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Hawkins v. Leake

Supreme Court of Arizona

June 13, 1933

FRANK C. HAWKINS and MARTHA HAWKINS, His Wife, Appellants,
v.
CONRAD M. LEAKE, Appellee

APPEAL from a judgment of the Superior Court of the County of Cochise. John Wilson Ross, Judge. Judgment affirmed.

Mr. C. I. McReynolds, for Appellants.

Mr. J. H. White, for Appellee.

OPINION

Page 834

McALISTER, J.

On November 16, 1931, Frank C. Hawkins, and his wife, Martha Hawkins, made and delivered their promissory note for $318.45, payable one year after date, to Conrad M. Leake, and to secure its payment executed the same day in favor of the latter a chattel mortgage on certain printing [42 Ariz. 122] machinery, type and accessories and delivered it. The mortgage was placed of record the following day.

On January 25, 1932, the defendant, Frank C. Hawkins, made and delivered a promissory note for $334.68 to the defendant, F. A. McKinney, and to secure its payment executed at the same time in favor of the latter a chattel mortgage on the identical property described in the mortgage to Leake and delivered it.

Notwithstanding the note to Conrad M. Leake did not mature until November 16, 1932, and notwithstanding neither it nor the mortgage contained an acceleration clause, he commenced an action to collect it on February 15, 1932, and in the prayer of his complaint asked not merely that he have judgment thereon but also that the chattel mortgage dated November 16, 1931, and given as security therefor, be foreclosed, the property sold at public sale, and the proceeds thereof applied to the payment of the amount found due.

The defendants were served personally but did not answer and the default of each was entered on March 22, 1932. Thereupon, a trial of the matter ex parte was had and it resulted in a judgment for the plaintiff in the amount of the note and an order foreclosing the mortgage lien and directing that the property be sold under special execution and that the proceeds be applied to the satisfaction of the indebtedness of plaintiff. The sale was had on May 26, 1932, after proper notice, and the plaintiff bid the property in for $25 and took possession of it under an order of the court directing its delivery to him.

On June 15, 1932, defendants filed a motion to set the judgment aside and allow them to defend the suit upon the ground that the court was without jurisdiction to render the judgment for the reason that the complaint did not state facts sufficient to constitute a cause of action in that it disclosed upon its face [42 Ariz. 123] that the indebtedness was not then due and could not become due before the date of maturity, November 16, 1932, because neither the note nor the mortgage contained an acceleration clause. There was filed at the same time in support of the motion to vacate an affidavit of merits signed by the defendant, Frank C. Hawkins. The motion was denied and the defendants have brought the matter here for review.

Appellants have assigned a number of errors but they each grow out of one main contention and that is that the court had no jurisdiction to render a judgment that the indebtedness evidenced by the note was then due. If it did not have this power, the denial of the motion to vacate was error, and this is true whether the failure to answer was excusable or not, though if jurisdiction did exist and the court merely rendered an erroneous judgment, one that the facts did not justify but which could be corrected on appeal, the denial of the motion to vacate was within its power (Black on Judgments, 2d ed., vol. 1, par. 329), and the only way the ruling could be reversed in this proceeding would be by showing that the failure to answer was the result of facts of such a nature that it constituted an abuse of discretion to hold that the neglect was not excusable. However, none of the assignments are based upon the view that there was a sufficient showing to bring the failure to answer within the excusable class, appellants' sole reliance being upon the contention that the judgment is void and should be set aside, regardless of the cause of appellants' default. hence, it is necessary to determine only whether the court had jurisdiction to render the judgment it did.

The claim that the court lacked jurisdiction is, as just stated, based upon the contention that the note did not become due until November 16, 1932, one year after the date of execution, and that neither it nor the mortgage contained an acceleration clause. The [42 Ariz. 124] principal of the note did not by its terms become due before maturity, and the interest, which was payable quarterly, became a part of the principal to be paid at the date of maturity if not satisfied when due, instead of merely advancing the due date of the note, as such failure often does. The court, however, evidently took the view that the effect of the following provision in the chattel mortgage was to accelerate the due date of the note:

"But if default shall be made in the payment of said sum of money, or interest thereon, at the time said note shall become due, or if any attempt shall be made to remove, dispose of or injure said property or any part thereof ...


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