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Dudley v. Peterson

Supreme Court of Arizona

October 2, 1933

M. B. DUDLEY and DAISY M. DUDLEY, His Wife, Appellants,
v.
VARRO PETERSON, Appellee

APPEAL from a judgment of the Superior Court of the County of Mohave. D. A. Bridges, Judge. Judgment reversed in part and affirmed in part.

Mr. Charles P. Elmer, for Appellants.

No appearance for Appellee.

OPINION

[42 Ariz. 283] LOCKWOOD, J.

Varro Peterson, hereinafter called plaintiff, brought suit against M. B. Dudley and Daisy M. Dudley, his wife, hereinafter called defendants, on two causes of action, the first being one of debt on open account for money alleged to have been loaned by plaintiff to defendant M. B. Dudley for the benefit of the community, and the second on a promissory note dated and payable in Los Angeles, California, alleged to have been executed by [42 Ariz. 284] both defendants. The original complaint was filed May 17, 1930, and shortly thereafter there were issued and served two writs of garnishment, one directed against Pilgrim Consolidated Mining Company, a corporation, and the other against Katherine Treasure Vault Gold, Inc., a corporation, hereinafter called the garnishees. The garnishees promptly answered, showing that defendant M. B. Dudley had had issued to him certain shares of stock in each corporation, but that they had no means of knowing whether he was at the time of the service of the writ still the owner thereof. No process had been served in any manner on either of defendants, but on September 2d they appeared specially, objecting to the jurisdiction of the court and moving to quash the writs of garnishment aforesaid, which motion was denied. At a later date the court held that defendants had by this action in effect entered a general appearance, and on April 9, 1931, required them to answer the complaint within

Page 277

ten days. Defendants thereupon, in compliance with such order, but expressly reserving their jurisdictional objections, did answer, setting up a plea in abatement on the grounds of lack of jurisdiction and a confession of the execution of the promissory note involved in the second cause of action, but denying personal liability thereon on the ground that it was made and payable in California and secured by real estate in that state, and that plaintiff had made no effort to exhaust such security prior to the commencement of the action. The allegations of the first cause of action were also denied in toto.

On April 18th defendant M. B. Dudley was served personally and properly with a copy of the summons and complaint. Defendant Daisy M. Dudley was never served in any manner, nor did she enter any appearance, except in so far as the foregoing recitals may show one.

[42 Ariz. 285] The case was tried to the court without a jury on the thirty-first day of July, 1931, on the issues raised by the amended complaint and the answer filed by order of the court, and judgment was rendered on the twelfth day of September, 1931, against M. B. Dudley on the first cause of action as a community liability and against both defendants on the promissory note involved in the second cause of action. There was further an order for a foreclosure of the garnishment liens hereinbefore described and for the usual deficiency judgment. From said judgment and the order overruling the motion for new trial this appeal is taken.

Defendants properly perfected the appeal and filed their brief in support thereof, but the plaintiff has wholly failed to appear or file any answering brief. There are some nine formal assignments of error, but defendants have very properly, in accordance with the rules of this court, presented the same in accordance with the legal propositions raised thereby, and we consider them in the same manner. The first question involved is whether or not the appearance made by defendants for the purpose of vacating the writs of garnishment conferred jurisdiction to hear and determine the main action. We think the rule under such circumstances is well laid down by the Supreme Court of the United States in the case of Davis v. Cleveland etc. R. Co., 217 U.S. 157, 30 S.Ct. 463, 54 L.Ed. 708, 27 L.R.A. (N.S.) 823, 18 Ann. Cas. 907, as follows:

". . . A court, without personal service, can acquire no jurisdiction over the person, and when it attempts to assert jurisdiction over property, it should be open to the defendant to specially appear to contest its control over such property; in other words, to contest the ground of its jurisdiction" -- (citing cases).

[42 Ariz. 286] It is true that a contrary rule has been adopted in some states, but the rule just quoted is upheld in the majority of the adjudicated cases, and we think it is most consonant with the general principles governing jurisdiction. No jurisdiction was therefore conferred upon the court to determine the main issues and to render a personal judgment against defendants by their appearance for the purpose of quashing the writs of garnishment. Nor was jurisdiction conferred by the answer filed by defendants under the express order of the court of April 9, 1931. It would be unjust to deny to defendants who honestly believe that the court has no jurisdiction, and who have raised that question in the proper manner, the right to answer and defend on the merits, unless they waive their jurisdictional objection, and, if we hold that their answer filed under the specific order of the court is a general appearance, we would in effect deny them the right of presenting the objection which they have always urged most strenuously. We are therefore of the opinion that the answer filed under the order of the court, even though it went to the merits, would not confer jurisdiction of the person of defendants. Such being the case, the personal judgment against defendant Daisy M. Dudley was erroneous, and must be reversed.

But before the trial of the case defendant M. B. Dudley was properly served with process. This, of course, conferred personal jurisdiction upon the court from that date so far as he was concerned. On the thirty-first day of August, therefore, it had jurisdiction to proceed to trial against defendant M. B. Dudley and to render judgment against him.

But it is urged that it had no jurisdiction of the subject matter of the second cause of action, for the reason that the note involved therein was made and is payable in California, and the record shows affirmatively [42 Ariz. 287] that it was secured by a realty mortgage on property in that state. Ordinarily speaking, the taking of collateral security for the payment of a debt does not oblige the creditor to look to the security only or primarily for payment, and a creditor holding a note secured by a mortgage may ignore his security and bring an action on the note. Rogers v. Ward, 8 Allen (Mass.) 387, 85 Am. Dec. 710; Page v. Ford,65 Or. 450, 131 P. 1013, 45 L.R.A. (N.S.) 247, Ann. Cas. 1915A 1048. In California, however, there is a special statute on this subject, and the Supreme Court of that state has held that, where a note is secured by a mortgage, the creditor must bring suit to foreclose the mortgage and may not waive his ...


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