KRUG v. PORTER

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Docket Number

No. 6317.

Attorney(S)

Hughes Steward, Phoenix, for appellant. Croaff Croaff and Norman H. Whiting, Phoenix, for appellees.

Judges

WINDES, Justice.

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Smart Summary

Factual and Procedural Background

This case arises from a lawsuit originally filed by Jack Collins against Royal Porter and Catherine Porter to recover on promissory notes executed by the defendants. Paul Krug intervened, claiming to be the owner and holder in due course of the notes. The trial court rendered a judgment on September 19, 1955, in favor of the defendants and Krug as holder in due course. Subsequently, on February 24, 1956, after a hearing, the court found the initial judgment uncertain and ambiguous, rendering a new judgment specifying amounts Krug should recover and striking a motion for new trial by the Porters as premature. The defendants filed another motion for new trial on February 27, 1956. On March 8, 1956, after a hearing, the court denied Krug’s motion to amend the judgment, ruled that Krug was not a holder in due course, vacated the prior judgment in his favor, and entered judgment for the defendants. Krug appealed this decision.

Legal Issues Presented

Whether the trial court erred in granting a new trial after the motion for new trial was denied by operation of law.
Whether the court may extend the time for hearing a motion for new trial by making a previously rendered judgment more complete.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Freese v. W.M. Bassett Furniture Industries, 78 Ariz. 70, 275 P.2d 758	Authority under Rule 59(b) to open a judgment and enter a new one in a non-jury case.	The court relied on this precedent to justify opening the original judgment and rendering a corrected one rather than granting a new trial.
Smith v. City of Nogales, 24 Ariz. 557, 211 P. 592	Holding that a party’s appearance and submission of a motion for decision after the statutory period is equivalent to stipulating to hearing the motion late, thus preserving court jurisdiction.	The court applied this principle to reject Krug’s claim that the court lacked jurisdiction to hear the motion for new trial after expiration of the 20-day period, since Krug appeared and submitted the motion for decision.

Court's Reasoning and Analysis

The court analyzed the procedural posture under Rule 59(b) of the Rules of Civil Procedure, which allows a court in a non-jury case to either grant a new trial or open the judgment and enter a corrected judgment. The court found that it did not grant a new trial but exercised its authority to open and amend the judgment. Consequently, the assignment of error claiming an erroneous grant of a new trial was baseless. Regarding the timing and jurisdiction to hear the motion for new trial, the court referenced Rule 59(e) and relevant Arizona statutes, concluding that the court retained jurisdiction because the intervener (Krug) appeared at the hearing and submitted the matter for decision despite expiration of the statutory period. Thus, the court rejected Krug’s argument that the court lacked jurisdiction due to timing.

Holding and Implications

Holding: The Supreme Court of Arizona affirmed the trial court’s judgment denying Krug’s complaint in intervention and ruling that Krug was not a holder in due course of the notes.

Implications: This decision confirms the trial court’s authority under Rule 59(b) to open and amend a judgment in a non-jury case rather than granting a new trial, and affirms that a party’s appearance and submission of a motion after statutory deadlines can preserve court jurisdiction. The ruling directly affects the parties by denying Krug recovery and upholding the defendants’ judgment. No new precedent beyond the application of existing procedural rules was established.

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Paul KRUG, Appellant, v. Royal PORTER and Catherine Porter, husband and wife, Appellees.

WINDES, Justice.

A lawsuit wherein Jack Collins was plaintiff and Royal Porter and his wife Catherine were defendants and counter-claimants. Basis of the action was to recover on promissory notes executed by defendants. Paul Krug intervened claiming to be the owner and holder in due course of the notes. Trial was had before the court without a jury and on September 19, 1955, judgment was rendered against plaintiff in favor of defendants and counter-claimants and in favor of Krug as holder in due course and that Krug "should have full recovery of same from defendant." On February 24, 1956, a hearing was had after which the court entered a judgment reciting that a motion for new trial was heard and deciding that the judgment entered September 19th was ineffective because of its uncertainty and ambiguity and rendered another judgment setting forth the respective amounts which intervener should recover on the various notes. The court in this same judgment ordered that the motion for new trial theretofore filed by the defendants Porter with respect to the judgment in favor of intervener be stricken as premature.

On February 27th, defendants filed another motion for new trial. On March 8th, a hearing was had after which the court entered an order reciting that the cause came on regularly for hearing "on defendant's Motion for a New Trial and Intervener's Motion to Amend Judgment" (intervener having theretofore made a motion to amend the judgment). This order also recites that the matters were submitted to the court for decision and proceeded to order that intervener's motion to amend be denied, that intervener Krug was not a holder in due course of the notes and that the judgment theretofore entered in his favor on February 24th be vacated and set aside. Following this order formal judgment was signed and filed adjudging that Krug was not a holder in due course; that his complaint in intervention be denied; and that defendants Porter have judgment in their favor.

Krug appeals and submits the following assignments of error:

"1. The lower court erred in granting a new trial for the reason that the motion was denied by the operation of law.

"2. The court cannot extend the time for hearing a motion for a new trial by making a previously rendered judgment more complete."

It is apparent that the court at the hearing of March 8th on the motion for new trial invoked the provisions of Rule 59(b), Rules of Civil Procedure (section 21-1304, A.C.A. 1939), 16 A.R.S., which authorizes the court on a motion for new trial in an action without a jury to open the judgment and direct the entry of a new judgment. Under the rule the court has two alternatives. It may grant the new trial or, if the record justifies, it may open the original judgment and render what it deems to be the correct one. Freese v. W.M. Bassett Furniture Industries, 78 Ariz. 70, 275 P.2d 758. The court having thus acted, it granted no new trial and the assignment of error based on the erroneous granting of a new trial is without basis in fact and cannot be considered.

The so-called second assignment of error is nothing but a statement of a reason why the motion for new trial had been denied by operation of law under the provisions of section 21-1308, A.C.A. 1939 (Rule 59(e), 1956 Rules of Civil Procedure). These assignments do not present the real question involved as to whether the trial court may, in the event it has lost jurisdiction to hear a motion for new trial under the provisions of Rule 59(e), supra, open and change the judgment. Be that as it may, our view is that the court had not lost jurisdiction to hear this motion. We have held that in the event the 20 days for hearing and disposing of the motion have expired, since the denial of the motion by operation of law was for the benefit of the party who obtained the judgment (intervener here) if he appears at the hearing on the merits thereof and allows its submission for decision, it is the equivalent of stipulating for a hearing of the motion after the expiration of the 20 days and he cannot thereafter claim the court lacked jurisdiction to hear the same. Smith v. City of Nogales, 24 Ariz. 557, 211 P. 592. The record herein reflects that intervener appeared at the hearing of March 8th and the same was submitted to the court for decision without objection.

Judgment affirmed.

UDALL, C.J., and PHELPS, STRUCKMEYER, Jr., and JOHNSON, JJ., concur.