Harris v. Morgensen

• Citation: 196 P.2d 317,31 Wn.2d 228
• Decision Date: 22 July 1948
• Docket Number: 30579.
• Parties: HARRIS v. MORGENSEN et ux.
• Court: United States State Supreme Court of Washington

196 P.2d 317

31 Wn.2d 228

HARRIS v. MORGENSEN et ux.

No. 30579.

Supreme Court of Washington

July 22, 1948

Department 2

Action by Lois Harris, a widow, against J. C. Morgensen, and wife on promise to pay $500 for plaintiff's interest in personal property, wherein defendant counterclaimed for damages for amount of alleged indebtedness. Judgment for plaintiff, and defendants appeal.

Reversed and cause remanded with direction.

Appeal from Superior Court, Kitsap County; H. G. Sutton, Judge.

A. J Hutton, of Bremerton, for appellants.

Wallace & Arthur, of Bremerton, for respondent.

BEALS Justice.

The plaintiff in this action, Lois Harris, a widow, as vendee and the defendants J. C. Morgensen and Marie Morgensen husband and wife, as vendors, entered into a written contract dated November 17, 1946, whereby the vendors delivered, and agreed to sell, to the vendee personal property in Kitsap county, Washington, described as equipment, furniture, and supplies, then used in the conduct of a business known as the 'Triple M Restaurant and Ice Cream Parlor,' located at Poulsbo, together with the name and good will of the business.

The contract provided that the vendee might use the property and would pay therefor two thousand dollars, one half of which was paid in cash, the balance to be paid at the rate of fifty dollars or more per month, including interest at the rate of six per cent per annum.

The contract provided that time was of the essence thereof, and that, should the vendee make any default in any condition of the contract, the sellers might terminate the same without notice, and should thereupon be entitled to immediate possession of all of the property and to retain all payments theretofore made. The contract further provided as follows:

'In case default is made and this contract terminated as above provided, the said forfeited payments shall be in full satisfaction of all claims against the buyer arising out of this contract, provided, the buyer shall forthwith peaceably deliver up possession of all goods and chattels to the seller in good order and condition (reasonable use and wear thereof excepted). * * *'

The foregoing contract was regularly acknowledged Before a notary public, and possession of the property was delivered to plaintiff in connection with a lease, bearing date November 17, 1946 between defendants, as lessors, and plaintiff, as lessee, whereby the defendants leased to plaintiff for the term of two years from the date of the lease, at a rental of one hundred dollars per month, payable monthly in advance, premises described as follows:

'A portion of that certain building known as the Triple M dairy located at Irish's corner, near Poulsbo, Washington, decribed as follows: an area approximately 20 X 24 feet being used on the date of this lease as a restaurant and ice cream parlor.'

The lease provided for the payment of the monthly rental on the 17th day of each month during the term, and that, if any rent should be due and unpaid, or if default be made in any of the covenants of the lease, it should be lawful for the lessors to re-enter the premises and remove all persons therefrom. The lease was regularly acknowledged Before a notary public, and, as above stated, plaintiff was placed in possession of the demised premises, which were a portion of a building owned by defendants, in which the latter had conducted and continued to conduct a dairy business.

Plaintiff's operation of the restaurant was not successful. About the middle of April, 1947, plaintiff discussed with defendants the matter of her abandonment of the project. At this time, plaintiff was indebted to defendants under the contract of conditional sale, having failed to make several of the payments provided therefor when the same fell due. Plaintiff was also delinquent under the lease, having failed to pay, when due, some installments of rent, The plaintiff was also indebted to defendants for merchandise which she had purchased from them, in a sum in excess of one hundred dollars, the exact amount of this indebtedness not being disclosed by the evidence.

It nowhere appears that plaintiff was entitled to any offsets against the defendants in connection with any portion of her indebtedness to them above mentioned.

It appears that plaintiff, after for some weeks operating the restaurant on a smaller scale, moved from the premises, May 17, 1947. Plaintiff had previously suggested to defendants the question of making some adjustment between the parties, and, on the date last mentioned, the matter was again the subject of discussion.

No agreement ever having been made and accomplished, August 29, 1947, plaintiff filed her complaint against defendants, alleging the making of the contract of conditional sale above referred to; that plaintiff remained in possession of the premises until May 17, 1947, when she and defendants agreed that the contract should be rescinded; that plaintiff had returned the business, personal property, and leased premises to the defendants, and that '* * * the defendants agreed in writing to pay to the plaintiff the sum of $500.00, in full payment of the plaintiff's interest therein.'

The plaintiff further alleged that, thereafter, defendants took possession of the premises, but that

'* * * notwithstanding the agreement to pay the sum of $500.00 in full of plaintiff's interest in said property, the defendants have failed and refused to pay the said $500.00 or any portion thereof.'

Plaintiff prayed for judgment against defendants in the sum of five hundred dollars, together with costs.

The defendants filed their answer and cross-complaint admitting the execution of the contract of conditional sale, denying that defendants had agreed to pay plaintiff five hundred dollars, and, as an affirmative defense, pleading the terms of the contract of conditional sale and alleging that plaintiff had breached the contract by removing some of the property from the premises, also alleging some further items by way of damages.

By a cross-complaint, the defendants alleged that the plaintiff had not made all of the payments called for by the contracts between the parties, and was indebted to defendants in the sum of $453.15, for which amount defendants demanded judgment against plaintiff.

Plaintiff having replied with denials to the affirmative allegations in defendants' answer and cross-complaint, the action was tried to the court, sitting without a jury, resulting in the entry of findings of fact and conclusions of law in plaintiff's favor, followed by the entry of judgment for the plaintiff and against the defendants, in the sum of five hundred dollars and costs.

The defendants moved for a new trial, and, after the denial of their motion, appealed to this court from the judgment rendered against them.

Appellants asign error upon the denial of their motion to dismiss the action at the close of respondent's case; upon the ruling of the trial court based upon the evidence; upon the entry of the findings of fact, conclusions of law, and judgment signed by the court; upon the refusal of the court to sign findings, conclusions, and judgment proposed by appellants, and upon the entry of the order denying appellants' motion for a new trial.

From the evidence introduced by the respective parties, it clearly appears that respondent's operation of the business was not successful, and that, during the month of April, 1947, respondent decided to abandon the project. May 1st, she took a position at Keyport, where she worked six hours a day, still conducting the business at Poulsbo on a limited schedule. Respondent was unsuccessful in attempting to find a purchaser for the restaurant, and requested appellants to cancel her lease and conditional sale contract. She also requested appellants to return to her some of the money which she had paid to them. These matters were, evidently, on several occasions, the subject of conversation between the parties.

Apparently, appellants were willing to cancel the lease and sale contract, but no definite agreement was reached between the parties concerning respondent's request for the return of some of the money which she had paid.

Friday, May 16th, respondent closed the restaurant, and, on the following morning, appellants began to repaint the premises, although respondent had not yet removed all of her property from the premises.

The trial court found that, May 17, 1947, respondent was in default on account of rental due appellants under the lease, in the sum of one hundred forty dollars, and was in default under the contract of conditional sale, in the sum of two hundred dollars, having failed to make payments aggregating these amounts as the same fell due. At this time, as above stated, respondent was also indebted to appellants for merchandise which she had purchased from them.

On the morning of May 17th, respondent visited appellants, and her indebtedness to them and other matters were discussed. At this time, because of respondent's defaults in paying her rent when due under the lease, and in paying installments on the purchase price of the personal property, as called for by the contract of conditional sale, both contract and lease were subject to termination at appellants' option, and, by the terms of the lease and contract, appellants were entitled to re-enter the premises and take possession thereof and of the personal property. Of coure, the provision of the lease last referred to did not give appellants the right to take forcible possession of the premises, but, nevertheless, appellants were entitled to demand possession thereof from respondent, and were entitled to receive possession of the premises from respondent, unless there existed, in respo...