Schneider v. Noel

• Decision Date: 26 July 1945
• Docket Number: 29652.
• Citation: 160 P.2d 1002,23 Wn.2d 388
• Parties: SCHNEIDER v. NOEL et al.
• Court: Washington Supreme Court

160 P.2d 1002

23 Wn.2d 388

SCHNEIDER v. NOEL et al.

No. 29652.

Supreme Court of Washington

July 26, 1945

Department 1.

Action by Fred C. Schneider against Walter Noel and others for breach of contract and for conversion of property, wherein named defendant cross-complained. At the conclusion of the evidence, a dismissal was granted to defendant J. A. Crimp. From a judgment for plaintiff, defendants Walter Noel and Fred Noel appeal.

Affirmed.

MILLARD J., dissenting in part.

Appeal from Superior Court, Yakima County; N. K. Buck, judge.

Cheney Hutcheson & Gavin and Gordon Hanson, all of Yakima, for appellants.

J. P Tonkoff, of Yakima, for respondent.

STEINERT Justice.

This action was instituted by the plaintiff to recover damages from the defendants for breach of contract and for conversion of property, following upon a transaction in which the defendants are alleged to have sold to the plaintiff a certain tavern business and the assets thereof.

The complaint alleged that on and prior to August 25, 1944 defendant Walter Noel was the owner of a certain tavern in Yakima commonly known as the Circle Inn, and that the defendant Fred Noel had some interest therein, his exact interest, however, being unknown to plaintiff; that on that day those two defendants orally agreed to, and did, sell the tavern to the plaintiff for the sum of $8,500; that the sale included all goods, wares, and merchandise in the tavern, together with all advanced water and light deposits, all liquor licenses relating to the operation of the business and all deposits made therefor, also the leasehold interest in the building in which the business was conducted and rentals paid in advance on the lease, and all equipment, signs, and other personal property connected with the business. The complaint further alleged that it was agreed that plaintiff's check for $8,500 should be held in escrow by defendants' attorney until such time as the Washington State Liquor Control Board had transferred and issued to plaintiff the licenses required for the operation of the tavern; that pursuant to that agreement, and with the consent and authorization of the defendant Walter Noel, the liquor control board issued to the plaintiff a temporary permit enabling him to continue the operation of the business; that on August 26, 1944, Walter Noel delivered possession of the premises to the plaintiff; and that plaintiff operated the tavern for two days thereafter. The complaint then charged that while the liquor control board was in process of transferring the liquor licenses to the plaintiff, as theretofore agreed, the two defendants above named and the third defendant, J. A. Crimp, caused the liquor control board to cancel the transfer of licenses; that about the same time the defendants sold the business to one Genevieve Aiken; that the liquor control board, acting upon the defendants' notification and request, gave notice to the plaintiff that he could no longer operate the tavern; that, because of that situation, plaintiff temporarily locked up the premises; and that, while the place was so closed, the defendants jointly and severally took possession of the tavern and subsequently opened, and have ever since operated, the business without plaintiff's consent. Finally, it is alleged in the complaint that the tavern and business were reasonably worth $12,000 and that plaintiff was damaged in the sum of $4,500.

Defendants in their answer denied each and all of the allegations in the complaint. Further answering, they alleged that the action had not been properly brought by the plaintiff, in view of the inhibitions of the statute of frauds and of the uniform sales act, no adequate consideration having passed between the parties, and no memorandum in writing with respect to the sale ever having been made; that none of the defendants presently had any right of ownership in the tavern and that defendants Fred Noel and J. A. Crimp never at any time during the negotiations here involved had any interest therein.

In explanation of the transaction between the parties, the answer alleged that plaintiff attempted to purchase the tavern, together with all its supplies and equipment, for the sum of $8,500; that the offer was verbal and was made to the defendant Fred Noel acting as the agent of the defendant Walter Noel; that a check for $8,500 was offered to Fred Noel and, on his refusal to accept it, was left with the defendants' attorney, as an offer to purchase the tavern, provided assurance were given that all bills owing by Walter Noel would be paid in accordance with the bulk sales law, or that Fred Noel would give a written guaranty that all such indebtedness would be satisfied; that as an integral part of the proposed sale and purchase, it was orally agreed between the parties that a written agreement would be executed covering the operation of certain pinball machines then located and being used in the tavern; that such written agreement was prepared, but that the plaintiff refused to sign it; that no bill of sale was ever executed by defendant Walter Noel and no transfer of lease or of utility deposits was ever executed by him; and that no payment of the purchase price was ever made by the plaintiff to Walter Noel, and owner of the tavern.

The answer then alleged that the plaintiff took possession of the premises, together with all supplies and merchandise located therein, and operated the tavern for two days, until told by the Washington State Liquor Control Board that he must close, since he had no license or permission to operate; that at all times pending the negotiations hereinabove referred to, the operation of the tavern continued under licenses held by Walter Noel, who paid and was responsible for all salaries, rentals, utility payments, and other expenses incidental to the business; that at no time were the beer and wine licenses transferred to the plaintiff; that no oral or written agreement was ever entered into between the parties respecting the sale or purchase of the tavern; that the terms of the tentative negotiations between the parties were never met by the plaintiff; and that plaintiff's operation of the tavern for the two-day period was without a license so to do and was in violation of both state and Federal laws.

Defendant Walter Noel further countered with a cross-complaint, included in the answer, alleging that, while in occupancy of the premises, plaintiff had sold certain merchandise belonging to Walter Noel and had received certain income from the business, for all of which an accounting was demanded.

The affirmative matter contained in the answer and cross-complaint was denied by the plaintiff, except in so far as it was not inconsistent with the allegations on the complaint.

The cause was tried to the court and jury. At the conclusion of plaintiff's evidence, defendants, challenging its legal sufficiency, moved for a dismissal of the complaint. The motion was denied. At the conclusion of all the evidence, defendants again moved for such dismissal. That motion was likewise denied as to the defendants Noel, but was granted as to the defendant Crimp. Plaintiff acquiesced in the dismissal of the latter-named defendant. The court then gave its instructions to the jury, to which further reference will be made a little later herein, and the jury, after due consideration, returned a verdict against the two remaining defendants, Walter Noel and Fred Noel, in the sum of $2,000. Defendants thereafter moved for judgment notwithstanding the verdict and, in the alternative, for a new trial, both of which motions were denied. Judgment was entered on the verdict, and the defendants Noel appealed.

The assignments of error are directed to (1) the denial of defendants' challenge to the legal sufficiency of the evidence and their motion for dismissal at the close of plaintiff's case; (2) the denial of defendants' motion for dismissal at the conclusion of all the evidence; (3) the denial of their motion for judgment notwithstanding the verdict; (4) the denial of their motion for new trial; and (5) the entering of judgment against the defendants Noel.

The evidence introduced by the respondent, and upon which the jury was warranted in returning its verdict under the instructions given by the trial court, was as follows:

Prior to August 23, 1944, appellant Walter Noel was the owner and operator of a tavern known as the Circle Inn, located in the city of Yakima. At the same time, his cousin, appellant Fred Noel, was the owner and operator of the Mayfair Tavern, which also was located in Yakima. Fred Noel was the older and more experienced of the two men and had financed and counselled his cousin Walter at the time the latter purchased the Circle Inn, in July, 1943. In both of these taverns were certain pinball machines which were owned by Fred Noel individually. Under an agreement between the Noels, the profits from the machines which were located and operated in the Circle Inn were divided equally between the two cousins. Defendant J. A. Crimp was the bookkeeper and accountant for both Fred Noel and Walter Noel. Genevieve Aiken, whose interest in the property here involved came into existence after the controversy between the litigant parties had come to a head as hereinafter related, is the sister of Fred Noel and the cousin of Walter Noel.

On Wednesday, August 23, 1944, respondent, Fred Schneider, having learned that the Circle Inn was for sale and having made several hours' observation of its operations, called on Walter Noel and discussed with him the matter of a possible purchase of the business. Walter told him that 'they' had another deal pending at that time but if that did not materialize, 'they' would be interested in selling to the...