Opinion ID: 532072
Heading Depth: 3
Heading Rank: 1

Heading: Lease-purchase agreement

Text: 28 When Cycles and the defendants entered into their contracts, Cycles was a resident of Arkansas, not Mississippi. Under the contract arm of section 13-3-57 a nonresident defendant must make a contract with a resident of [Mississippi] to be amenable to process. Miss.Code Ann. Sec. 13-3-57 (Supp.1989) (emphasis added). The threshold decision in whether Cycles is a resident of Mississippi for the purposes of this action. We have held that for tort actions under section 13-3-57, residency is determined by the residency of the parties when the suit is filed, not when the action accrues. Golden v. Cox Furniture Mfg. Co., 683 F.2d 115, 117 (5th Cir.1982). As we find no contrary Mississippi authority we shall apply this rule to the contract aspect of this action. 29 A thornier issue is whether the fact that Cycles' interests are represented by an Arkansas bankruptcy trustee defeats the assertion that Cycles was a Mississippi resident at the time suit was filed. The parties have not briefed the issue nor has our own research disclosed any direct authority. However, because Cycles was incorporated under the laws of Mississippi, we doubt that the Mississippi courts would deny it resident status. We assume that Cycles qualifies as a Mississippi resident under section 13-3-57. 30 We turn now to the question whether WJD and Cycles entered into a contract to be performed in whole or in part by any party in this state. WJD's contemplated performance under the lease-purchase agreement consisted of making payments to Cycles or its lessors and lienors, to use best efforts to secure for Cycles a loan and to return equipment to Cycles in case it terminated the agreement. The contract was silent as to where payments were to be made or where equipment was to be returned. 31 Cycles argues that where a contract fails to specify place of performance, the obligor must render performance at the obligee's location. Thus it contends WJD was obligated to render performance, that is, return the equipment upon the contract's termination and make payments to Cycles, wherever Cycles happened to be located when performance was due. After Cycles moved to Mississippi, WJD's obligation moved there with it. 32 Colorado, whose law the parties have chosen to govern interpretation of the contracts, has no reported case on point. The general rule, however, is that where a bailment contract is silent and no fair inference can be made regarding the place to which the bailee is to return bailed property, the bailee has the implied duty to return the bailment to the bailor at the place the property was received. See, e.g., Winchester v. Sipp, 252 Iowa 156, 106 N.W.2d 55, 57 (1960). Only where the parties reside within a reasonable distance of each other should the bailee return the bailment to the bailor at its residence upon termination of the bailment. 8 Am.Jur.2d Bailments Sec. 87C (1988). 33 The only fair inference to be drawn from the equipment-lease portion of the lease-purchase contract is that the equipment was to be returned to the leased garage in West Memphis, Cycles' then-place of business. Even were we not to draw this inference, according to the general rule WJD was obligated to return the equipment to the West Memphis garage, the place it was received. Either way, Mississippi was not the contemplated place of return. 34 Similarly, where a contract between residents of different states is silent regarding place of payment, the payor is generally obligated to render payment at the place the contract was made. T.C. Young Constr. Co. v. Hartford Accident and Indem. Co., 441 S.W.2d 781, 783 (Ky.1969); 60 Am.Jur.2d Payment Sec. 21 (1988) (authority collected therein); cf. Carbonit Houston, Inc., v. Exchange Bank, 628 S.W.2d 826, 831 (Tex.Ct.App.1982) (payor's domicile is place of payment where contract silent); but see Liberty Mutual Ins. Co. v. Vanderbush Sheet Metal, 512 F.Supp. 1159, 1169 (E.D.Mich.1981) (under Michigan law debtor must seek out creditor at creditor's residence). Cycles cites as opposing authority three Colorado cases. Each case determined which county's courts had venue of a contract lawsuit between residents of different Colorado counties. The courts held that the contract's place of performance controlled in this intrastate situation. They further held that where payment was the issue and the contract was silent as to place of performance, payment was due in the creditor's county of residence. See Walter Brewing Co. v. Hoder, 230 P.2d 170, 173 (Colo.1951); Progressive Mut. Ins. Co. v. Mihoover, 87 Colo. 64, 284 P. 1025, 1025-26 (1930); People v. District Court, 70 Colo. 540, 203 P. 268, 269 (1922). We do not read these cases as inconsistent with the general rule. 35 The lease-purchase contract provides that WJD should make periodic payments either to Cycles or Cycles' lessors and lienors. None of the latter are located in Mississippi. Regarding the place of any payment to Cycles, the only fair inference that may be drawn from the contract is, once again, that payment would be made in West Memphis, Arkansas. That was the location of the leased premises and equipment and was the residence of Cycles and the individual plaintiffs when the agreement was made. Payment was due in West Memphis, Arkansas. 36 In contrast to its silence regarding the place of WJD's performance, the lease-purchase agreement locates the place of Cycles' performance. Cycles was obligated to transfer its ICC authorities to WJD, to turn over its equipment and to lease to WJD its West Memphis headquarters, garage and office facility. The closings of both the lease and purchase aspects of the transactions were to occur in Denver, the physical transfers were to take place in West Memphis. Thus Cycles was not obligated to perform in whole or in part in Mississippi.