Court Opinion

ID: 9733718
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:15:23.788342+00
Date Added: 2024-06-11T18:26:43.815605
License: Public Domain

*554PIERCE, P. J.
I dissent. I would reverse the judgment with directions for a new trial. I agree, and it is elementary, that a binding bilateral contract exists only where there has been an offer and a communicated acceptance: and where the offer requires that a notification of an acceptance be accompanied by an act (e.g., payment of a sum of money) no contract comes into being unless and until both the notification and the act have been accomplished. On the other hand, if the parties so decide, no policy of the law prevents their agreement that a binding contract shall occur upon the communication of the acceptance of the offer and without payment of the first installment of the purchase price even though it be agreed that such payment is to follow promptly—as a contractual obligation of the buyer immediately after the communicated acceptance. Whether the ease falls into the one category or the other depends upon the intent of the parties.
That was the question presented to the trial court and which is presented to us—what did the parties intend here?
In the answer of that question the rules by which courts are bound are these: If the agreement is in writing and the terms of the written instrument are clear, the parole evidence rule requires that the search for intent shall begin and end by giving effect to this language. If it is unclear, then resort may be had to parole evidence not to vary the terms of the instrument but to ascertain what the parties meant by what they said under the various guide rules prescribed for the interpretation of ambiguous writings. This is also Hornbook law.
Inquiry in this case centers upon the interpretation of the sentence: “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.” (Italics supplied.) And in these sentences I would emphasize the word “upon.”
Depending upon context the word “upon” when denoting time can mean either “before,” “after,” or “simultaneously with” the fact to which it relates. (67 C.J.S. 495, and cases cited.)
The majority opinion finds that as used here the meaning of the language used was too clear to admit interpretation. Had this statement been made in a seller’s offer to a buyer, I would agree; and the eases cited in the majority opinion so hold either expressly or by inference. But here the statement *555quoted was not made originally in a seller’s offer to a buyer. It was a proposal being made by buyers to a seller who was located at a place some distance away and since the offer was not accompanied by a payment of a thousand dollars as earnest money it was made with the knowledge that some period of time must elapse after the communicated acceptance of the offer before the thousand dollars payment could be made.
From this fact I draw the conclusion that, whatever the ultimate intent of the parties may have been, it was not the buyers’ original intent that a binding contract would occur only when they, after the seller’s notification of acceptance, delivered the thousand dollars to the seller. So to construe their intent would be to give them complete control over the inception of the contract. Under such a construction the buyers would have merely been taking a revocable option until the contract was brought into being by their sending a thousand dollars to the seller. That, to me, was clearly not their intent.
Reasonably construed, the buyers’ offer obviously intended a binding contract as soon as the seller communicated his acceptance of the proposed terms with payment of a thousand dollars by the buyers to follow promptly thereafter as their obligation under the contract.
Did the asserted “conditional acceptance” of the buyers’ offer (legally a counteroffer) incorporating by reference the buyers’ expression of terms change this intent? Possibly, but, as I see it, not so clearly and unambiguously that resort may not be had to parole evidence to determine what the parties really intended.
There are factors present here which permit reasonable inference that when the seller replied to the offer he did not regard payment of the thousand dollars as the sine qua non of the contract’s birth. In his letter of “conditional acceptance” the seller seems preoccupied with a new condition being imposed—the location of the 2 acres to be reserved. In fact, importance of the thousand dollars was not apparent in the seller’s mind even after the buyers’ acceptance of the counteroffer. Having received such acceptance, he consulted his attorney and it seems clear that both the seller and his attorney then considered that a contract existed because the latter, at the seller’s instance, then wrote the buyers “rescinding” the contract—upon the ground of “fraud.”
In summary, I consider the meaning of the word “upon” by a buyer in the context of this written instrument and its *556incorporation by reference in the seller’s counteroffer sufficiently unclear to permit a trial court to receive parole evidence to determine the true intent of the parties. And I think that the case should be reversed for a new trial to permit determination of the parties’ intent.
The case should be reversed and retried because in my opinion prejudicial error occurred when the trial court rejected the seller’s proffered evidence that the purchase price, $250,000, was grossly lower than the market value of the property. Objections to questions on this point were interposed upon the ground that the seller by making a counteroffer was effectually estopped to urge inadequacy of consideration. Statements by the court appear to accept this contention, and although some of this evidence was received, it was later stricken on plaintiffs’ motion.
The ruling was error because specific performance will not be decreed where the consideration to be paid is inadequate (Civ. Code, § 3391, subd. 1; 2 Rest., Contracts, § 367) or where the contract is unjust or unreasonable (Civ. Code, § 3391, subd. 2.) (And see 4 Witkin, Summary of Cal. Law (1960) Equity, §§ 28, 29, pp. 2810, 2811.) The circumstances under which this contract was negotiated, and the happenstance that the price originally fixed by the buyers was incorporated by reference into a counteroffer, does not affect the operation of this principle.
In my opinion the judgment should be reversed and the cause remanded for a new trial.
A petition for a rehearing was denied January 27, 1965. Pierce, P. J., was of the opinion that the petition should be granted.