Court Opinion

ID: 9615019
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:30:29.475316+00
Date Added: 2024-06-11T13:20:28.862260
License: Public Domain

CONNOR, Justice
(concurring in part, dissenting in part).
I agree with the majority opinion except that portion which deals with deducting $95,019 in interest paid directly to Mrs. Day by A & G Construction Co.
The purchase price of $1,000,000 was to be paid in installments, plus interest on the unpaid balance at 6% per annum. The interest represents compensation for the deferred payment of money owing to Mrs. Day. It is an obligation which is additional to payment of the purchase price itself.
The deduction of the interest in computing the net profits from the sale of the property results in Mrs. Day receiving an effective interest rate of 3% for the use of her money, i. e., the purchase price of the property. Had the parties intended this, it should have been stated expressly in the *450memorandum of agreement. The agreement merely refers to
“All costs incurred in connection with the acquisition and development including purchase price and improvements on or for the benefit of the property.”
The payment of interest was not, in my opinion, a cost of acquisition. It was a continuing obligation after the property had been acquired by A & G. Neither was the payment of interest a cost of development, as the interest in itself developed nothing. It did not add anything to the value of the property. It merely compensated for deferred payment of the purchase price.
Applying the standard of reasonable expectation of the parties, I conclude that one in the position of Mrs. Day would not have understood the language of the agreement to include interest as part of the costs to be deducted in computing the net profit realized from the purchase and resale of the property.
As to this item I would reverse the judgment below.