City of Everett v. Sumstad's Estate

• Decision Date: 23 July 1981
• Docket Number: No. 47331-5,47331-5
• Parties: The CITY OF EVERETT, a Municipal Corporation, Plaintiff, v. The ESTATE OF Oddmund SUMSTAD, Deceased, Respondent, and Al Mitchell and Rosemary Mitchell, his wife, Petitioners.
• Court: Washington Supreme Court

Page 853

95 Wn.2d 853

631 P.2d 366

The CITY OF EVERETT, a Municipal Corporation, Plaintiff, v. The ESTATE OF Oddmund SUMSTAD, Deceased, Respondent and Al Mitchell and Rosemary Mitchell, his wife, Petitioners.

No. 47331-5.

Supreme Court of Washington, En Banc.

July 23, 1981.

Lanning & Bryan, Robert S. Bryan, Seattle, for petitioners.

Franklin & Watkins, Wilfred E. Schlicker, Bellevue, for respondent.

DOLLIVER, Justice.

The City of Everett commenced an interpleader action against the seller (the Sumstad Estate) and the buyer (Al and Rosemary Mitchell) of a safe to determine who is entitled to a sum of money found in the safe. Both the Estate and the Mitchells moved for summary judgment. The trial court entered summary judgment in favor of the Estate. The Court of Appeals affirmed. Everett v. Estate of Sumstad, 26 Wash.App. 742, 614 P.2d 1294 (1980).

Petitioners, Mr. and Mrs. Mitchell, are the proprietors of a small secondhand store. On August 12, 1978, the Mitchells attended Alexander's Auction, where they frequently had shopped to obtain merchandise for their own use and for use as inventory in their business. At the auction the Mitchells purchased a used safe with an inside compartment for $50. As they were told by the auctioneer when they purchased the safe, the Mitchells found that the inside compartment of the safe was locked. The safe was part of the Sumstad Estate.

Several days after the auction, the Mitchells took the safe to a locksmith to have the locked compartment opened. The locksmith found $32,207 inside. The Everett Police Department, notified by the locksmith, impounded the money.

We agree with the Court of Appeals that the question is not whether the Estate, through its agent, entrusted the safe and its contents to the auctioneer who sold it in the ordinary course of business. Clearly the entrustment did occur. RCW 62A.2-403(2); see Restatement (Second) of Agency § 26 (1958). The issue is whether there was in fact a sale of the safe and its unknown contents at the auction. In contrast to the Court of Appeals, we find that there was.

A sale is a consensual transaction. The subject matter which passes is to be determined by the intent of the parties as revealed by the terms of their agreement in light of the surrounding circumstances. West Coast Airlines, Inc. v. Miner's Aircraft & Engine Serv., Inc., 66 Wash.2d 513, 518, 403 P.2d 833 (1965). The objective manifestation theory of contracts, which is followed in this state (Plumbing Shop, Inc. v. Pitts, 67 Wash.2d 514, 408 P.2d 382 (1965)), lays stress on the outward manifestation of assent made by each party to the other. The subjective intention of the parties is irrelevant.

A contract has, strictly speaking, nothing to do with the personal, or individual, intent of the parties. A contract is an obligation attached by the mere force of law to certain acts of the parties, usually words, which ordinarily accompany and represent a known intent. If, however, it were proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes upon them, he would still be held, unless there were some mutual mistake, or something else of the sort.

Hotchkiss v. National City Bank of New York, 200 F. 287, 293 (S.D.N.Y.1911) per L. Hand, J.

As stated in Washington Shoe Mfg. Co. v. Duke, 126 Wash. 510, 516, 218 P. 232 (1923):

The apparent mutual assent of the parties, essential to the formation of a contract, must be gathered from their outward expressions and acts, and not from an unexpressed intention.

Washington Shoe Mfg. Co., at 516, 218 P. 232.

The inquiry, then, is into the outward manifestations of intent by a party to enter into a contract. We impute an intention corresponding to the reasonable meaning of a person's words and acts. Plumbing Shop, Inc. v. Pitts, supra. If the offeror, judged by a reasonable standard, manifests an intention to agree in regard to the matter in question, that agreement is established. Gaasland Co. v. Hyak Lumber & Millwork, Inc., 42 Wash.2d 705, 711, 257 P.2d 784 (1953); Washington Shoe Mfg. Co. v. Duke, supra.

There are few reported cases on whether the unknown contents of an item pass with its sale, and even fewer that deal with consensual transactions. The cases are collected in Annot., Title to unknown valuables secreted in articles sold, 4 A.L.R.2d 318 (1949). Those which are pertinent are analyzed by the dissent in Everett v. Estate of Sumstad, 26 Wash.App. 742, 749, 614 P.2d 1294 (1980), and need not be reviewed here.

The case upon which the Court of Appeals relies, West Coast Airlines, Inc. v. Miner's Aircraft & Engine Serv., Inc., supra, is inapposite. In that case, a commercial scrap metal company, Junk Traders, removed several containers of scrap metal from plaintiff West Coast Airlines' storage yard. Inadvertently, two containers in which aircraft engines were stored were removed by Junk Traders along with the scrap metal. West Coast, however, retained Federal Aviation Agency documents of title for the engines. A year later, Mr. Miner, president of Miner's Aircraft, learned about the engines from a competitor of Junk Traders. He purchased both engines for $125 and shortly thereafter resold one of them to a fourth party without the Federal Aviation Agency documents. West Coast first became aware of the mistake as a result of a telephone conversation in which Mr. Miner told a West Coast employee that the Federal records...