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Dunseath v. Tucson Golf & Country Club

Supreme Court of Arizona

December 6, 1937

JAMES R. DUNSEATH, Appellant,
v.
TUCSON GOLF & COUNTRY CLUB, a Corporation, and MARY H. CANNEY, a Widow, Also Known as M. CANNEY, Appellees

APPEAL from a judgment of the Superior Court of the County of Pima. Wm. G. Hall, Judge. Judgment affirmed.

Mr. James Elliott Dunseath, for Appellant.

Mr. Arnold T. Smith, for Appellee Canney.

OPINION

[51 Ariz. 15] ROSS, J.

This is a foreclosure action by James R. Dunseath, assignee, against the Tucson Golf & County Club, a corporation, as mortgagor, and Mary H. Canney who it is alleged claims some title or interest in the mortgaged premises. The mortgagor, to which we shall refer as the club, made no defense to the action. Canney answered that she was the owner of the mortgaged premises having acquired title through sheriff's deed; denied that there

Page 44

was anything owing plaintiff from the club by reason of the mortgage; alleged that the said mortgage was made without consideration and to hinder, delay, and defraud the creditors of the mortgagor.

The case was tried with a jury to which was submitted a number of written interrogatories, the answers to which were that the mortgagee paid no consideration [51 Ariz. 16] for the mortgage and that the purpose of the mortgage was to hinder and delay creditors of the mortgagor. The court's findings were to the same effect. The judgment was that the mortgage was null and void as against defendant Canney's title to the premises; that plaintiff take nothing, and that defendant have judgment for her costs, etc.

The plaintiff has appealed.

The salient facts, and those important to a decision of the questions raised on this appeal, are as follows: In October, 1931, the club was indebted in the sum of $35,000 to the Consolidated National Bank of Tucson, secured by a mortgage on its land and improvements. As this indebtedness was about to mature, it became necessary that the club make arrangements to care for it. It did so by borrowing $33,200 from the Southern Arizona Bank & Trust Company, $30,000 of which was secured by a first mortgage on its land and improvements (except a strip of 230 feet on the east end running the entire width) and for the balance of $3,200 the club gave the bank six notes for $533.33 each and each of these notes had an indorser whose identity will appear later on. The club owned 120 acres and the $30,000 mortgage covered all of it except the strip mentioned above. This strip, of about 12 acres, had been subdivided into lots, which it was the intention of the club to sell for homesites and apply the proceeds to the liquidation of its debts. The six unsecured notes were renewed from time to time.

On September 17, 1932, the club's board of directors authorized and directed its president and secretary to obtain a loan from the "Southern Arizona Bank & Trust Company, or such other persons as they may designate," of $10,000, payable in three years, and to deliver to the person or persons loaning the money the club's notes secured by mortgage on its property.

[51 Ariz. 17] On October 29, 1932, the club's president and secretary delivered to the Southern Arizona Bank & Trust Company its four notes for $2,500 each, payable five years after date, secured by mortgage on the east 230-foot strip. This mortgage was recorded at the request of James R. Dunseath, the plaintiff, May 11, 1933, more than six months after its date.

On April 4, 1933, the club's board of directors authorized the president and secretary

"to have the present mortgage on the 200 feet more or less along the Eastern Boundary line of property include the amount owed Messrs. Clyne, Heidel, Burcham, Julian, Dunseath ...


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