John G. BULLA, Appellant,
The VALLEY NATIONAL BANK OF PHOENIX, a national banking association, Appellee.
[82 Ariz. 86] Moore & Romley, Phoenix, for appellant.
Gust, Rosenfeld, Divelbess & Robinette, Phoenix, for appellee.
Arizona Airways, Inc., an Arizona public service corporation, was indebted to the Valley National Bank in the total sum of $72,652.50 secured by a lien on 114 airplane engines and certain propellers and instruments. This company was seeking from the Civil Aeronautics Board a certificate as an interstate carrier of passengers, property and mail. The CAB had announced its purpose to grant the certificate on condition that Arizona Airways improve its financial position. To enable it to comply with this condition a scheme was devised whereby the bank would lend the company an additional $30,000, making a total of $102,652.50; Arizona Airways would transfer the property securing the payment of the indebtedness to the bank in trust in accordance with a trust [82 Ariz. 87] agreement; and the bank would release Arizona Airways from the entire indebtedness with certain individuals to guarantee payment.
In furtherance of this scheme, a trust agreement was entered into which recited, in addition to the facts heretofore related, that certain 'guarantors' in order to preserve the assets of Arizona Airways were willing to assume the entire indebtedness of $102,652.50 which was somewhat greater than the present bulk sale value of the property and that the bank upon the execution of the agreement by Arizona Airways and the guarantors was willing to advance the additional $30,000 and release Arizona Airways from its obligation to pay any of the indebtedness. After such recitals it was agreed between the bank, Arizona Airways and the guarantors that Airways would execute a promissory note payable to the bank in the amount of $102,652.50 payable on demand representing the original indebtedness plus the $30,000 additional loan and was to convey the property to the bank. Each guarantor agreed to pay the proportionate part of the obligation represented by the note set opposite their respective signatures. Arizona Airways was to be released from any obligation to pay the debt represented by the note. The bank was to hold and receive the property 'as trustee and shall from time to time as it, in its sole discretion shall determine advisable, sell or otherwise dispose of said engines, propellors and instruments' and disburse the receipts therefrom to first satisfying the costs and expenses in connection with the trust, then paying the obligation owing to the bank by the guarantors and any surplus to be paid to the guarantors in the proportion that their respective obligations bear to the entire
indebtedness. The agreement further provided:
'The obligation of The Trustee shall be limited to holding title to said engines, propellors and instruments and selling, or otherwise disposing of them from time to time as it, in its sole judgment and discretion, shall deem proper.
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'The discretion and judgment of The Trustee shall be absolute and it shall he liable as Trustee only for acts and omissions and actual fraud of the rights of Guarantors hereunder.'
This agreement was signed by appellant John G. Bulla, hereinafter designated plaintiff, and approximately fifty other guarantors.
Subsequent to the execution of this agreement, Arizona Airways gave the bank a bill of sale which recited that the conveyance was in trust to be held, dealt with and controlled by the bank as trustee in accordance with the terms of the trust [82 Ariz. 88] agreement. The bill of sale also provided that the conveyance was subject only to an existing lien in favor of the bank for the total sum due from Arizona Airways.
From time to time about six engines were individually sold and on or about February 3, 1951, the remainder of the property was sold for the sum of $95,000; and after making deductions of $6,572.26 because it was claimed the engines were not in good condition, the net realization was $88,427.74. The plaintiff being dissatisfied with the sale filed a complaint against the bank and the purchaser alleging that he had guaranteed 21.15 percent of the debt represented by the note; that it was agreed the bank should hold the property as trustee; and that it should from time to time as it in its sole discretion might determine advisable sell or otherwise dispose of the property. It was further alleged that subsequent to the execution of the agreement the bank promised plaintiff that before it made a sale of any property, it would notify him of the price at which it proposed to make the sale; that the sale was made without giving such notice; and that the fair value of the property at the time of sale far exceeded $95,000 and the bank knew or by the exercise of reasonable diligence could have ascertained this fact. Prayer was in the alternative for injunction preventing the consummation of the sale or judgment against the bank for 21.15 percent of the difference between the fair value and sale price. The injunction feature of the case was abandoned and the purchaser eliminated from the case. The bank answered and counterclaimed against plaintiff for his proportionate share of the deficiency after crediting the receipts of the sale on the debt.
The case was tried with a jury and, pursuant to agreement that the action was of an equitable nature, interrogatories were submitted to the jury which by its verdict answered the same generally in favor of the plaintiff. The trial court made independent findings of fact and conclusions of law contrary to the jury's findings and rendered judgment dismissing plaintiff's complaint and in favor of defendant bank on its counterclaim for 21.15 percent of the deficiency. Plaintiff appeals, submitting a brief consisting of 137 pages, 21 of which consist of assignments of error and propositions of law. There is much duplication in these voluminous assignments and propositions. We are, therefore, not attempting to answer all the assignments but to the best of our ability dispose of the matter upon what we determine to be the controlling facts and questions presented.
It is first contended that properly construed the bill of sale was a mortgage or pledge for the reason the agreement preserved the bank's original lien on the property[82 Ariz. 89] and that under the provisions of sections 62-527 and 62-530, A.C.A.1939 (A.R.S. §§ 33-757, 33-791) sale of the property could not be legally effected without giving the mortgagor or pledgor notice as required by these sections. We do not think this position well taken. The owner, Arizona ...