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Wilhorn Builders, Inc. v. Cortaro Management Co.

Supreme Court of Arizona

February 5, 1957

WILHORN BUILDERS, Inc., a corporation, and Mildred J. Sligh, a single woman, Appellants,
CORTARO MANAGEMENT COMPANY, a corporation, Appellee.

[81 Ariz. 382] Hall, Catlin & Molloy, Tucson, for appellants.

Hymen D. Goldberg and Lawrence Ollason, Tucson, for appellee.

PHELPS, Justice.

This is an appeal from a judgment in favor of the plaintiff, Cortaro Management Company and against the defendants, Wilhorn Builders, Inc., and Mildred J. Sligh, and from each provision thereof. The parties will be hereinafter designated as the seller (Cortaro Management Company) and the buyer (Wilhorn Builders, Inc.) and Mildred Sligh (Mildred J. Sligh, president and agent of Wilhorn Builders, Inc.).

This case involves an action by the seller against the buyer on a contract for the sale of land. The written contract which is the subject of this action was entered into on January 2, 1952. It called for the sale of approximately one hundred and twenty acres of land for a total purchase price of $18,625, $5,000 of which was paid at the

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time of the execution of the contract. The balance was to be paid in annual installments of $2,725 each, plus interest on the unpaid balance at six per cent, payable on December 21 of each year thereafter until fully paid. The seller agreed to convey to the buyer upon payment of each $2,725 and [81 Ariz. 383] accrued interest, a parcel consisting of twenty acres, commencing with the most westerly twenty-acre parcel of the one hundred and twenty-acre tract. The contract is silent as to which party had the duty of providing the legal description and deed for each twenty-acre conveyance. The contract did provide for costs, expenses and reasonable attorney's fees in favor of the prevailing party if suit was brought to enforce or cancel the agreement.

On January 7, 1953 the buyer made the payment which was due December 21, 1952. The payment consisted of $2,725 to be applied to the principal and $803.88 interest, which paid the interest up to January 2, 1953. The seller did not deliver a deed for the westernmost twenty acres at that time, nor did it prepare such a deed or secure a legal description for the deed. The buyer, as a matter of expediency, incurred the expenses of $183.10 in securing the survey for the legal description for the deed, as well as the actual drawing thereof. It is the buyer's contention, with which we agree, that this cost should be borne by the seller.

The next contract payment was due on December 21, 1953, although it was not made on that date. A controversy arose between the parties as to the expenses for the previous twenty-acre parcel and as to whose duty is was to have the deed to the next twenty-acre parcel prepared. As a result the second deed was prepared by the seller and it was deposited with the escrow agent on March 6, 1954. The seller paid the expense for procuring the description for this parcel.

On March 20, 1954, the buyer tendered the sum of $3,194 as and for the principal and interest due December 21, 1953, on the theory that the buyer was entitled to deduct the costs of survey, and for preparation of the prior deed and that such tender would be sufficient. This tender was refused as being late and not in the correct amount. On the same date the seller brought this action in the Superior Court of Pima County to recover the December 21, 1953 installment. The buyer answered and pleaded in defense that the seller failed to place the twenty-acre deeds in escrow with a policy of title insurance. In addition, the buyer contended that it was entitled to offset the expenses of surveying the land for a legal description of the first twenty-acre deed and preparation of the deed itself.

At the time of the filing of this suit more than thirty per cent but less than fifty per cent of the total purchase price had been paid, and it was properly stipulated that a forfeiture could not have been declared prior to April 20, 1954, under the provisions of section 71-126, A.C.A.1939 (now sections 33-741, 33-742, A.R.S.1956). On August 4, 1954, the seller moved to amend its complaint to seek forfeiture of the buyer's interest rather than to recover the unpaid purchase money installment. This motion [81 Ariz. 384] to amend was resisted by the buyer on the grounds that the seller had conclusively elected its remedy in suing for the purchase money installment of December 21, 1953, and was estopped to change its position. The trial court granted the motion to amend and the amended complaint was filed September 22, 1954. The amended complaint added Mildred Sligh as a party-defendant.

The trial court, sitting without a jury, granted judgment in favor of the seller, cancelling and forfeiting the buyer's interest in the contract and declaring the seller to be fee simple owner of all the land in question, except the land described under the exception described therein, and awarding all sums paid under the contract as liquidated damages.

Appellant has presented a number of assignments of error for our consideration but we believe the case may be disposed of by a consideration of only one question raised, i. e., did plaintiff's act of bringing an action on March 20, 1954, to

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recover the installments and interest due under the terms of the contract on December 21, 1953, constitute an irrevocable election of its remedies and substantive rights under the terms of the contract.

In order to answer this question we will first look to the terms of the contract between the parties. So far ...

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