Cessna Finance Corp. v. Mesilla Valley Flying Service, Inc.
Docket: 8855
Court: New Mexico Supreme Court; December 8, 1969; New Mexico; State Supreme Court
The Supreme Court of New Mexico addressed a case involving Cessna Finance Corporation (formerly National Aero Finance Company, Inc.) seeking recovery on installment notes, chattel mortgages, and guarantee agreements against Mesilla Valley Flying Service, Inc. The plaintiff secured a writ of replevin executed by the sheriff, while the defendant filed a counterclaim for wrongful replevin. Both parties sought summary judgment, which the court granted to the plaintiff, prompting the defendant's appeal.
The defendant raised three main arguments against the summary judgment:
1. The defendant contended that its motion for summary judgment should have been granted due to the plaintiff's failure to respond to the counterclaim and claimed the mortgage provisions allowing an agent to take possession upon default were void as a cognovit provision under New Mexico law. The court found these arguments unmeritorious, stating the counterclaim did not provide sufficient factual basis to necessitate a reply. Additionally, the plaintiff's actions were deemed sufficient notice of the mortgagee's taking of possession.
2. The defendant argued that the plaintiff lacked the capacity to maintain the action, asserting it was a foreign corporation doing business in New Mexico without authority. The court disagreed, noting that the plaintiff merely financed aircraft purchases through independent dealers and did not solicit or procure orders in New Mexico, which did not constitute doing business without authority.
3. The defendant claimed there were genuine issues of fact regarding the amount of damages awarded, which were not established as a matter of law. However, the court did not find this argument persuasive.
Overall, the court upheld the summary judgment in favor of the plaintiff, affirming the validity of its actions and its capacity to operate within the state.
The appellant asserts that security agreements were executed in Kansas at the appellee's home office by an agent authorized through a New Mexico power of attorney, with negotiations conducted via telephone from New Mexico. The security aircraft are located in New Mexico, and between 1965 and July 7, 1968, seven transactions occurred, with two involving guarantees signed in New Mexico. The appellant references *Walter E. Heller & Co. of Cal. v. Stephens*, arguing that the leasing of a mill constitutes doing business. However, the court limits its review to N.M. Stat. § 51-30-1, which clarifies that creating debts, mortgages, or liens does not equate to transacting business in New Mexico. The appellee primarily finances Cessna aircraft purchases, creating liens on personal property within New Mexico, with other activities being incidental and permissible. Previous rulings indicate similar activities do not constitute transacting business. The court also notes that a contract is binding when both parties execute or accept it, which was not the case here as the appellant challenges the authority of the signers. An affidavit from Thomas R. Borst, president of Mesilla Valley Flying Service, Inc., indicates a loan was received from National Aero Finance Company, but he lacks knowledge of the signing authority and requests more time to locate relevant corporate records, expressing confidence that documentation exists to support the corporation's approval of the instruments in question.
The affidavit in question does not create a material issue of fact that would warrant a trial. In summary judgment proceedings, the burden lies with the movant to demonstrate the absence of genuine material facts for a fact-finder. An opposing party must actively respond to a compelling showing from the movant; mere assertions of factual disputes are inadequate. The appellant failed to present sufficient evidence to justify a trial, particularly when only the damage amount remained in dispute and the defendant did not provide evidence regarding damages. Consequently, the appellant's affidavit opposing summary judgment was insufficient, leading to the affirmation of the trial court's judgment.
