Comerata v. Chaumont, Inc., A--411

• Decision Date: 23 October 1958
• Docket Number: No. A--411,A--411
• Citation: 52 N.J.Super. 299,145 A.2d 471
• Parties: Jean COMERATA, Plaintiff-Appellant, v. CHAUMONT, Inc., a New Jersey corporation, Defendant-Respondent. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 299

52 N.J.Super. 299

145 A.2d 471

Jean COMERATA, Plaintiff-Appellant, v. CHAUMONT, Inc., a New Jersey corporation, Defendant-Respondent.

No. A--411.

Superior Court of New Jersey Appellate Division.

Argued Oct. 6, 1958.

Decided Oct. 23, 1958.

Leo B. Mazer, Hackensack, argued the cause for plaintiff-appellant (Edward O. West, Hackensack, attorney).

Leonard Adler, Englewood, argued the cause for defendant-respondent (Edward Marshall, Englewood, and Harry Schwartz, Jersey City, attorneys).

Before Judges GOLDMANN, CONFORD and FREUND.

The opinion of the court was delivered by

CONFORD, J.A.D.

Plaintiff's complaint in the Bergen County District Court seeks the return of $500 paid by her to the defendant as a deposit in relation to a proposed contract and lease for a check room concession. It is averred that the parties agreed that if the terms of a written contract to be submitted to plaintiff by the defendant were not satisfactory to her the deposit would be returned; that this eventuated but that the defendant nevertheless was refusing to return the money.

The proofs show a somewhat different situation. The defendant corporation was about to open a new restaurant and needed a check room attendant. On December 10, 1957 the defendant's officers discussed with plaintiff a proposal for her to lease the concession for the check room for one year from the opening date, December 17, 1957, at a rental of $1,000, and plaintiff paid a $500 deposit against the rental, taking a receipt reading:

'Received from Jean Comerata, 7 Buckingham Court, Maywood, N.J., $500.00 Deposit on check room concession subject to contract and lease to be drawn.'

The testimony given on behalf of both sides makes it fairly clear that the parties had an oral understanding at the time of the taking of the deposit not only as to the consideration and term of the lease, but also as to when the balance of the rent was to be paid. The testimony conflicted, however, as to what the latter stipulation was, the defendant contending it was February 1, 1958. Plaintiff at one point in her testimony said it was to be 'sometime in February,' and, at another, in February 'or March.' Plaintiff concedes that she also agreed orally to keep the premises 'clean and sanitary' and in 'excellent order' and to pay for fire, theft and liability insurance and turn the policies over to the lessor. She also said it was agreed that she might sell cigars, but not cigarettes, and that she was to keep the check room open at all restaurant hours.

On December 17, 1957, opening date of the restaurant, plaintiff went into possession and operation of the check room. The next day an officer of the defendant tendered her a written agreement for execution, and she advised him that she would have a lawyer look it over for her. Mr. Bernkoff, treasurer of defendant, testified that defendant never heard from plaintiff concerning the draft of agreement, but that after four days of attendance she failed to return to the premises without explanation. Plaintiff's testimony was that after consultation with a lawyer and finding several provisions in the proffered writing not in accordance with the oral understanding, she asked the president of the defendant for the return of her $500 for the reason that the draft of agreement 'was not satisfactory.' There was no testimony by plaintiff that at the time she specified the portions of the writing which were not in accord with the oral understanding or that she requested that the instrument be amended to conform thereto.

Plaintiff testified that the following provisions of the draft were contrary to the oral agreement: (1) that the balance of $500 be paid February 1, 1958, failing which the agreement was to be nullified and the $500 deposit retained by the lessor; and (2) that failure to keep the place in excellent order and to conduct it in an orderly and respectable manner to the satisfaction of the lessor would nullify the contract and forfeit any moneys already paid.

Plaintiff realized net receipts from tips and cigar sales of either $35 or $45 during the four days she ran the check room. The restaurant closed down February 4 or 5, 1958, apparently for lack of business, and the defendant had the property listed for sale at the time of the trial, in March 1958.

The oral determination of the trial judge, sitting without a jury, was as follows:

'Of course the original arrangement between these parties is merely a deposit received for $500 subject to a lease and agreement to be drawn. So that it is necessary in order for the plaintiff to be successful, to establish what the terms of that lease, agreement were and whether those terms were met in the proposed document that was presented. She has testified as to what they were in her opinion and what she objected to in the document which was presented. The defendant has contradicted her testimony in respect to the items which she says she objected to. There is no corroboration on the part of either party. Frankly, under the circumstances, I can't feel that the plaintiff has established her case and there will be a judgment for the defendant.'

The first two sentences of the foregoing determination appear on the surface to be in conflict but may be reconciled in the light of the complaint, and plaintiff's opening at the trial, which conformed thereto. From these it appears that plaintiff's theory of recovery was that it was expressly agreed that the $500 deposit should be returned if defendant failed to present a written agreement according with the oral understanding, and that defendant having tendered a writing conflicting with the understanding (as to time of payment of balance) and also containing provisions not discussed (forfeiture provisions), plaintiff had a cause of action on the express undertaking. The determination of the trial court is thereby illuminated as a finding of fact against plaintiff on her contention that there were discrepancies between the oral understanding and the writing tendered.

While there was directly conflicting testimony as to whether the oral understanding called for the second $500 payment to be made on February 1, 1958, the defendant did not refute plaintiff's testimony that the forfeiture provisions and the stipulation for the method of operation to be to the satisfaction of defendant were not a part of the understanding. It does not follow, however, that this circumstance compels a conclusion that plaintiff established the case she pleaded on the alternative theory--that even if the payment date orally agreed to was February 1, 1958, the inclusion of the admittedly new provisions in the draft constituted a breach of the arrangement between the parties. Defendant merely submitted a proposed draft. Before it could be regarded as having breached the understanding plaintiff says existed it would reasonably have been necessary for plaintiff not only to take exception to the objectionable provisions but to call upon defendant to eliminate them. Only if defendant failed to do so would a breach mature. Plaintiff's treatment of the mere tender of the allegedly nonconforming draft of contract as a breach of contract and terminating the relationship solely on account of it was unjustified and made the plaintiff the defaulter, even were we to concede the truth of plaintiff's pleaded version of the express agreement between the parties. See Kurtz v. Busch, 3 N.J.Misc. 389, 391, 128 A. 552 (Sup.Ct.1925); cf. Morris v. Ballard, 56 App.D.C. 383, 16 F.2d 175, 176, 49 A.L.R. 1461 (D.C.Ct.App.1926).

On this appeal, however, plaintiff's principal contention is that the parties did not intend to be bound at all unless a formal contract were drawn and executed; and since that contingency never eventuated plaintiff was free at any time and for any reason to terminate the negotiations and have her deposit back. The rule relied upon is exemplified by such cases as Trustees of First Presbyterian Church in Newark v. Howard Co.-Jewelers, 12 N.J. 410, 97 A.2d 144 (1953); Moran v. Fifteenth Ward B. & L. Ass'n, 131 N.J.Eq. 361, 367, 25 A.2d 426 (Ch.1942); Stuart & Wood Inc., v. Palisades, etc., Corp.,109 N.J.Eq. 401, 157 A. 659 (Ch.1931). However, parties may orally, by informal memorandum, or by both agree upon all the essential terms of a contract and effectively bind themselves thereon, if that is their intention, even though they contemplate the execution later of a formal document to memorialize their undertaking. See the case last cited (109 N.J.Eq. at page 404, 157 A. at page 660); Zuendt v. A. Eisenstein, Inc., 139 N.J.Eq. 476, 51 A.2d 898 (Ch.1947); 1 Williston on Contracts (rev. ed. 1936), §§ 28, 28A,...