Court Opinion

ID: 9700731
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:47:12.315126+00
Date Added: 2024-06-11T18:21:14.198545
License: Public Domain

Prescott, J.,
dissenting in part, filed the following opinion.
I agree with all of the majority opinion except the part that holds that the $5,000 payment made on June 20, 1957, was not a payment on the “principal amount of indebtedness” as provided in the contract between the parties.
The transaction involved the sale and purchase of a small trucking business including its equipment and good will. The purchase price agreed upon was $23,000; $5,000 of which was to be paid when the contract was signed (May 28, 1957); $5,000 on or before June 20, 1957; and the balance of $13,000 at the rate of $450, per month, beginning August 20, 1957, with interest from June 1, 1957. None of these facts is in dispute.
In order to effectuate the transaction between the parties, they met on May 28, 1957, at a lawyer’s office. A contract was prepared and executed that called for the purchase by Brown and the sale by Fraley of the trucking business, its equipment (which consisted of exactly twelve pieces of mo*492tor equipment) and good will. The purchase price and the mode of its payment were as above set forth. While there were, of course, other provisions in the contract, the only relevant ones concerning the specific issue here being discussed were that the purchaser agreed to execute a bill of sale in the usual form upon the equipment, securing “the deferred purchase money ” and, in the next sentence in the contract, it was mutually agreed that any of the “aforegoing equipment” will be released from the lien of the bill of sale “at the rate of reduction in principal amount of indebtedness at the rate of Fifteen Hundred Dollars ($1,500.00) per piece of equipment to be released * * *.” (Italics added.) Simultaneously with the execution of the contract, Brown executed the bill of sale called for therein, which simply provided that for and in consideration of the sum of $13,000 Brown bargained and sold unto Fraley the twelve pieces of equipment. The bill of sale made no reference as to when or how the $13,000 was payable; whether or not it was to bear interest; or when and under what circumstances the equipment was to be released. Obviously, the contract and the bill of sale constituted an integrated transaction and they must be construed together, a fact upon which all seem to agree.
Thus, it is seen that on May 28, 1957, when the parties executed the contract and the bill of sale Brown owed Fraley $18,000, payable, as above stated, $5,000 on or before June 20, 1957, and the remaining $13,000 in monthly installments. The parties had agreed that the purchaser would execute a bill of sale securing “the deferred purchase money” (this necessarily was $13,000 as the bill of sale for that amount was executed at the same time); and they also agreed that the equipment would be released from the lien of the bill of sale “at the rate of reduction in principal amount of indebtedness” of $1,500 per piece of equipment. It is clear to me that the $5,000 payable (and which was paid) on June 20, 1957, was a “reduction in principal amount of indebtedness.” If it did not mean this, I fail to know what it did mean. When the contract was signed on May 28, Brown owed Fraley $18,000. On June 20, when he paid Fraley $5,000, he certainly, as a pure matter of arithmetic, only owed him $13,000, which, to *493me, necessarily constituted a “reduction in [the] principal amount of the indebtedness.” Moreover, it will be noted that there were twelve pieces of equipment covered by the bill of sale, and twelve times $1,500 is exactly $18,000, the amount of the principal indebtedness from Brown to Fraley when the contract and bill of sale were executed; on the other hand, if the amount of the consideration named in the bill of sale, $13,000, be divided by twelve, the quotient is $1,083.33, an odd amount.
I think that when Brown paid Fraley the $5,000 on June 20, this constituted a reduction in the “principal amount of indebtedness,” and Brown was entitled to a release from the bill of sale of three of the pieces of equipment.