California Lettuce Growers v. Union Sugar Co.
| Decision Date | 23 December 1954 |
| Citation | 278 P.2d 106 |
| Parties | CALIFORNIA LETTUCE GROWERS, Inc., a corporation, Plaintiff and Respondent, v. UNION SUGAR COMPANY, a corporation, Doe Company, a corporation, Roe Company, a copartnership, et al., Defendants and Appellants. * Civ. 20213. |
| Court | California Court of Appeals Court of Appeals |
Richard E. Guggenhime, Eugene S. Clifford, Heller, Ehrman, White & McAuliffe, San Francisco, Twitchell & Rice, Santa Maria, for appellants.
Schauer, Ryon & McMahon, by Robert W. McIntyre, Santa Barbara, for respondent.
This is an appeal by the defendant-appellant, Union Sugar Company, a corporation from a summary judgment granted to the plaintiff-respondent, California Lettuce Growers, Inc., a corporation, by the Superior Court of Santa Barbara County after the sustaining of a demurrer to an answer and counterclaims without leave to amend.
The pleadings refer to a series of transactions, generally denominated leasing contracts and growing contracts, between the parties over a period of years. On November 1, 1945, Union Sugar leased to California Lettuce approximately 1000 acres in Santa Barbara and San Luis Obispo counties for a three year term ending October 31, 1948, providing specified rental for the first two years, rental for the third year to be fixed by arbitration in the event the parties failed to agree thereon. By an additional provision the lessee agreed to apply a minimum of fourteen tons of steer manure per acre on the leased land. On the same date, a growing agreement was executed by the parties covering the same three years and providing that California Lettuce would grow and sell to Union Sugar 500 acres of beets in 1946, 500 in 1947 and 400 in 1948. This agreement, however, did not specify the price, terms of payment, place and manner of delivery and contained no express promise on the part of Union Sugar to purchase the beets. In its first counterclaim appellant asserts that 'the parties knew and understood that it was the standard practice of defendant to enter into separate supplemental and specific sugar beet contracts with each of its growers for the respective years in which beets were to be grown'.
On April 10, 1946, a complete contract for the purchase and sale of the 1946 crop of beets was executed by the parties, and on March 7, 1947, a similar agreement was executed for the 1947 crop year. On March 3, 1948, the parties again executed a contract concerning the growing of beets, but this instrument differed from those executed in 1946 and 1947, as will be discussed hereinafter.
On November 1, 1947, the parties entered into an agreement fixing rental for the 1948 crop under the lease and extending the lease an additional year to cover the crop period of 1948, leaving the rent to be paid for the latter period to subsequent determination.
On November 1, 1948, the parties entered into a further agreement concerning the rental under the lease and on the same date entered into a growing contract for 1949. This latter instrument, upon which the first counterclaim is based, was silent as to price to be paid for the beets or terms of payment, did not specify the time or place of delivery, and contained no obligation on the part of Union Sugar to accept and pay for the beet crop.
California Lettuce delivered 117 acres of 1949 crop sugar beets to Union Sugar for the price of which it brought suit against Union Sugar. The latter conceded its indebtedness for the beets received, but has maintained California Lettuce should have delivered a full 239 acres of sugar beets, the deficiency allegedly damaging Union Sugar in the sum of $7,412.45. In addition, Union Sugar contended that California Lettuce was indebted to it in the sum of $14,529.94 for failure to apply additional manure as required by the agreement of November 1, 1947, for the sum of $1,395.21 for certain manure sold and delivered, $21.50 for certain pumping plant charges, and $115.74 on account of holding certain leased acreage. These deductions left a balance of $2,355.09, which Union Sugar tendered in full settlement of its obligations. California Lettuce accepted it merely on account.
The original complaint filed by California Lettuce on January 11, 1950, contained four counts, two in assumpsit and two for breach of contract, seeking a judgment in the sum of $27,300.78. Union Sugar filed an answer and counterclaims, to which demurrers were sustained thrice.
California Lettuce thereafter amended its complaint, alleging in the first count in assumpsit the reasonable value of sugar beets sold and delivered in the sum of $45,000 and it acknowledged receipt of $2,355.09. In its second and third causes of action, California Lettuce alleged breach of contract and damages therefor in the sum of $29,655.37, less $2,355.09, paid, leaving a balance due of $27,300.78 (sic).
To the amended complaint. Union Sugar filed an answer and counterclaim, admitting liability for $29,655.37 less the $2,355.09 paid on account and less certain setoffs claimed in five counterclaims.
California Lettuce demurred to the answer and first and second counterclaims, admitting the amounts claimed in the third, fourth and fifth counterclaims. The demurrer was sustained this time without leave to amend. On motion, summary judgment was granted on the pleadings in favor of California Lettuce in the sum of $25,768.34, together with interest thereon at the rate of seven percent from December 13, 1949.
On this appeal, Union Sugar contends that the first and second counterclaims state facts sufficient to constitute a valid setoff against the claims contained in the first amended complaint, and that the finding that the answer does not state facts sufficient to constitute a defense to the amended complaint is contrary to law. In addition, Union Sugar challenges the finding that the indebtedness was fixed by its account to California Lettuce dated December 13, 1949, and finally it maintains that in any event the award of interest is improper.
Cutting through the maze of pleading gymnastics the crux of this controversy revolves primarily about the validity of the first counterclaim, and that in turn depends upon the legal sufficiency of the agreement of November 1, 1948. This brief contract provides that California Lettuce 'agrees to personally grow, on suitable land in the Santa Maria Valley, and deliver to First Party two hundred and thirty-nine (239) acres of beets during the year 1949.'
It was first contended by respondent that the agreement was unenforceable because it imposed no obligation on Union Sugar to purchase the beets which respondent was obligation to grow and deliver. We are not impressed with this argument. Such a rule has been recognized in some jurisdictions, Cold Blast Transp. Co. v. Kansas City Bolt & Nut Co., 8 Cir., 114 F. 77, 57 L.R.A. 696; American Cotton Oil Co. v. Kirk, 7 Cir., 68 F. 791; Joliet Bottling Co. v. Joliet Citizens' Brewing Co., 254 Ill. 215, 98 N.E. 263; Hoffman v. Maffioli, 104 Wis. 630, 80 N.W. 1032, 47 L.R.A. 427; Velie Motor Car Co. v. Kopmeier Motor Car Co., 7 Cir., 194 F. 324, but not in California. Where a written contract is signed by both parties requiring one to sell and deliver to the other a specified commodity, there is an implied covenant on the part of the other to purchase and receive the commodity. King-Keystone Oil Co. v. San Francisco Brick Co., 148 Cal. 87, 82 P. 849; Preble v. Abrahams, 88 Cal. 245, 26 P. 99.
More significant here, however, is the omission from the contract of any reference to price.
The law does not favor, but on the contrary leans against the destruction of contracts because of uncertainty, and if at all possible will construe agreements so as to carry into effect the reasonable intention of the parties if it can be ascertained. The description of the subject matter of an agreement may be indefinite, but if it is capable of being identified and rendered definite and certain by evidence aliunde the contract is enforceable. McIllmoil v. Frawley Motor Co., 190 Cal. 546, 549, 213 P. 971; Sutliff v. Seidenberg, Stiefel & Co., 132 Cal. 63, 64 P. 131, 469; Mebius & Drescher Co. v. Mills, 150 Cal. 229, 88 P. 917.
Where no price is fixed in a contract for the payment of a commodity, the law, upon a delivery and acceptance of the thing sold, implies an understanding between the parties that a reasonable price is to be paid, and in such a case the contract will be deemed to be executed. However, where the price of the commodity called for but not delivered is to be subsequently ascertained and fixed by the valuation of others, by future agreement of the parties, or by future determination in any manner, the contract of sale is incomplete and unenforceable until the price is agreed upon. Jules Levy & Bro. v. A. Mautz & Co., 16 Cal.App. 666, 117 P. 936; Stone Drill Corp. v. Stoody Company, 4 Cal.App.2d 367, 40 P.2d 945. As stated in Avalon Products Inc., v. Lentini, 98 Cal.App.2d 177, at page 180, 219 P.2d 485, at page 487:
It is clear that this contract made no provision whatever for price, terms, manner or time of payment. But, contends appellant, the price may be ascertained by the course of dealing between the parties. Civ.Code, § 1729. It was understood between the parties, insists appellant, that the price would be determined in accordance with the custom of the parties, the same terms...
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Huntoon v. Hurley
...190 Cal. 294, 308, 212 P. 21.) The following cases, relied on by defendant, are not here applicable. California Lettuce Growers v. Union Sugar Co., Cal.App., 278 P.2d 106, is not applicable for the reason that a hearing has been granted by the Supreme Court. Cox v. McLaughlin, 76 Cal. 60, 1......