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Commerce Mortg. Co. v. Title Realty Corp.

Supreme Court of Arizona

February 8, 1955

COMMERCE MORTGAGE COMPANY, a corporation, Appellant,
TITLE REALTY CORPORATION, a corporation, Appellee.

Page 718

[78 Ariz. 305] Shimmel, Hill & Hill, Phoenix, for appellant.

Lewis, Roca, Scoville & Beauchamp, Phoenix, for appellee.

UDALL, Justice.

Appellant, Commerce Mortgage Company, a corporation, prosecutes this appeal from a judgment of $951.75 rendered against it and in favor of plaintiff-appellee Title Realty Corporation, on an alleged contract of joint venture. The case was tried to the court sitting without a jury. The parties will be referred to as they appeared in the lower court-plaintiff and defendant.

While there are many sharp conflicts in the evidence, some of which must be referred to in determining the issues raised on this appeal, yet it is our duty to consider the facts in an over-all light most favorable to sustaining the findings and judgment of the lower court.

Defendant is an Arizona corporation, engaged in the mortgage loan business in the Phoenix area. As local representative for various life insurance companies, it negotiates mortgage loans on real estate for which it receives a 2% commission from the builder, a further commission of 1% from the lender when the mortgage is assigned, and sometimes an interest differential on moneys advanced to the builder for interim construction costs. It also owns an interest in an insurance agency from which it receives commissions on policies issued on the mortgaged property.

In the summer of 1949 it secured the mortgage loan business on a 20-acre subdivision

Page 719

division known as 'Tangerine Park', located at 16th Street and Montebello Avenue in Phoenix, and ultimately commitments to supply the mortgage money for twent-five of the houses were given by New York Life Insurance Company.

[78 Ariz. 306] One Robert Willcutt, who was then employed by defendant as its mortgage loan manager and corporate secretary, felt the sales in 'Tangerine Park' were moving too slowly. Because this was defendant's first large subdivision financing and first commitment from New York Life he took steps to speed up the sale of the properties, in order that a substantial profit could be realized from a rapid turnover. He therefore approached one Bert Fineg, president of plaintiff corporation, whom he considered to be a 'live wire salesman' with the suggestion that Fineg contact the owners of 'Tangerine Park' about the possibility of securing an exclusive sales agency with them for his company. After negotiations with the owners, Fineg reported to Willcutt that while the subdivision had possibilities, he was not interested in undertaking the sale of the subdivision because the houses were in such run-down condition as would make sales difficult and the owners would not give him the usual 5% commission.

Willcutt, to induce Fineg to take over the sale of this subdivision, agreed with him to pay plaintiff a share of defendant's profits from financing the properties. Relying on this promise, Fineg, on behalf of plaintiff, on August 26, 1949, entered into an exclusive sales agency with the owners of the subdivision, accepting less than the customary 5% commission he desired, and all the houses were thereafter sold through his efforts. In October, 1949, after Willcutt left his position with defendant, Fineg made several demands upon the defendant corporation for a share of the profits due him under the agreement with Willcutt. Defendant, through Albert Brygger, its president and primary stockholder, refused to honor his demands, claiming this was the first he had heard of such an agreement, though Brygger did offer a check for $250 as a 'nuisance value' settlement which Fineg refused to accept. After the houses in the subdivision had all been sold this lawsuit was instituted.

Plaintiff in its complaint alleged that defendant, through its agent Willcutt, agreed to give plaintiff one-half of its gross profits from the financing and insuring of the subdivision properties. Fineg in his testimony referred to it as 'a split down the middle'. Defendant answered denying the formation of any contract or the authority of Willcutt to enter into such an agreement and in addition it plead the statute of frauds as a bar to the action.

The trial court in its findings of fact found that a contract was made, that it was within Willcutt's authority, and concluded that the agreement was not within the statute of frauds. It found, however, that the agreement made was not for a 'split down the middle', but accepted Willcutt's testimony that the contract was for one-half of one percent of the $190,350 loaned by the New York Life Insurance Company on this subdivision.

[78 Ariz. 307] Defendant asserts that the findings of fact and conclusions of law are erroneous in that there is a fatal variance between pleading and proof and that the evidence conclusively shows there was no meeting of the minds between the parties. Further it is contended that the terms of the contract were so uncertain as to be invalid and that if an oral contract was entered into it was unenforceable under the statute of frauds, section 58-101 (sub. 7), A.C.A.1939.

The court found, inter alia, that:

'* * * Commerce Mortgage Company, through Mr. Willcutt, agreed to pay Mr. Fineg the sum which would be equal to one-half of one percent of the total amount of the mortgages negotiated and placed by Commerce Mortgage ...

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