Ott v. Home Savings & Loan Association

• Decision Date: 20 October 1958
• Docket Number: No. 15804.,15804.
• Citation: 265 F.2d 643
• Parties: Warren A. OTT, and Mortgage Services of Norfolk, Inc., a Corporation, Appellants, v. HOME SAVINGS & LOAN ASSOCIATION, a Corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

265 F.2d 643 (1958)

Warren A. OTT, and Mortgage Services of Norfolk, Inc., a Corporation, Appellants, v. HOME SAVINGS & LOAN ASSOCIATION, a Corporation, Appellee.

No. 15804.

United States Court of Appeals Ninth Circuit.

October 20, 1958.

Hindin & Susman, Los Angeles, Cal., Edwin J. Regan, Weaverville, Cal., Maurice J. Hindin, Los Angeles, Cal., for appellants.

Paul Fitting, Los Angeles, Cal., for appellee.

Before STEPHENS, Chief Judge, and FEE and BARNES, Circuit Judges.

JAMES ALGER FEE, Circuit Judge.

This action involves the construction of an instrument wholly in writing. The trial court in effect held that an offer in writing by Home Savings & Loan Association, hereinafter called "Home," to purchase from Harold L. Shaw or his nominee up to seven and one-half million dollars worth of permanent real estate loans could not be accepted by a stranger not purporting to act as a representative of Harold L. Shaw, but as his assignee. The decision of the trial court is correct and is affirmed.

The pertinent documents, which were exhibits to the amended complaint, are as follows:

"Home Savings and Loan Association "Main Office: 800 South Spring Street "Los Angeles 14, California TRinity 7991 December 31, 1953 "Mr. Harold L. Shaw "650 South Spring Street "Los Angeles 14, California

"Dear Mr. Shaw:

"This letter is to serve as a binding commitment, for a period of three years from date hereof, upon Home Savings and Loan Association to make to you or your nominee the following loans:

"(1) Two and One Half Million Dollars ($2,500,000) in permanent real estate loans to be guaranteed under the provisions of the Servicemen\'s Readjustment Act of 1944, as amended. Said loans shall have a maturity date of twenty nine years and call for no down payment, and Home shall not make any service charge therefor, but shall be entitled to the One Per Cent (1%) charge to be collected from the Veteran purchaser.

"(2) In addition to the above, Home agrees to purchase from you or your nominee up to Seven and One Half Million Dollars ($7,500,000) of permanent real estate loans to be guaranteed under the provisions of the Servicemen\'s Readjustment Act of 1944, as amended. Said loans shall have a maturity date of twenty nine years. The purchase price of said loans to be at par less Seven and One Half Per Cent (7½%) thereof.

"Yours very truly "Home Savings and Loan Association "Howard F. Ahmanson "President" "Designation of Nominee and Assignment of Commitment

"For and In Consideration of Ten ($10.00) Dollars and other good and valuable consideration, I, the undersigned Harold L. Shaw, herewith designate and appoint Mortgage Services of Norfolk, Inc., and Warren A. Ott, of Norfolk, Virginia, as my Nominee under that certain commitment executed December 31, 1953, by Home Savings & Loan Association, by Howard Ahmanson, President, to the undersigned, a copy of which said loan commitment is attached hereto.

"I, the undersigned Harold L. Shaw, herewith assign, set over and transfer unto Mortgage Services of Norfolk, Inc., and Warren A. Ott, as my nominee, all of my right, title and interest in and to the aforesaid commitment and all of my rights thereunder.

"Dated 10th day of November, 1956. "/s/ Harold L. Shaw "Foregoing Assignment Is Accepted "Dated: November 15, 1956 "Mortgage Services of Norfolk, Inc. "By /s/ Warren A. Ott, President "/s/ Warren A. Ott" "Mortgage Services of Norfolk, Inc. "Granby at Olney Road, Norfolk 10 Virginia "Warren A. Ott Telephone "President Madison 7-5601 "December 20, 1956 "Home Savings & Loan Association "9245 Wilshire Boulevard "Beverly Hills, California "Attention: Mr. Kenneth D. Childs "Gentlemen:

"This will serve to advise you that Mortgage Services of Norfolk, Inc., and Warren A. Ott of Norfolk, Virginia, have been designated as nominee by Mr. Harold L. Shaw under the commitment dated December 31, 1953, executed by Home Savings & Loan Association to Mr. Harold L. Shaw, and we are pleased to advise you that we hold an assignment from Mr. Shaw of all of his rights as his nominee under the aforesaid commitment of Home Savings & Loan Association.

"We herewith accept the offer and commitment of Home Savings & Loan Association of December 31, 1953, to purchase loans described in Paragraph (2) of the said commitment in the total aggregate amount of $7,500,000.00, to be purchased by Home Savings & Loan Association, at par less 7.5% thereof.

"Pursuant to Paragraph (2) of the commitment of December 31, 1953, executed by Home Savings & Loan Association by Mr. Howard Ahmanson, as President, to Mr. Harold L. Shaw, we are pleased to formally tender to you $7,500,000.00 worth of permanent real estate loans guaranteed under provisions of the Servicemen\'s Readjustment Act of 1944, as Amended, and as specified in the said commitment.

"We are ready, able and willing to make immediate delivery of these loans to Home Savings & Loan Association, and we request immediate delivery instructions as to place of delivery of the said loans and payment procedure.

"Since physical delivery of all of these loans represents a heavy mechanical burden, to facilitate completion of transfer of the loans we are pleased to hand you herewith original loan documents and supporting documents in the sum aggregating $96,070.11 for which we will be pleased to accept your trust receipt for payment.

"The remainder of the loans, to aggregate a total of $7,500,000.00, is likewise available for immediate delivery to you, for which we request immediate delivery instructions and payment procedure.

"Very truly yours, "Mortgage Services of Norfolk, Inc. "By /s/ Warren A. Ott "President. "/s/ Warren A. Ott"

The amended complaint alleges that Ott and Mortgage Services had fully performed all the terms and conditions of the "agreement in writing" and "have been and were ready, able and willing" at all times mentioned to perform. It was set up that Home refused to purchase the real estate loans described and continued the refusal at all times since December 20, 1956. It was also alleged that Ott and Mortgage Services notified Home of the alleged nomination and assignment on or about December 5, 1956, and between that date and January 8, 1957, Home recognized, acknowledged and dealt with Ott and Mortgage Services as the assignee of Harold L. Shaw, and, in reliance thereon, Ott and Mortgage Services changed their position to their detriment and damage. It is claimed that Ott and Mortgage Services have been damaged in the sum of $237,135.80.

The trial court sustained a motion to dismiss the amended complaint "on the grounds that such Amended Complaint failed to state a claim upon which relief could be granted and failed to join an indispensable party in that Plaintiffs purported to act and to sue as assignees of a written agreement which was not assignable and hence had no rights in the alleged written agreement on which the action was based, in that Plaintiff's were not the real parties in interest and the real party in interest had not acted or sued under the alleged agreement, and in that a waiver or estoppel was not and could not be pleaded as against Defendant."

At the outset, a question arises as to the nature of the instrument dated December 31, 1953, in the form of a letter from Home to Shaw.¹ Throughout the complaint it is characterized as an "agreement," which is, of course, merely a legal conclusion which may be unwarranted.² The instrument itself does not purport to be a contract or an agreement between Home and Shaw. The signature or affirmance of Shaw does not appear, consideration is not recited, nor is the instrument an engagement under seal. Upon its face, the letter appears to be an offer by Home to Shaw for a unilateral contract which by its terms is to remain open three years. Also pleaded in the complaint is the letter of Ott to Home dated December 20, 1956, whereby Ott and Mortgage Services purport to "accept the offer and commitment of Home." Of course, this letter of Ott could not serve as an acceptance of the offer for the unilateral contract made to Shaw. The only one able to accept such an offer would be the offeree, who would accept by the performance of the act sought, in this case the tender of the guaranteed real estate loans. While such tender might be made by letter, it could not be made by someone other than Shaw. Indeed, it is hornbook law even in the realm of bilateral contracts that a revocable offer cannot be accepted by anyone other than...