Durrett v. Petritsis

• Decision Date: 14 September 1970
• Docket Number: No. 8982,8982
• Citation: 1970 NMSC 119,82 N.M. 1,474 P.2d 487
• Parties: Ray DURRETT, Plaintiff-Appellee, v. Kyriakos PETRITSIS, Defendant-Third-Party Plaintiff-Appellant, v. Loretta SIMPIER, now Loretta Brady, Leroy S. Tipton, Janie Tipton, Third-Party Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 487

474 P.2d 487

82 N.M. 1

Ray DURRETT, Plaintiff-Appellee, v. Kyriakos PETRITSIS, Defendant-Third-Party Plaintiff-Appellant, v. Loretta SIMPIER, now Loretta Brady, Leroy S. Tipton, Janie

Tipton, Third-Party Defendants-Appellees.

No. 8982.

Supreme Court of New Mexico.

Sept. 14, 1970.

Wright & Kastler, Raton, for appellant.

Robert S. Skinner, Raton, for Durrett.

William H. Darden, Raton, for Loretta Brady.

OPINION

McKENNA, Justice.

Durrett, the appellee, sued appellant Petritsis for the balance due on a promissory note in the original amount of $8,500. The complaint alleged that the note was executed by Loretta Simpier (now Mrs. Brady), Janie Tipton and Leroy Tipton, and endorsed by Petritsis. A third-party complaint was then filed by Petritsis against Mrs. Brady and the Tiptons stating that the third-party defendants were primarily liable under the note and demanding judgment against them for any sums recovered by Durrett in the main action. Petritsis denied liability in his answer to the complaint and counterclaimed against Durrett for fraudulent representations in the sale of certain trade fixtures and merchandise, asking for compensatory and punitive damages. Durrett denied any fraudulent representations; Mrs. Brady denied liability in her answer to the third-party complaint. The Tiptons answered separately, admitting their liability under the note. They also alleged that Mrs. Brady had agreed to hold them harmless under the note, and prayed for judgment over against Mrs. Brady for any judgment against them.

All of this arose out of the sale of Duds for Dolls, a retail clothing business. The business was operated by Mrs. Brady and Mrs. Tipton after it was purchased. Intermixed in this was a personal relationship between Petritsis and Mrs. Brady. They were keeping company, but the relationship cooled and terminated as the business faltered.

The issues were tried before a jury. The verdicts were for Durrett on the complaint; for the third-party defendants; against Petritsis on his counterclaim, and against the Tiptons on their complaint that Mrs. Brady had agreed to hold them harmless. In answer to a special interrogatory the jury found that Petritsis was the maker and primarily liable on the note. A judgment was entered for Durrett on the note. Judgment was also entered against Petritsis on his third-party complaint. A motion to set aside the verdict on the third-party complaint and enter judgment for Petritsis or, in the alternative, to grant a new trial, was denied.

This appeal attacks the verdicts on the counterclaim and the third-party complaint as unsupported by substantial evidence, contrary to the evidence, and argues also that the motion was erroneously denied for the same reasons.

Durrett and Petritsis entered into a written contract for the sale of Duds for Dolls. The price for the name, trade fixtures and merchandise was $14,500. The sum of $6,000 was paid to Durrett and the balance was evidenced by the mentioned promissory note for $8,500. Petritsis testified that although he originally purchased the business, the third-party defendants took over the sale, signed the $8,500 note to Durrett and that he endorsed the note purely as a surety or for their accommodation. He stated further that he took back their note for $6,400, which sum represented the down payment of $6,000 and a loan of $400 for the business. This second note, however, is the subject matter of a separate dispute. The Tiptons generally agreed with Petritsis' explanation of the transaction, adding that when the business failed to prosper, Mrs. Brady agreed verbally to take it over and hold them harmless.

Mrs. Brady testified that she never authorized Petritsis to buy the busienss for her and that he bought it himself to provide an income for both of them after their marriage, which never came to pass. Durrett the seller, testified that at no time did Petritsis ever say that Mrs. Brady and the Tiptons were the owners. There was also evidence that after the business ran into financial troubles, Petritsis tried to resell it back to Durrett and also to another party. There was testimony that Petritsis had the 'girls' (Mrs. Brady and Mrs. Tipton) sign the $8,500 note to have them 'be responsible.' What this meant was a matter of conflicting evidence. Suffice it to say that there was conflicting evidence on other material aspects of the transaction.

As to the counterclaim, the contract of sale referred to an itemized list of trade fixtures to be attached as an exhibit to the contract, but it was never attached. The evidence showed that some of the trade fixtures in the store belonged to the landlord, not Durrett. Petritsis claimed he paid for all of the trade fixtures in the store. Mrs. Brady testified that she was present at the taking of the inventory on behalf of Petritsis and that an itemized list was prepared. This list was introduced. The landlord's testimony was that none of the fixtures he owned appeared on the list.

The remaining portion of the counterclaim also claims fraudulent representations in the transfer of certain items of the merchandise inventory. Prior to the sale, these items had been marked down by Durrett for quick sale or as loss leaders. The markdown had been accomplished by running a line through the original retail price and adding the lower sales price. Before the inventory was taken, the seller's wife erased the lower sales price on each of these...