Roberts v. Adams

• Decision Date: 17 October 1958
• Citation: 330 P.2d 900,164 Cal.App.2d 312
• Court: California Court of Appeals Court of Appeals
• Parties: Charles ROBERTS, Plaintiff, v. George ADAMS, an individual; Thomas Merino, as Special Administrator of the Estate of Laura Adams Merino, deceased, Defendants. Charles ROBERTS, Plaintiff and Appellant, and Harry J. Grella (as an aggrieved party under C.C.P. § 938), Appellant, v. George ADAMS, Defendant and Respondent. Civ. 23273.

Page 900

330 P.2d 900

164 Cal.App.2d 312

Charles ROBERTS, Plaintiff, v. George ADAMS, an individual; Thomas Merino, as Special Administrator of the Estate of Laura Adams Merino, deceased, Defendants Charles ROBERTS, Plaintiff and Appellant and Harry J. Grella (as an aggrieved party under C.C.P. § 938), Appellant, v. George ADAMS, Defendant and Respondent.

Civ. 23273.

District Court of Appeal, Second District, Division 2, California.

Oct. 17, 1958.

Cooney & Cooney, Matt D. Cooney, Sherman Oaks, for appellants.

Earl J. Opsahl, Studio City, for respondent.

ASHBURN, Justice.

Action for specific performance, damages, declaratory judgment and other relief. From a judgment in favor of defendant Adams, plaintiff appeals.

A lease from Adams, as lessor, to plaintiff Roberts, as lessee, covering certain real property in Van Nuys, California, and for a term of five years from March 23, 1954, contains an option reading as follows: 'It shall be a condition of this tenancy that the lessee Charles Roberts shall have the option to purchase the said property as per map reported in Book 19, pages 1 to 34 for the total sum of $85,000.00, payable as mutually agreed by both parties.' Emphasis has been added to the words which engendered this controversy.

Plaintiff swore that this paragraph was in the lease when signed; defendant was equally positive that it was not there and that he at no time gave plaintiff an option to buy the property. After the court had ruled in defendant's favor the parties waived findings, with the result that it must be presumed upon appeal that the judge found in favor of the prevailing party every fact necessary to sustain the judgment. Gray v. Gray, 185 Cal. 598, 599, 197 P. 945; Bekins Van Lines, Inc., v. Johnson, 21 Cal.2d 135, 137, 130 P.2d 421. Application of this rule would imply a finding that the option paragraph was not in the lease and there was never an option of any sort. But the trial judge's oral ruling was placed squarely upon the unenforcibility of the option paragraph, assuming it to be a part of the lease. The attorneys have presented that as the controlling issue upon this appeal and we prefer to decide the cause upon that basis. We therefore proceed upon the assumption that the option was at all times a part of the lease,--an option to purchase for the total sum of $85,000 'payable as mutually agreed by both parties.'

Of course a later agreement upon terms of payment and security therefor would have cured the defect in the writing. Laughlin v. Haberfelde, 72 Cal.App.2d 780, 785, 165 P.2d 544; 6 Cal.Jur.2d § 150, p. 227. But there was no subsequent oral or written agreement. Defendant at all times repudiated the alleged obligation.

Plaintiff-appellant testified that there were certain conversations about terms of payment, defendant insisting that he wanted part of the purchase price 'under the table' and he would specify the details when the time for payment arrived. But the evidence shows that these conversations (if they occurred) were merged into the writing when at defendant's request plaintiff placed in the agreement the phrase, 'payable as mutually agreed by both parties.'

It is Hornbook law that an agreement to make an agreement is nugatory, and that this is true of material terms of any contract. But the law has progressed to the point that it "does not favor, but leans against, the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties if that can be ascertained." California Lettuce Growers v. Union Sugar Co., 45 Cal.2d 474, 481, 289 P.2d 785, 790, 49 A.L.R.2d 496. This softening of the original concept of nudum pactum has extended to a failure to state the price of a purchase. 'Unexpressed provisions of a contract may be inferred from the writing or external facts. Thus it is well settled that a contract need not specify price if it can be objectively determined.' Id., 45 Cal.2d at page 482, 289 P.2d at page 790. But, in the absence of internal or external indicia of what the parties would have agreed upon, the court cannot supply the omitted provision, for that would amount to making a contract for the parties. It is firmly established as the law of California that failure to specify or furnish a standard for determination of terms of payment and method of securing the unpaid balance of the purchase price of real or other property is fatal to its enforcibility notwithstanding any desire of the courts to be liberal and helpful.

Ablett v. Clauson, 43 Cal.2d 280, 272 P.2d 753, 755, an action for declaratory relief, trespass and injunction, dealt with an option for a renewal lease for a period of five years 'upon terms to be then agreed upon.' Holding the option to be unenforceable the court said, 43 Cal.2d at page 284, 272 P.2d at page 756: 'The general rule regarding contracts to agree in the future is stated to be as follows: 'Although a promise may be sufficiently definite when it contains an option given to the promisor or promisee, yet if an essential element is reserved for the future agreement of both parties, the promise can give rise to no legal obligation until such future agreement. Since either party by the terms of the promise may refuse to agree to anything to which the other party will agree, it is impossible for the law to affix any obligation to such a promise.' 1 Williston, on Contracts (Rev. Ed. 1936) 131, § 45. The rule is well established in this state [citations], and, in conformity with the weight of authority in other states [citation], it has been held that an option agreement which leaves an essential term to future agreement is not enforceable. [Citations.]'

Klein v. Markarian, 175 Cal. 37, 165 P. 3, was an action for specific performance of an option to buy land for $45,000, payable $11,000 within ten days after notice of acceptance and the balance 'in quarterly yearly payments with interest at 6 per cent. annually.' 175 Cal. at page 39, 165 P. at page 4. It was held that the quoted clause was too vague and ambiguous to support that form of action as it failed to indicate the number of such payments or the amount of each; also, that failure to provide how the obligation for deferred payments was to be evidenced or secured was equally fatal to specific performance. It appears, however, from the Ablett case, supra, and authorities hereinafter cited, that an agreement to agree upon a material term of a contract, as distinguished from mere silence on the particular subject, renders the instrument unenforceable in any from of action because it is a mere nullity.

Five cases decided by this court affirm and apply the principle announced in the Ablett decision. They are Bonk v. Boyajian, 128 Cal.App.2d 153, 274 P.2d 948; Burgess v. Rodom, 121 Cal.App.2d 71, 262 P.2d 335; Kline v. Rogerson, 80 Cal.App.2d 158, 181 P.2d 385; Avalon Products, Inc., v. Lentini, 98 Cal.App.2d 177, 219 P.2d 485; and Vangel v. Vangel, 116 Cal.App.2d 615, 254 P.2d 919.

Bonk, though a specific performance action, announces rules which preclude any form of relief based upon a mere agreement to make an agreement. That case involved an option to purchase property for $7,000 with a down payment of $3,000 or more and 'monthly payments on the balance due to be agreed upon at the time of purchase.' [128 Cal.App.2d 153, 274 P.2d 949.] At page 155 of 128 Cal.App.2d, at page 950 of 274 P.2d the court said: "Uncertainty, as to the terms and conditions of deferred payments is fatal to a claim for specific performance.' [Citations.] Where, in a business transaction, an important item is reserved for future determination no enforceable obligation is thereby created for 'neither law nor equity provides a remedy for a breach of an agreement to agree in the future.' [Citations.] In the Ablett case, * * * the court points out that 'an option agreement which leaves an essential term to future agreement is not enforceable.' The court may not imply or speculate upon what the parties will agree. [Citations.] A statement of the rule and the reason therefor is to be found in 1 Williston, Contracts (1936), sec. 45, p. 131, where the author says: '* * * if an essential element is reserved for the future agreement of both parties, the promise can give rise to no legal obligation until such future agreement. Since either party by the very terms of the promise may refuse to agree on anything to which the other party will agree, it is impossible for the law to affix any obligation to such a promise."

Burgess was an action for damages for breach of a contract to purchase realty. The document provided for a deposit of $200 and a balance of $5,000 to be paid within 30 days from date, to wit: 'Terms to be made as soon as new purchaser arranges for new mortgage now held by * * * Bank to Burgess (the seller).' 121 Cal.App.2d at page 73, 262 P.2d at page 335. This instrument was held to be fatally uncertain, the court saying at page 73 of 121 Cal.App.2d, at page 336 of 262 P.2d: 'An action for damages for breach of contract for the purchase or sale of real property will not lie unless the writing contains the essential terms and material elements of such an agreement without recourse to parol evidence of the intention of the contracting parties. [Citations.] The law does not provide a remedy for breach of an agreement to agree in the future, and the court may not speculate upon what the parties will agree.' Referring to the language of the particular agreement it was further said, 121 Cal.App.2d at page 74, 262 P.2d at page 336: 'How this balance would be paid, whether in monthly, quarterly, semi-annual or annual installments, or at the end of a specified term of years does not appear. Likewise, absent is the rate of interest. The security, if any, to be provided for this balance, whatever it might be, is not specified. These are all important items, yet agreement with respect to each...