Logan v. O. S. Stapley Co.
| Decision Date | 17 February 1971 |
| Docket Number | No. 1,CA-CIV,1 |
| Citation | 480 P.2d 680,14 Ariz.App. 65 |
| Parties | Samuel Burr LOGAN and Helen Logan, husband and wife, doing business as Logan Drilling Company, Appellants, v. The O. S. STAPLEY COMPANY, a Arizona corporation, Appellee. 1087. |
| Court | Arizona Court of Appeals |
Minne & Sorenson, by George Sorenson, John W. Rood, Phoenix, for appellants.
Jennings, Strouss & Salmon, by Charles E. Jones, Phoenix, for appellee.
This appeal involves questions arising from the proof of a written chattel lease contract 1 between lessee-appellant, Samuel Burr Logan, hereafter called 'Logan' and the lessor-appellee, The O. S. Stapley Company, hereafter called 'Stapley', and the proof of the agency relationship and authority of Ed Hallmark to execute the lease contract on behalf of Logan with Stapley. The trial court, sitting without a jury, ruled in effect that the agency relationship was proven, as were the damages, and awarded Stapley judgment in the sum of $1700, together with interest and costs. Logan appeals from that judgment.
In 1967 this case was before this Court to review the trial court's involuntary dismissal of Stapley's case pursuant to Rule 41(b), Rules of Civil Procedure, 16 A.R.S. See O. S. Stapley Co. v. Logan, 6 Ariz.App. 269, 431 P.2d 910 (1967). We reversed the trial court and remanded the case for trial because our review of the record revealed that Stapley had established a prima facie case that Logan had clothed Ed Hallmark with apparent or ostensible authority to execute the contract with Stapley on his behalf. On remand to the trial court, the case was retried in early 1969 without a jury. Neither party requested findings of fact and conclusions of law and none were made by the court. Under such circumstances we are required by law to draw all inferences which arise from the evidence in favor of sustaining the judgment. Rosen v. Hadden, 81 Ariz. 194, 303 P.2d 267 (1956); Kay v. Biggs, 13 Ariz.App. 172, 475 P.2d 1 (1970).
Logan raises five questions on appeal as follows:
1. Did plaintiff prove a breach of contract?
2. Did plaintiff establish any damages as the result of the alleged breach of contract?
3. What was the authority of Ebert, if any, to execute credit statements?
4. Was the conduct of defendants with respect to Hallmark and Ebert such as to establish the business left in the hands of agents?
5. Did defendants ratify the actions of Ebert and Hallmark?
The first two questions relate to the lease contract, while the last three questions involve the proof of the agency relationship. We will discuss the related questions in the same context.
The contract in this matter consists of a written document drawn in the form of a lease wherein Stapley is designated the 'lessor' and Logan Drilling Co. is described the 'lessee'. The 'Equipment Leased' or bailed consisted of construction equipment, generally, one International Tractor, one Wagner Backhoe, and one Wagner Loader. The term of the lease was for a 6-month period with the 'lessee' granted the option to purchase the leased equipment. 2 The lease was executed by Ed Hallmark on behalf of Logan Drilling Co. on February 14, 1962, and by John C. Dutton on behalf of Stapley on February 20, 1962. It provided that possession of the leased equipment was delivered to the lessee conditioned upon the payment to the lessor of $550 plus tax ($19.25) each month for the 6-month term of the lease. The first payment in the sum of $569.25 was received from Logan Drilling Co. by lessor on February 17, 1962, and the second and last payment was received from the lessee on May 5, 1962. The leased equipment was returned to Stapley one month early, on July 1, 1962, and the instant case was filed for the recovery of three months 'rent' or $1700 (rounded off). The lease provides in part:
11. In the event the lessee accepts the machinery and equipment, as herein provided, and thereafter the said machinery proves defective or unfit for use, because of accident or otherwise, or, if for any other reason lessee desires to discontinue the use of said machinery or equipment, the only remedy of lessee shall be to return the machinery to lessor and terminate this contract as herein elsewhere provided, by paying all rental charges and other charges herein provided for, which in no event shall be less than the transportation charges on said machinery and equipment and minimum rental herein provided for.
* * *
* * *
21. The lessee agrees to pay all rentals when they are due and for all services and materials furnished and all damages and sums due the lessor under this contract as soon as the loss occurs or services are rendered or materials are furnished. The taking of notes, or renewals thereof, covering rentals herein specified shall not in any manner whatsoever change or invalidate the terms and conditions of this contract.
* * *
* * * 25. This lease before becoming effective must be approved by an officer of the lessor, at the home office of the lessor.
Logan first questions whether a breach of the lease contract was proven. As we have seen, the contract specifically called for the payment of a specified rent to the lessor each month and the lessee undertook to pay this obligation as it accrued. (Par. 21). The record shows that three payments were not made before the leased equipment was returned on July 1 (Par. 11). By the express terms of Paragraph 21 of the contract, upon the non-payment of rent a breach occurred. Ogonowski v. Bankers Leasing Corp., 8 Ariz.App. 484, 447 P.2d 576 (1968); 8 Am.Jur.2d, Bailment, § 127, p. 1021.
Logan next contends that Stapley failed to prove its damages. The record does not support this contention. The lease provides that all rentals were due monthly in advance and payable at Stapley's office in Phoenix. It further provided that the lease would become effective upon approval of an officer of Stapley. This approval occurred on February 20, 1962, when Mr. John C. Dutton executed the lease on behalf of Stapley. The monthly rental cycle, as we see it, began on February 20, 1962. The first monthly payment made by the lessee was for the first month's period, February 20 to March 19; the second and last payment, made in May, was for the next monthly rental period then due--March 20 to April 19. No other payments were made by Logan and the leased equipment was returned to Stapley on July 1, 1962. Under the express terms of the lease, three payments in the sum of $569.25 were due at the time the equipment was returned--the payments for April 20, May 20, and June 20, or $1700 (rounded). Paragraph 11 of the lease, supra, provides for the July 1st termination of the lease by the return of the equipment conditioned upon '* * * (Logan) paying all rental charges and other charges herein provided for. * * *' One of these charges is for the minimum rental period which is defined on the face of the lease as a '* * * a minimum period of 6 months. * * *' However, Stapley limited its prayer in the complaint and its proof of damages to a 5-month period because of the clear language of Paragraph 11 of the lease dealing with termination of the lease upon redelivery of the equipment. We hold that the trial court applied the proper measure of damages under the circumstances of this case and that the record supports the trial court's determination of damages. See 9 Williston on Contracts, § 1041, p. 925 (3rd Ed.1967); 8 Am.Jur.2d, Bailments, § 330, p. 1217.
Logan's last three questions on appeal question the sufficiency of the proof of the agency relationship between Logan and his office manager Ebert, and Hallmark, who executed the lease on behalf of Logan. In our prior opinion, O. S. Stapley Co. v. Logan, supra, we set out in some detail the evidence that made out a prima facie case for the plaintiff Stapley. We said at p. 273 of 6 Ariz.App. at p. 914 of 431 P.2d:
* * * Logan, albeit due to his illness, had allowed his business to continue in the hands of his employees. His absence from the business who to be for some period of time. From his actions of delegating authority to Ebert and expecting him, as office...
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