Court Opinion

ID: 7818364
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:44:48.186915+00
Date Added: 2024-06-11T16:30:39.941127
License: Public Domain

John A. Fogleman, Justice, dissenting. I can readily agree with the chancellor and the majority that the preponderance of the evidence shows that Robert Earl Priest never entered into a binding contract for the purchase from appellees. I do not agree that the decision of the chancellor to hold Jack Madden responsible is clearly against the preponderance of the evidence, and I do not see how the majority can so hold when demeanor evidence is such a vital factor in determining where the preponderance lies. As I will endeavor to demonstrate, it could easily be said that a preponderance of the evidence supports the chancellor’s decree in this respect. I do not agree with the chancellor, however, that a preponderance of the evidence shows that Sheldon Madden was bound on the contract, so I do not agree with the majority that it is unnecessary to determine Sheldon Madden’s status, nor do I agree that his agency relationship was admitted. It is pertinent to call attention to some of the chancellor’s findings in his opinion and decree in order to better evaluate the evidentiary support, or lack of it, for the results reached. Significant findings are: 1. The testimony of Bell, the bank president, was that of an interested witness. 2. There was no “wavering” or “shading” in the demeanor of Staggs, a bank officer and close friend and next-door neighbor of Robert Earl Priest. 3. Sheldon Madden, without the knowledge of Priest, had an appraisal made of the Associated Ready-Mix equipment before the meeting of August 25. 4. It was agreed at the meeting of August 25 that the land and a certain winch truck were not included in the deal. 5. Appellees’ business operated August 22 and had business for the next week and could have reasonably anticipated more business, but it rained on the weekend following August 22. 6. The business was shut down on August 25 because of words and actions of appellants. 7. Appellants were responsible for the mail to Ashdown Ready-Mix being sealed and not taken from the post office after the meeting of August 25. 8. The covenant not to compete was put in the memorandum of agreement at the behest of Sheldon Madden before he left the meeting of August 25. 9. The Maddens did not speak for Priest so as to bind him to a contract to purchase. 10. There is no evidence that Jack Hart, one of the appellees, failed to stand ready and willing to sell when appellants offered to consummate the sale, in spite of conflicting testimony that the sale was conditioned upon his being relieved from the Small Business Administration debt. 11. Sheldon Madden led Jack Hart to believe that the SBA loan would be paid. 12. If Jack Hart “backed out” specific performance would have lain against him. 13. Jack Madden’s testimony was evasive. 14.Jack Madden’s use of the business truck of appellees in completing a job for which appel-lees had contracted and his hiring of their foreman were convincing evidence that Jack Madden considered the contract negotiated. 15. The Maddens accomplished their purpose in that Jack Madden’s company had all the ready-mix concrete business in Ashdown without a competitor, who could not reopen except at a distinct disadvantage. 16. Jack Madden signed the memorandum of agreement. 17. The evidence that there was no contract if Priest was not a party to it was not persuasive. The evidence that Sheldon Madden was acting for himself, rather than as agent for his son, does not seem to me to be convincing. There is no question but that Sheldon Madden asked both his son and Priest if the amount of the offer finally made was agreeable. Staggs testified that the purchase was to be in the names of Jack Madden and Priest and that nothing was said about who was putting up the money. Sheldon Madden and Bell dictated the agreement typed by Staggs for the signatures of Jack Madden and Priest, and Sheldon Madden’s name did not appear as a purchaser. Staggs testified that Sheldon Madden was not to participate in the ownership or operation and was not to sign the coñtract. Sheldon Madden was present when his son signed the agreement. Appellee Bowman testified that Sheldon Madden was not to be included in any written instrument, having stated that Jack and Priest were the actual purchasers and that it was clear that Sheldon Madden was not to be involved in the ownership. Bowman also testified that within three weeks after the August 25 meeting Sheldon Madden stated to him that if Jack still wanted the business they were going through with the deal whether Priest did or did not participate. Bell testified that two weeks after the August 25 meeting Sheldon Madden stated that he wished to go_ through with the arrangement of a $46,000 loan at 9A% if Jack still wanted to. Bell assumed that Sheldon Madden was going to be in the operation and management because of his arrangement for the loan. He recalled that no place on the memorandum was provided for Sheldon Madden’s signature, at the latter’s request. Sheldon Madden had never operated such a business but had acquired from Priest another such business for his son. Priest testified that Sheldon Madden made the offer on Jack’s and Priest’s behalf. Sheldon Madden testified that he was assisting his son in order to give him a livelihood and to keep him in Ashdown. He also testified that he did not ever anticipate that he would own any part of the property. He stated that elimination of competition with his son’s business was one reason for buying out the competing company. There is really no significant evidence that Sheldon Madden was not acting as agent, rather than as a principal, except by inferences that might have been drawn from the testimony and assumptions made by the parties. The direct testimony recited is certainly stronger than any of the inferences and assumptions. Even though there was testimony by Sheldon and Jack Madden that Jack did not agree to be bound unless Priest also joined in the agreement, evidence to the contrary seems overwhelming to me, even though there is no question but that Sheldon Madden very much wanted Priest to have an interest in the business. Jack Madden heard Priest’s refusal to sign the memorandum, but never indicated in any way to the parties present that his obligation was conditional or that he desired to withdraw his signature or have the signed memorandum returned to him. Staggs testified that Sheldon Madden was present and that he and Sheldon Madden went for coffee after this happened. Staggs also said that a determination was made that the sellers’ business should be closed on the 25th of August because the purchasers wanted a cutoff day as to the creation of debts and the receipt of accounts receivable and that the sellers did shut down on that date and remained shut down. Jack Hart corroborated this statement. Hart also said that none of the appellants told him at any time after the August 25 meeting that they did not have an agreement. Bowman testified about uncompleted business and new prospects that his company had. They were pouring concrete on a road job at Foreman on a contract with Calvin Carter Construction Company on Friday prior to the meeting. Bowman said that he so advised Jack Madden. Jack Madden finished that job, using a vehicle peculiarly suited to the job and obtained from Bowman. Not only did Jack Madden do this but he immediately employed the foreman and principal employee of the company owned by appellees. Jack Madden obtained the truck the next day after the meeting. Bowman said that Madden called and asked if it would be all right if they went ahead and got one of the trucks. Bowman testified that Sheldon Madden told him repeatedly after the August 25 meeting that they were going through with the deal if his son still wanted it. Jack Madden continued to use the truck for an extensive period of time and only discontinued its use after being requested to do so by Jack Hart when it seemed apparent that Madden would not carry out the contract. Jack Madden admitted use of the truck for 3 or 4 weeks, and stated that there was never any agreement regarding this use. He admitted that he ceased to use it when one of the appellees told his “batch man” to park it. Sheldon Madden continued to take steps to finance the deal after the meeting. He was reluctant to pay the high interest required for a direct loan at that time but did endeavor to learn whether the SBA loan could be assumed rather than paid. Jack Madden admitted talking on the day after the meeting to appel-lees’ principal employee about going to work for him. This employee did not know what had happened on Monday, August 25, when Madden called. He did go to work for Madden on Wednesday. Sometime between Monday and Wednesday Bowman called this employee, advised him about the prospective use of the truck and asked him if he wanted to operate it for Madden. These actions of Jack and Sheldon Madden after the meeting of August 25 seem to be clear and convincing evidence that they considered that Jack Madden had entered into a binding contract. Even if this were not sufficient, the evidence clearly calls for application of the rule, stated but not applied, in Downtowner v. Commonwealth Sec., 243 Ark. 122, 419 S. W. 2d 126. There we quoted from Restatement, Contracts, § 72 (2): Where the offeree exercises dominion over things which are offered to him, such exercise of dominion in the absence of other circumstances showing a contrary intention is an acceptance. If circumstances indicate that the exercise of dominion is tortious the offeror may at his option treat it as an acceptance, though the offeree manifests an intention not to accept. I am at a loss to understand the significance of testimony about the SBA loan. If anyone had a right to complain about the inability of the parties to obtain release of the sellers on that loan, it was the appellees, not the appellants. Even so, the evidence seems to me to overwhelmingly show that no conversation about assumption of this loan took place until after the August 25 meeting. Staggs testified that the loans were discussed at the meeting. The instrument he typed made no mention of the SBA loan but did provide for assumption of all obligations of the sellers. He testified that the question of the sellers’ being relieved of financial responsibility for this loan was not discussed, to his knowledge. There was no doubt that the SBA loan was part of the purchase price negotiated. Jack Hart said that he understood from Sheldon Madden that the SBA loan was to be retired and that Sheldon Madden had arranged to borrow $50,000 at 9V¡% but was hoping to get another loan. Bowman testified that he heard no discussion of the SBA loan at the meeting of August 25 except as to its amount. Bell testified that there was no mention at the meeting of the release of the sellers from the SBA loan. He understood that Sheldon Madden had arranged for $46,000 to pay off the SBA loan and other obligations and said that the subject of release of the sellers did not arise until a couple of weeks after the August 25 meeting. He testified that Sheldon Madden came to him and sought to determine the possibility of assuming the SBA loan. He said that Madden told him then that he did not want to go on with the loan he had arranged for at 914%. He also stated that the Maddens never indicated to him that they did not intend to go through with the deal until this suit was filed. Bell had tried to get his bank to lend the money for the purchase. Bell told the attorney to whom the sellers went two or three weeks after the August 25 meeting that he believed that an agreement was made on the 25th of August. The attorney testified that, at a meeting called to define the positions of the parties, Bell suggested that the SBA loan might be taken care of by bank financing if the cement plant already owned by Jack Madden were mortgaged to secure it. Priest said that Sheldon Madden thought the necessary money could be borrowed. He recalled discussion of the SBA loan many times, but testified that in no conversation was the necessity of the sellers’ names being removed ever discussed. While Sheldon Madden denied having reported that he could borrow $46,000, or any other amount, he admitted that his family put Jack Madden in business by helping with the purchase of the Ashdown Cement Plant and that, while he was not putting up the money, he had a brother-in-law who was financing the new purchase on his (Sheldon Madden’s) approval. He also admitted that he had discussed with Jack Madden and Priest prospects of borrowing the money from a couple of insurance companies. He also admitted that it was some two or three weeks after the August 25 meeting when he pursued the question of assuming the SBA loan. I would affirm the decree as to Priest and Jack Madden, and reverse it as to Sheldon Madden.