Dawson v. Goff

• Decision Date: 30 July 1954
• Citation: 43 Cal.2d 310,273 P.2d 1
• Court: California Supreme Court
• Parties: DAWSON et al. v. GOFF et al. L. A. 23175.

Page 1

273 P.2d 1

43 Cal.2d 310

DAWSON et al. v. GOFF et al.

L. A. 23175.

Supreme Court of California, In Bank.

July 30, 1954.

Warner, Jackson & Sutton, Ridgway Sutton and Caryl Warner, Los Angeles, for appellants.

McInnis & Hamilton and John W. McInnis, San Diego, for respondents.

CARTER, Justice.

Plaintiffs, the administratrix of the estate of C. L. Dawson, Jr., deceased, and two other Dawsons, commenced, in Los Angeles County, an action against defendants Goff and Garland, alleging in their complaint that on February 26, 1953, a written contract of sale was made in Los Angeles County in which plaintiffs agreed to sell and defendants to buy 28,800 shares of stock in Grand Stores Company, at $2.53 per share, to be paid within three years with interest at 5%. Plaintiffs' tendered delivery of the stock on February 26, 1953, was refused by defendants on March 10, 1953, whereupon plaintiffs notified defendants that they would 'hold' defendants liable for damages for breach of the contract. By reason of the market value of the stock at the time of proffered delivery plaintiffs have been damaged at the rate of $2.03 per share, or a total of $66,240.

Thereafter defendants demurred to the complaint and filed a notice of motion for change of venue to San Diego County on the ground that they were residents of that county when the action was commenced.

According to the supporting affidavits defendants are residents of San Diego County and the following instrument was signed by the parties in San Diego County on the date it bears.

'February 28, 1950

'Mr. C. L. Dawson, Jr.

'2668 Victoria Drive

'Laguna Beach, California

'Dear Mr. Dawson:

'The undersigned hereby agree to purchase from you, your heirs or assigns, upon demand written or verbal at any time after February 28, 1951, not to exceed forty thousand (40,000) common shares of Grand Stores Co for a price of $2.53 per share. The terms of the payment for this stock to be determined by negotiation at the time demand is made but in any case full payment is to be made within three years from that date and interest on deferred payments to be at 5%.

'Yours very truly,

'/s/ Charles R. Goff

'/s/ R. Hastings Garland

'2/28/50

'This agreement terminates if no demand is made on February 28, 1953.

'/s/ Charles R. Goff

'Accepted 2/28/1950

'/s/ C. L. Dawson, Jr.'

Laguna Beach, the address stated for deceased in the instrument, is in Orange County. Apparently the number of shares was changed in writing by the parties to 30,300 on January 17, 1951.

On February 26, 1953, in Los Angeles County, plaintiffs wrote and mailed to defendants in San Diego County a writing entitled Demand to Purchase Stock Pursuant to Option Agreement, demanding that defendants purchase 28,800 shares of stock pursuant to the instrument dated February 28, 1950, and tendered the stock. Defendants refused to buy the stock. On April 28, 1953, further written demand was made notifying defendants that they would be held responsible if they did not take the stock, and on May 20, 1953, plaintiffs notified defendants that they would hold them responsible.

The certificates of stock are physically located in Los Angeles County.

Defendants' motion for a change of venue to San Diego County was granted and plaintiffs appeal.

Defendants support the order for change of venue on the ground that being residents of San Diego County they were entitled to have the action tried there and plaintiffs have not brought themselves within any of the contract exceptions mentioned in section 395 of the Code of Civil Procedures; ¹ that even under those exceptions, San Diego is the proper county because the contract, the basis of the action the instrument dated February 28, 1950 was made there. Plaintiffs assert that the document dated February 28, 1950, was merely an offer and that the contract was not made until they accepted the offer by their demand that plaintiffs take the stock, which they say was made in Los Angeles County when the demand was deposited in the United States mail there, and hence the contract was made in Los Angeles County and it was a proper county for the trial of the action.

Section 395, supra, has been interpreted to mean that the opening clause, 'When a defendant has contracted to perform an obligation in a particular county' has no particular significance as a limitation on the rest of the sentence. The section in effect says that '* * * all actions arising on contract shall be tried in the county in which the defendant resides, or in which the contract was made, unless the defendant has contracted specially and in writing as to the county in which his obligation is to be performed, in which event such county is also a proper county for the trial of the action.' Armstrong v. Smith, 49 Cal.App.2d 528, 532, 122 P.2d 115, 117; see, also, De Campos v. State Compensation Ins. Fund, 75 Cal.App.2d 13, 20-21, 170 P.2d 60.

The obligation is incurred at the time the contract is made and the obligations under in arise and are incurred in the county in which it is made. Under the section the county where the contract is made is deemed to be the county where it is to be performed unless there is a special contract in writing to the contrary. The counties in which an action on the contract may be tried are two, that of defendant's residence or where the contract is made, unless there is a special contract contract in writing to the contrary. Armstrong v. Smith, supra, 49 Cal.App.2d 528, 122 P.2d 115; De Campos v. State Compensation Ins. Fund, supra, 75 Cal.App.2d 13, 170 P.2d 60; Pacific Bal Industries v. Northern Timber, 118 Cal.App.2d 815, 259 P.2d 465; Hale v. Bohannon, 38 Cal.2d 458, 241 P.2d 4; Wilson v. Hoffman, 81 Cal.App.2d 664, 184 P.2d 951; Yedor v. Ocean Accident & Guarantee Corp., 85 Cal.App.2d 698, 194 P.2d 95. Thus it must be ascertained whether the contract, the basis of action, was made in Los Angeles County as it does not specially say it is to be performed there.

Plaintiffs allege in their complaint, as a basis for their action, that a contract was entered into in Los Angeles County when they 'accepted' what is claimed was defendants' offer, and their affidavits are to the same effect. No answer denying such allegation has been filed but the affidavits of defendants show the transactions and writings involved and that the so-called acceptance was the writing relied on by plaintiffs in their complaint as the contract made in Los Angeles County. There is no dispute that the transactions were such as are heretofore set forth. It is not important, therefore, that there is no express denial of the allegation. Which paper is the contract is a question of law in the absence of extrinsic evidence on the question, assuming it would be admissible.

Assuming the February 28, 1950, instrument did not constitute a binding contract for the sale of the stock because it was lacking in mutual consent and consideration in that plaintiffs did not promise to sell any stock or any number of shares to defendants, yet it could constitute an offer by the buyers (defendants) to buy such number of shares, not exceeding the stated amount, as the sellers (plaintiffs) desired to sell. Or, stated in another way, since plaintiffs had an option to sell an amount of stock at a stated price to defendants, the defendants could not revoke the offer or option given to plaintiffs during the time specified because it was supported by special consideration, such consideration being presumed because of the writing, ² the document dated February 28, 1950, therefore constituted a binding option contract. 'In an option contract the optionor stipulates that for a specified or reasonable period he waives the right to revoke the offer.' Warner Bros. Pictures v. Brodel, 31 Cal.2d 766, 772, 192 P.2d 949, 952, 3 A.L.R.2d 691. The questions still remain, however, when as the contract to which the option related (the contract for the sale of stock) made? If it was made when plaintiffs mailed their demand that defendants buy the stock, which was in Los Angeles County, is the contract for the purpose of the venue statute, nevertheless the option contract which was entered into in San Diego County?

As to the first question, 'If a proposal prescribes any conditions concerning the communication of its acceptance, the proposer is not bound unless they are conformed to; but in other cases any reasonable and usual mode may be adopted.' Civ.Code, § 1582. 'Consent is deemed to be fully communicated between the parties as soon as the party accepting a proposal has put his acceptance in the course of transmission...