City of Everett v. Estate of Oddmund Sumstad

Supreme Court of Washington · Contracts

Contractsobjective assentsaleunknown contentslocked safemutual assentreasonable person standardauction sale

Facts

The Mitchells, who operated a secondhand store, bought a used safe from an estate auction for $50. The auctioneer told bidders the safes came from an estate, were still locked, had not been opened by him, and that he lacked the combinations and key. After taking the safe to a locksmith, the Mitchells discovered $32,207 in a locked inner compartment, and the police impounded the money. The auction rules also provided that all sales were final, and the auctioneer made no reservation of rights to any contents.

Issue

Whether, under the parties' objective manifestations at the auction, the sale of the locked safe included the unknown contents inside it. More specifically, the question was whether there was a consensual sale of both the safe and the money later found in its locked compartment.

Rule

A sale is a consensual transaction, and the subject matter that passes is determined by the parties' intent as revealed by the terms of their agreement in light of the surrounding circumstances. Under the objective manifestation theory, courts determine assent from outward expressions and acts, not unexpressed subjective intentions, and impute an intent corresponding to the reasonable meaning of a person's words and conduct.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

At an estate auction in Spokane, auctioneer Dana Brooks offered a locked cedar trunk from the Nolan Estate. She told the crowd that she had never opened it, had no key, and that all sales were final; she said nothing about reserving any contents. After buying the trunk, Owen Price paid a locksmith and found antique coins inside.

Who is most likely entitled to the coins?

Explanation. A sale is a consensual transaction, and the subject matter that passes is determined by the parties' intent as revealed by their agreement and surrounding circumstances. Under the objective manifestation theory, the court looks to outward expressions, not unexpressed subjective intent. Here, the trunk was disclosed as locked and unopened, the key was unavailable, the sale was final, and no rights to contents were reserved. Those objective facts would lead a reasonable person to conclude the sale included the unknown contents.