Court Opinion

ID: 9544800
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:01:51.160383+00
Date Added: 2024-06-11T15:13:40.645686
License: Public Domain

STRUCKMEYER, Chief Justice,
dissenting.
Since I believe the holding of the majority on assignments of contracts is an anachronism which will lead to mischievous and undesirable results, I dissent.
We have held:
“ * * * that where not bound by previous decisions of this court or legislative enactments we will follow the Restatement of the Law.” Ingalls v. Neidlinger, 70 Ariz. 40, 46, 216 P.2d 387 (1950).
The Restatement of Contracts § 164 provides:
“(1) Where a party to a bilateral contract which is at the time wholly or partially executory on both sides, purports to assign the whole contract, his action is interpreted, in the absence of circumstances showing a contrary intention, as an assignment of the assignor’s rights under the contract and a delegation of the performance of the assignor’s duties.
(2) Acceptance by the assignee of such an assignment is interpreted, in the absence of circumstances showing a contrary intention, as both an assent to become an assignee of the assignor’s rights and as a promise to the assignor to assume the performance of the assignor’s duties.”
See also 3 Williston, Contracts § 418A, p. 104 (3rd ed.), and 4 Corbin, Contracts, Ch. 50, § 906, p. 626 et seq. (1951 ed.). Corbin, for example, says with regard to the assignment of bilateral contracts:
“In such a case, the American Law Institute has laid down a rule of presumptive interpretation, to the effect that the assignor is presumed to have delegated performance of his duties to the assignee, and that the assignee is presumed to have promised to perform them. This seems reasonable; and it is supported by a number of decisions.” Id. at 629.
Moreover, the holding rejecting the rule of the Restatement is inconsistent with the philosophy, if not the language, of the Uniform Commercial Code, A.R.S. § 44-2317(D), providing:
“An assignment of ‘the contract’ or of ‘all my rights under the contract’ or an assignment in similar general terms is an assignment of rights and unless the language or the circumstances (as in an assignment for security) indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract.”
The majority state: “The assignment was of interests in plaintiffs Norton’s real estate lots, among other properties, not of Hutcheson’s contracts for the sale of those lots.” This statement no doubt will surprise First Federal, since its counsel wrote a letter to the Nortons, dated July 22, 1977, saying:
“In November of 1976, First Federal Savings entered into an agreement with Clyde Hutcheson wherein Clyde Hutcheson deeded all of his interest in the Pine-crest subdivision to First Federal Savings and also Clyde Hutcheson assigned any and all of his rights under the contract for sale between you and Mr. Hutcheson to First Federal Savings.”
Further, the majority say: “Even if the Restatement rule were adopted in Arizona, *184we do not believe it would operate to impose Hutcheson’s duties under lot sales contracts upon the assignee of an assignment agreement which makes no reference to those contracts.” But paragraph 3 of the agreement between Hutcheson and First Federal says:
“3. Hutcheson covenants and agrees to execute and deliver to FIRST FEDERAL forthwith upon the execution of this Agreement, Deeds and Assignments conveying any and all of HUTCHESON’S interest in and to those certain properties set forth in Exhibit ‘B’ from HUTCHESON to FIRST FEDERAL.”
One of the interests in Exhibit “B” is: “All interests of Clyde V. Hutcheson arising from the sale of lots 8 & 9, * * * to Daniel F. Norton and Jacqueline T. Norton, Transamerica Title escrow # 05008781-6.”
Inasmuch as the deeds were placed in escrow for delivery upon payment of the purchase price, Hutcheson’s interests were the right to receive payments or to have the deeds returned to him.
I would hold that when First Federal Savings accepted an assignment from Hutcheson of the benefits of his lot sales agreements, it accepted the burdens which go with the agreements. Any other holding permits the assignee of a contract to take the benefits of the assignor’s bargain with lot purchasers without the legal compulsion of performing the assignor’s promises. In this case, First Federal was compelled to complete the street and other off-premises improvements, such as water and sewerage, only because it had entered into a bond guaranteeing that Hutcheson would complete the off-site improvements. However, for 18 months First Federal delayed performance on the bond, constructing the improvements at its convenience and in disregard of the time limits set in the sales contracts to the detriment and injury of the lot purchasers.