Court Opinion

ID: 9448422
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:35:28.854244+00
Date Added: 2024-06-11T17:31:25.584697
License: Public Domain

McALLISTER, Circuit Judge
(dissenyng)
Appellant agreed to sell all of its property to appellee; appellee agreed to pay for it; and September 16,1957, was fixed as the date of closing or settlement of the contract for the sale and payment, It was also agreed that an inventory of many of the items sold, would be taken jointly by the seller and buyer, beginning September 9, 1957, and continuing until completed. The inventory was to be taken on the basis of cost or market, whichever was less; and it was stipulated that if the parties were unable to agree as to whether cost or market applied to any item’ such valuation should be made by a designated arbitrator. It was further that if the total dollar value of these items exceeded $400,000, as of the date °f closin9, September 16, 1957, then the buyer would have the right to elimsny such items so as to reduce the total dollar value to $400,000.
It was also provided that upon the closing of the contract on September 16, 1957, the buyer would deliver a certified cheek to the seller for the aggregate amount of the assets including those in which the amount to be paid by the buyer should be determined jointly by seller and buyer on the basis of cost or market, or by the designated third party arbitrator>in case the seller and buyer couId not agree'
On September 16, 1957, the buyer paid the seller $315,590; but the parties could not agree on the value of many items in the inventory. The buyer, however, *812estimated that these items were of the value of $200,000 and this amount was paid to the seller as part of the $315,590 above mentioned. The seller and buyer then had recourse to the arbitrator named in the contract to determine the value of the questioned inventory items and, accordingly, the balance of the purchase price to which the seller was entitled. The arbitrator determined that the buyer still owed the seller $78,157.87 for the property sold.
It is my view that this sum of $78,157.-87 was part of the purchase price due and payable on September 16, 1957, although the value of certain items of the inventory and the above balance due could not be ascertained until after the above-mentioned date.
The whole contract of sale was based upon the closing and settlement of the contract on September 16, 1957. All of the items of property were specifically sold on that date. Bills of sale and covenants of warranty were given, on that date, by the seller to the buyer, for all the property that the buyer received, including trademarks, trade names, and copyrights. All of the seller’s patents were assigned to the buyer on the same day and on that date the seller’s president covenanted not to engage in similar business in the future. Moreover, on the same date, in accordance with the terms of the contract of sale, the buyer and seller entered into a lease whereby the buyer went into possession of the seller’s showroom, and the seller granted the buyer the right to store the purchased assets on certain of the seller’s premises. Everything was done that could be done on the part of a seller to sell and on the part of a buyer to buy; and when all of the property was transferred by the seller, the buyer owed the seller the agreed or arbitrated value of that property. Accordingly, the buyer owed interest on the money subsequently found due by the arbitrator, from the date of the sale of the property. The buyer could not have the property in question, of the fair value of $78,157.87, which had been transferred to it by the seller, as well as the use of the money representing its fair value. It is the buyer’s use of the money, to the disadvantage of the seller, that resulted in unjust enrichment.
In Herrmann et al. v. Gleason, 6 Cir., 126 F.2d 936, 940, a case which was given much consideration by this court, it appeared that where tenants had the use of money representing the fair rental value of premises as well as the use of the premises for twenty months while arbitration proceedings were under way to establish the fair rental value thereof, in accordance with the lease, under the doctrine of unjust enrichment, the landlord was entitled to restitution by way of interest on the rentals unpaid during such period. The court said:
“Applying the law to the facts in this case, appellee retained and used the premises for a period of 20 months, while arbitration proceedings were under way to establish an agreed fair rental therefor. During this period, appellants were deprived of the receipt of rental, and appellee had the use of the premises, as well as the use of the money representing the fair rental value. When the referees determined such rental value, it expressly dated back to the beginning of the period during which the rentals had remained unpaid. Equity and fairness require that appellants have restitution, by way of interest, on the rentals unpaid during that period. Otherwise, appellee would receive the benefit of the value of the use of such money, to the disadvantage of appellants, and his retention thereof would result in inequity and unjust enrichment at their expense. It is our conclusion that appellants are entitled to the interest claimed.”
In accordance with the foregoing, it is my view that the judgment of the district court should be reversed and that the order of the district court should be set aside and the case be remanded for entry of a judgment awarding appellant interest on the sum of $78,157.87 from September 16, 1957.