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Santa Cruz Ranch v. Superior Court of State, In and For Maricopa County

Supreme Court of Arizona

June 8, 1953


[76 Ariz. 20] Bob Barber and Franklin E. Vaughan, Tucson, for petitioners.

Evans, Hull, Kitchel & Jenckes, William A. Evans, Phoenix, and John E. Madden, Phoenix, for respondent, James R. Moore.

Page 414

PHELPS, Justice.

Petitioners seek to prohibit the superior court of the state of Arizona in and for Maricopa County and the Honorable Fred C. Struckmeyer, one of the judges thereof, from further proceeding in a cause of action instituted by respondent James R. Moore against the Santa Cruz Ranch, a corporation, and Arthur Pinner, Jr., except to order the transfer of said cause to the superior court of Pima County, Arizona. In said cause of action the respondent James R. Moore sought to rescind a certain oral agreement entered into by him with [76 Ariz. 21] Arthur Pinner, Jr., or in the alternative to have said oral agreement specifically performed and for such other relief as is deemed equitable and just in the premises.

The facts are that in 1948 respondent James R. Moore, Paul Roca and wife, Elias Romley and Arthur Pinner and wife were owners as tenants in common of certain ranch land located in Pima County, Arizona, against which Pinner held an equitable lien in the sum of $37,000, plus. Respondent Moore and Roca and Romley were the owners of an undivided one-third interest in said ranch and Pinner and wife were the owners of an undivided two-thirds interest threin. In December of that year the owners of said ranch were offered $100,000 for it. Moore, Roca and Romley were in favor of accepting the offer but Pinner refused to sell. Thereupon as an accommodation to Pinner, Moore entered into an oral agreement with him in which Moore agreed to acquire the undivided interest of Romley and Roca and wife in the ranch; Pinner agreed to take over the legal title to the rnach and Pinner and Moore agreed to organize a corporation and to convey the ranch to it in consideration of its assuming the payment of Pinner's equitable lien thereon which was to be evidenced by its promissory note secured by a first mortgage on the ranch, payable upon its sale. Pinner and Moore were to receive unspecified shares of stock at the rate of two shares for Pinner to one for Moore. It was agreed that the corporation would sell the ranch in 1949 at the best price and under the most favorable terms obtainable and that it thereupon would liquidate its business.

Pursuant to the above agreement Moore acquired the interest in the ranch of Romley and Roca and wife and caused the legal title to be vested in Pinner. A corporation was organized and all of the real property together with the appurtenances thereto was conveyed by Pinner to the corporation.

Certain corporate transactions were had thereafter which are immaterial to the issues involved herein and will not be realted.

During the summer of 1949 the corporation ascertained that it could obtain natural gas to operate its irrigation wells much cheaper than it cost to opreate such well or wells by the use of electricity, and by taking advantage of this opportunity to use gas instead of electricity, the corporation could bore and operate another well upon the premises and enlarge its farming operations, thus increasing greatly the value of the corporate assets. It was then orally agreed between Pinner and Moore that their prior agreement for the sale and liquidation of the corporate assets in 1949 would be modified as follows:

That it would convert the power for pumping irrigation water to natural gas; drill and equip an additional well for the irrigation of more land; cement line all [76 Ariz. 22] ditches; reclaim additional land; defer the sale of the ranch until the completion of said improvements; and then sell the ranch and its equipment for the best price and upon the most favorable terms obtainable and liquidate the corporation.

The improvements were completed in the late spring of 1950 and respondent Moore sought to have the corporate assets liquidated by a sale of the ranch or, as an alternative to its liquidation, by a prorate distribution of its assets to its stockholders as tenants in common, two-thirds to Pinner and one-third to Moore, subject to its debts and obligations and to be restored to the per-incorporation status of ownership. This Pinner refused to do although repeatedly requested so to do by respondent

Page 415

Moore. Moore thereupon instituted the above cause of action in the superior court of Maricopa County.

The respondent is a resident of Maricopa County and the articles of incorporation of Santa Cruz Ranch, a domestic corporation, provide for its place of business to be located in Phoenix, Maricopa County, Arizona. The assets of the corporation include some 1,200 acres of land located in Pima County together with necessary farming equipment. Pinner is a resident of Los Angeles, California. The farming operations of the corporation are managed by the respondent Moore from the office of the corporation in Phoenix. It is engaged largely in growing cotton, all of which is ginned at Marana in Pima County and the cotton and cotton seed shipped therefrom. It is engaged in a small way in cattle raising and in the production of alfalfa. The total gross production per annum amounts to approximately $270,000.

The petitioners filed a motion in the superior court of Maricopa County to transfer the cause of action to the superior court of Pima County under the provisions of section 21-102, A.C.A.1939, and a ground therefor, rely upon subsection 12 of section 21-101, A.C.A.1939, relating to the venue of actions.

Section 21-102, supra, provides:

'If the action be not brought in the proper county, the court shall nevertheless have jurisdiction thereof, and may hear and determine the cause, unless the defendant shall, before the expiration of the time allowed to answer, file with the clerk of the court in which the action is brought an affidavit of the defendant, his agent or attorney, stating that the county in which the action is brought is not the proper county and stating the county of the defendant's residence, and praying that the action be transferred to the proper county. A copy of such affidavit shall be served upon the plaintiff, and unless such affidavit be controverted under oath, within five (5) days after such service the court shall order the action transferred to the proper county. If the affidavit be controverted the court ...

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