Nationwide Resources Corp. v. Massabni
| Decision Date | 04 November 1982 |
| Docket Number | CA-CIV,No. 2,2 |
| Citation | 658 P.2d 210,134 Ariz. 557 |
| Parties | NATIONWIDE RESOURCES CORPORATION, an Arizona corporation, Plaintiff/Appellant, v. Bertha S. MASSABNI and Fadlo Massabni, husband and wife; and Pierre M. Zouheil, Defendants/Appellees. 4293. |
| Court | Arizona Court of Appeals |
This is a contract case. The major issue is whether there was a valid offer and acceptance. Appellees have filed a "cross-appeal". However, since they prevailed in the trial court, we shall treat their cross-appeal as a cross-issue. See DeLozier v. Smith, 22 Ariz.App. 136, 524 P.2d 970 (1974); Aegerter v. Duncan, 7 Ariz.App. 239, 437 P.2d 991 (1968).
Nationwide Resources Corporation (Nationwide) owned a restaurant business in Sierra Vista, known as the A & W Drive-In Restaurant. The owner of the real estate on which the restaurant was located was Cochise Enterprises, Inc. Fadlo Massabni was a colonel in the United States Army stationed at Fort Huachuca, which is located adjacent to Sierra Vista. Pierre Zouheil was a friend of the Massabnis and lived in Morocco.
The business was listed with Century 21 Great American Realty, a Sierra Vista brokerage, through Vicki Dickson. Richard Hyatt, an agent of Century 21, showed the A & W restaurant to the Massabnis and Zouheil. Thereafter, Mrs. Massabni, with her husband's consent, formed a partnership with Zouheil in order to purchase and operate the restaurant. The actual operation of the restaurant was to be done by Mrs. Massabni. Mrs. Massabni and Zouheil were to be 50-50 partners. She contributed $16,000 to the partnership capital, which came from a loan that Colonel Massabni had obtained for her. This loan was secured by a joint account.
On August 14, 1978, Mrs. Massabni and Zouheil made an offer to buy the restaurant. After negotiating with Harold Freedman, the vice president of Nationwide, they arrived at new terms and on August 16, 1978, the partners signed a written offer to buy the business and assume the existing 18-year lease.
The partners, in accordance with the terms of their offer, also signed a $2,000 promissory note, which was an earnest money deposit and was to be redeemed by them "... upon written acceptance of the offer".
The written offer had a signature line for the seller with the legend: "Acceptance of Offer: I (or we) accept this offer to sell the above described property on the terms and conditions herein stated, acknowledge receipt of a copy of this document, and agree to pay the Broker's fee...."
On the evening of August 16, Hyatt and Mrs. Massabni spoke on the telephone with Morton Freedman, the president of Nationwide and brother of Harold Freedman. Morton was in California at the time. Hyatt related the terms of the offer to Morton who in turn told Mrs. Massabni that they were acceptable. Hyatt told the partners that a mailgram confirming the acceptance would be forthcoming.
The next morning Hyatt called Harold Freedman who lived in Tucson, told him what had happened the night before and asked him to send an acceptance by mailgram. After consulting with his brother on the telephone, Harold sent the following mailgram to Vicki Dickson:
On August 19, Hyatt gave the mailgram to Mrs. Massabni and Zouheil. Pursuant to the terms of their offer the partners redeemed the promissory note by giving Hyatt a check for the earnest deposit.
After receiving the mailgram Mrs. Massabni visited the restaurant almost every day, inquired about the repair required by the contract, interviewed the employees of the restaurant, proposed "house rules" to govern their conduct, and obtained an application for a business license.
In the meantime, Morton Freedman received a copy of the contract. It was noticed that there were errors in the contract. For example the offer erroneously provided that the sellers, rather than the buyers, would give the promissory note by which the bulk of the purchase price was to be paid. Furthermore, it failed to provide that the note would be secured by the property. All parties agreed that this was an error and that the note was to be secured.
Morton Freedman took the agreement to his lawyer, Marvin Cohen, and asked Cohen to do whatever was appropriate to correct the situation. Cohen made an addendum to the agreement and sent it to Hyatt with the following letter:
"Enclosed please find a form of addendum to the offer of August 16, 1978 from Zouheil and Massabni. I understand that the seller is willing to sell on the terms stated in said offer, as amended by the enclosed form of addendum.
Please advise me or the Freedmans concerning the willingness of Zouheil and Massabni to agree to the enclosed addendum.
If there are any problems with the form, please let me know...."
The addendum did three things. It corrected the scriveners errors with respect to who was giving the note, it provided that the note would be secured and, in exchange for a personal guarantee of one-half the amount of the note by Colonel and Mrs. Massabni, it permitted a corporation to execute the closing documents instead of Zouheil and Mrs. Massabni. (Zouheil and the Massabnis had seen Robert Morrison, an attorney, on August 18, 1978, about incorporating.) On August 25, the Massabnis had decided not to go through with the purchase of the restaurant and they went to see Robert Morrison, their lawyer. Morrison had obtained a copy of the addendum. Colonel Massabni was not in agreement with the personal guarantee and Morrison contacted Nationwide. He told them that Mrs. Massabni would not go through with the purchase.
The final closing of the sale was scheduled for September 22, 1978, and on that date Morrison wrote the following letter to the title company:
We should also mention that Cochise Enterprises, Inc., had, on September 7, 1978, executed a release and consent to assignment, which released the present lessees, Michael J. McGinn and Hope McGinn, from the A & W Drive-In lease and consented to the sublease of the property to Zouheil and Mrs. Massabni. The closing never took place and this suit followed.
The case was tried to the court sitting without a jury, and judgment was entered for appellees after written findings of fact and conclusions of law were made. The conclusions of law upon which its final judgment was based were as follows:
" * * *
6. Since Bertha Massabni and Peter Zouheil were married and their spouses did not sign the offer, the offer violated the provisions of A.R.S. 25-214(c)(1).
7. The interest of Bertha Massabni and Peter Zouheil and that of their respective spouses, in the business venture was community property.
8. The unsigned mailgram violated the Statute of Frauds.
9. The offer as written required that the acceptance contain the signature of the seller.
10. No circumstances justified the use of a mailgram as a substitute for a written acceptance containing the signature of the seller.
11. The offer was withdrawn by the Plaintiff prior to acceptance.
12. Plaintiffs, by their counter offer made by Mr. Cohen, withdrew the offer."
Appellant presents the following questions for our review: * * * "
Were the signatures of the spouses of Mrs. Massabni and Zouheil necessary in order to make a valid offer? Since the leasehold interest was involved, appellees contend that A.R.S. § 25-214(C)(1), which requires both spouses to join in any transaction involving the acquisition of an interest in real estate, required the signatures of the respective spouses. We first note that there is no evidence that Zouheil was married. In any event, the joinder of the spouses was not necessary.
DeFuniak in his work Principles of Community Property, discusses the problem:
" * * *
If the wife becomes a partner in a commercial partnership and invests or employs therein community property under her management or community property under the management of the husband and which he consents to her so using, or even if her contribution to the partnership consists of her services which is to entitle her to membership, the partnership earnings and gains to which she becomes entitled constitute community property. But it must be kept in mind that the marital ownership of such earnings and gains, or in other words the ownership therein of the wife and her husband by halves, exists only as they represent profits coming from the wife's partnership interest after the claims of the partnership creditors and the equities of the partners have been satisfied. Likewise, so far as community property is invested by the wife in the commercial...
To continue reading
Request your trial
-
Demasse v. ITT Corp.
...See Angus Med. Co. v. Digital Equip. Corp., 173 Ariz. 159, 164, 840 P.2d 1024, 1029 (App. 1992); Nationwide Resources Corp. v. Massabni, 134 Ariz. 557, 563, 658 P.2d 210, 215 (App.1982); Coronado Co. v. Jacome's Dep't Store, Inc., 129 Ariz. 137, 140, 629 P.2d 553, 556 (App.1981); Yeazell, 9......
-
Rigden, In re
...not necessarily serve to defeat the formation of a contract if that mistake was unilateral. See Nationwide Resources Corp. v. Missabni, 134 Ariz. 557, 564-65, 658 P.2d 210, 217-18 (Ct.App.1982). See also Restatement (Second) of Contracts Sec. 153 (1981). There are issues of fact which shoul......
-
Chase Bank of Arizona v. Acosta
...demonstrate to this court the connection between this appeal and those adversary claims. See, e.g., Nationwide Resources Corp. v. Massabni, 134 Ariz. 557, 565, 658 P.2d 210, 218 (App.1982). III. Is the Acosta marital community liable for any indebtedness of Acosta as a partner of the Meadow......
-
State v. Wagner
...have on the sentencing issue. Consequently, we decline to address these provisions separately. See Nationwide Resources Corp. v. Massabni, 134 Ariz. 557, 565, 658 P.2d 210, 218 (App.1982).2 Appellant did not object below to the statutory sentencing provision or the imposition upon him of a ......