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Solana Land Co. v. National Realty Co.

Supreme Court of Arizona

February 8, 1954


Page 740

[77 Ariz. 19] John M. Schwartz, Tucson, for Solana Land Co.

Knapp, Boyle, Bilby & Thompson, Tucson, for National Realty Co.

Conner & Jones, Tucson, for Simon Kivel and wife, and Joseph K. Kivel, and wife.

UDALL, Justice.

This is an appeal from a single judgment entered in two separate actions that were consolidated for trial in the court below. In accordance with our practice, as between appellant Solana Land Company (hereinafter called Solana) and appellee National Realty Company (hereinafter called National), the facts are stated in the light most favorable to National, and as between appellants Joseph Kivel, et ux. and Simon Kivel, et ux. (hereinafter called Kivels), and appellee Solana, the facts are stated in the light most favorable to Solana.

Solana owned Section 19, T. 14 S., R. 15 E., G. & S. R. B. & M. in Pima County, Arizona, hereinafter called Section 19, or the 'tract'. Roy Drachman, a realty broker hereinafter called Drachman, solicited and obtained a 'business property sales listing' from Solana which gave him the 'exclusive right to sell' the tract during the sixty days after March 5, 1951 for a price of $140,000. In the dealings that followed, Drachman submitted the various offers from all prospective purchasers to Solana's president, Mrs. A. R. Schwerin, who was in California.

F. Fred Roberts and William A. Mitchell, hereinafter called Roberts and Mitchell, made several offers to buy the tract or parts thereof. On April 18th they offered $140,000 payable in six months with interest after two months. To this Solana promptly replied by telegram: 'Your offer not acceptable; must have all cash.' The next day the same parties offered $140,000 payable in sixty days. Drachman, by telephone, submitted this offer to Solana's president on the afternoon of Friday, April 20, 1951. Mrs. Schwerin refused the offer because it did not call for a prompt closing. At this same time Kivels had a pending offer of $130,000 reduced to writing on [77 Ariz. 20] a broker's business form used by Drachman, and during this same conversation this offer was refused. A pending offer from National was likewise refused because it did not call for $140,000 cash on prompt closing. Drachman called Roberts and Mitchell, Kivels, and National, informing all of them that the first offer, if any, of $140,000 cash on prompt closing would be accepted.

About 9:30 or 10 o'clock that same evening (April 20th) Kivels decided to raise their offer to $140,000 and Simon Kivel informed Drachman of this by telephone. Drachman changed the amounts on the business form from $130,000 to $140,000, then telephoned Solana and informed it of the new offer. Mrs. Schwerin voiced acceptance, saying the same would be confirmed by telegram. Drachman met with Kivels and they initialed the changes made on the business form. Kivels gave Drachman two checks for $7,000 each as earnest money. A night letter was sent that night by Solana to Drachman, reading:

'Your offer of one hundred forty thousand dollars cash for Section 19 accepted for prompt closing. Confer with Richard Chambers on preliminary agreement and deed.'

Chambers, who was secretary of the Solana corporation and its Tucson attorney, also received a night letter informing him of the sale.

About 7 a. m. Saturday morning (April 21st), Simon Kivel telephoned Drachman and informed him that Kivels would be unable

Page 741

to go through with the deal because their brother Tom Kivel in California had died during the night, and this event would upset their financial plans. Simon Kivel asked that the property be sold to some other persons. Drachman then telephoned Edward Smotkin, president of National, and informed him Section 19 was still for sale. At 9:30 a . m. the same day, Smotkin appeared at Drachman's office, signed an offer of $140,000 and deposited $14,000 earnest money. This written offer was submitted to attorney Richard Chambers late the following Monday but was never signed or accepted by the officers of Solana.

On the morning of Sunday, April 22nd, Joe Kivel telephoned from California and spoke to Drachman, stating the Kivels were willing to go through with the business deal and purchase the tract. Drachman expressed his regrets, stating he had sold the tract to National.

Kivels' written offer of $140,000, dated April 20th, had in the meantime been transmitted to Mrs. Schwerin who upon reading it found it unacceptable and sent it to attorney Chambers with a letter to this effect. On Wednesday, April 25, the written offer, unsigned, was returned by Chambers to Drachman with an accompanying letter stating the written offer was not in accordance with the telephone conversation wherein Solana understood payment of $140,000 cash would be made [77 Ariz. 21] immediately upon receipt of title papers (the written offer provided for cash payment fifteen days after receipt of title papers). The letter further stated Solana did not agree to the provisions for payment of Drachman's fee in event of buyer's default.

On Thursday, April 26, Roberts and Mitchell filed their complaint in cause 35781, naming Solana as defendant and asking specific performance of an alleged contract to sell Section 19. On Friday or Saturday of that week, Drachman entered into an agreement with National whereby Drachman, purportedly acting as the duly-empowered agent of Solana, sold Section 19 to National. Drachman relied upon his 'business property sales listing' as conferring authority upon his to accept National's offer to purchase and thus form a contract binding upon Solana. On May 5, National intervened in cause 35781, alleging Roberts and Mitchell had no contract to purchase the tract, alleging that National had purchased the tract from Solana, asking specific performance of that contract, and asking that National's title be quieted.

Kivels knew of this action and its developments from and after April 30th. However, they made no demand upon Solana for performance of any contract, nor did they tender the purchase price. On July 6th Solana filed its complaint in cause 36151, naming Kivels as defendants alleging they claimed some right in the tract, and asking that plaintiff's title thereto be quieted. Kivels' answer and counterclaim was filed July 26th, alleging Solana had agreed on April 20th to sel the tract to Kivels and praying specific performance of the contract. The causes were consolidated for trial. At the trial no findings of fact were requested--nor made--though findings would have proved of great value in determining this appeal.

All parties joined in a motion that one judgment be rendered, settling the rights of all parties in both causes. Accordingly, on June 3, 1952, judgment was rendered adjudging in cause 35781(1), that Roberts and Mitchell take nothing; (2) that National pay $140,000 to Solana and receive a deed to Section 19; (3) that Solana take nothing by its counterclaim against National to quiet title. In cause 36151 it was adjudged (1), that Kivels had no right, title, or interest in or to Section 19; (2) that Solana was the lawful owner of the tract; (3) that Kivels were entitled to no relief against Solana on their counterclaim for specific performance; (4), that Solana should recover costs from Kivels. From this judgment Solana appeals against National, and Kivels appeal against both Solana and National. Roberts and Mitchell did not appeal, hence the judgment is final as to them.

By appropriate assignments of error the parties have raised the issues ...

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