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Hamberlin v. Townsend

Supreme Court of Arizona

October 13, 1953


Page 1004

[76 Ariz. 193] Johnson & Shelley, of Mesa, for appellants.

Emmett R. Feighner, of Phoenix, for appellee.

UDALL, Justice.

This action was brought to recover damages for breach of warranty of title to certain personal property sold to plaintiffs by defendant. The case was tried to the court without a jury, and judgment was rendered for defendant, from which plaintiffs appeal. The parties appear before us in the same order as they appeared in the trial court. While Mrs. Hamberlin is party to the record, she did not testify and we shall refer to Mr. Hamberlin as plaintiff, and to appellee Fred Blair Townsend as defendant.

Defendant and William L. Hammontree, as copartners, leased from Salim Ackel, now deceased, certain premises in the Jefferson Hotel building in Phoenix, wherein the partners planned to conduct a restaurant business. Defendant acquired Hammontree's interest, and the latter is not a party to this action. This lease agreement

Page 1005

will be referred to as the Ackel-Townsend lease. It was for the term April 1, 1946, to March 31, 1951, with option to renew for five more years. Paragraph 8 of this lease set out the agreement of the lessor and [76 Ariz. 194] lessees concerning the fixtures and personal property on the leased premises, and provided:

'8. (A) It is understood between the parties hereto that all fixtures or other properties or equipment built in or attached to said premises shall, upon the expiration of this lease, be left in their place and shall then be and become the property of the Lessor. (B) with the understood exception, however, that any counter and stools installed in said premises, whether or not same are attached to the freehold, shall nevertheless be and become, upon the expiration of this lease, the property of said Lessor. (C) Any and all removable equipment or property not attached to the freehold, so as to cause damage to same in its removal, may be moved from said premises by said Lessees, upon the expiration of this lease. However, Lessees agree that Lessor may have a fair appraisal made of their said property prior to removal and Lessor is hereby accorded the right to buy same, or any part thereof, over and above inventory attached, and said counter and stools, for the appraisal price so fixed. (D) It is understood, however, between the parties hereto, that there will be turned over by the Lessor to the Lessees, certain coffee shop inventory as per copy attached to this lease. Lessees agree that if they do not use said equipment it shall nevertheless be considered the property of said Lessees, and said Lessees agree to leave, upon the expiration of this lease, item for item, said property or equipment either removed or destroyed during the tenancy under this lease. The Lessees further agree that Lessor shall not be obligated to replace, repair or redecorate said premises during the term of this lease.' (NOTE: The alphabetizing has been added for our convenience.)

Late in the month of March, 1949, defendant began negotiating to sell this restaurant business to plaintiff. The sale was effected through Grace & Grace, realty brokers. Construing the evidence in a light most favorable to defendant, it appears that during these negotiations plaintiff, defendant, and W. W. Grace met in defendant's offices and there defendant read aloud the Ackel-Townsend lease and its attached list and discussed the provisions thereof with plaintiff and Grace. Plaintiff, however, denied that such discussion occurred.

The sale of the going restaurant business and its equipment was to be effected by a conditional sales contract, while the tenancy of the restaurant premises was to be handled by a sublease agreement. Defendant drafted these two instruments, and plaintiff took them to an attorney for advice. The conditional sales contract referred to the sublease, and the sublease incorporated the Ackel-Townsend lease by reference and expressly stated that the sublessee would [76 Ariz. 195] faithfully keep and perform each and all of the promises, agreements, and covenants remaining to be performed by the lessee in the Ackel-Townsend lease. Plaintiff was advised by his attorney (Dix Price) that he should learn the contents of the Ackel-Townsend lease, as its provisions were controlling.

The parties met on April 1, 1949, and executed the two instruments. As we said, the sublease agreement incorporates the Ackel-Townsend lease by reference, states that plaintiff assumes the burdens thereof, and recites that the same is attached thereto. The conditional sales agreement has an attached inventory listing the furnishings and equipment of the business. Included in this list is one item (a walk-in ice box) which falls within clause (A) of paragraph 8 of the Ackel-Townsend lease, supra; three items (a U-shaped counter, a straight counter, and twenty-four stools) which fall within clause (B), supra; and eight items (three cup racks, one meat table, one steam table, two ranges, one four-door ice box, one table, one high chair, and the booths) which fall within clause (D), supra. There is a claim for, and testimony concerning,

Page 1006

one waffle iron, but it is not clear just what plaintiff contends about it.

Upon the termination of the original lease and sublease, Mr. Ackel exercised his rights given in paragraph 8, supra, and claimed ownership of all these enumerated items. Plaintiff now brings this action to recover the reasonable value of these same items, upon the theory that defendant sold them to him with warranty of title thereto, and that such warranty was breached because at the time of the sale Ackel had an interest in this same property.

Plaintiff's position in the trial court seems to have been that he signed a contract without reading all of it; that thereafter he discovered the unread part (the Ackel-Townsend lease) was other than he hoped it to be; that no evidence was admissible to show that he had read the whole thereof, or that it was read to him; that the parts which he read were to be strictly construed against defendant who drew the contract; and that the part he did not read was to be held a nullity.

Plaintiff's first contention upon appeal is in essence that the evidence shows defendant warranted clear title to the chattels, and that this warranty was breached because the title transferred was subject to the rights given to Ackel in paragraph 8 of the Ackel-Townsend lease. He asserts that the title retention clause in the conditional sales contract is an express warranty of title. We agree that such a clause may in a proper case be an express warranty of clear title, see Annotation 132 A.L.R. 338. However, such a construction in this case would completely ignore and nullify everything contained in paragraph 8, supra. Plaintiff declares it is proper to ignore ...

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