Claunch v. Jones

• Decision Date: 18 May 1954
• Docket Number: No. 8067,8067
• Parties: CLAUNCH v. JONES et al.
• Court: Idaho Supreme Court

Page 1002

270 P.2d 1002

75 Idaho 271

CLAUNCH v. JONES et al.

No. 8067.

Supreme Court of Idaho.

May 18, 1954.

Albaugh, Bloem, Barnard & Smith, Idaho Falls, for appellants.

Donald R. Good, Blackfoot, for respondent.

PORTER, Chief Justice.

In June, 1949, respondent came into the town of Arco from Salmon City seeking a business opportunity. He contacted appellant, a real estate dealer. An oral agreement was entered into between the parties whereby appellants agreed to sell to respondent four lots in Arco for the price of $4,000. It was the purpose of respondent to construct a motel thereon. No money was paid down. Respondent represented that he had sold his farm near Salmon City on contract and would receive about $15,000 as proceeds from the sale. Permission was granted respondent to start the construction of the motel on such lots.

In August, respondent borrowed $1,500 from appellants, agreeing to pay the same back within thirty days. Such repayment was not made. Later, respondent made application to the First Security Bank of Idaho, Pocatello Branch, for a loan of $5,000 in order to obtain funds to repay the $1,500 and to complete the construction of the motel. As a condition for the loan, the bank required that appellants transfer an undivided one-half interest in the lots to respondent. This was done; and the parties, together with their wives, signed the note and mortgage on the property dated October 4, 1949, for $5,000. The obligation was made payable May 1, 1950, upon the representation by respondent that he would have money at that date from the proceeds of the sale of his farm.

When the note and mortgage fell due respondent did not pay the same. He had not fully completed the construction of the motel. He had sizable outstanding accounts for labor and material. The bank requested the payment of the obligation. Appellant Jones was told by respondent that he could not pay the note and mortgage.

On June 5, 1950, R. S. Tysom, Vice President of the First Security Bank in Idaho Falls, with a Mr. Wasley, assistant manager of such bank, at the request of the Pocatello Bank, came to Arco to get a settlement on the note and mortgage. Mr. Tysom had a meeting with Jones and Claunch. He advised them the bank would not renew the loan to both parties, but that if the property were deeded to appellants the bank would renew the $5,000 loan. At a subsequent meeting the same day, a quitclaim deed was signed and delivered by respondent and wife to appellants. The quitclaim deed recited a consideration of one dollar and other valuable consideration.

By his amended and supplemental complaint, respondent alleged that at the time of the execution of the quitclaim deed there were outstanding obligations for labor, materials and supplies used in the construction of the motel as follows: To Montgomery Ward & Co., the sum of $1,831.25; which indebtedness respondent has since compromised and paid by disbursement of the sum of $1,200. To Merrill Brothers for gravel and building materials in the sum of $85; which amount is due, owing and unpaid. To Salmon Electric in the sum of $571.09; which said amount is due, owing and unpaid. To the Federal Housing Administration for the reasonable value of the furnace in the sum of $832.63; which sum is due and unpaid. To the Boise-Payette Lumber Co., in the sum of $2,466.78; which indebtedness has been compromised and settled by appellants.

It was further alleged in said amended and supplemental complaint that appellants agreed to assume, pay and discharge said items of indebtedness as part of the consideration for the quitclaim deed, but have failed, neglected and refused so to do. Respondent prayed judgment for the total of the indebtedness paid by him and the unpaid obligations in the sum of $2,688.64; and for $300 attorney's fees.

By their answer, appellants denied that as part of the consideration for such quitclaim deed or otherwise, they agreed to assume and pay any indebtedness save and except the $5,000 mortgage. They alleged a lien for the Boise-Payette Lumber Co., obligation was filed against the property and appellants were thereby compelled to settle such obligation. Upon the issues thus made trial was had to the court sitting without a jury. The court made findings of fact and conclusions of law favorable to respondent and entered judgment against appellants for the total of the items of indebtedness, both paid and unpaid by respondent, together with $300 attorney's fees; and made the whole thereof a lien upon the property in question. From such judgment this appeal has been taken.

Appellants contend upon this appeal that the evidence is insufficient to sustain the court's finding and judgment that appellants, as a part of the consideration for the quitclaim deed, agreed to assume, pay and discharge any obligations of respondent for labor and materials used in the construction of the motel or incurred in connection therewith, save and except the $5,000 mortgage. Appellants recognize the well-established rule that this court will not disturb the findings of the trial court where there is any competent and substantial evidence to sustain them although the evidence may be meager and conflicting.

Appellants rely upon the also well-established rule that the appellate court is not bound by the findings of the trial court and the judgment based thereon, where they are not sustained by substantial evidence. Harding v. Home Investment, etc., Co., 49 Idaho 64, 286 P. 920, 297 P. 1101; Clark v. Clark, 58 Idaho 37, 69 P.2d 980; Bussell v. Barry, 61 Idaho 216, 102 P.2d 276.

Let us examine the evidence as to what was said and occurred between the parties with reference to the consideration for the quitclaim deed. Respondent testified as to what was said at the meeting between Mr. Jones, Mr. Tysom, Mr. Wasley and respondent on June 5, 1950, as follows:

'Q. Will you tell The Court generally as best you can recall what this conversation was between the four of you? A. Well, Mr. Tysom told me that Mr. Severn from the First Security Bank in Pocatello had asked him to bring the note to a conclusion, and the one Mr. Jones had at the First Security Bank in Pocatello----

'Q. That is this five thousand dollar note? A. The five thousand dollar note--And he asked me if I had the money to pay it, and which I didn't, and asked if I would assign my interest in the Motel to Mr. Jones and they could give Mr. Jones an extension of the note, but they couldn't give us both one.

'Q. Did he give any reason for his inability--inability of the bank to make an extension? A. No they didn't.

'Q. Now, what was the rest of the conversation that you can recall? A. Well, I told them I would be willing to assign my interest to Mr. Jones along with the outstanding accounts.

'Q. What do you mean, assign your interest together with the outstanding accounts, explain that? A. Well, I would do it if he would assume the accounts which was against the Motel.

'Q. Now--Your understanding was reached with respect to that proposition? A. It was my understanding, yes.

'Q. Well, what was the understanding?' (To this question an objection was sustained.)

Respondent testified that later in the day a Mr. Boyatt, Mr. Tysom and Mr. and Mrs. Jones came to the house where respondent was working; and that they brought a quitclaim deed. He further testified:

'Q. And what--Can you recall the conversation that took place then? That's up to the house there before you signed the deed? A. Well, they brought the deed up and asked if I would sign it and I wouldn't do it, and I discussed the accounts and I asked Mr. Boyatt for legal advice on the thing and he said he couldn't give me any because he was representing Mr. Jones.

'Q. Well, did you sign the deed at that time? A. Yes, we discussed the accounts to the point--and I asked Mr. Tysom who would be responsible for the accounts against the Motel, and he said he thought legally in his mind Mr. Jones would be. We discussed the accounts for quite some time before I signed the deed.'

He further testified that Mr. and Mrs. Jones came down to the motel where respondent and wife were living later that evening and wanted to know what the outstanding accounts were against the motel.

He also testified that four or five days later, he stopped in at the office of Mr. Jones with reference to the outstanding accounts and the following conversation took place:

'Q. Will you relate the conversation that took place between Mr. Jones and yourself at that time? What did you say, and what did he say? A. Well, I told Mr. Jones some of these people were riding me on these accounts, and asked him what he was going to do, and Mr. Jones said he wouldn't say he wasn't going to pay them but was going to beat them down all he could.'

Mrs. Ethel Novotney, the wife of respondent at the time the quitclaim deed was executed, testified concerning the occasion of the signing of the deed as follows:

'A. Well, it seems the first that was said was Mr. Boyatt, said that he had the quit claim deed made up and wanted to know if we would sign it, and then I think that Wesley asked Mr. Jones at that...