Price & Price Investment Co. v. McGrath

222 P. 714, 26 Ariz. 110, 1924 Ariz. LEXIS 129
CourtArizona Supreme Court
DecidedFebruary 7, 1924
DocketCivil No. 2120
StatusPublished
Cited by1 cases

This text of 222 P. 714 (Price & Price Investment Co. v. McGrath) 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
Price & Price Investment Co. v. McGrath, 222 P. 714, 26 Ariz. 110, 1924 Ariz. LEXIS 129 (Ark. 1924).

Opinion

ROSS, J.

— The appellee (referred to hereafter as plaintiff) brought this action to compel appellant (referred to hereafter as defendant) specifically to perform a contract to sell him lot 18, block 13, F. Q. Story Addition to the city of Phoenix. The terms and conditions of the contract were as follows: Price $1,050, to be paid: $750 as “earnest money and part purchase money” on date of contract (March 4, 1921), which is receipted for; $100 on June 1, 1921; $100 on August 1, 1921, and $100 on November 1, 1921; deferred payments to bear 8 per cent interest, and to be secured by title to property until paid; the seller’s title to be merchantable, and, if found defective, to have ninety days’ extension to perfect it.

[112]*112Plaintiff alleged the payment of the $750, and its acceptance, the tender of deferred payments as they became dne, the refusal of defendant to accept such payments, and offered to pay into court for defendant such deferred payments.

We gather from the answer and evidence the defense was that a Kissel car the defendant accepted as satisfaction of the first payment of $750 was badly out of repair, and could not be used, whereas plaintiff had falsely and fraudulently represented it to be in good condition, repair and running order; that the payment of June 1, 1921, was not made or tendered on said day; and that by reason of said false representation and said nonpayment the defendant declared the contract forfeited, and tendered back to plaintiff the car in as good condition as it was when received. Upon the issues thus stated, evidence was introduced, and the jury returned its verdict in favor of plaintiff. The appeal is from the judgment.

The answer contains the suggestion of two defenses, but defendant has stated it in such a manner as to make it difficult to determine whether reliance is upon both or one. It alleges that fraud was perpetrated upon it by plaintiff in procuring it to accept the automobile as the first payment of $750, and states that it has tendered the car back to the plaintiff in as good condition as when received. It does not state when it made this tender. The fact is it kept the car for four months after (according- to its own evidence) it discovered that it was defective. The other defense disclosed is a forfeiture of the contract because of the failure to make the deferred payment of June 1st. It is well settled that these two defenses are very different. One affirms the contract as made, and asks that it be rescinded because of the fraud, and the other puts an end to the contract, and extinguishes it in pursuance to its terms, just as performance extinguishes it. Stennick v. J. K. Lumber Co., 85 Or. [113]*113444, 161 Pac. 97, loc. cit. 107, 166 Pac. 951. Since the case was tried as though both defenses were well pleaded, we will consider it in the double aspect.

The first assignment is that the verdict and judgment are not justified by the evidence, and are contrary to the law. This contention is made, because, about a week after the car had been delivered to defendant and after it had been demonstrated some two or three times by salesmen, it could not be made to run on account of a leakage of water into the carburetor, caused, as stated by defendant’s witnesses, by a crack in the valve chamber of the engine.

The automobile was examined by an experienced automobile man of defendant’s choice before it was accepted by defendant, and when testifying this expert said he discovered nothing wrong in the engine; that he tried it out a day or two before the deal was closed; that he thereafter went to plaintiff’s garage, and received the car for defendant, and drove it to his storeroom, ten or twelve blocks away, and it ran all right. Plaintiff likewise testified that if the engine was cracked he did not know it; that it ran ail right while he owned and operated it. There was the testimony of other witnesses, both pro and con on the issues, but what we have stated shows the disputed point. If it be granted the plaintiff did state to defendant that the car was in good condition, repair, and running order at the time it was delivered, the testimony does not show it otherwise. The crack in the valve chamber might have developed subsequently. The car was in the possession of defendant for about four months before it advised plaintiff of its defective condition or notified him of its intention to rescind the contract.

However, the testimony of plaintiff and defendant is not in accord as to the language plaintiff used in describing the condition of the auto when it was turned over to defendant. The plaintiff says he [114]*114represented only that it was in good repair, had a new battery, and was in running order. The evidence on the disputed issues being in conflict, the verdict of the jury in favor of the plaintiff must stand. Durazo v. Ayers, 21 Ariz. 373, 188 Pac. 868; Otero v. Wheeler, 21 Ariz. 50, 185 Pac. 359; Benton v. Regeser, 20 Ariz. 273, 179 Pac. 966; Southwest Hay & Grain Co. v. Sherer, 21 Ariz. 166, 185 Pac. 820; Kjerschow v. Daggs, 24 Ariz. 207, 207 Pac. 1089.

Under this assignment defendant also contends that because the plaintiff did not pay or tender the payment of $100.due June 1st he forfeited his contract. The plaintiff testified he went to defendant’s office on June 1st, and explained to its secretary and treasurer that money was close with him, and asked for an extension, and was informed by such officer that defendant would let him know later. On June 4th he tendered the $100 and interest, which tender was refused and a forfeiture declared, because he had not made payment on June 1st. It was at this time also that defendant informed plaintiff the Kissel car was no account, and that he could have it hack, and that the defendant would not go through with the contract.

Although defendant’s contention is that the car was in bad condition and unfit for use at the time it took possession of it, its officer in chargé on June 1st, when plaintiff went to its office and asked for an extension in which to make payment due on that date, did not tell him defendant was dissatisfied with car or that it was no account. Bather it demeaned itself so as to engender in plaintiff a false hope that his request for an extension might be granted. While the defendant on June 4th undertook to rescind the contract ostensibly, because the $100 was not paid, it is quite apparent that the real reason was not the slight delay in that regard, hut [115]*115because of tbe bad bargain it had made in taking the car as part of the purchase price.

There is no essence clause in the contract. The only expression therein looking to a forfeiture is as follows:

“In the event the seller complies with his part of this contract, and the purchaser fails to comply with his part of this contract, the earnest money receipted for herein shall be forfeited.”

There is nothing in this language to warn the purchaser that he must meet deferred payments promptly and exactly or lose all previous payments and his contract. And, besides, a $750 payment on a $1,050 purchase could hardly be called “earnest money,” or money to bind the bargain. In fact the contract, which is also a receipt, shows that the $750 was not earnest-money only, but a part of the purchase price. It recites:

“Received of J. O. McGrath the sum of $750 earnest money and part purchase money. ...”

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Cite This Page — Counsel Stack

Bluebook (online)
222 P. 714, 26 Ariz. 110, 1924 Ariz. LEXIS 129, Counsel Stack Legal Research, https://law.counselstack.com/opinion/price-price-investment-co-v-mcgrath-ariz-1924.