Reese v. Cradit

469 P.2d 467, 12 Ariz. App. 233, 1970 Ariz. App. LEXIS 620
CourtCourt of Appeals of Arizona
DecidedMay 11, 1970
Docket2 CA-CIV 700
StatusPublished
Cited by40 cases

This text of 469 P.2d 467 (Reese v. Cradit) 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
Reese v. Cradit, 469 P.2d 467, 12 Ariz. App. 233, 1970 Ariz. App. LEXIS 620 (Ark. Ct. App. 1970).

Opinion

HATHAWAY, Judge.

The appellees, Paul and Janet Cradit, filed a lawsuit against Mr. and Mrs. Julius S. Kleinman, Mr. and Mrs. Sidney Katz, and Mr. and Mrs. Ferdinand Reese, as the aftermath of an attempted land exchange with Ferdinand and Dorothy Reese. After the suit was instituted the defendant Ferdinand Reese died, his wife Dorothy qualified as executrix of his estate and was substituted in the lawsuit. No creditor’s claim was filed against the estate by the plaintiffs. After a jury trial, a plaintiff’s verdict was returned. This appeal is from the judgment entered on that verdict and from the denial of the usual post-trial motions.

The property exchanged by the Cradits was a motel located on the Benson Highway in Tucson and in which they had a $23,000 equity. In 1961 they listed the motel for sale with Strout Realty. Mr. Katz, an agent working in the Ferdinand Reese real estate office learned of the listing and went to the Cradits with Mr. Gore from Strout Realty. At that meeting Mr. Katz suggested an exchange of property— the Cradit’s motel in exchange for 80 acres of land in New Mexico which Katz represented to them was owned by Mr. Klein-man. This New Mexico land was in fact owned by Mr. Reese. Various other representations concerning the New Mexico property were made by Mr. Katz to the Cradits. These will be discussed later.

The New Mexico land was part of a 640 acre parcel which Mr. Reese and 3 others had acquired in Taos County, New Mexico, by a contract of sale on September 11, 1961 for $11,520 total consideration. Of that price $3,340.80 had been paid in cash and the balance was carried under two realty contracts secured by that property. In October 1961 Mr. Katz negotiated an exchange of 80 acres for the plaintiffs’ equity in the motel. On October 27, 1961 the Cradits and Julius Kleinman entered into a Deposit Receipt & Agreement whereby the exchange was formally agreed upon. No money passed in the exchange except the real estate commission in the sum of $1,950 paid by the Cradits. Half of the commission went to Strout Realty and the other half was divided between Mr. Katz and Mr. Reese.

The New Mexico property was conveyed by Mr. Reese to Mr. Kleinman on December 16, 1961 and on that same day the Cradits released the motel property from *236 escrow and delivered the deed to Mr. Klein-man even though the New Mexico property had not been conveyed to them.

On December 19, 1961 Mr. Kleinman transferred the motel to a Mr. Hand-macher. The testimony was that Mr. Kleinman was a strawman in these real estate transactions and that consideration for the sale to Handmacher went to Reese,

Several questions are raised by the appellant. The first contention is that a suit to rescind a contract for the sale of land is an action based on contract requiring proof of creditor’s claims under A.R.S. § 14-570 and § 14-576.

A.R.S. § 14-570 provides in part:

“Claims based on contracts; failure to present as bar; exception
A. All claims arising upon contracts, whether due, not due or contingent, shall be presented to the executor or administrator within the time limited in the notice to creditors, and any claims not no presented is barred forever, * *

A.R.S. § 14-576 provides:

“Action pending against decedent at time of death; presentment of claim
If an action is pending against decedent at the time of his death, plaintiff shall in like manner present his claim to the executor or administrator for allowance or rejection as required in other cases. No recovery shall be had in the action unless proof is made of the presentation.”

Tort claims do not come within the provision of the foregoing sections. Brainard v. Walters, 85 Ariz. 60, 331 P.2d 595 (1958). Contract and tort claims are not, however, so inconsistent as to preclude their joinder where both arise from the same transaction or from transactions connected with the subject of the action. 1 Am.Jur.2d Actions § 106.

Count One of the complaint alleges the real estate transaction described in the Deposit Receipt & Agreement; that this property was supposed to be free and clear of encumbrances and with full warranty of title; and that this property was not free and clear of encumbrances and title insurance could not be obtained. The prayer asks for the relief of the agreement and if recission was not possible for the return of the plaintiffs’ equity in the property transferred and for punitive damages.

In their brief the plaintiffs contend that Count One was a suit for recission or damages arising out of false representations, but this contention is not confirmed by the pleadings. While recission may be a remedy for fraud, Kahn v. Lischner, 128 Cal.App.2d 480, 275 P.2d 539 (1954), recission is generally thought of as a contractual remedy. 17 Am.Jur.2d Contracts § 482, § 501. This count appears to have arisen from an agreement between the parties requiring the presentation of a claim under A.R.S. § 14-570 and § 14-576. Since no claim was made it is barred. Ray v. Rambaud, 103 Ariz. 186, 438 P.2d 752 (1968); In re MacDonald’s Estate, 4 Ariz.App. 94, 417 P.2d 728 (1966); Latham v. McClenny, 36 Ariz. 337, 285 P. 684 (1930).

Count Two of the complaint adopted by reference allegations of Count One and further alleges that the plaintiffs were induced to enter into the contract on the false representations of the defendants; that these representations were false and fraudulently made with the intent that they be relied upon by the plaintiffs; that the plaintiffs did rely and were induced to enter into the contract by those representations which the defendants knew were false. This count demands as relief damages, special and punitive.

“Actions ex delicto have been classified fundamentally as (1) breaches of duty by wrongful means, as in cases of fraud, * * 1 Am.Jur.2d Actions § 8

In analyzing the plaintiffs’ grievances in Count Two, Morriss v. Barton, 200 Okl. 4, 190 P.2d 451 (1947), we conclude this action is based on tort and no creditor’s claim need be filed.

It is next contended that since the plaintiffs knew Katz was a real estate agent working for Reese they would not *237 have the right to rely on Katz’s representations. There is testimony that Katz had represented to the Cradits that the New Mexico property had been purchased by Kleinman many years before; that this property was free and clear of all encumbrances or title defects; that the property was worth $300 an acre and that the property had been subdivided and streets were in. One of the nine elements 1

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Bluebook (online)
469 P.2d 467, 12 Ariz. App. 233, 1970 Ariz. App. LEXIS 620, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reese-v-cradit-arizctapp-1970.