Case Title: Associated Builders, Inc. v. Stovall

Citation: 102 Ariz. 54, 424 P.2d 455

Docket Number: 

State: arizona

Court: Arizona Supreme Court

Date: 1967-03-01T00:00:00Z

Document:
102 Ariz. 54 (1967) 424 P.2d 455 ASSOCIATED BUILDERS, INC., an Arizona corporation, Appellant, v. Al STOVALL and Irene Stovall, his wife, Robert C. Stovall and Lois Stovall, his wife, Jack K. Stovall and Noyla Stovall, his wife, James A. Stovall, a single man, Orville K. Mills and Myra Mills, his wife, Austin P. Lutz and Vera Jane Lutz, his wife, Supreme Builders, an Arizona corporation, Appellees. No. 8202. Supreme Court of Arizona, In Division. March 1, 1967. *55 Spector & Johnson, and Wm. J. Samuels, Phoenix, for appellant. Christy, Kleinman, Peterson, Hoyt & Fuller, Phoenix, for appellee Al Stovall and others. Allen B. Bickart, Phoenix, and Alan M. Kyman, Phoenix, for appellee Supreme Builders. UDALL, Justice: The appellant corporation, plaintiff below, and hereinafter referred to as plaintiff, brought this action against appellees, defendants below, alleging its claim in three counts: (1) For a claimed breach of written contract; (2) the second claim was dismissed and no appeal taken therefrom; (3) plaintiff claimed that the defendants agreed to satisfy a claim against the plaintiff by McMillan Mortgage Company, and that the defendants refused to abide by their agreement. The trial court granted judgment in favor of defendants on both counts. The facts, briefly stated, are as follows: Plaintiff corporation is a subdivider and owned a residential subdivision in the City of Phoenix known as "Cinderella Meadows". In the latter part of 1959 Nate Rosenbaum, the president of the plaintiff corporation, and defendant Al Stovall entered into negotiations for the sale and purchase of certain properties owned by plaintiffs. On January 6, 1960 their negotiations were reduced to writing in a document designated as a purchase contract and receipt. However, the name of the plaintiff was not mentioned in the document and it was signed by Nate Rosenbaum in an individual capacity as seller and by Al Stovall as purchaser. Thereafter, on January 11, 1960, two escrows were opened with the Phoenix Title and Trust Company. The first escrow, No. 576-301, designated plaintiff as the seller and Al Stovall as buyer. The second escrow, No. 576-302, designated Nate and Ann Rosenbaum as sellers, and Al Stovall as the buyer. Escrow No. 576-301 was signed plaintiff corporation by Nate Rosenbaum, whereas Escrow No. 576-302 was signed by Nate Rosenbaum individually. Neither escrow was signed by defendant Al Stovall. Prior to negotiations between the parties to this action the plaintiff had, on May 1, 1959, obtained from the McMillan Mortgage Company (hereinafter referred to as McMillan), a mortgage commitment in the amount of two million dollars, which was to be used as needed in the development of the subdivision owned by plaintiffs. *56 One of the provisions in Escrow No. 576-301 concerned the mortgage commitment and reads as follows: The escrow instructions provided that the terms and conditions were to be complied with on or before February 1, 1960, except as otherwise specified therein. On the 20th day of January, 1960, two trust agreements were signed by the negotiating parties and were deposited with Phoenix Title & Trust Company, as trustees. Trust Agreement No. 3300 pertained to the real estate described in Escrow No. 576-302, and was executed by Nate Rosenbaum and Ann Rosenbaum, his wife, as the first beneficiaries, and Al Stovall and Irene Stovall, his wife, and others, as the second beneficiaries. The second Trust Agreement, No. 3301 VQ, was executed by the plaintiff corporation as the first beneficiary and Al Stovall and Irene Stovall, his wife, and others, as the second beneficiaries. Trust No. 3301 VQ pertained to the real estate described in Escrow No. 576-301. On January 25, 1960 the plaintiff, by its president, Nate Rosenbaum, and Nate Rosenbaum and Ann Rosenbaum, his wife, and Al Stovall and his wife, wrote a letter to the title company wherein they advised the company as follows: The plaintiff and defendant Al Stovall, on February 8, 1960, executed an amendment to the escrow instructions, No. 576-301 Ex 16, as follows: The trust agreement between plaintiff and the Stovalls, numbered 3301 VQ, contained the following interlineation in paragraph 8 thereof: "have the option to declare the contract forfeited." Other remedies which were in the original trust agreement were crossed out and replaced by interlineations noted above. During the trial Weldon Girard, agent of the Ed Post Realty Company, where the purchase agreement was executed, in response to the question asked by the court, to relate the conversation between the parties prior to the signing of the agreement of January 6, 1960, stated: A stipulation in lieu of a pre-trial order was entered on April 16, 1963, limiting the issue to be determined by the court as follows: The plaintiff first contends that the judgment of the trial court was unsupported by the evidence and was contrary to law, because plaintiff having assigned its rights in the mortgage commitment to defendant Stovall, Stovall as assignee took the assignment with benefit of its low discount fee, and the burden of its contingent liabilities. *57 The evidence shows that the purchase contract and receipt dated January 6, 1960, had as one of the terms and conditions a paragraph which reads: Since the commitment for mortgage financing was with McMillan, it would appear from the face of the contract that the commitment could not be assigned to a buyer without the consent of McMillan, the parties who were advancing the money and would naturally have the right to determine the parties to whom they would make such a commitment. The testimony of Walter Kidwell, the manager of McMillan, shows conclusively that the plaintiffs did not have blanket authority to assign or transfer this commitment without the consent of McMillan. His testimony on this point is as follows: (Questions by Mr. Peterson) There was some evidence given on the part of Kidwell that the consent was given to make the assignment but the question of the date of the giving of the consent was finally determined to have been in a letter dated February 17, 1960, which reads: It was developed in the testimony that the subdivision in question was "Cinderella Meadows", and further, that McMillan was agreeable to making the assignment when it learned that Stovall was to be a partner of "Supreme Builders". [Further testimony from Mr. Kidwell]: Other testimony of the witness Kidwell throws light on the transactions between the parties, which reveals that on February 18, 1960, the manager of McMillan, after due investigation, concluded that Supreme Builders were not financially in a position to assume the commitment which the plaintiffs were endeavoring to transfer and assign. His testimony follows: It thus clearly appears that the plaintiffs did not have the right to transfer and assign the commitment which it had attempted to assign, and it also conclusively shows that McMillan had never given its consent for a commitment to be made in favor of Stovall until February 18th. Having in mind the stipulation of the parties as to the issues to be determined in this litigation, namely: whether defendants agreed to assume the obligations created by the note dated May 1, 1959, which plaintiff gave to McMillan Mortgage Company for the purpose of securing a commitment to loan $2,400,000, it is very evident there was ample testimony in the record upon which judgment for the defendant could be predicated. The defendant, Al Stovall, did not, in the original contract of purchase and receipt, in the Escrow No. 576-301, nor in Trust Agreement No. 3301 VQ, agree to assume an indebtedness due McMillan from plaintiffs, and the $20,000 note was never mentioned. The Trust Agreement No. 3301 VQ, dated January 20, 1960, was modified by the parties to show that the limit of the sellers' remedy would be an option to declare the contract forfeited. And further, the parties on February 8, 1960 agreed that the sellers' only recourse in the event of default would be the repossession of the then unreleased portions of the land. The evidence taken in its most favorable light in support of the judgment of the court, clearly shows that the judgment should be sustained. This Court has repeatedly stated that evidence will be taken in the strongest manner in support of the trial court, and on appeal we will construe the evidence most favorable to sustaining the judgment of the lower court. Smith v. Smith, 71 Ariz. 315, 227 P.2d 214; Gillespie Land & Irrigation Co. v. Jones, 63 Ariz. 535, 164 P.2d 456; City of Bisbee v. Cochise County, 50 Ariz. *59 360, 72 P.2d 439; Barth Mercantile Co. v. Jaramillo, 46 Ariz. 365, 51 P.2d 252. The plaintiff next contends the court erred in admitting into evidence Exhibit No. 16, which was an amendment to the escrow instruction dated February 8, 1960; claiming that the exhibit was ineffectual to act as a novation and therefore was immaterial and irrelevant to the issue of defendant Stovall's liability. This contention is without merit, first, because neither the purchase agreement, the escrow agreement nor the trust agreement committed the purchaser to assume the note for $20,000 given to McMillan Mortgage Company. Furthermore, the amendment to the escrow instruction, dated February 8th, being the first document signed by Al Stovall in connection with the escrow, limited the right of the sellers as follows: It is the law of this state that where there is a conflict of evidence we will not review the judgment of the trial court. Hatfield v. Arizona Highway Patrol Merit System, 97 Ariz. 24, 396 P.2d 256; Kingsbery v. Kingsbery, 93 Ariz. 217, 379 P.2d 893. Judgment affirmed. BERNSTEIN, C.J., and STRUCKMEYER, J., concur.