citizens State Bank, an insolvent, and is between the state superintendent of banks, ex-officio receiver, and E. S. Wakelin, mortgagee.
The bank was taken over by the superintendent for liquidation on July 31, 1930, and among its assets were a number of past-due notes and acceptances of the Farmers Ginning Company, hereafter referred to as ginning company. Thereafter the superintendent instituted several collection suits against the ginning company, which, in due course, were reduced to judgments under which executions were issued and of realty and personalty, and at a sale thereunder the superintendent of banks, as the receiver of the bank, became the purchaser of such property. Thereafter, on June 16, 1931, the appellee, E. S. Wakelin, brought suit against the ginning company to foreclose a mortgage on the same property as that which had been sold under execution and bought by the receiver, and made the latter a defendant, and prayed that he be restrained from removing any of said [41 Ariz. 86] property pending the determination of its ownership. The court issued a temporary restraining order as prayed for, which, after a hearing, was continued. From the order of the court refusing to dissolve such restraining order, the superintendent has appealed to this court.
Thereafter a trial of the issues on their merits was had before the court, which resulted in a judgment in favor of appellee, Wakelin. It is the appeal from this latter judgment that we now proceed to consider.
The appeal in the other case is numbered 3155, and will be disposed of in a separate opinion, infra, p. 94, 15 P.2d 960.
The property involved consists of a ginning plant and its equipment and about twelve acres of land upon which it is located. The plaintiff, according to his complaint, loaned the ginning company on March 21, 1921, $25,000 at eight per cent. interest, and at the same time took as security therefor a mortgage on the ginning plant, etc. He alleges that, shortly before the note and mortgage became due, for a good and valuable consideration from the maker ginning company, he extended the date for payment to the 21st day of March, 1925, or three years from its due date, and made and signed a notation on the note in words and figures as follows: "Extended to Mch 21, 1925. E. S. Wakelin" -- and that thereafter, on June 2, 1930, the maker acknowledged in writing the justness of the note and mortgage and promised to pay same according to tenor.
The receiver bank superintendent, in his answers to the complaint and restraining order, raised the following issues: (1) He alleges that plaintiff's remedy, when he filed his action on June 16, 1931, was barred by the six-year statute of limitation; and (2) that plaintiff, Wakelin, while he was president of the Citizens State Bank and a member of its loan committee, loaned and advanced to the mortgagor ginning [41 Ariz. 87] company the sum of $18,714.39, itemized as follows: On December 29, 1928, $5,000; September 13, 1929, $2,000; January 3, 1930, $8,500; March 10, 1930, $1,525; and July 30, 1930, $1,689.39 overdraft -- that after he took possession of the bank he realized as a credit thereon only $3,308.15, the balance being reduced to judgments against the ginning company; that plaintiff, Wakelin, on June 2, 1930, the date of the purported acknowledgment of the justness of the note and mortgage, was the president and a director of the bank and knew it was hopelessly insolvent; and that said acknowledgment, if made as alleged, created an unlawful preference in favor of the bank's president, to the prejudice of the rights of creditors, depositors and stockholders of the bank.
We first notice the contentions concerning the bar of the statutes of limitations. The section relied upon is 2062, Revised Code of 1928, the pertinent part of which reads:
"Actions for debt where the indebtedness is evidenced by or founded upon a contract in writing, executed within this state, shall be commenced and prosecuted within six years after the cause of action has accrued and not afterward."
It is of course not arguable that a note due March 21, 1922, would not be outlawed on March 22, 1928, under the above statute, unless the holder and the maker thereof have taken proper and legal steps to prevent the running of the statute. Recognizing this, the plaintiff in his complaint anticipated the defense of limitation to his action and alleged that certain things had been ...