Maurice BRITZ and Clare A. Britz, husband and wife, Appellants,
Mathilda KINSVATER, a single woman, Appellee.
[87 Ariz. 387] Shute & Elsing, Phoenix, for appellants.
Marvin Johnson, Phoenix, for appellee.
[87 Ariz. 388] This is an appeal from a judgment in favor of plaintiff, Mathilda Kinsvater, and against defendants-appellants, Maurice A. and Clare A. Britz. The action was one to recover payments of interest which were allegedly usurious, i. e., in violation of A.R.S. § 44-1202. The case was tried to the court, sitting without a jury. The parties will hereinafter be designated as they appeared in the trial court, i. e., plaintiff and defendant.
There are two claimed errors:
1. The conclusions of law are not supported by the findings of fact;
2. The judgment is not supported by the evidence.
Inasmuch as the trial court's findings of fact are not themselves challenged by this appeal, we may assume that their accuracy is conceded. In any event the evidence must be considered in the light most favorable to a sustaining of the judgment. We paraphrase these findings as follows:
Plaintiff was the owner of certain real property in Tempe, Arizona, which she had
transferred under an executory contract of sale. This contract, dated August 3, 1954, called for periodic payments which were to be applied toward the reduction of the principal debt of $75,000 (the sale price), and which also were to include interest at 4% per annum on the principal amount.
On November 9, 1955, the payments theretofore made by the buyer of the property had reduced the principal amount of the obligation to $63,200. Shortly prior to that date, plaintiff had found herself in pressing need of some $15,000. In an effort to acquire that sum, she had made several unsuccessful efforts to borrow money on the security of her executory sales contract. One of the prospective lenders approached for this purpose was defendant, who refused to lend any money on such terms. This proposal was made on behalf of plaintiff by an intermediary, one Joan Demand, a real estate broker. Some time later defendant advised Demand that he would 'purchase' the sales contract for $12,000, with an option to plaintiff to repurchase the instrument at some later time. Demand communicated this proposition to plaintiff, who agreed thereto. Up to this point plaintiff and defendant had never met.
An escrow agreement was set up on November 9, 1955, with Phoenix Title and Trust Company as escrow agent, for the 'sale' of said contract by plaintiff to defendant. Under the terms of the escrow, plaintiff was to put up her contract, and defendant was to pay in the $12,000. The following provision was also contained in the escrow instructions:
'The consideration for this assignment shall be by agreement between [87 Ariz. 389] the parties outside of this escrow. You will be handed by the buyer hereunder the sum of $12,000 in cash to be disbursed through this escrow, and the other terms of the agreement regarding the consideration hereunder shall be no concern of the escrow agent. Your title policy called for hereunder shall be for $12,000.'
In accordance with the terms of the escrow, plaintiff assigned or, as defendants maintained, 'sold' the contract to defendant on November 14, 1955. On the same date, the parties executed a collateral agreement which was not made a part of the escrow instructions. This was called a 'reassignment agreement', and it defined the continuing rights and obligations of the parties to this 'sale'. This instrument provided that: (1) defendant would reassign the contract to plaintiff 'when the obligation has been reduced to $51,200, however, not for a period of at least six months from date;' (2) defendant was 'purchasing outright the interest and the principal in connection with the above mentioned contract of sale, subject, however, to an option in favor of [plaintiff] to repurchase at any time after one year as above stated;' and (3) 'the terms of the contract of sale cannot be changed, altered, or amended, sold, transferred, or conveyed, without the consent of [plaintiff].'
In June of 1956, some seven months after the above described transaction, it became necessary for plaintiff to reacquire the contract. Pursuant to plaintiff's instructions, the escrow agent paid $13,686.07 to defendant, who thereupon reassigned the instrument to plaintiff. The sum of $13,686.07 represented the following items: the $12,000 received by plaintiff from defendant; approximately 4% interest on $63,200 from the date of the ...