Joy Enterprises, Inc. v. Reppel

537 P.2d 591, 112 Ariz. 42, 1975 Ariz. LEXIS 308
CourtArizona Supreme Court
DecidedJune 27, 1975
Docket11685
StatusPublished
Cited by16 cases

This text of 537 P.2d 591 (Joy Enterprises, Inc. v. Reppel) 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
Joy Enterprises, Inc. v. Reppel, 537 P.2d 591, 112 Ariz. 42, 1975 Ariz. LEXIS 308 (Ark. 1975).

Opinion

LOCKWOOD, Justice:

Appellant, hereinafter called lessee, filed this action in .the Superior Court seeking specific performance under an alleged lease, or in the alternative damages for breach thereof. The Superior Court directed a verdict in favor of appellees-lessors on what we understand to be the following facts.

The lessors entered into an agreement to sell the lessee the capital stock of Joy Enterprises, Inc. Joy Enterprises, Inc. was a corporation engaged in the manufacture of mobile homes. Prior to the sale, all of the stock in Joy Enterprises was owned by Reppel Steel & Supply, and Joy Enterprises was doing business on property owned by Reppel. Concurrent with the sale of the capital stock of Joy Enterprises appellant as lessee entered into an agreement with appellees-lessors Reppel and Tracy acting for Reppel Steel & Supply Co. By the agreement, the premises upon which Joy Enterprises was located were to be leased to appellant. In addition, appellees agreed to build an additional permanent structure upon the premises. This dispute arises out of that portion of the agreement by which appellees as lessors promised to lease the premises to appellant. The agreement provided in pertinent part as follows:

“3. First party [appellees] shall cause a lease to be granted to Second party [appellant] on the premises presently leased by Joy Enterprises, Inc. for the operation of said corporation’s business, said lease to be for a period of Fifteen (15) years commencing September 13, 1971 for the consideration of rent in the sum of Fifteen Hundred ($1,500.00) Dollars per month paid in advance as a net, net, net monthly rental by Second Party to First Party or nominee. Second Party shall pay advance rental in the sum of Two Thousand Two Hundred Fifty ($2,250.00) Dollars, receipt thereof being acknowledged by First Party on this date and thereafter the monthly rental commencing November 1, 1971 in the sum of Fifteen Hundred ($1,500.00) Dollars shall be paid each month during the period of the leasehold term.
“Provided Second Party be not in default under the terms of this agreement or the lease agreement, then Second Party shall have an option for an additional Five (5) years lease provided the rental be mutually agreed upon and provided Second Party exercises said option by giving written notice to First Party not later than Six (6) months before the expiration of the term of the original lease.”
“4. First Party shall at their expense enclose an area 80' X ZOO' on the east side of the presently existing building *44 structure utilized by Joy Enterprises, Inc. upon request by Second Party at any time pursuant to written notice to First Party within Six (6) months from the date of this agreement, subject however to proper authorization and permits by any City of Phoenix, Maricopa County or State of Arizona department or subdivision having jurisdiction thereof, and subject to Second Party procuring said authorization or permit. In the event said authorization or permit is procured then said structure shall be completed by First Party within a reasonable time and upon completion Second Party shall pay to First Party or nominee additional rental in the sum of Seven Hundred fifty ($750.00) Dollars per month net, net, net — with all rental payments to be payable monthly and in advance during the term of lease agreement referred to in this agreement.” (Emphasis supplied.)

The parties who originally signed the agreement were A. J. Goulder and Leland Larson, for Chardon Mobile Homes, predecessor in interest to lessee, and Robert L. Reppel and Kurion Tom Tracy, as lessors. A. J. Goulder was the principal stockholder in Chardon Mobile Homes, Inc. and Leland Larson was its president. Robert L. Reppel was the president and principal stockholder of Reppel Steel & Supply Company. Tom Tracy, Reppel’s son-in-law, was an officer in Reppel Steel and Supply and owned the remaining stock in that corporation.

The testimony disclosed that the enclosure referred to in paragraph 4 of the agreement was to be an additional manufacturing building, although its exact nature and cost were in dispute. Subsequent to the execution of the foregoing agreement, an addendum agreement was prepared and executed. By it, A. J. Goulder and his wife, Julia, disclaimed personal liability on the “lease agreement between the parties in the original agreement, * * * ” leaving only Chardon Mobile Homes, Inc. and Leland Larson on the agreement.

The advance rent was paid and accepted, and the appellant (lessee) took immediate possession. Rent was paid each month and accepted by lessors Reppel and Tracy. Demand was timely made upon the lessors to build the additional structure, but no building of any kind was built.

Six months after lessee took possession of Joy Enterprises, it filed a lawsuit under the paragraph of the agreement quoted above which called for the subsequent addition of a manufacturing facility. Appellant sought either that the construction of the building be ordered or that damages be awarded. At the time of oral argument, the premises had been vacated.

We first observe that it is not within the power or province of this court to revise, modify, alter, extend or remake an agreement. Our duty is confined to the construction or interpretation of the one which the parties have made for themselves. Goodman v. Newzona Investment Co., 101 Ariz. 470,421 P.2d 318 (1966).

The agreement specifically stated that the “first party [appellees] shall cause a lease to be granted to Second Party [appellant].” This language clearly indicates an intention at some later date to set out in a more formal way the terms and conditions of the proposed agreement. The agreement provided for certain consequences in the event of default “of this agreement or the lease agreement” again indicating a separate lease agreement was contemplated. (Emphasis supplied.) At the time this agreement was executed, it was handwritten by the appellees’ counsel, and the appellant’s counsel was not present. There is no doubt that the instrument fails as a legal conveyance of a leasehold interest.

The issue now becomes whether, although the agreement falls short of a valid lease, the appellees as lessors are estopped to deny its enforceability as a contract.

*45 It is appellant's position that estoppel will be applied to prevent injustice and that it would be unconscionable to permit the lessors to maintain a position inconsistent with one in which they have acquiesced. See Holmes v. Graves, 83 Ariz. 174, 318 P.2d 354 (1957).

We note first that under Arizona statute A.R.S. § 33-437, a defective conveyance may be enforced as a contract to convey. A.R.S. § 33-437 provides :

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Bluebook (online)
537 P.2d 591, 112 Ariz. 42, 1975 Ariz. LEXIS 308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/joy-enterprises-inc-v-reppel-ariz-1975.