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Commercial Standard Ins. Co. v. West

Supreme Court of Arizona

November 3, 1952

COMMERCIAL STANDARD INS. CO.
v.
WEST

Judgment affirmed.

Struckmeyer & Struckmeyer and Jack C. Cavness, all of Phoenix, for appellant.

Jerman & Jerman and Richard R. Greenfield, all of Phoenix, for appellee.

Udall, Chief Justice. Stanford, De Concini, and La Prade, JJ., and Don T. Udall, Superior Court Judge, concur. Note: Justice PHELPS, being unable to take part in the case, the Honorable DON T. UDALL, Judge of the Superior Court of Navajo County, participated in his stead in the determination of this appeal.

OPINION

Udall, Chief Justice.

Paul West, dba Cut Rate Car Mart, as plaintiff, brought suit against defendants [74 Ariz. 360] Douglas Reid and Commercial Standard Insurance Co., a corporation. Both the plaintiff and defendant Reid were licensed "used motor vehicle dealers" and the defendant corporation was the surety on Reid's statutory bond. The case was tried to the court sitting without a jury, at the conclusion of which judgment was entered for the plaintiff, against both defendants. The surety company was only held liable for $ 1,000, the amount of its bond. It alone appeals as the defendant Reid admitted his personal liability.

The parties to this appeal will hereafter be referred to as appellant and appellee.

The facts, which are not in dispute, may be summarized as follows: In November, 1949, appellee West had in stock, and held title to, a 1940 Buick automobile and a 1947 Studebaker automobile. During that month he sold these cars to different purchasers. Purchase orders, on his forms, were used in connection with each sale. In each instance conditional sales contracts were also signed by the "purchasers". Appellee did not sign these contracts as "seller" though he was the true owner. In keeping with an established practice based on an oral agreement between them, appellee delivered the contracts to the defendant Reid who signed them as "seller" and, through a "dealer's setup" or arrangement -- not enjoyed by appellee -- assigned the contracts to the Valley National Bank. The practice was convenient for appellee and profitable to defendant

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Reid who received two or three percent of the contract price.

The appellant has consistently maintained throughout these proceedings, first, that the complaint does not state a claim upon which relief could be granted, and secondly that the evidence presented does not support the judgment entered. The court, however, denied appellant's various motions to dismiss and its motion for a new trial predicated upon the ground that the judgment was not justified by the evidence and is contrary to law. These rulings have all been assigned as error. The appeal from the final judgment entered challenges the correctness of these orders. If the judgment is to be sustained, it must be that the bond executed by appellant covers the activities of defendant Reid outlined above.

Chapter 92, S.L.1945 (now appearing as Art. 11, Ch. 66, 1952 Cum.Supp. to A.C.A. 1939), governs motor vehicle dealers. It makes them subject to regulation and control by the superintendent and provides for their licensing. Section 7 thereof, 66-1107, supra, provides for a bond, the pertinent provision reading:

"* * * Every application shall also be accompanied by a bond in the form to be approved by the vehicle superintendent, and shall be in such amount -- but in no event less than one thousand dollars ($ 1,000) -- as the vehicle superintendent shall prescribe, and with a surety company authorized to transact business in this state as surety thereon, [74 Ariz. 361] and on which such applicant shall be the principal obligor and the state of Arizona shall be the obligee, and such bond shall be conditioned that the applicant will faithfully comply with all of the provisions of the law and that the same shall be non-cancellable for the period of time for which the license to ...

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