Court Opinion

ID: 9549573
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:21:26.589285+00
Date Added: 2024-06-11T15:20:32.671756
License: Public Domain

SCHAUER, J.
I dissent. The majority of this court, by a process disguised as statutory construction, strike the word “executed” from section 1698 of the Civil Code and invite fraudulent minded persons to perpetrate, and be rewarded for, fraudulent schemes unhampered longer by rules which for centuries the accumulated wisdom of mankind had deemed desirable.
The majority opinion is one further step in the court-erosion of salutary code provisions of this state which embody longstanding rules of Anglo-American law designed to prevent successful fraud and perjury. Provisions which have this purpose include the present rule (Civ. Code, § 1698), the statute of frauds (Civ. Code, §§ 1624, 1624a, 1724), and the aspect of the parol evidence rule (Civ. Code, § 1625) which would exclude extrinsic evidence of negotiations which preceded or accompanied execution of an integrated writing to vary the terms of that writing. The latter rule was refused application by the majority of this court in Simmons v. California Institute of Technology (1949), 34 Cal.2d 264, 274 [209 P.2d 581] (see dissenting opinion, pp. 290-292).
Now the majority turn their attention to section 1698 and, instead of accepting the clear import of the language (and the frequently stated holding) that “an executed oral agreement” means one which has been fully performed (see cases cited (ante, p. 433 [246 P.2d 948] of majority opinion ; Fuller v. Mann (1932), 119 Cal.App. 568, 573 [6 P.2d 999] ; Taylor v. Taylor (1940), 39 Cal.App.2d 518, 522 [103 P.2d 575]), they announce that a written agreement can be modified by an oral agreement which has been performed only by the party who seeks enforcement of the modifying agreement. The two decisions of this court which the majority cite {ante, p. 433 [246 P.2d 948], as permitting such enforcement do so without discussion of the reason for the rule, and without mention of section 1698 (Katz v. Bedford (1888), 77 Cal. 319, 323 [19 P. 523, 1 L.R.A. 826]; Wood v. Nelson (1934), 220 Cal. 139, 141 [29 P.2d 854]). The eases cited by the majority which characterize an agreement per*435formed by plaintiff alone as “executed” ignore plain statutory language. Section 1661 of the Civil Code provides that “An executed contract is one, the object of which is fully performed.” The object of an oral modifying agreement is to modify the prior agreement, and this object is not fully performed until the modifying agreement has been performed on both sides.
Writers upon the subject of parol modification of written contracts have recognized that in California by statute such modification can be accomplished only by a parol agreement fully performed on both sides (see 17 C.J.S., Contracts, § 377, p. 866; 4 Cal.Jur. 10-Yr.Supp. (1943 Rev.), Contracts, § 226, p. 162; 2 Rest., Contracts, §407, Cal. Annotations (1933)). That this has been the California rule has been recognized even by writers who assume to characterize section 1698 as “bad” (6 Corbin, Contracts (1951), § 1316, p. 233) or “unfortunate” (6 Williston, Contracts (rev. ed.), §1828, p. 5179).
As I have already indicated, in accord with the great weight of authority, reflecting the accumulated wisdom of centuries of striving for justice under law, I do not believe that the statute, aptly designed to prevent fraud, is “bad” or “unfortunate. ’ ’ The reason for rules such as that of section 1698, and of the statute of frauds and the parol evidence rule, was well stated at least as long ago as 1604, in The Countess of Rutland’s Case, (Trin. 2 Jac. 1) 5 Co.Rep. 25b, 26a-26b, 77 Eng.Rep. 89, 90: “[I]t would be inconvenient, that matters in writing made by advice and on consideration, and which finally import the certain truth of the agreement of the parties should be controlled by averment of the parties to be proved by the uncertain testimony of slippery memory. And it would be dangerous to purchasers and farmers, and all others in such cases, if such nude averments against matter in writing should be admitted.” The reason is applicable here. A party to a written agreement should not be able, by rendering either a different performance from, or as here precisely the same as, that called for by the agreement and averring that such performance was rendered pursuant to an oral modification of the agreement, to require of the other party a performance different from that which the latter promised in writing.
The precise holding of the majority here can be graphically illustrated by applying it to these more simple, but legally exactly parallel, facts: Seller agrees in writing to sell and deliver, and Buyer likewise agrees to accept and purchase, *4361,000 short tons of steel a month for 12 months for a price of $110 a ton. Twelve thousand tons of steel are delivered. By today’s decision, at the end of the year the door is wide open, and the court invites, fraudulent minded Mr. Seller to sue and recover twice the agreed selling price through the simple expedient of alleging that there was an oral modifying agreement, made subsequent to the signing and delivery of the written contract but before' delivery of the steel, that solely for purposes of computing the price to be paid a ton should be considered as consisting of 1,000 pounds; this court, consistently with its majority decision today, must uphold Seller in his argument that the oral agreement is executed in that Seller has fully performed by delivering the steel as agreed.
In compliance with long-established law the judgment should be affirmed.
Respondents ’ petition for a rehearing was denied September 4, 1952. Sehauer, J., and Spence, J., were of the opinion that the petition should be granted.