State Farm Mut. Auto. Ins. Co. v. Sargent, 63713

• Decision Date: 15 April 1982
• Docket Number: No. 63713,63713
• Citation: 354 S.E.2d 833,162 Ga.App. 127
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. SARGENT et al.
• Court: Georgia Court of Appeals

Page 833

354 S.E.2d 833

162 Ga.App. 127

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. SARGENT et al.

No. 63713.

Court of Appeals of Georgia.

April 15, 1982.

Malberry Smith, Jr., Luhr G.C. Beckmann, Jr., Savannah, and Andrew J. Hill III, for appellant.

Joseph P. Brennan, Delano Maurice and J. Walter Cowart, Savannah, for appellees.

DEEN, Presiding Judge.

State Farm Mutual Automobile Insurance Company brought a petition for a declaratory judgment and injunction against Sargent, Vincent, and Travelers Indemnity Company. At trial, the evidence showed that Mrs. Sargent (who was confined to a nursing home) asked her daughter, Mrs. Fries, to sell her automobile for her. On several occasions, the daughter showed the vehicle to prospective purchasers and allowed them to test drive it. At least one of the prospective purchasers was permitted to keep the vehicle overnight. Vincent, a long-time friend of Mrs. Fries, expressed an interest in the automobile and asked if he could test drive it for several days. He took possession on a Tuesday and on Wednesday telephoned Mrs. Fries and offered to pay the asking price of $900 provided he could obtain financing from his credit union. It was agreed that he would return the vehicle to Mrs. Fries on Thursday morning (Thanksgiving) when he had lunch with her and she was to retain possession until Vincent paid for it. He could not apply for a loan at the credit union until Friday because Thursday was a legal holiday. Early Thursday morning, Vincent was involved in a one-vehicle accident, the automobile was never returned to Mrs. Fries, no papers of sale or transfer of title were ever prepared or signed by the parties, and Vincent did not pay for the automobile. At trial, the parties stipulated that the sole issue to be decided was whether or not there was a purchase and sale of the vehicle. The answer to this question would determine whether Travelers (Vincent's insurance carrier) or State Farm (Mrs. Sargent's carrier) would be responsible for insurance coverage. Both sides moved for a directed verdict on the issue of ownership. The trial court denied State Farm's motion and sustained Travelers' finding that a sale had not taken place. State Farm appeals following the denial of its motion for a j.n.o.v. Held:

In order to find whether or not a sale had taken place we must first determine whether there was a binding agreement between Vincent and Mrs. Fries. The evidence is uncontroverted that the sale was to be consummated only if Vincent could obtain financing. No papers were ever signed or drawn up and both parties agree that Vincent's oral offer was contingent upon his receiving a loan from his credit union and but for the accident the vehicle would have been returned to Mrs. Fries' possession on Thursday morning. Mrs. Fries testified that she did not intend Vincent's offer conditioned upon obtaining financing to be a binding sale of the automobile: "To me a sale is money in hand, and when I get money in hand, then I'll give you the tag receipt and title and transfer it over." While Vincent testified that he did not anticipate difficulty in obtaining financing and that he had an outstanding loan with the credit union, he did not intend to be bound to purchase the automobile if he could not obtain financing. He testified, "If I did not get financing there would be no sale."

While the "existence vel non (or not) of mutual intention is ordinarily a question of fact which is reserved for determination by the jury," Siegel v. Codner, 153 Ga.App. 438, 442, 265 S.E.2d 287 (1980), the evidence is undisputed that neither party considered themselves to be bound by a contract of sale until Vincent obtained a loan to cover the purchase price of the automobile. The parties are in complete agreement that obtaining financing was a condition precedent to the formation of a contract of sale as both Vincent and Mrs. Fries testified that they did not intend to be bound to a contract of sale in the event Vincent was unable to obtain financing. "In the case of a condition precedent, the condition must be performed before the...