Brubaker v. D'Orazi

• Decision Date: 15 April 1947
• Docket Number: 8707.
• Parties: BRUBAKER v. D'ORAZI.
• Court: Montana Supreme Court

179 P.2d 538

120 Mont. 22

BRUBAKER v. D'ORAZI.

No. 8707.

Supreme Court of Montana

April 15, 1947

Appeal from District Court, Fourth District, Missoula County; C. E Comer, Judge.

Action by Charles Brubaker against Joe F. D'Orazi for reformation and specific performance of written option to repurchase retail liquor business sold to defendant. From a judgment for specific performance of the option as reformed defendant appeals.

Judgment affirmed.

Edward T. Dussault and Krest Cyr, both of Missoula for appellant.

Russell E. Smith and Pope & Smith, all of Missoula, for respondent.

CHEADLE Justice.

Appeal by defendant from a decree and judgment for the specific performance of a contract between the parties, as reformed by the decree.

The record does not include a bill of exceptions, consisting only of the judgment roll, including the pleadings, findings and conclusions prepared by both parties, the court's findings and conclusions and exceptions thereto by both parties, order overruling and sustaining certain of such exceptions, the decree, and notices of appeal. Plaintiff's cross-appeal was dismissed prior to oral argument. Since the evidence adduced at the trial is not before us, the appeal must be decided on points of law, most ably presented by counsel for the respective parties.

The complaint, summarized, alleges that about April 4, 1942, plaintiff, as owner, was operating a certain retail liquor business in Missoula, consisting of a leasehold on certain described premises, store and bar fixtures and equipment, and liquor and beer licenses issued to plaintiff by appropriate public authorities permitting the conduct of such business by plaintiff; that on said date plaintiff, intending to enlist in the armed forces of the United States, and desiring to enter into an arrangement for the disposition of such business during his absence and a resumption thereof upon his return, entered into an agreement with defendant whereby the latter agreed to take over said business under terms agreed upon; that 'It was further understood and agreed * * * that in the event that plaintiff returned to the city of Missoula, and if in the meantime the defendant had become the owner of said business * * *, then the plaintiff should have from the ninth day of April, 1945, to the ninth day of July, 1945, the option to reacquire said business and the whole thereof upon the same terms that the defendant had acquired the same from plaintiff.' It further alleges that defendant would so operate the business that plaintiff's option should not be defeated by conduct of defendant, and that it be maintained by renewal of the leasehold and of the liquor and beer licenses; that such leasehold and licenses were renewed and are held by defendant as a part of the business.

In support of plaintiff's right to reformation of the agreement, it is alleged that in an attempt to make a written memorandum of such agreement, the parties executed a writing, attached to the complaint as an exhibit; that such writing did not truly and correctly express the intention of the parties or reflect the true agreement, by reason of mutual mistake, or by a mistake of plaintiff which the defendant knew or suspected; that the whole intent and purpose of the parties, in making the agreement, was to accomplish a result which would permit plaintiff, upon his return, to have the same business which he had when the agreement was made; and further, that it was understood that plaintiff contemplated enlisting in the United States armed forces, whereas the agreement referred to enlistment in the United States Army.

The complaint alleges the enlistment by plaintiff in the United States Navy, and his subsequent discharge; that on April 27, 1945, and again on July 9, 1945, plaintiff notified defendant in writing of his wish to exercise the option, and offered in writing to pay all sums and do all things required of him under the terms of the agreement, but that defendant, disregarding his obligations without specifying any objections to said offers, advised plaintiff that the agreement was void and without legal validity and denied all obligation thereunder, and refused to permit plaintiff to exercise his said option, and refused to perform his said agreement; that plaintiff has duly performed all of his obligations under the agreement; that he has no adequate remedy at law, and offers to do all things required of him by the court in order to exercise and procure the benefit of said option. It is further alleged that the business is unique in character in that the ordinances of the city of Missoula prohibit the licensing of additional liquor establishments by reason whereof plaintiff could not be adequately compensated for the loss incident to the refusal of defendant to comply with his agreement. Damages to the extent of $400 monthly are alleged, by reason of defendant's aforesaid refusal.

Defendant demurred generally to the complaint, and specially on the ground that the court has no jurisdiction of the subject of the action, the demurrer being overruled. Defendant's answer admits execution of the agreement by the parties, the bill of sale by plaintiff, and the promissory notes by defendant; admits that liquor and beer licenses had been issued to plaintiff, as alleged; denies specifically that such licenses are assets or property of the business, or that plaintiff was the owner thereof or had any property interest therein.

Defendant's motion for a judgment of nonsuit, interposed at the conclusion of plaintiff's case, was denied.

Exhibit 'A,' attached to the complaint, is entitled 'Lease Agreement,' under the terms of which the premises in question, together with 'certain store fixtures and all equipment used in the operation of the Havana Bar' are leased by plaintiff to defendant for a term of three years, terminating on April 8, 1945. As rental for the premises and equipment defendant agrees to pay plaintiff the sum of $5,220, in monthly installments of $145, as evidenced by two promissory notes attached. Defendant further agrees to keep the fixtures insured and to pay the taxes thereon, same to be assessed in plaintiff's name. It is agreed that $1,000, deposited by defendant with the Western Montana National Bank as a performance bond, shall, in case of defendant's default, be delivered to plaintiff, together with a certain bill of sale, hereafter mentioned. And further, 'It is understood that party of the first part is enlisting in the United States Army and in the event he returns to Missoula and party of the second part has become the owner of fixtures and business known as the Havana Bar, the party of the first part shall have from April 9th, 1945 to July 9th, 1945 the option, and party of the second part hereby acknowledges receipt of One Dollar as consideration for said option, to rent the fixtures on the same terms from party of the second part as set out in this agreement, with the understanding that in the event party of the first part pays his rent promptly over a period of three years, then the ownership of said fixtures shall revert to and become the property of party of the first part.'

Exhibit 'A' attached to the agreement is an inventory of furniture and fixtures; exhibits 'B' and 'C' promissory notes in the respective amounts of $3,600 and $1,620; exhibit 'D' a bill of sale executed by plaintiff, conveying to defendant the furniture and fixtures described in exhibit 'A.' This contains a paragraph identical with that above quoted from the agreement proper.

The trial court substantially adopted findings of fact and conclusions of law proposed by plaintiff. The pertinent portions of the findings are:

1. That in April, 1942, plaintiff was the owner of a liquor business in Missoula, known as the Havana Bar, consisting of federal, state and city liquor and beer licenses, a lease running from April 9, 1942, to April 9, 1945, a stock of liquors, trade fixtures, and good will.

2. That plaintiff, intending to enlist in the armed forces of the United States, entered into an agreement with defendant that plaintiff would sell and defendant would buy all of such business and no specific part thereof; that under the terms thereof defendant paid plaintiff $1,300, and a sum of money representing the unused portion of the liquor licenses and the liquor stock, and two promissory notes, one being collateral for rental on the building; that plaintiff transferred to defendant the Havana Bar, including the liquor stock, licenses, fixtures, good will, and lease.

3. That it was agreed that during the period April 9, 1945, and July 9, 1945, plaintiff should have an option to repurchase such business and all of its components on the identical terms on which it had been sold by him; that it was contemplated by both parties that the defendant should renew the liquor licenses and lease as they expired, and that the renewed licenses and lease should be a part and parcel of such business.

4. That the written agreement between the parties did not, by reason of mutual mistake, express the true intention of the parties, in that in referring to plaintiff's option to repurchase, it mentioned only the fixtures, whereas it was the intention that plaintiff should have the option to repurchase the entire business, on the same terms as he had sold them.

5. That between April 9, 1945, and July 9, 1945, plaintiff notified defendant of his intention to repurchase the property according to the terms of the option agreed upon, but that defendant refused to perform the option agreement and advised plaintiff that he would not perform; that on July 9, 1945 plaintiff made a formal tender of performance to defendant, and the latter did not specify any objections to the manner or mode...