Jerger v. Rubin

• Decision Date: 03 July 1970
• Docket Number: No. 9974--PR,9974--PR
• Citation: 471 P.2d 726,106 Ariz. 114
• Parties: Frank I. JERGER and Bertha Jerger, his wife, Appellants, v. Morris J. RUBIN and Sari J. Rubin, his wife, Appellees. Ed THIRKHILL, Ed Thirkhill Realty, Cross-Appellants, v. Frank I. JERGER and Bertha Jerger, his wife, Cross-Appellees.
• Court: Arizona Supreme Court

Page 726

471 P.2d 726

106 Ariz. 114

Frank I. JERGER and Bertha Jerger, his wife, Appellants, v. Morris J. RUBIN and Sari J. Rubin, his wife, Appellees.

Ed THIRKHILL, Ed Thirkhill Realty, Cross-Appellants, v. Frank I. JERGER and Bertha Jerger, his wife, Cross-Appellees.

No. 9974--PR.

Supreme Court of Arizona, In Banc.

July 3, 1970.

Sullivan & Mahoney, by William P. Mahoney, Jr., Phoenix, for appellants.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, by Wilbert G. Anderson, Phoenix, for appellees.

Milliken & Mitchell, by James T. Milliken, Scottsdale, Moeller, Hover, Jensen & Henry, by James Moeller, Phoenix, for cross-appellants.

LOCKWOOD, Chief Justice:

This is an appeal, by the sellers of a parcel of land, from a judgment of the Superior Court rescinding the contract of sale. The Court of Appeals, Division 1, Department B, reversed the judgment of the Superior Court, and this Court granted review. The opinion of the Court of Appeals, 11 Ariz.App. 183, 463 P.2d 78 (1969), is vacated and the judgment of the Superior Court is affirmed.

The facts show that in 1964 the defendant-sellers, Frank I. Jerger and his wife, were the owners of a five acre parcel of land located on North Scottsdale Road and Shea Boulevard in Scottsdale, Arizona. The property was zoned commercial. On June 1, 1964, the Jergers sold the entire parcel to the plaintiffs, Morris J. Rubin and his wife. The sale was negotiated by cross-appellant-defendant, Ed Thirkhill realty, through its salesman, R. L. Stamper. Stamper was a defendant at the trial, but is not a party to this appeal.

In February 1964, defendant Stamper contacted the plaintiffs and advised them that he had an unusually attractive real estate deal consisting of a five acre commercial parcel. The price of the property was $125,000. The deal was particularly attractive because, according to plaintiffs' testimony, Stamper told them that Shell Oil Company 'had agreed' to purchase a corner portion of this property for $75,000 and that the Shell Oil deal would be closed 'back-to-back' with plaintiffs' purchase of the entire parcel. Stamper further advised plaintiffs that the sellers could not take advantage of the Shell deal because they had to sell the parcel as a five acre unit to avoid adverse tax consequences.

Following these representations, plaintiffs agreed to purchase the property. The purchase contract, which took the form of a trust agreement, required a down payment of $36,250 and the balance in four annual payments with the first annual principal and interest payment due June 2, 1965.

After the transaction was closed, plaintiffs inquired of Stamper on several occasions as to the progress being made on the purchase by Shell Oil. Stamper informed them that he felt he could obtain an additional $10,000 over and above the original deal and, therefore, had not closed the deal. The additional $10,000 did not materialize, and in January or February of 1965 plaintiffs advised Stamper to accept the original $75,000 purchase price. At this time, Stamper told plaintiffs that Shell had decided not to purchase the site because of a Scottsdale sign ordinance then in effect. However, he informed plaintiffs that he had contacted another party (Ray A. Brashear) who was willing to purchase the site for $65,000. Based on this representation, plaintiffs authorized Stamper to set up an escrow for the sale of the site. This escrow was established on March 4, 1965.

Brashear testified that he told Stamper that he was only interested in the service station site if it had a firm lease on it. He also testified that prior to the trial, he had never seen the escrow instruments Stamper prepared for the site.

In April 1965 Stamper again contacted plaintiffs and advised them that because of domestic problems, Brashear would be unable to purchase the site. He related, however, that he had an additional purchaser for the service station property (the Rothchilds) who would purchase the site for the same price.

Pursuant to this last representation, plaintiffs and the Rothchilds both signed escrow instructions agreeing to the sale of the site for $65,000. This sale, however, was expressly contingent upon a lease being secured with American Oil Company, which Stamper represented would be forthcoming.

While the Rothchild escrow was pending, plaintiffs contacted defendant sellers, asking for an extension of time to make the initial annual payment due on June 2, 1965. Although hesitant at first, defendant sellers agreed to an extension on the principal payment, provided that the interest payment was made on time.

On May 16, 1965, plaintiffs contacted another real estate agent, and from that contact requested defendant Stamper to show them his files concerning the property. A search of Stamper's files revealed that there had been no negotiations with Shell Oil Company, or with any other oil company, concerning either a sale or lease of this property. At the trial this was verified by representatives of American Oil Company and Shell Oil Company who testified that their respective companies had no files that would reflect any dealing on the parcel of land in question.

Plaintiffs failed to make the interest payment on June 2nd, and on June 25, 1965, defendant sellers issued a notice of forfeiture against plaintiffs. On July 13, 1965, plaintiffs offered to rescind the transaction because of the alleged fraud of defendant Stamper. This offer was rejected, the property was forfeited back to defendant sellers, and this suit for rescission by plaintiffs followed.

The trial court sitting without a jury found for plaintiffs and granted rescission. Since the forfeiture of plaintiffs' interest had already occurred, the trial court granted judgment against defendant sellers for the down payment price, granted judgment for defendant sellers against the defendant Thirkhill for the amount of commission paid, and for defendant sellers and against defendant Stamper for the balance of the down payment. Further, defendant Thirkhill was granted judgment against defendant Stamper for the amount of commission paid him.

Defendant sellers appeal from the judgment granting rescission and the money judgment against them, and defendant Thirkhill appeals from that portion of the judgment entered in favor of defendant sellers against it. Defendant Stamper did not appeal the judgment against him.

The trial court was not requested to, and did not make findings of fact or conclusions of law. Accordingly, this Court must view the evidence and reasonable inferences therefrom in the light most favorable to plaintiffs and if there is any evidence to support the judgment it must be affirmed. Balon v. Hotel & Restaurant Supplies, 103 Ariz. 474, 445 P.2d 833 (1968). Defendants' first contention is that Stamper's alleged representations were not actionable as a basis of rescission because they did not relate to a present fact. Defendants argue that the representations as to the Shell Oil deal were either merely 'puffing' statements or were statements of a future probability or expectation. This contention, however, misses the thrust of plaintiffs' allegations and the evidence as developed at the trial.

The evidence adduced at trial shows that when Stamper first approached plaintiffs, he represented that he had negotiated with Shell Oil and that they 'had agreed' to purchase the service station site and that this sale would be closed 'back-to-back' with the purchase from defendant sellers. it is true that the Shell Oil deal was to be closed after the sale between plaintiffs and defendants. The falsity of the representation that the deal would be closed 'back-to-back' is not what plaintiffs have relied upon to support their cause of action. The representation relied upon was the fact that Stamper had contacted and been in negotiations with Shell. The evidence clearly showed that he had not. Cf. Miller v. Boeger, 1 Ariz.App. 554, 405 P.2d 573 (1965).

Defendants' second contention is that plaintiffs, by laches, waiver and estoppel, lost any right they may have had to relief by rescission or damages.

The defense of laches, waiver and estoppel, are all affirmative defenses. Ariz.R.Civ.P., Rule 8(d), 16 A.R.S. As such, it is the defendant's duty to plead and prove each.

The defense of laches, estoppel, and waiver raise similar questions of law and fact and can be discussed together for the purpose of this appeal. Laches, a form of estoppel, is a defense where, because of delay or by lapse of time, the party asserting the defense either is injured (by the mere lapse of time) or changes his position in...