City of Phoenix v. South Bank Corp.

649 P.2d 293, 133 Ariz. 90, 73 Oil & Gas Rep. 235, 1982 Ariz. App. LEXIS 479
CourtCourt of Appeals of Arizona
DecidedApril 13, 1982
Docket1 CA-CIV 5093
StatusPublished
Cited by5 cases

This text of 649 P.2d 293 (City of Phoenix v. South Bank Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Phoenix v. South Bank Corp., 649 P.2d 293, 133 Ariz. 90, 73 Oil & Gas Rep. 235, 1982 Ariz. App. LEXIS 479 (Ark. Ct. App. 1982).

Opinion

OPINION

B. MICHAEL DANN, Judge.

The City of Phoenix commenced this litigation to condemn 10.92 acres of land owned by the appellees Patón for a land-fill site. Just prior to the inception of the litigation the Patons had entered into a “material sales contract” with the appellant South Bank Corporation, by which South Bank obtained the right to purchase sand and gravel “in place” on the Patons’ land. The basic issue on appeal is whether South Bank had an interest in the land for which the city was required to pay compensation in the condemnation proceeding. We have concluded that the summary judgment of the trial court against South Bank must be reversed.

The land in question comprises a portion of the south bank of the Salt River as it runs through the City of Phoenix. The Patons purchased the land in 1963 for long term investment. On May 21, 1974, when the city commenced the instant condemnation proceedings, the city operated a landfill on property adjacent to the subject property. On March 19, 1974, just two months prior to the institution of the condemnation proceedings, the Patons and an agent for an undisclosed principal (South Bank) executed the “material sales contract” referred to above. Eliminating portions without critical materiality to the issues of the present case, the contract reads as follows:

MATERIAL SALES CONTRACT
Comes now the following named parties and for good and valid consideration hereby enter into this Exclusive Sale and Purchase Agreement for Sand and Gravel.
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2. That the First Party [Patons] is desirous of making the ultimate utilization of the real property to obtain the maximum income and return from this most valuable and unique parcel of real property containing a massive sand and gravel deposit.
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4. That First Party is desirous of entering into an exclusive agreement for the sale of the sand and gravel in place located on said property and they are not interested in engaging in the mining and manufacturing mineral aggregate at this juncture of time, further it will rent industrial space to contractors, manufacturers, etc., on the real property that is not being mined for san [sic] and gravel or being used in the manufacture of mineral aggregate and heavy contracting operations, it will also construct a temporary portable office complex that will be rented to the tenants who are renting temporary yard space from us for their operations.
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8. It is expressly understood that the First Party is only selling the sand and gravel in place. They are not renting and/or leasing said real property. That the Second Party [agent for undisclosed principal] is not paying a royalty to the First Party.
9. That the Second Party has no interest in the real property, save and except that they have the exclusive right to purchase the sand and gravel from said pit and they own out right all materials that they have prepaid. The party of the First Part is the owner of any and all material until the Second Party pays for the same.
10. The Second Party will buy all the material contained in said property regardless of quality.
*92 TERMS
1. The purchase price is 25$ per ton for the sand and gravel in place on said property.
2. That the Second Party will purchase a minimum of $1,000.00 worth of material in advance monthly for the term of this Agreement.
3. That after a period of 6 months (which will be necessary to set up the necessary plant facilities) the Second Party will purchase a minimum of $1,200.00 worth of material per month. Said purchase shall be made in advance and payable on or before the 10th of each month.
That in the event the Second Party purchases more than $1,200.00 per month, it will pay for the same on or before the 10th of the preceding month.
4. The Second Party shall avail itself to all the land to conduct its mining and plant operation, without any payment for the use of the same.
5. The Second Party will conduct its mining operations of the sand and gravel pit to utilize the material to a depth of 200 feet as feasible.
6. That the First Party expressly reserves the right to possession and use and the profits from said property that is not being mined and used by the Second Party in its operations on said property.
7. That in the event the Second Party fails for a period of 6 months to make its monthly payments in advance, then and in that event the Agreement of Sale of Materials shall be canceled and voided and of not other force and effect.
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9. That in the event the Second Party is prevented from removing of any material that it has purchased from First Party through no fault of the First Party, that said mandatory monthly payments will be deferred until the First Party can deliver said material free and clear title to said personal property, to Second Party.
That Second Party will endeavor to make up any lost monthly payments as soon as sound business practice permits.
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11. That the Second Party shall have no interest in the oil rights located on said property.
12. That the First Party will defend its rights to sell said material, in the event any Third Party should interfere with their property rights.
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15. If any other party, other than First Party, should take possession of said property preventing Second Party from removing material from said pit, for which it has paid, then and in that event the First Party is not obligated to reimburse said Second Party for any improvement. Second Parties relief is to recover from the party preventing them from removing their property.

Additional facts will be referred to in connection with discussion of the specific contentions of the parties as necessary.

I. STATUS OF THE CITY AS A REAL PARTY IN INTEREST

The city has filed the only brief for appellees in this appeal. The Patons, however, requested and were granted leave to join in the city’s brief.

Appellant has challenged the right of the city to participate in this controversy which concerns the question of whether South Bank does or does not have an interest in the property. The city argues that it has sufficient standing in the matter because of its interest in seeing to an expeditious termination of the condemnation proceedings. It concedes that the over-all value of the property would not be affected by resolution of appellant’s claim.

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Cite This Page — Counsel Stack

Bluebook (online)
649 P.2d 293, 133 Ariz. 90, 73 Oil & Gas Rep. 235, 1982 Ariz. App. LEXIS 479, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-phoenix-v-south-bank-corp-arizctapp-1982.