CALIFORNIA & HAWAIIAN SUGAR R. CORP. v. Mason By-Products Co.

• Citation: 23 F.2d 436
• Decision Date: 09 January 1928
• Docket Number: No. 5135.,5135.
• Parties: CALIFORNIA & HAWAIIAN SUGAR REFINING CORPORATION v. MASON BY-PRODUCTS CO.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

23 F.2d 436 (1928)

CALIFORNIA & HAWAIIAN SUGAR REFINING CORPORATION v. MASON BY-PRODUCTS CO.

No. 5135.

Circuit Court of Appeals, Ninth Circuit.

January 9, 1928.

Sidney Ballou and Wm. B. Tyler, both of San Francisco, Cal., for plaintiff in error.

Sullivan & Sullivan and Theo. J. Roche, all of San Francisco, Cal., and Thomas P. Boyd, of San Rafael, Cal., for defendant in error.

Before GILBERT, RUDKIN, and DIETRICH, Circuit Judges.

RUDKIN, Circuit Judge.

This was an action to recover the purchase price of a quantity of molasses. Under date of December 8, 1925, the plaintiff addressed a letter to the defendant stating: "In confirmation of conference with you on December 5, 1925, we are willing to enter into negotiations to contract with you for Hawaiian plantation feed molasses on approximately the following bases, detailed contract to be submitted to you after you have decided upon the basis you desire." Then followed three separate and distinct propositions. The first covered a period of three years, from December 1, 1925, to November 30, 1928; the second, a period of one year, from December 1, 1925, to November 30, 1926; and the third, a period of two years, from December 1, 1926, to November 30, 1928. The second proposition provided for the sale of 30,000 tons, of 2,000 pounds each, at a price of $9 per ton, delivered to the barge of the purchaser alongside the distributing plant of the vendor at Crockett, California. The price stated was subject to additions and deductions for molasses containing more or less than 45 per cent. combined sucrose and reducing sugars. Deliveries were to be made upon 30 days' notice, but the vendor did not obligate itself to deliver more than 3,000 tons in any calendar month. The third proposition was the same as the first, except for the period covered. All terms of payment under any contracts to be entered into, based on the foregoing propositions, were to be in form and upon conditions satisfactory to the vendor. It was further provided that all terms and conditions in any contracts that might be entered into would be similar to those shown in the usual form of sales agreement, under which the purchaser had purchased molasses from the vendor in the past.

Under date of December 17, 1925, the defendant addressed a letter to the plaintiff accepting the second proposition contained in the foregoing letter, for 30,000 tons of molasses at a price of $9 per ton of 2,000 pounds, based on 45 per cent. sugar content. But it was stated in the letter of acceptance that none of the molasses would be required by the purchaser until during the month of March. The third proposition was likewise accepted, but the acceptance was conditional upon working out the question of price to fit the alcohol price, as explained in a previous conference between the parties, and also upon condition that, if the vendor sold molasses to competitors of the purchaser for less than the price fixed by the contract, it would make a like reduction to the purchaser. Under date of December 19, 1925, the plaintiff addressed a second letter to the defendant, stating its understanding of the acceptance of December 17, 1925. In this letter it was stated that the vendor understood that the second proposition was accepted, and that it would proceed to prepare the usual form of contract covering the transaction, and would forward same to the defendant for execution at an early date. The letter continued: "We shall appreciate confirmation of our understanding that proposition No. 2 is accepted, without relation to any further negotiations that may be pending between us. In other words, that proposition No. 2 stands upon its own feet, and that contract shall be drawn and signed immediately."

This letter was answered under date of December 22, 1925, but the defendant failed to confirm the understanding of the vendor as to the terms of acceptance. All the letter contained in that regard was the following: "My understanding of the molasses situation for the next three years is as I wrote to you on December 17th and we have only to iron out the details in regard to the price on proposition No. 3." Thereafter, on January 13, 1926, the plaintiff prepared a formal draft of the contract and submitted it to defendant. The defendant then suggested certain changes in the draft as proposed, and these were agreed to, but the contract itself was never executed. On April 12, 1926, the plaintiff by letter tendered delivery of 2,000 tons of molasses during that month, and requested the defendant to accept deliveries as provided in its letter of December 17. The tender was refused, and the refusal was followed by the present action. At the close of the testimony on the part of the plaintiff, the court below directed a nonsuit, and the judgment of nonsuit has been brought here for review. The only question presented for our consideration is: Was there a binding contract between the parties?

"The preliminary negotiations...