Balon v. Hotel & Restaurant Supplies, Inc.

• Decision Date: 11 October 1968
• Docket Number: No. 9178--PR,9178--PR
• Citation: 445 P.2d 833,103 Ariz. 474
• Parties: Gustave BALON and Jane Doe Balon, husband and wife, Appellants (Respondents), v. HOTEL & RESTAURANT SUPPLIES, INC., an Arizona corporation, Appellee (Petitioner).
• Court: Arizona Supreme Court

Page 833

445 P.2d 833

103 Ariz. 474

Gustave BALON and Jane Doe Balon, husband and wife, Appellants (Respondents), v. HOTEL & RESTAURANT SUPPLIES, INC., an Arizona corporation, Appellee (Petitioner).

No. 9178--PR.

Supreme Court of Arizona, In Banc.

Oct. 11, 1968.

Rehearing Denied Nov. 19, 1968.

Royal & Carlson, Tucson, for appellants (respondents).

Silver, Silver, Ettinger & Karp, Tucson, for appellee (petitioner).

UDALL, Vice Chief Justice:

We have granted a petition to review the judgment of the Court of Appeals, Division 2, 6 Ariz.App. 481, 433 P.2d 661, rendered on the 16th day of November, 1967.

The judgment of the court of appeals is vacated and the judgment of the Superior Court of Pima County is affirmed.

Hotel & Restaurant Supplies, Inc., the plaintiff below, and appellee herein, entered into a written contract for the sale and installation of restaurant equipment, much of which was to be specially designed, with the appellants Balon. The printed contracts initially provided:

'All the above items furnished and set in place as stated above for the sum of ($19,950.00) Nineteen thousand nine hundred fifty and no/100 Dollars plus sales tax.'

Before execution of the contract, however, and following a bargaining discussion wherein the buyer stated he was of the opinion the equipment could be procured from another supplier for.$19,000, the above-quoted clause of the contract was stricken and the following words and figures written in by the seller's agent: 'Nineteen hundred and no/100ths Dollars ($1900.00).' Both buyer and seller's agent initialed this penned amendment.

The written contract is silent on the questions of time for delivery and time for payment. It was the seller's intention, however, and its evidence that immediately after the time of signing the contract the parties agreed that the buyers would pay $500 'now' and $10,000 after some of the merchandise had been delivered. This evidence was refuted by the buyers and their contention was that payment was due when the job was complete and satisfactory.

The evidence is undisputed that the $500 was never paid, and when demand was made for payment of $10,000--at a time when a quantity of the items purchased had not yet been delivered--the buyers refused and the seller thereafter refused to go ahead with the contract. After giving notice of rescission buyers purchased the balance of their equipment elsewhere and this suit was instituted by the sellers.

Trial was had before the court without a jury and judgment was rendered in favor of the Hotel & Restaurant Supplies, Inc., in the amount of $4,070.00. No specific findings of fact or conclusions of law were requested or made by the court. It is inherent, however, that the trial court found the initial contract to be.$19,000, rather than $1900.00; believed the plaintiff's evidence as to time of payment; believed that plaintiff's conduct in refusing to continue to perform the contract, after payment of the $10,000 was refused, was justified; and found from the evidence that at the time of the unjustified rescission by buyers the seller's damage amounted to $4,070.00.

We believe, as did the court of appeals, that there was sufficient evidence in the record to support the trial court's finding that the expression of $1900.00 in the written contract was a clear mistake and that the manifested intention of the parties--as shown by all of the circumstances--was a bargained-for consideration of $19,000.00.

It is with the balance of the court of appeals decision that we take issue. Where no time of payment or delivery is specified in a contract the law, both at common law and under our statutory law as it existed at the time this contract was entered into, Creates a rebuttable presumption that the time of payment is concurrent with the delivery of the goods. A.R.S. § 44--242, a section of the Uniform Sales Act then in effect in this state, provided:

'Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions; that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer must be ready and willing to pay the price in exchange for possession of the goods.' (Emphasis added)

There was evidence in this case, submitted by the plaintiff, from which the trial court could find that the parties had 'otherwise agreed'. There is nothing in A.R.S. § 44--242 which stipulates that such an agreement must be in writing nor is there any such holding in American Law Institute's 'Restatement of Contracts' section 240, clause 1--b, and we find on our reading of 4 Williston on Contracts, section 640, pps. 1051 to 1063, that parole evidence may be admissible to rebut the presumption that payment becomes due when the goods are delivered. To like effect, see 3 Corbin on Contracts, section 593, pages 555 to 564.

Section 240 of the Restatement of Contracts, dealing with the subject 'In What Cases Integration Does Not Affect Prior or Contemporaneous Agreements' states:

'(1) An oral agreement is not superseded or invalidated by a subsequent or contemporaneous integration, nor a written agreement by a subsequent integration relating to the same subject-matter, if the agreement is not inconsistent with the integrated contract, and

'(a) * * *

'(b) is such an agreement as might naturally be made as a separate agreement by parties situated as were the parties to the written contract.'

* * * * * *

Under the illustrations of clause (1)(b) is given the following:

'4. A and B in an integrated contract...