Rehearing Denied June 14, 1951.
John M. Schwartz, Richard B. Evans, and Herbert F. Krucker, all of Tucson, for appellant.
Gust, Rosenfeld, Divelbess, Robinette & Linton, Phoenix, for appellees.
Thomas, Superior Court Judge. Udall, C. J., and Stanford, De Concini and La Prade, JJ., concurring.Note: Justice M. T. PHELPS, being disqualified, the Honorable FRANK E. THOMAS, Judge of the Superior Court of Cochise County, was called to sit in his stead.
Thomas, Superior Court
[72 Ariz. 94] Plaintiffs W. H. Weast and Gertrude F. Weast, husband and wife, filed an equitable action to quiet title to certain lands, hereinafter described, joining as defendants Roland Cummings and Marjorie Cummings, his wife. The husband defaulted but the wife appeared and answered. A trial to the court, sitting without a jury, resulted in a judgment for plaintiffs. After denial of her motion for a new trial, Marjorie Cummings alone has appealed. She will be hereafter referred to as defendant and the appellees designated as plaintiffs.
To determine the legal questions raised by this appeal will involve a consideration of principles of community property and partnership law pertinent to resolving the facts shown by this record. This rather involved factual situation may be generally summarized as follows:
The state land department in the year 1932 issued a certificate of purchase to the land involved in this suit to one Daniel Rentchler. The certificate covered land in Pinal county, more particularly described as Sec. 4, Twp. 4 S., R. 9 E. of the G. & S.R.B. & M.
Plaintiffs and others, under the laws of Arizona, had formed two corporations known as Magma Ranches, Inc., and Arizona Ranches, Inc., for the purpose of acquiring land and developing same for farming. While the ownership of stock in the two corporations was not entirely identical, [72 Ariz. 95] to all intents and purposes they were both owned and controlled by plaintiffs. Rentchler in 1940 assigned his certificate of purchase to Magma Ranches, and it subsequently assigned same to Arizona Ranches. Both of these assignments were in due course filed with and approved by the state land department. Secs. 11-416, A.C.A.1939, and 11-426, Cum. Pocket Supp. A.C.A.1939. Thereafter these two corporations were dissolved and their assets distributed.
As will more fully appear hereafter the evidence shows that during the period 1941-1943, and prior to the dissolution of the corporations, Roland Cummings loaned to plaintiff W. H. Weast sums aggregating $ 8,500. Some time later -- without filing with the land department -- Arizona Ranches executed and delivered two separate deeds to the land in question to Roland Cummings as grantee, purportedly conveying in all an undivided 50% interest thereto. There is a dispute between the parties as to whether these deeds were outright conveyances or were in truth and in fact mortgages given by way of security for the debt.
In April 1944 Roland Cummings and plaintiffs entered into a formal partnership agreement. Shortly thereafter Arizona Ranches, with the approval of the land department, assigned the certificate of purchase to section four to the individual members of the partnership. The venture proved unprofitable, and in September, 1947 the three partners entered into a formal agreement dissolving the partnership. The interest of each of the partners and of defendant under this agreement of dissolution will be more particularly discussed hereafter. Before the termination of the partnership, marital troubles developed between Roland Cummings and his wife, the defendant, culminating in an interlocutory decree of divorce being entered by the superior court of Los Angeles county, California, wherein Marjorie Cummings was decreed to have an undivided one-half interest in the partnership rights owned by Roland Cummings and a 25% interest in section four.
Pursuant to such decree the latter was directed to execute to defendant a deed of conveyance for such interest in section four. Such deed was executed without the approval of the land department. Both this deed and a copy of the California decree were recorded in Pinal county. Thereafter Roland Cummings, in accordance with the agreement to dissolve the partnership and with the consent of the land department, assigned the interest in the certificate of purchase standing in ...