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Gallaway v. Smith

Supreme Court of Arizona

July 15, 1950

GALLAWAY
v.
SMITH et al

Reversed and remanded for new trial.

Jennings, Strouss, Salmon & Trask, of Phoenix, attorneys for appellant.

Renz L. Jennings, Carl Tenney, of Phoenix, attorneys for appellees Thelma Sweat and Otto Sweat.

Darrell R. Parker, of Phoenix, attorney for appellees John F. Smith and Kenneth W. Franklin.

Udall, Justice. La Prade, C. J., and Stanford, Phelps and De Concini, JJ., concur.

OPINION

Udall, Justice.

Page 858

[70 Ariz. 365] The sole question presented by this appeal is whether the trial court erred in directing verdicts for the defendants and in entering judgment against plaintiff in accordance with the verdicts.

Appellant-plaintiff, Grace M. Gallaway, brought this action to recover the sum of $ 6250 against defendants-appellees, Thelma Sweat, a real estate broker, her husband Otto Sweat, the National Surety Company, a corporation, surety on the broker's official bond, and John F. Smith and Kenneth W. Franklin, purchasers of the restaurant property in question. The amended complaint, upon which the case was tried, alleged: that in November of 1946, plaintiff was the owner of a restaurant located [70 Ariz. 366] at 1735 East Van Buren Street, Phoenix, Arizona, together with the furniture and fixtures located therein; that on November 14, 1946, she entered into a brokerage contract with defendant, Thelma Sweat, to sell the restaurant for a commission of 5%; that said broker did sell the restaurant for the sum of $ 6250 to defendants Smith and Franklin, receiving the purchase price from them and delivering a bill of sale from plaintiff to the purchasers who took possession thereof. It is further alleged that Thelma Sweat subsequently failed to pay the net purchase price over to the plaintiff but instead, without plaintiff's knowledge or consent, returned same to the purchasers.

While certain admissions, hereinafter enumerated, were made by the answering defendants, they all denied the plaintiff's ownership of the restaurant at the time of the sale. The purchasers set forth in their answer the assertion that the restaurant was in fact owned by one James C. Estes, who they allege had transferred it to the plaintiff in violation of a restraining order procured against him in a then pending divorce action and that therefore the entire transaction was a fraud upon them and it was for this reason that they had demanded and obtained a return of the consideration from the broker. As an affirmative defense, Thelma Sweat alleged that she had returned the money to the purchasers pursuant to an authorization from plaintiff.

The case was tried before the court sitting with a jury. Plaintiff's case consisted solely of her own oral testimony and the admission in evidence of two bills of sale and a telegram. When plaintiff Gallaway rested a motion to require her to elect whether to proceed by way of a demand for specific performance or an action for damages was denied by the court. All of the defendants then made motions for instructed verdicts upon the ground that plaintiff had failed to establish a prima facie case. The court, without specifying the basis therefor, granted said motions in favor of all defendants and directed judgment to be entered accordingly. After a denial of a motion for new trial this appeal followed.

It is unquestionably the rule in Arizona that a motion for directed verdict should be denied where there is competent evidence to support the plaintiff's case. The most recent expression of this rule is found in Nichols v. City of Phoenix, 68 Ariz. 124, 202 P.2d 201, 204:

"* * * A motion of this kind is regarded as admitting the truth of whatever competent evidence the opposing party had introduced including the reasonable inferences to be drawn therefrom, and it is only where the evidence is insufficient to support a verdict, or where it is so weak that upon a motion for a new trial after verdict the court would feel constrained to [70 ...


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