Court Opinion

ID: 9578774
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:48:14.846151+00
Date Added: 2024-06-11T13:29:46.514452
License: Public Domain

THOMPSON, J.
I dissent. I am of the opinion defendants’ motion for summary judgment, under section 437c of the Code of Civil Procedure, was properly granted, for the reason that it appears there is no merit in plaintiffs’ cause of action for specific performance of their alleged executorye contract to purchase wine. In holding that plaintiffs’ averments in their affidavits opposing the motion present a valid *633cause of action, the majority opinion, in my judgment, violates the provisions of section 1698 of the Civil Code, which provides that:
“A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise.”
The suit is founded upon two telegrams which the majority opinion, construing them in the light of the averments of plaintiffs’ affidavits, holds constitute a completed written contract to purchase wine from the defendants. The purported contract was not executed. The defendants denied that a contract was agreed upon. They pleaded the statute of frauds. The validity of the asserted contract must stand or fall upon a lawful interpretation of the two telegrams construed in the light of competent averments of the affidavits presented on the motion. In stating purported facts in plaintiffs’ affidavits in opposition to the motion, for the purpose of construing the language of the telegrams, they have averred alleged extrinsic oral agreements between the parties which constitute alterations or modifications of the essential provisions of those instruments, rather than mere interpretations of ambiguous or uncertain terms or language. Their averments amount to a substitution of alleged oral agreements for the written instruments upon which plaintiffs rely as a completed contract. Section 1638 of the Civil Code provides that:
“The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.”
In the guise of explaining the presence of certain terms, for instance the proposal to furnish samples of wine and a formal written contract, the averments of subsequent oral agreements result in eliminating those material provisions entirely as unnecessary terms of the alleged contract. The affiants assert that, by oral agreements, the samples were not required except for plaintiffs’ own benefit in blending wines for resale, and that the written contract was provided for merely to enable plaintiffs to exhibit it to their banker to procure funds with which to finance the purchase of wine. In other words, the alleged oral agreements result in expunging from the written messages essential terms which are clear and imam*634biguous. This, of course, may not be lawfully done. That procedure would destroy the integrity of written contracts.
I am convinced the telegrams do not constitute a completed contract. I am also satisfied that the portions of plaintiffs’ affidavits which were stricken from the record would be incompetent evidence at a trial on the merits because they tend to vary the terms of a written instrument. It was therefore harmless to strike them out. Plaintiffs’ cause of action is therefore without substantial merit.
The defendants’ telegram said:
“FIND IT NECESSARY TO ASK FOR FOLLOWING PRICES [specifying various quantities of designated wine with prices per gallon mentioned, including 100,000 gallons of dry red and dry white wine], OR AN AVERAGE PRICE OF .80 PER GALLON ON THE ABOVE 500,000 GALLONS TERMS CASH . . . PLEASE WIRE TODAY IF INTERESTED AND SAMPLES AND SALE CONTRACT WILL GO FORWARD.”
The plaintiffs replied by wire the following day, as follows:
“RETELEGRAM TAKE ALL WINE AT PRICES SPECIFIED EXCEPT DRY RED AND DRY WHITE PREPARE SALES CONTRACT AND SHIP SAMPLES AT ONCE WIRE TODAY CONFIRMATION SALE SWEET WINE TO US SO WE MAY COMMENCE ACCUMULATING FUNDS FOR CASH PAYMENTS.”
The negotiations proceeded no further. The defendants did not wire confirmation of plaintiffs’ offer to buy 400,000 gallons of wine. The proposed written agreement was not prepared by defendants nor executed nor forwarded. No samples were forwarded. When the plaintiffs subsequently prepared a written agreement on their own terms and forwarded it together with their check for $25,000, as part payment, the contract was not signed by the defendants, but was promptly returned with the accompanying check to the plaintiffs. The defendants assumed their offer to sell wine had not been accepted upon the terms proposed, and that the agreement to sell was not completed. Defendants therefore refused to continue negotiations with the plaintiffs. This suit was then commenced.
Upon the motion for summary judgment, plaintiffs’ affidavits in opposition thereto averred that the parties orally discussed the terms of the agreement and it was understood by them that: (1) The formal written contract mentioned in the telegrams was to be “substituted for the contract made *635---;-'---i-by the interchange of wires” for the sole purpose of exhibiting that document to plaintiffs’ bankers to enable them to procure the necessary loan of money with which to pay for the wine; (2) Plaintiffs’ request contained in their reply telegram to “wire today if interested” was also for the mere purpose of exhibiting the message to the banker as proof of the existence of the contract to aid plaintiffs in financing the purchase of the wine; (3) The request in said telegram to “ship samples” was not a condition precedent to acceptance of the wine, but was merely to determine “whether or not any specific blends . . . were desirable; and, (4) Subsequent to the exchange of telegrams, Brother John orally accepted by means of a telephone, plaintiffs’ offer to buy 400,000 gallons of wine in lieu of the defendants’ offer to sell them 500,000 gallons.
The foregoing averments refute the clear and unambiguous terms of the telegrams. The plaintiffs’ reply did not unconditionally accept the terms of defendants’ message. It offered to buy only a portion of the 500,000 gallons of wine mentioned in defendants’ telegram. If it may be deemed to be a valid acceptance upon the exact terms and conditions specified, plaintiffs’ reply message recognizes that the sale was to be consummated on samples to be furnished, and that the completed contract was to be expressed in a subsequent formal written agreement. Plaintiffs’ reply message says in that respect, “Prepare sales contract and ship samples at once.” Plaintiffs also recognize the fact that their telegram was not an unconditional acceptance of defendants’ terms, for they say, “Wire today confirmation sale sweet wine to us.”
It is therefore evident that the two telegrams were not intended by the parties to be a completed contract of purchase and sale of the wines. They constitute mere evidence of in-completed negotiations which were to be consummated by a subsequent formal written agreement to be signed by the parties. No formal written contract was ever signed taking the transaction out of the statute of frauds.
. I am in hearty accord with the principles announced in Eagle Oil & Ref. Co. v. Prentice, 19 Cal.2d 553, 556 [122 P.2d 264], to the effect that a summary judgment is a harsh remedy which should be granted only with caution lest injustice may result therefrom, and that the affidavits of the party resisting the motion should be liberally construed to afford him a trial when the merits warrant it.
*636It is true that a telegram offering to sell personal property, which contains all the necessary terms and conditions of sale, including sufficient identification of the quality, quantity and price of the goods, to which offer a message of unconditional acceptance of all the terms thereof is sent, may constitute a completed enforceable contract fulfilling the requirements of the statute of frauds. (Breckinridge v. Crocker, 78 Cal. 529 [21 P. 179]; 12 Cal.Jur. 899, §§ 63 and 64; 1 Willistonon Contracts (rev. ed.) 240, § 83.)
In 2 Jones Commentaries on Evidence (2d ed.) 1476, section 805, it is said in that regard:
“When a contract is made by telegraph, which contract must be evidenced by writing under the statute of frauds, . . . and the other party accepts it by telegram, that constitutes' a contract in writing under the statute of frauds. ’ ’
But the memorandum must contain all the essential elements and terms of the contract. In the Breckinridge case, supra, the court said:
“A memoradum of the agreement is sufficient, and it may be found in one or more papers, some or all of which may be telegrams. But the memorandum must contain all the material elements of the contract.”- (Italics added.)
In 37 Corpus Juris Secundum, page 683, section 196, subdivision a, the text which is amply supported by authorities reads:
“Since one object of the statute of frauds is to prevent disputes as to the terms of sale, a memorandum of an agreement of sale must show the terms and conditions of sale. The memorandum of agreement must contain within itself, or by reference to some other written evidence, dll the essential terms and all the essential conditions of the sale and purchase which the parties made, expressed with such reasonable certainty that they may be understood from the memorandum and other written evidence referred to, if any, without any aid from parol testimony.” (Italics added.)
Oral evidence is admissible to explain thé meaning of terms or expressions, used in the memorandum of a contract, which are uncertain or ambiguous. (12 Cal.Jur. 902, §65.) But oral evidence is not competent to prove material alterations, modifications or omitted terms of the written proposal to sell unless the changes' are subsequently accepted or ratified.
*637The offer of defendants in this case to sell the wine is not defective in omitting to state the time when the purchase price shall be paid. The statute supplies that omission. When the time for payment of the purchase price of personal property is not mentioned in the contract, the law requires the payment to be made at the time of delivery. (Civ. Code, § 1762; Gilfallan v. Gilfallan, 168 Cal. 23 [141 P. 623, Ann.Cas.l915D 784] ; Southern Pacific Milling Co. v. Billiwhack Stock Farm, Ltd., 50 Cal.App.2d 79 [122 P.2d 650].)
It is doubtful, however, whether defendants’ telegram may be considered as a definite offer to sell wine at specified prices. It does not say “We will sell you” specified quantities of wine for quoted prices. It merely says “Find it necessary to ask” specified prices. A binding offer to sell property should be couched in language that may be enforced as a definite promise. Language similar to that which was used in defendants’ telegrams, to wit, “Find it necessary to ask for following prices,” has been held not to constitute an enforceable promise or offer to sell property for the prices mentioned. Such language as “I am asking 23 cents per pound” for red clover, and ‘ ‘ I want $2.25 per cwt. ’ ’ for millet seed, have been held not to constitute enforceable contracts for lack of definite offers. (Courteen Seed Co. v. Abraham, 129 Ore. 427 [275 P. 684] ; Nebraska Seed Co. v. Harsh, 98 Neb. 89 [152 N.W. 310, L.R.A.1915F 824] ; Brillhart v. Beever (Tex.Civ.App.), 198 S.W. 973.)
It is true that when an oral agreement or a telegram contains all of the essential terms and conditions of a completed contract, according to the intentions of the parties, it may be enforceable, if it is not barred by the statute of frauds, notwithstanding the fact that it is agreed that a subsequent formal contract shall be reduced to writing. (Clarke v. Fiedler, 44 Cal.App.2d 838 [113 P.2d 275].) But when the preliminary negotiations evidenced by telegrams from which essential terms or conditions are eliminated, and the language of both the offer and acceptance clearly indicates that the parties contemplated the execution of a subsequent more formal written agreement, the telegrams may not be construed to constitute a valid enforceable contract. (1 Williston on Contracts (rev. ed.) 59, § 28; Fly v. Cline, 49 Cal.App. 414, 425 [193 P. 615] ; Durst v. Jolly, 35 Cal.App. 184, 189 [169 P. 449]; Patterson v. Clifford F. Reid, Inc., 132 Cal.App. 454, *638456 [23 P.2d 35] ; Spinney v. Downing, 108 Cal. 666 [41 P. 797]; 122 A.L.R. 1252, note.)
In the Ply case, supra, the court says in that regard:
“It also is elementary law that, unless the agreement to execute the future contract be definite and certain upon all the subjects to be embraced, so that nothing is left for future negotiation, it is nugatory.”
In the elaborate note found in 122 American Law Reports at page 1252, on the subject of the necessity for the execution of a formal written contract, supported by numerous authorities, including several from the jurisdiction of California, it is said:
“There are numerous cases supporting the rule that where the terms of a contract, or the conditions under which it is to become effective, are not fully and definitely settled in the preliminary negotiations, and a written or more formal contract embodying the completed contract is contemplated, no valid and enforcible contract exists until the execution of the written or more formal instrument.”
It is true, as stated in the majority opinion, that when the language which is used in a note or memorandum to take the case out of the statute of frauds “is uncertain or ambiguous,” parol evidence is admissible to show the intention of the parties. That is the full extent to which the eases cited in the majority opinion go. In the Brewer case, in 127 Cal. at page 643 [60 P. 418, 50 L.R.A. 240] , cited in the majority opinion, oral evidence was received to interpret obscure language used in a telegram which merely said “Bought thirteen at eleven five-eighths net you; ... Do you want fifteen at eleven quarter.” Clearly that language is ambiguous and requires interpretation. Without explanation it is meaningless. No such unintelligible and obscure language appears in the telegrams involved in the present ease. The true rule is also announced by the Supreme Court in the Balfour case in 109 Cal. at page 221 [41 P. 876], cited in the majority opinion. It quotes with approval from the case of Sandford v. Newark etc. R. R. Co., 37 N.J.L. 1, 3, as follows:
“When any doubt arises upon the true sense and meaning of the words themselves, or any difficulty as to their application under the surrounding circumstances, the sense and meaning of the language may be investigated and ascertained by evidence dehors the instrument itself.”
*639To the same effect are the other cases cited in support of that rule authorizing the use of oral evidence to explain uncertain or ambiguous language appearing in written instruments. But that rule does not justify the emasculation or elimination of clear and unambiguous terms to replace them with oral explanations in absolute conflict with the language used.
In the present ease it seems clear from the telegrams that both parties contemplated the reduction of their negotiations to a formal written contract. Moreover, the material terms which were expressed in the telegrams may not be eliminated or construed by subsequent oral statements to mean something contrary to what their clear language imports.
I am of the opinion the oral statements contained in plaintiffs’ affidavits, which were stricken from the record, would be incompetent evidence at a trial because they tend to vary the terms of the telegrams. It was therefore harmless to strike them from the affidavits. Under no circumstances, as I view the record, have the plaintiffs a valid cause of action based upon a written contract which is not barred by the statute of frauds.
Conceding that a summary judgment is a harsh proceeding, and that it should not be granted except upon a clear showing of a lack of merit as provided by section 437c of the Code of Civil Procedure, I am impelled to conclude that the plaintiffs have no valid cause of action, that it would therefore be idle, to send the ease back for trial, and that the trial court did not err in granting the motion for summary judgment. Our courts definitely hold that when there is no valid question of fact involved, and the record discloses as a matter of law a clear lack of merit, the court is bound to grant the motion for a summary judgment. (Bank of America v. Casady, 15 Cal.App.2d 163, 168 [59 P.2d 444].) In the case last cited the court said:
“It may be conceded at the outset that on a motion for summary judgment the allegations of fact made by defendants in their affidavits must be accepted as true, and that the primary question for the court to decide is whether the affidavits, .when so viewed, raise an issue of fact. If an issue of fact is raised, then a summary judgment is improper, and the case must proceed to trial. (Krieger v. Dennie, 123 Cal.App.Supp. *640777, 780 [10 P.2d 820].) If, however, the facts as averred are accepted and create only an issue of law, the court is bound, under the provisions of section 437c, to render a judgment on motion.” (Italics added.)
To the same effect are the cases of Bromberg v. Bank of America, 58 Cal.App.2d 1 [135 P.2d 689], and Hardy v. Hardy, 23 Cal.2d 244 [143 P.2d 701].
For the foregoing reasons I am persuaded the judgment dismissing plaintiffs’ cause of action should be affirmed.
A petition for a rehearing was denied November 29, 1944, and respondent’s petition for a hearing by the Supreme Court was denied December 28, 1944.