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Thomas v. Brown

Supreme Court of Arizona

May 18, 1953

BROWN et ux.

Page 399

[75 Ariz. 386] Shute & Elsing, of Phoenix, for appellant.

Evans, Hull, Kitchel & Jenckes, Phoenix, for appellees.

PHELPS, Justice.

The appellant herein brought an action against defendants-appellees in three separate counts in the superior court of Maricopa County. In the first and second counts he asked judgment in the sum of $89,750 representing his alleged one-third interest in certain property belonging to a co-partnership formerly existing between him and defendant E. E. Brown; and in the third count he asked that he be restored to his status as an owner of an undivided one-third interest in the assets of said co-partnership. Defendants answered the complaint presenting issues upon which the court rendered its judgment in favor of plaintiff and against defendants in the sum of $28,501, from which plaintiff appeals.

The litigation here involved arose out of a written agreement dated June 2, 1947, between plaintiff and defendant Brown dissolving a partnership theretofore existing between the parties, and transferring all of the assets thereof to defendant consisting of approximately 19,000 acres of patented land and about the same acreage in state land leases together with certain water rights. Also a grazing permit for 18 head of cattle upon the forest reserve. The agreement provides further, among other things, so far as here material, that at any time within three years from the date of the agreement the plaintiff may demand an appraisal of the full value of all the lands held or used by the co-partnership at the date of the dissolution 'including patented lands, leases, permits and allotments, or otherwise, with improvements thereon as of this date.' The dissolution agreement further provides that the appraisal was to be made by three appraisers, one of whom was to be appointed by plaintiff and one by defendant and the third by plaintiff and defendant jointly. The appraisal was to represent the full value of all the assets of the previous co-partnership at the time the appraisal was made. The appointment [75 Ariz. 387] of the appraisers and their report thereon of a total value of said assets were required under the terms of the contract to be made and completed at the earliest practical moment after a demand for appraisal was made. Defendant agreed therein to pay to plaintiff in cash within 60 days after submission of the report of appraisal, a full one-sixth of the amount of the total appraisal less certain deductions provided for in the agreement which are immaterial to this decision.

Thereafter on May 19, 1950, plaintiff made demand upon defendant for an appraisal of the former co-partnership property and notified defendant that plaintiff would name his appraiser within ten days from that date. The appraisers were duly appointed in the manner provided by the agreement of the parties and soon thereafter on July 29, 1950, they met and attempted to agree upon a valuation of said property.

From the outset of the meeting of the appraisers it became manifest that there existed a wide divergence of views between

Page 400

the appraiser appointed by plaintiff and the other two appraisers not only concerning the value of the property to be appraised but also as to the modus operandi of making such appraisal. It soon became apparent to all three appraisers that unanimous agreement of appraisal was impossible. Two of the appraisers, however, did agree upon a value of $232,585.14 as being the full value as of that date, of all of the property previously belonging to the co-partnership and immediately reported the same to plaintiff and defendant. The other appraiser valued the property at $424,163.60.

Plaintiff refused to accept the majority report as a valid appraisal and brought this action asking either a money judgment based upon a valuation of $600,000, or the restoration to him of his interest in the co-partnership.

Plaintiff contends that the court erred:

1. In basing its judgment on the value of the property as of July 29, 1950, the date of the attempted appraisal, instead of its value upon the date of trial;

2. In refusing to admit evidence of value of the property and sales of comparable property in that neighborhood subsequent to July 29, 1950; and

3. In refusing to permit plaintiff to introduce in evidence the books of account pertaining to the income derived from the operation of the properties involved as a cattle ranch.

Defendants on their cross-appeal assign as error the court's ruling that an appraisal made by a majority of the appraisers is not binding upon the parties, under the circumstances in this case.

For convenience we will consider the assignment on cross-appeal first, because under the fact situation in this case the authorities are practically unanimous that unless the contract expressly or impliedly provides for an appraisal by a majority[75 Ariz. 388] of the appraisers, an appraisal by any number of appraisers less than the whole is invalid. The reason for the rule is as sound as it is simple. The instant contract provides that said appraisal is 'to be made by three appraisers', not by two appraisers, not by a majority of the appraisers appointed, but by three. For the court to treat as valid an appraisal by a majority of the three appraisers appointed when the contract expressly provides that it shall be made by three appraisers would be tantamount to the court rewriting the contract and incorporating therein a provision entirely different from ...

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