Court Opinion

ID: 9852318
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:28:29.53646+00
Date Added: 2024-06-11T09:22:25.494149
License: Public Domain

PETERS, J.
I dissent.
Section 2309 of the Civil Code provides, and has provided *845since 1872, that “An oral authorization is sufficient for any purpose, except that an authority to enter into a contract required by law to be in writing can only be given by an instrument in writing.” The majority hold that this section of our statute of frauds only applies to the contract between the principal of the orally authorized agent and the third party, and has no application to the oral contract of agency between the principal and his agent. As a result, if the contract between the agent and third party is in writing, and the third party recovers a judgment against the agent, then the agent may sue the principal for indemnity although the agent’s authority to act was not in writing. This startling result is reached, not on the theory of waiver or estoppel, but on the ground that section 2309 has no application at all to the relationship between the principal and his agent! This conclusion is arrived at by reliance on what is referred to as an “unbroken line of California cases,” starting with the 1885 decision of this court in Kutz v. Fleisher, 67 Cal. 93 [7 P. 195], That case did not even mention section 2309, and certainly did not purport to interpret it. Yet the cases following the Kutz case that do cite section 2309 rely on the Kutz case as authority as to the proper interpretation of the section. Thus was created what is referred to as the “unbroken” line of authorities. Certainly I do not have to labor the point that no case is an “authority” for a point it did not discuss. It seems to me to be the law that a ease that was not an authority on a point when decided, cannot, by some magic, be metamorphized into a binding authority by simply citing it, no matter how many times, on a point it did not decide.
The majority simply do not like the statute of frauds, and believe that it has been outgrown. (See fn. 3 in the majority opinion.) For what it is worth, I might add that in many situations I do not like the statute of frauds either. But I respectfully suggest that my likes or dislikes, or the likes and dislikes of the majority, are legally immaterial. Within constitutional limits it is for the Legislature to determine policy, not for the courts. The Legislature has determined, as section 2309 plainly says, that an oral authority to enter into a contract in writing must be in writing to bind the principal. Section 2309 and section 2310, applying the same rule to ratification, are practically read out of the code by holding that they apply only between the principal and third party but not between the principal and agent. If the oral authorization is insufficient to authorize the agent to bind the prin*846cipal to a third party, a fortiori it is not sufficient to bind the principal to his agent who has but an insufficient authority to act. Of course, any application of the statute of frauds, where the parties admit the oral contract, results in an apparent injustice. In proper cases a liberal application of the doctrines of waiver or estoppel frequently can be employed to reach a just result. But the Legislature has decided that the danger of fraud in enforcing oral contracts outweighs the danger of injustice even where, as here, the oral authorization is admitted. That policy should not be emasculated by the courts.
Section 2309 is not ambiguous or uncertain. It says quite clearly that an agent with oral authority to enter into a contract in writing cannot bind the principal. That obviously means that the agent cannot bind the principal to the third party, as held by the majority, and it also means that the oral authorization cannot bind the principal to his agent. To hold that the third party may sue the agent, and that then the agent can sue the principal for full indemnification is to certainly hold that the oral authorization is sufficient, in direct violation of the section. I am not willing to thus write the section out of the code.
I would reverse the judgment.