Christianson v. Mincoff

Appeal by plaintiffs from an adverse judgment in an action for money had and received, tried by the judge of the district court sitting without a jury. The record does not disclose whether the services of a jury were dispensed with by the parties by stipulation, nor that request for a jury trial was made by either party. The transcript recites "That * * * the said cause came on regularly for hearing before the court sitting without a jury, * * *," and that both parties appeared in person and by counsel.

The pleadings are simple. The complaint alleges that on or about September 10, 1943, the defendants became and now are indebted to plaintiffs for money belonging to plaintiffs, and which was received by defendants for the use and benefit of plaintiffs in the sum of $600, which defendants hold and retain without right and without consideration. It further alleges demand upon defendants for payment, and their refusal; that defendants have wrongfully converted such money to their own use, and wrongfully withhold same from plaintiffs.

The defendants' answer consists of a general denial.

The controversy arose over negotiations for the leasing of the building known as the "Turf Bar", on Main Street in Miles City, owned by defendants. This building has been operated as a saloon, and on September 10, 1943, was under written lease to Leon Bros. the then unexpired term of which was approximately two and one-half years. On that date the building was vacant and was not being used by the lessee, for reasons here immaterial. On September 9 and 10, 1943, negotiations and discussion took place between plaintiffs and D.P. Leon, one of the lessees, relative to the transfer of the lease to plaintiffs, the former agreeing to make such transfer with an increase in the monthly rental from $75 to $100. During the negotiations it developed that plaintiffs desired the lease agreement to contain an option to purchase the building, a provision not embodied in the Leon lease. At Leon's request the defendant Pete Mincoff went to Miles City and on September 10th negotiations were continued between him, Leon, and the plaintiffs. Apparently an agreement was reached between Mincoff and plaintiffs, with Leon's consent, for a lease on the property for a term to expire on December 31, 1945, with right of renewal and an option in plaintiffs to purchase at any time prior to expiration of the primary term. Monthly rental of $100 was agreed upon. On the evening of that day all the persons mentioned went to the office of H.E. Herrick, Esq., an attorney, for the purpose of having a written lease prepared in accordance with their verbal understanding. The terms of the agreement were explained to Mr. Herrick, who undertook to reduce them to writing within a day or two following. Before leaving the office, Mr. Christianson, one of the plaintiffs, delivered to Mr. Herrick $600 in cash, which was to be paid by him to Mincoff in accordance with the agreement. The application of this money is in dispute, plaintiffs insisting that, if payable under the agreement, it was to be applied to rental for the first six months, while defendants' version is that it was to be applied to rental for the last six months. Both parties agree that it was to be applied on the purchase price in the event of the exercise of the option by plaintiffs.

A written lease agreement was prepared by Mr. Herrick and signed by the defendants the following week. The plaintiffs never signed the agreement or occupied the premises. The $600 held by Mr. Herrick was delivered to Pete Mincoff on October 14, 1943, after demand made upon him for its return to plaintiffs. Plaintiffs sued to recover same from defendants.

After submission of the case the trial court made findings of fact and conclusions of law, pursuant to which judgment was entered in favor of defendants and against plaintiffs. This appeal is from such judgment.

Appellants' first twelve specifications of error are based upon the insufficiency of the evidence to support the findings and judgment. The remaining specification is that the conclusions of law and the judgment are in conflict with the law.

It is our view that the sole question for determination is that of the sufficiency of the evidence to support the findings and judgment of the trial court. The determinative question, of course, concerns the agreement of the parties as to the delivery of the $600 by Mr. Herrick to the defendants.

Plaintiffs' contention is that the money was to be returned to them in the events, either that they were unable to procure a license from the State Liquor Control Board to operate the premises as a retail liquor store, or the written lease agreement was not executed by both of the parties thereto. Both plaintiffs testified that the money was to be delivered to Mincoff only if and when the written lease was signed by both parties. They also testified that it was agreed that the deal was not to take effect unless they were able to procure a license to operate the premises as a saloon, with a liquor quota sufficient for that purpose, in which event the money was to be returned to them. This testimony was flatly contradicted. The defendant Pete Mincoff testified as follows:

"Q. Now was there to be any payment down? A. The payment would be six hundred dollars down, and this six hundred dollars to be applied on the last six months of the rent. They gave me six hundred dollars — they gave this money to Mr. Herrick, and I told them that if this lease wasn't signed within a certain time — whenever I and my wife was to sign the lease, I come in and she signed too, — I signed it before my wife did — and when I come back I got the six hundred dollars, and I told Mr. Christianson and Mr. Volney that if they didn't sign the lease within a certain time or date that I was to get this money and they was to get no money back but it was to go on the deal.

"Q. Was that all stated in Mr. Herrick's office? A. Yes sir, it was. * * *

"Q. Now was there anything said or any conversation had, either at Mr. Herrick's office or before you went to Mr. Herrick's office, about any liquor license or quota for liquor? A. There was never anything mentioned. * * *

"Q. And now under this agreement that you had in regard to the lease, when was the six hundred dollars to be paid to you or turned over to you by Mr. Herrick? A. As soon as we signed the contract that Mr. Herrick drawed up I was supposed to get the six hundred dollars.

"Q. By ``we' who do you mean? A. My wife and myself.

"Q. Were you to get it before it was signed by Mr. Christianson and Mr. Volney? A. That is right.

"Q. Was there any conversation had, either in Mr. Herrick's office or before that time, that the lease on this place would depend on whether they could get a quota or not? A. No sir, it was never mentioned. * * *

"Q. In the meeting in Mr. Herrick's office, or at any time before that, did you have a conversation with Mr. Christianson or Mr. Volney in which you told them that if they were unable to get a liquor license or quota that you would refund the six hundred dollars? A. No sir, I never did.

"Q. Did this lease depend upon the getting of a liquor license for the place? A. It what?

"Q. Did the lease depend upon a liquor license? A. No."

Mincoff's testimony is to a certain extent strengthened by the testimony of Mr. Herrick that the former refused to have the six hundred dollars left in the form of a check, but demanded cash. The latter testified:

"I advised that Mrs. Mincoff also should sign the lease, and it was agreed as to the terms of the lease and then the terms of the payment and the matter of the payment of the six hundred dollars came up, and this gentleman here, I think it is Mr. Chrisitanson, started to write out a check for the money and Mr. Mincoff spoke up and he said, ``Oh no, — I don't know that that is the words he said, but immediately after the motion of starting to write a check he advised Mr. Christianson that he wouldn't accept any check from him and something was said. ``Well,' Mr. Christianson said — I believe he was the one writing out the check — he said, ``I usually give a check on any deal I am in,' and Mr. Mincoff said, ``Nothing doing, I have been hooked too often and you will have to give me the cash.'"

Mincoff's version is further borne out by his testimony and that of the witness D.P. Leon, wholly uncontradicted, that the six hundred dollars was agreed to be, and actually was, paid by Mincoff to Leon as consideration for the relinquishment by the latter of the existing lease on the building in question.

Concerning the agreement made in Herrick's office the witness D.P. Leon testified:

"Q. What was said in relation to the payment of the six hundred dollars, — What did he say? A. He (referring to plaintiff Christianson) said it was O.K.

"Q. He was to pay six hundred dollars? A. He said it was O.K.

"Q. How was that six hundred dollars to be applied? A. On the last payment.

"Q. On the last six months of the lease? A. Yes, that is right.

"Q. Now, Mr. Leon, at this conversation in Mr. Herrick's office, or at any other conversation before then, was there anything said about getting a liquor license or quota? A. At that particular time, what was discussed most was the building.

"Q. Was there anything said at that time or before that about getting a liquor license or quota? A. In regard to the liquor, never. * * *

"Q. And what was said there as to when the six hundred dollars was to be paid to Mr. Mincoff? A. When Mr. Mincoff signed the contract, and his wife.

"Q. When Mr. Mincoff and his wife signed the contract? A. Yes.

"Q. Regardless of whether it was signed by the others or not? A. That's right."

Mr. Herrick to whom the money was delivered by the plaintiff Christianson, testified with reference to the agreement, especially as to the disposition of the $600:

"Q. Mr. Herrick, during this conversation in your office that you have testified to, was there anything said by any of these parties in relation to a liquor license or a liquor quota on the building? A. No sir — that is, you mean to me or anything in connection with this agreement?

"Q. Yes, in your office. A. No sir.

"Q. To whom was the $600 paid? A. It was handed to me by — I believe it was Mr. Christianson — whoever was making the deal.

"Q. And what were you to do with it? A. Well I objected to taking it that time of night, I objected to having that much money around, and finally I had to take it, ``And now,' I said, ``I want a distinct understanding as to what is to be done with this money.'

"Q. And was that understanding had? A. Yes sir.

"Q. And what was that? A. That I was to take the money and hold it. Mr. and Mrs. Mincoff were to sign the agreement and they were to be in either Thursday or Friday —

"Q. ``They,' you mean — A. Mr. Volney and Mr. Christianson, — and they were to be here Thursday or Friday of the next week, and if they failed to be here then, or the lease was not signed by them, I was to turn the money over to Mr. Mincoff — the six hundred dollars. That was repeated three or four times by me —.

"Q. Did the turning over of the money to Mr. Mincoff depend upon the liquor license or liquor quota being available for that place? A. I knew nothing about any liquor license or any liquor quota or anything like that. The only thing I knew was the deal made in my office, and, as I said, that if this lease wasn't signed by Thursday or Friday of the next week, then I was to turn the money over to Mr. Mincoff."

There was some evidence of negotiations between plaintiffs and Pete Mincoff relative to the transfer from the latter to the former of Mincoff's liquor license at Cohagen. This, however, took place subsequent to the agreement reached in Mr. Herrick's office. Mincoff testified that he offered this license to plaintiffs for $500, but it was not transferred because his liquor quota was not sufficient for plaintiffs' purposes, and because it was ascertained that the Liquor Control Board would not sanction such transfer.

Plaintiffs place much stress upon a letter written by D.L. O'Hern, Esq., to the Board, on behalf of Mr. Mincoff, stating that Mr. Mincoff "now has a chance to dispose of his property in Miles City and is desirous of transferring his Cohagen license to Miles City, Montana. * * * The license would be transferred from Mincoff to Mr. D.V. Volney of Bainville, Montana, who is contemplating going into business at Miles City, Montana. * * *" This letter was dated September 16, 1943, and has no bearing, so far as we can perceive, upon the agreement concluded six days earlier. And it is not inconsistent with Mincoff's testimony with reference to the proposed sale of the Cohagen license to plaintiffs.

That portion of finding No. 2, objected to, is as follows: " —[1, 2] That the said sum of $600.00 in cash was paid by plaintiffs to H.E. Herrick; and it was specifically agreed that the said sum should be, by the said H.E. Herrick, paid to the defendant, Pete Mincoff, when the plaintiffs executed the lease and if they executed the same not later than Thursday of the following week, and regardless of whether plaintiffs executed said lease by the following Thursday or not, the said $600.00 was, at all events, to be paid to the defendant, Pete Mincoff, by the said H.E. Herrick." While this finding might have been made more clear, we feel that it is amply supported by the evidence, especially the testimony of Mr. Herrick. This was not so inherently improbable as to require disbelief by this or the trial court.

Likewise the other findings complained of are warranted by the evidence, including Number 4, to the effect that the agreement or the execution of the lease by plaintiffs was not in any manner conditioned upon plaintiffs being able to acquire a liquor license or liquor quota for the leased premises. Although the testimony is conflicting there is substantial evidence to support the findings, and under such circumstances they will not be disturbed by this court. Sanders v. Lucas, 111 Mont. 599,111 P.2d 1041; Lewis v. Bowman, 113 Mont. 68,121 P.2d 162.

Appellants urge, by specification 13, that the conclusions of law and the judgment are contrary to law, in the following particulars:

First: That the contract was impossible of performance because[3] of the scarcity of liquor, due to the war, and therefore void under the provisions of section 7501, Revised Codes of 1935. This argument is without merit, and is entirely unsupported by either the law or the facts.

Second: That the agreement was never completed and never became binding. This refers to the written lease agreement. The answer is the court's finding, supported by the evidence, that the $600 was to be delivered to and become the property of Mincoff regardless of whether or not the lease was completed by the signatures of the plaintiffs.

Third: That the agreement was void under the statute of frauds[4] because not in writing. We hold that the statute of frauds is not applicable. The question here involved is not as to the validity of the leasing agreement, but as to the terms of the agreement relating to the delivery of the $600 and its subsequent ownership.

Fourth: Mutual mistake, in that both parties believed that the[5] premises in question had a liquor quota which could be established, and that the Cohagen license and quota could be transferred to the plaintiffs. Mutual mistake is neither pleaded nor proved.

There is nothing unusual about the agreement involved as[6] contended for by defendants and supported by the evidence. The making of a down payment or the delivery of earnest money in a transaction of this kind is common practice. Had plaintiffs attempted recovery on the ground of misrepresentation it is possible the outcome would have been different. But they chose to base their right on contract, and the trial court found against them on that theory. The agreement which that court found was entered into may have been improvident and unwise, with most unfortunate results to plaintiffs in view of subsequent events. But it cannot be said that plaintiffs received no consideration for the $600; they were at liberty to accept the lease and to occupy the premises during the term thereof, and to purchase the building had they so desired, in either of which events they would have received full credit for the payment. The function of courts is not to make contracts, but to interpret and construe them.

As heretofore noted, we think the determinative question is whether the record contains substantial evidence sufficient to support the findings and judgment. We hold that it does, and, therefore, that the findings and judgment must be permitted to stand.

The judgment is affirmed.

Mr. Chief Justice Johnson and Associate Justice Morris concur.