Case Name: RALPH L. SMITH et al., Plaintiffs and Respondents, v. LOREN HOLMWOOD, Defendant and Appellant
Court: District Court of Appeal of the State of California
Jurisdiction: California
Decision Date: 1965-01-04
Citations: 231 Cal. App. 2d 549
Docket Number: Civ. No. 10890
Parties: RALPH L. SMITH et al., Plaintiffs and Respondents, v. LOREN HOLMWOOD, Defendant and Appellant.
Judges: 
Reporter: California Appellate Reports, Second Series
Volume: 231
Pages: 549–556

Head Matter:
[Civ. No. 10890.
Third Dist.
Jan. 4, 1965.]
RALPH L. SMITH et al., Plaintiffs and Respondents, v. LOREN HOLMWOOD, Defendant and Appellant.
Bowers & Sinclair and F. L. Sinclair for Defendant and Appellant.
Richard E. Saulque for Plaintiffs and Respondents.

Opinion:
VAN DYKE, J.
This is an appeal by defendant from a judgment in favor of plaintiffs granting specific performance of a contract to buy and sell real property situated in Placer County in the Lake Tahoe area. We have concluded that as contended by appellant no contract was made between the parties for the sale of the subject property and that the judgment appealed from must be reversed.
Holmwood, the defendant and appellant, owned 800 acres of land in the region of Lake Tahoe. He dealt with a real estate broker, one White, who in turn dealt with plaintiffs and respondents concerning the sale and purchase of the property. The dealings between the parties took the following form: Respondents gave to White for transmission to appellant a document dated November 16, 1958, entitled, "This Is An Offer" and signed by two of respondents as offerors. In material part the document read as follows: "The undersigned Ralph L. Smith, Glenn H. Millage and Nello Malerbi, Hereby Offer to Purchase from Loren Holmwood, on the following terms and conditions, the property [description].
"1. The purchase price shall be the sum of $250,000.00.
"2. The purchase price shall be paid as follows:
"a. $1,000.00 cash to be paid upon the acceptance of the within offer. Said acceptance to be in writing by Loren Holmwood the owner.
"b. $4,000.00 cash to be paid to the owner within 30 days after the date of the acceptance of the within offer in writing by the owner.
"c. $25,000.00 cash to be paid to the owner on or before May 31, 1959.
"d. The balance of the purchase price shall be paid according to the terms of the promissory note to be executed by the offerors, a copy of which is attached to this offer and made a part hereof; said note to be secured by a deed of trust to be executed by the offerors, a copy of which is attached hereto and made a part hereof for all purposes."
The document contained many other provisions unnecessary here to relate.
White presented this offer to appellant on November 17. It was not accepted by him, although in almost all respects it was satisfactory. However, the written offer contained a provision that out of the 800 acres appellant reserved the right to select and have conveyed to him without consideration a parcel of two acres located in a certain area described in the offer. This was unsatisfactory to appellant because of the limited location. Appellant signed and delivered to White for communication to respondents a document reading as follows:
"Regarding offer from Ralph L. Smith, Glenn H. Millage and Nello Malerbi to Loren Holmwood, dated Nov. 16, 1958 and relative to 800 acres of land in Placer County, Calif., which is attached hereto and made a part hereof:
"The Undersigned Loren Holmwood accepts the said offer subject to the following change:
"Relative to item 6 of said offer. The seller reserves the right to select the two acres described in said item 6 at any place in the said section 23 except within 200 feet of the big spring.
"Other items of the original offer are acceptable.
/s/ Loren Holmwood"
This document contained in the left lower part the word "Accepted," below which appeared three signature lines— the names of the respondents being typed below the signature lines.
White transmitted the document signed by appellant to the respondents who signed it and gave it to White for transmission to appellant with a letter reading as follows:
"November 19, 1958.
"Ed. White,
2616 J St.,
Sacramento, Calif.
Dear Sir:
This is to advise you that the offer dated Nov. 16, 1958, and your (representing Mr. Loren Holmwood) counter offer of Nov. 17, 1958, covering 800 acres more or less in Placer County, Calif., owned by Mr. Loren Holmwood, from Ralph Smith, Glenn Millage and Nello Malerbi has been accepted.
Copies of properly signed documents will be forwarded to you under separate cover."
White then wrote to appellant telling him that "Regarding offer of Ralph Smith, Glenn Millage and Nello Malerbi dated November 16, 1958 and your counter of November 17, 1958,
"I am pleased to inform you that I have been advised, in writing, . . . that your conditional acceptance of the original offer has been accepted by the offerors."
In the meantime appellant had consulted an attorney who on November 22, 1958, mailed to respondents a letter telling them that appellant had "rescinded" any contract that existed by reason of fraud in the procurement of the same. On December 12, 1958, the sum of $5,000 was tendered by respondents to appellant who refused the tender. Prior to that no money had been paid or tendered by respondents to appellant.
The parties are in agreement, and we think necessarily so, that the question of contract or none depends upon what was done prior to the letter from appellant's attorney to respondents. The trial court decided that the contract had arisen, notwithstanding no money had been paid, and decreed specific performance. We think this was error.
Respondents' offer to purchase was rejected by appellant when he offered to sell on different terms, the difference being his refusal to sell without modifying the provisions concerning the reserved two acres contained in the respondents' offer. It is familiar law that an offer to sell must be accepted precisely as made and that any qualifications insisted upon by the offeree amounts to a rejection of the offer and in a proper ease the making of a counteroffer. The parties are agreed that appellant did refuse respondents' offer and did make a counteroffer of his own. Appellant claims this counteroffer was never accepted. Respondents claim that it was and the court so found. Appellant contends that in order to accept his counteroffer respondents had to pay the $1,000 as a material part of that acceptance. Respondents contend that the payment of the $1,000 was not necessary to acceptance but was merely a first payment of a purchase price agreed upon in the contract which was completed and went into effect when they, through White, notified appellant that they were ac cepting, or had accepted, his counteroffer. If the prescribed mode of acceptance of an offer to sell property requires the payment of a sum of money, the offer is not accepted unless the money be paid or tendered, and a simple notice of acceptance, however executed, unaccompanied by the payment of the prescribed sum amounts to no more than a counteroffer and does not give rise to a contract unless this counteroffer is in turn accepted by the first offeror. (Conley v. Fate, 227 Cal.App.2d 418 [38 Cal.Rptr. 680]; Callisch v. Farnham, 83 Cal.App.2d 427 [188 P.2d 775] ; Bowles v. Fickas, 140 Tex. 312 [167 S.W.2d 741]; Post v. Gillespie (1959) 219 Md. 378 [149 A.2d 391]; Stembridge v. Smith (1957) 213 Ga. 227 [98 S.E.2d 609]; Ruble v. Ruble (1951) 234 Minn. 15 [47 N.W.2d 420].)
On the rule that acceptance must in every respect correspond with the offer before a contract results see generally 17 Corpus Juris Secundum, Contracts, section 42, page 674; 12 California Jurisprudence 2d, Contracts, section 21, page 211; 1 Restatement of the Law of Contracts (1932 ed.) section 59, page 65; 1 Williston on Contracts (3d ed.) section 73, page 238. From Williston we quote the following: "In order to make a bargain it is necessary that the acceptor shall give in return for the offeror's promise exactly the consideration which the offeror requests. If an act is requested, that very act and no other must be given."
The documents interchanged between the parties when read in connection with the acts hereinbefore described accomplished the following: Respondents offered to buy the property upon terms which required them to pay $1,000 cash to appellant "upon the acceptance" in writing of their offer. This offer appellant rejected and it no longer stood as an offer. Appellant then offered to sell, adopting, save for the modification he made, all the terms of respondents' previous offer. Thus he required on his part a written acceptance of his offer concurrently with the payment of $1,000 cash. The payment of this sum was an act "requested" and "that very act and no other" had to be given; otherwise no contract arose. There is no dispute concerning the facts insofar as material to the discussion here. The money was never paid nor even tendered until after the appellant's offer was revoked.
The judgment appealed from is reversed with directions to enter judgment for defendant.
Friedman, J., concurred.
Retired Presiding Justice of the District Court of Appeal sitting under assignment by the Chairman of the Judicial Council