Treadway v. Western Cotton Oil And Ginning Co.

• Decision Date: 18 April 1932
• Docket Number: Civil 3150
• Citation: 40 Ariz. 125,10 P.2d 371
• Parties: L. C. TREADWAY and MARY P. TREADWAY, His Wife, Appellants, v. WESTERN COTTON OIL AND GINNING COMPANY, a Corporation, and PHOENIX SALES AND INVESTMENT COMPANY, a Corporation, Appellees
• Court: Arizona Supreme Court

10 P.2d 371

40 Ariz. 125

L. C. TREADWAY and MARY P. TREADWAY, His Wife, Appellants, v. WESTERN COTTON OIL AND GINNING COMPANY, a Corporation, and PHOENIX SALES AND INVESTMENT COMPANY, a Corporation, Appellees

Civil No. 3150

Supreme Court of Arizona

April 18, 1932

APPEAL from a judgment of the Superior Court of the County of Maricopa. Joseph S. Jenckes, Judge. Judgment affirmed.

Messrs Alexander, Silverthorne & Van Spanckeren, for Appellants.

Mr Charles Woolf, for Appellee Western Cotton Oil and Ginning Company.

No appearance for Appellee Phoenix Sales and Investment Company.

OPINION

LOCKWOOD, J.

L. C Treadway and Mary P. Treadway, his wife, hereinafter called plaintiffs, brought suit against the defendants herein, Western Cotton Oil and Ginning Company, a corporation, and Phoenix Sales and Investment Company, a corporation, hereinafter more particularly designated respectively as the oil company and the sales company, to recover the sum of $4,380 alleged by plaintiffs to be due from the defendants as installments on a certain contract between plaintiffs and the sales company, which was by the latter assigned to the oil company. Apparently the sales company did not defend the action, but a demurrer was interposed to the complaint by the oil company, and sustained, and plaintiffs amended. A second demurrer was interposed to the amended complaint, which was also sustained, and plaintiffs electing to stand on that complaint, judgment was rendered in favor of the defendant oil company, and the matter is before us now for review.

The sole question for our consideration is one of law, involving the construction of two contracts. The facts in the case, as set up in the pleadings, may be stated as follows: Plaintiffs were the owners of a half section of land in Maricopa county. On November 1, 1928; they entered into an agreement with the sales company, the material parts of which read as follows:

"That the first parties agree to sell and the second party agrees to buy all that certain parcel of land situated in the County of Maricopa, State of Arizona, described as follows: The West Half (W 1/2) of Section 11, Township 1 North, Range 2 West of the Gila and Salt River Base and Meridian, for the sum of Forty Thousand Dollars ($40,000.00) payable as follows:

"$1200.00 November 5th, 1928; $2000.00 April 1st, 1929; $2800.00 January 22nd, 1930; and $2000.00 on the 2nd day of January of each following year, until the full purchase price of $40,000.00 is paid hereunder.

"It is understood and agreed that second party shall pay interest on all deferred payments hereunder at the rate of seven per cent (7%) per annum, payable annually on the second day of January of each year. . . .

"It is understood and agreed that the first parties are to execute a good and sufficient warranty deed conveying said property to second party, as of this date, and second party is to execute a quit-claim deed of this date conveying said property to first parties, said deeds to be placed in escrow with the Arizona Title Guarantee and Trust Company, where all payments provided herein shall be made by second party.

"Upon failure on the part of second party to perform promptly all acts required of it herein, including the payment of all sums of money due hereunder, and the payment of all taxes and assessments required by it to be paid by the terms of this agreement, said quit-claim deed and warranty deed is to be delivered to first parties by said Arizona Title Guarantee and Trust Company.

"Upon payment of one-half of the purchase price under the terms of this agreement by second party, said Arizona Title Guarantee and Trust Company is to deliver said quit-claim deed and warranty deed to the party of the second part, at which time second party agrees to execute promissory notes representing the balance of the purchase price then due hereunder, together with a mortgage upon the property sold, securing the payment of said notes by it, and deliver same to first parties. . . .

"Second party agrees to enter upon said premises immediately and farm same in a good and husband-like manner during the life of this agreement, and to allow no noxious weeds or Johnson grass to mature on the premises.

"Time is the essence of this agreement, and the terms hereof are to extend to and bind the heirs, executors, administrators, and assigns of the respective parties hereto."

Upon the execution of said contract the sales company took possession of the premises.

On February 19, 1929, being heavily indebted to the oil company, it entered into an agreement with the latter, the material parts of which read as follows:

"Phoenix, Arizona,

"Feb. 18th, 1929.

"Western Cotton Oil Company,

"Phoenix, Arizona.

"In confirmation of the understanding between us in connection with our note and the chattel mortgage securing the same, executed to you under date hereof, and to complete and carry out our agreement in that connection, we hereby assign to you as additional security for the payment of the indebtedness and obligations mentioned in said chattel mortgage, all our right, title, claim and interest in, to and under the following:

"First. That certain 'Agreement for the Sale of Real Estate,' dated November 1st, 1928, and made by L. C. Treadway and Mary E. Treadway, husband and wife, to us (Phoenix Sales and Investment Co.), wherein the said Treadway and wife have agreed to sell and convey to us the West Half (W 1/2) of Section Eleven (11), Township One (1) North, Range Two (2) West, Gila & Salt River Base & Meridian, Maricopa County, Arizona. . . .

"You are to finance the growing of cotton crops on each of the three above mentioned tracts of land during the year 1929. . . .

"There are certain payments to be made during the year 1929 on the two land purchase contracts above mentioned and hereby assigned. Each and all of these payments you are hereby authorized to make for our account.

"You are further authorized to pay for our account any and all money that you shall find necessary to pay out in connection with the farming operations on the three above mentioned tracts of land for the year 1929 and the growing, gathering, processing, protection and sale of the crops that may be produced thereon during that year. . . .

"Our note to you for Twenty Six Thousand ($26,000.00) Dollars, mentioned in and secured by our said chattel mortgage of even date, is intended to include and cover all advances which it is expected you will find necessary to make in connection with the farming operations of said three tracts of land, the payments necessary to be made under said purchase contracts. . . .

"You are to receive all of the crops and products that may be grown on each of the three parcels of land above mentioned during the year 1929 as well as all proceeds from said crops and products, which proceeds when received by you are to be applied, first, on the payment of said Twenty Six Thousand ($26,000.00) Dollar note with the interest thereon and if any balance of said proceeds remains after the full payment of principal and interest of said note, you are to apply the same on any other indebtedness which we then owe you, including our said indebtedness formerly owed to Western Credit Corporation but which you have now taken over. . . .

"You have the option and privilege of continuing to finance cotton growing and farming operations on the two tracts of land covered by the sales or purchase agreements above mentioned and hereby assigned, during the years 1930 and 1931, by paying such amounts as may be necessary to pay for taxes and for water for irrigation of said land and the amounts necessary to be paid on account of installments of the purchase price of said two tracts in accordance with the terms of said purchase agreement.

"It is understood and agreed, however, that if we should sell all or any part of either of said tracts or the whole of both of said tracts during any one of the three years, 1929, 1930 and 1931, then the tract or portion of tract so sold shall be eliminated from this contract. . . .

"We further understand that after the application on said indebtedness of the proceeds from the 1929 crops above mentioned, together with any proceeds from land sales as hereinbefore mentioned, we are to pay the balance of said indebtedness as follows:

"Not less than Ten Thousand ($10,000.00) Dollars of the principal of said balance on or before January 1st, 1931, together with the interest accrued and unpaid on the entire amount of said balance to that date and the remainder of said indebtedness, with the interest thereon, we are to pay on or before January 1st, 1932. . . .

"It is understood that if and when we fully pay all our indebtedness to you, agreeable to the terms mentioned in the next paragraph hereof, then and in such event, but not otherwise, you will release or re-assign to us the two sale contracts or agreements hereinbefore mentioned and deed to us the sixty-three acres of Garrison land or such part thereof, if any, as may not have previously been sold as herein stipulated.

"Should you, during the years 1930 and 1931, or either of said years, continue to finance the growing of crops on all or any part of the land hereinbefore mentioned, then you are to receive all of said crops and the products and the proceeds thereof and shall have the absolute right to apply said proceeds when received by you on any indebtedness which we may then owe you. . . ."

The oil company thereupon went into possession of the property involved, and farmed it for the years 1929 and 1930, and was still in possession in the spring of 1931, having paid to plaintiffs all sums becoming due under the contract of sale above set forth, up to the installment due ...