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Waddell v. White

Supreme Court of Arizona

April 18, 1938

D. W. WADDELL, Appellant,
ELVIN E. WHITE, Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. J. C. Niles. Judge. Judgment reversed.

Messrs. Gust, Rosenfeld, Divelbess, Robinette & Coolidge, for Appellant.

Messrs. Woolf & Shute, for Appellee.


Page 491

[51 Ariz. 527] LOCKWOOD, J.

This is an appeal from a judgment in favor of Elvin E. White, hereinafter called plaintiff, against D. W. Waddell, hereinafter called defendant, for the sum of $8,000. The undisputed facts leading up to the action, as they appear from the record, may be stated as follows:

The Arizona Citrus Land Company, hereinafter called the company, is an Arizona corporation which [51 Ariz. 528] owns a considerable acreage of undeveloped land in the Beardsley project, situated west of the Agua Fria River. Defendant is, and has been for some time, the president of the company and the owner of a majority of its outstanding stock. On October 29, 1932, plaintiff was the owner of a considerable amount of citrus nursery stock and some equipment for caring for the same, and had had considerable experience in the growing of citrus trees. On that date he and the company entered into a contract which recited the following inducements thereto: The company desired to sell a certain portion of section 11, township 3 north, range 2 east, Gila and Salt River base and meridian, for the purpose of having it planted to Marsh seedless grapefruit, and the plaintiff desired to contract with the prospective purchasers of said land for its planting, care, and cultivation. The company therefore agreed that it would survey, plat, and set aside a part of section 11, and offer such lands for sale for $250 per acre, payable within ten years, with the stipulation that they should be planted to Marsh seedless grapefruit, and that prior to the 15th day of March, 1933, it would sell not less than 100 acres of the land so platted, or if such amount should not be sold and the purchasers contract for the development thereof by plaintiff, as hereinafter provided, it would contract with plaintiff to develop sufficient of the company lands to bring the total of his contract for development to 100 acres. It further agreed that if any purchaser defaulted in his contract for development with plaintiff, it would try to resell the land to purchasers who would bring the payments under plaintiff's contract up to date, but in case such resale was not effected within six months, it would assume the contract and make the payments thereunder to plaintiff. In other words, the company guaranteed, on the conditions set forth below, that plaintiff should secure contracts [51 Ariz. 529] for the planting, care and development of at least 100 acres of land in Marsh seedless grapefruit, while the plaintiff agreed that he would provide sufficient grapefruit trees of suitable quality for the planting, and would contract with any person who purchased the land, and desired him to do so, for the planting, care, cultivation, irrigation, and fertilization thereof, up to the 31st day of March, 1936, for the sum of $180 per acre, which presumably was to cover the planting and care for the first year, and $75.24 per acre for its care the second year, and $75.72 per acre for the third year. These payments were to be made in equal monthly installments over the particular year for which they ran. There were other conditions in the agreement to which it is not necessary for us to refer.

It will be seen that the parties contemplated by this agreement that the company should furnish its land and secure purchasers therefor, and would guarantee that plaintiff should have the planting, care, and cultivation of at least 100 acres thereof, either by contract with the company itself or with purchasers of such land, for three years at the price above set forth. The company was under no obligation to make any payments to plaintiff except in case it did not find purchasers who would contract with him for the care of their land, as aforesaid, up to

Page 492

the extent of 100 acres, but it was bound to see that he secured at least 100 acres to care for in the manner above described. Immediately after the signing of the agreement, the parties, without any further written agreement, proceeded to prepare the land for planting. This work was done under the supervision of plaintiff, and certain equipment owned by him was used in the work, but all of the money expended in such preparation, such as labor and rental hire for additional equipment, was paid by the company and charged in its books as against the [51 Ariz. 530] future receipts that plaintiff expected to secure under his contract for the planting and cultivation of the 100 acres aforesaid. The land was not sold as expected, and on April 7, 1933, the parties entered into a supplemental agreement, reciting the original agreement and the failure to sell the lands, together with the advancement by the company of the money to cover the preparing of the land for planting, and that plaintiff desired to sell citrus stock in excess of the quantity required to plant 100 acres. The supplemental agreement then provided that the company agreed to advance such money as might be necessary to cover the actual expense of the planting of 200 acres, not in excess of $6,000, and to advance the necessary cost of cultivation of such 200 acres, not exceeding $900 per month for three years, or until it could be sold. Plaintiff agreed to waive any payments required to be made by the company until the land should be sold, but in no case later than three years after its planting. He also assigned to the company any moneys due by virtue of the contract, as provided in the original agreement, until all advances made by the company on account of the improvement of the 200 acres should have been repaid. About the time this supplemental agreement was under discussion, the parties began to discuss the planting of 100 acres which were owned by defendant personally, as it was believed that the setting out of citrus on his personal lands would stimulate the sale of the company land. In April, before defendant left for New York, a proposition for the planting of his personal land was made to him by plaintiff. The terms of this proposition are in dispute, defendant claiming one thing and plaintiff another, and we shall discuss it in detail later in this opinion. The parties did not reach an agreement immediately, but shortly after defendant went to New York he instructed plaintiff by letter to go ahead with [51 Ariz. 531] the proposition, not on the 100 acres of his personal land, but on 65 of that, and 30 acres which belonged to the company which defendant thought would be purchased by his brother at a later time. Shortly thereafter, plaintiff went ahead and planted citrus trees on approximately 200 acres of section 11, under the terms of the original agreement as modified by the supplemental agreement. The company paid all the expenses of the planting, in accordance with the terms of the agreement, and allowed plaintiff $150 per month for his personal expenses. All of these expenditures were carried by the company on its books as charges against the future receipts expected to be secured by plaintiff under the terms of his contract, as were certain bills that plaintiff owed which were assumed and paid by the company. Plaintiff also proceeded to prepare and plant the 95 acres included in his contract with defendant personally. The expense in planting these 95 acres was taken care of in exactly the same manner, as far as plaintiff was concerned, as the planting of the 200 acres in section 11; plaintiff reporting the expenditures on the 95 acres to defendant, and making no segregation between the 30 acres which belonged to the company and the 65 acres which belonged to defendant personally. He planted on defendant's land 1,520 grapefruit trees of a special variety, for which he was not paid, and the remainder of the trees on the 95 acres was purchased from a nursery company at 25 cents each; defendant assuming the payment therefor. Defendant returned from New York in June, 1933, and found the work substantially completed. Plaintiff continued caring for the company's property in section 11, and the 95 acres which were planted under his agreement with defendant personally, until the 20th of September, 1933. About that time plaintiff, defendant, and one Brown, who was secretary of the company, organized the [51 Ariz. 532] Agua Fria Citrus Grove Development Company, which we shall hereafter call the development company. Stock in it was issued in the approximate proportions of one-fourth each to plaintiff and Brown, and one-half to defendant. Thereafter, plaintiff assigned all of his interest in his two contracts with the company to the development company in exchange for the issuance to him of stock in the latter company. After the development

Page 493

company was organized, and about the 20th of September, 1933, plaintiff discontinued the care of all of the groves above referred to, and all of them were thenceforth cared for by the development company, under plaintiff's direction as manager; he receiving for his services as such manager a salary of $150 per month. The development company continued with the work until July 1, 1935, when it was dissolved by mutual agreement of the parties. In making a settlement, both plaintiff and Brown sold their stock holdings in the development company to defendant, receiving approximately $1,500 each for his stock. Thereafter, the company itself took care of all the groves; plaintiff receiving a salary of $200 per month for his work until the summer of 1936, when he ceased his employment, and shortly after this suit was filed.

The first amended complaint, on which the case went to trial, contained two causes of action. The gist of the first cause of action declared on reads as follows:

"II. That on or about the 7th of April, 1933, in Maricopa County, Arizona, the defendant, D. W. Waddell, hired and employed plaintiff herein to prepare and plant for said defendant approximately sixty-five (65) acres of land in Section 26, Township 3 North, Range 2 West, to Marsh seedless grapefruit, said plaintiff to furnish all of the said trees for planting said acreage, and for which the said defendant then and there agreed to pay said plaintiff a reasonable [51 Ariz. 533] sum per tree, and under and by virtue of the same agreement said defendant agreed to pay the said plaintiff for preparing and planting the said acreage the sum of One Hundred Seventy-five Dollars ($175.00) per acre for the period of one year after the date of the said agreement, and thereafter as long as the said plaintiff maintained and cared for the said crop he was to receive Seventy-five Dollars and twenty-four cents ($75.24) per acre payable in equal monthly installments for the year ending June 1, 1935, all payable on or before April 7, 1936.

"III. That after the making of the aforesaid agreement plaintiff prepared the land hereinbefore described and planted thereon sixty-five (65) acres of Marsh seedless grapefruit consisting of 4,940 trees, of the reasonable value of One Dollar twenty-five ($1.25) per tree delivered upon the ground, or Six Thousand One Hundred Seventy-five Dollars ($6,175.00) for the aforesaid trees, and further sum of Eleven Thousand Three Hundred Seventy-five Dollars ($11,375.00) for preparing the ground, planting said trees and caring for said grove for the first year ending June 1, 1934.

"IV. That at the termination of the crop year, to-wit, about the first of June, 1934, said defendant withdrew the grove from the care and custody of the above named plaintiff and placed the custody and care thereof in the Agua Fria Citrus Grove Development Company, a corporation, and terminated the contract he had with the said plaintiff, who had earned thereunder the sum of Eleven Thousand Three Hundred Seventy-five Dollars ($11,375.00) and said defendant became indebted to the plaintiff for such work and labor the sum of Eleven Thousand Three Hundred Seventy-five Dollars ($11,375.00), payable as aforesaid."

The second cause of action is in the following language:

"I. That on or about the 7th day of April, 1933, in Maricopa County, Arizona, the defendant, W. D. Waddell, hired and employed the plaintiff herein to prepare and plant for said defendant approximately [51 Ariz. 534] sixty-five (65) acres of land in Section 26, Township 3 North, Range 2 West, to Marsh seedless grapefruit, to thereafter cultivate, irrigate and care for the said grove so planted as aforesaid, for which the said defendant agreed to pay a reasonable consideration for such work, trees and labor, Six Thousand One Hundred Seventy-five Dollars ($6,175.00) for said trees, and Eleven Thousand Three Hundred Seventy-five Dollars ($11,375.00) for preparing, planting and caring for the said grove for the period of one (1) year from the 7th day of April, 1933, to the 1st day of June, 1934.

"II. That said plaintiff did prepare and plant sixty-five (65) acres, as aforesaid, to Marsh seedless grapefruit, and thereafter did care for the said grove, cultivated, irrigated and improved the same until the 1st day of June, 1934, the reasonable value for the said trees and of the said work and labor, as aforesaid, being the sum of Seventeen Thousand Five Hundred Fifty Dollars ($17,550)."

The case came on for trial on the 25th of June, 1937, and the plaintiff offered considerable evidence, and rested. The minutes ...

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