Ft. Mohave Farms, Inc. v. Dunlap

393 P.2d 662, 96 Ariz. 193, 1964 Ariz. LEXIS 258
CourtArizona Supreme Court
DecidedJune 25, 1964
Docket7746
StatusPublished
Cited by11 cases

This text of 393 P.2d 662 (Ft. Mohave Farms, Inc. v. Dunlap) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ft. Mohave Farms, Inc. v. Dunlap, 393 P.2d 662, 96 Ariz. 193, 1964 Ariz. LEXIS 258 (Ark. 1964).

Opinion

UDALL, Chief Justice.

This was an action for specific performance of an option to buy certain parcels of real estate situated in Mohave County. Judgment was entered granting the relief sought and from the denial of their motion for a new trial defendants bring this appeal.

Certain basic facts are undisputed. On December 16, 1958, defendant Ft. Mohave Farms, Inc., entered a written agreement with plaintiff Charles H. Dunlap and one Gardner giving them an option to buy specified parcels of real property then owned by Ft. Mohave. By the terms of the instrument, the lands were grouped into two tracts designated “A” and “B”, and the right to purchase could be exercised separately as to each tract. The agreement further provided:

“This option shall be considered revoked only in the event that we, as owners, have made a bona fide sale to a third party at the same price and conditions as heretofore set above.”

This option was to expire at midnight of June 1, 1959.

On March 9, 1959, Dunlap and Gardner exercised their option to buy Tract A. A second agreement was executed on April 8, *195 1959 by defendants Robert M. and Barbara B. Bonelli, respectively the President and Secretary of Ft. Mohave Farms, giving Dunlap a further option to buy Tract B and containing the following clause:

“The term of this option shall begin on September 15, 1959, and shall extend to January 30, 1960, and shall expire at midnight on that date.”

It should be noted that Dunlap was the only optionee named in this second agreement and that no clause permitting a sale to third parties was included.

On May 19, 1959, before expiration of the December 16 option and before the effective date of the April 8 option, Ft. Mohave sold Tract B to defendant Pyramid Land, Inc. The following December, Dunlap attempted to exercise the option of April 8 and tendered the agreed down payment. When advised that the land had been sold, he commenced this suit for specific performance pleading the contract and naming Pyramid as a defendant on the ground that it bought the property with notice of his rights. Part of the land had been conveyed to innocent purchasers by Pyramid; as to those particular parcels, Dunlap sought money damages for the difference between the property’s value at the time of tender and the price stated in the option agreement.

Defendants argue that the December 16 option continued in force until June 1, 1959 and that the sale to Pyramid was made in compliance with the revocation clause contained therein. Plaintiffs, on the other hand, take the position that the first option, including the clause which permitted a sale to third persons, was revoked by the second; that the case must therefore be treated as involving a single valid option after April 8. The execution of this option, they urge, necessarily restricted Ft. Mohave’s power to dispose of the land pri- or to September 15. Ft. Mohave, in other words, was required to hold itself in readiness to perform when the time for performance arrived.

In ruling for plaintiffs, the trial court specifically found that:

“The option of April 8 was inconsistent in its terms with the earlier option either (a) because of material variations of substantially important portions of the option, or (b) because of a difference in parties, Mr. Gardner not being included. In any case, so far as the plaintiff Dunlap and these defendants are concerned, the April 8 option upon its execution replaced the earlier option and became the agreement of the parties.”

The first assignment of error, and the only one we need consider, is that this finding was unsupported by any evidence.

The evidence is primarily those documents which were introduced in April, *196 1962 in connection with defendants’ motion for summary judgment. They are: the two options in question, copies of certain trust agreements, and depositions of both Robert Bonelli and Charles Dunlap. Summary judgment was granted on the basis of these documents but we reversed, saying that material issues of fact appeared and that a trial was therefore necessary. See Dunlap v. Fort Mohave Farms, Inc., 89 Ariz. 387, 363 P.2d 194 (1961). The only new evidence presented by plaintiff at the subsequent trial consisted of some maps and plats, showing the location of the property; depositions of certain representatives of Pyramid Land, Inc., designed to establish that Pyramid purchased with notice of the option agreements; and the deposition of Glenn Ginn of Lane Title & Trust Co., the escrow agent. After a thorough examination of all these matters, we conclude that appellants’ assignment is well-taken; that the above finding by the trial court is not supported by the record.

It is established law that a contract is superseded by a subsequent agreement concerning the same subject matter only if that result is intended by the parties, see Turner v. Turner, 242 N.C. 533, 89 S.E.2d 245 (1955). Such intent must be established by clear and satisfactory proof. Glaser v. Haskin, 140 Or. 392, 13 P.2d 1071 (1932) ; Bering Mfg. Co. v. W. T. Carter & Bro., 255 S.W. 243 (Tex.Civ.App. 1923). Where the effect of the later contract on the previous one is not expressly stated, it is to be determined from the implications contained in the instruments and the relevant circumstances which aid interpretation. Commercial Nat. Bank of Charlotte v. Charlotte Supply Co., 226 N.C. 416, 38 S.E.2d 503 (1946). See also Ashton v. Ashton, 89 Ariz. 148, 359 P.2d 400 (1961). Turning to the instruments stib judiee, we find no express statement in the option of April 8 which would abrogate the earlier contract. Nor are there inherent inconsistencies which necessitate that result. There are, to be sure, variations in the terms which we pointed out in our previous opinion. But the crucial issue is whether the second option went into force immediately upon execution and thus foreclosed any further action in reliance on the terms of the December 16 option. On this point— the respective dates of commencement and expiration — the two instruments are wholly compatible. The December 16 option expired on June first; the second agreement took effect on September 15. While the latter document may imply that Ft. Mohave was required to keep itself in a position to transfer the property, there is every possibility that the parties intended such implication to become effective only on June 2.

To resolve this dilemma, we must look to the surrounding circumstances and may also consider statements of the parties which reflect on their intent. Komarek v. Cole, *197 94 Ariz. 94, 381 P.2d 773 (1963). The following excerpt from the deposition of Robert M. Bonelli is helpful:

“Well, at the time that Mr.

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Bluebook (online)
393 P.2d 662, 96 Ariz. 193, 1964 Ariz. LEXIS 258, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ft-mohave-farms-inc-v-dunlap-ariz-1964.