Weisenburg v. Thomas

• Court: California Court of Appeals
• Citation: 89 Cal.Rptr. 113,9 Cal.App.3d 961
• Decision Date: 24 July 1970
• Parties: L. E. WEISENBURG, Jr., Plaintiff and Respondent, v. Leroy B. THOMAS and Jean G. Thomas, Defendants and Appellants. Civ. 26184.

Page 113

89 Cal.Rptr. 113

9 Cal.App.3d 961

L. E. WEISENBURG, Jr., Plaintiff and Respondent, v. Leroy B. THOMAS and Jean G. Thomas, Defendants and Appellants.

Civ. 26184.

Court of Appeal, First District, Division 3, California.

July 24, 1970.

Rehearing Denied Aug. 21, 1970.

Hearing Denied Sept. 24, 1970.

Harold R. Martin, Berkely, for appellants.

Low & Ball, San Francisco, for respondent.

CALDECOTT, Associate Justice.

Defendants, Leroy B. Thomas and Jean G. Thomas, appeal from a judgment awarding plaintiff-respondent, L. E. Weisenburg, Jr. damages for breach of contract.

Defendants, owners of 310 acres of Bethel Island, contracted with respondent for the development of a marina on the property. A written agreement entitled 'Land Development Agreement' was signed by Leroy B. Thomas and L. E. Weisenburg, Jr. but not by Jean G. Thomas, and the appellants also executed an option relative to the sale of the land to a corporation to be formed.

Appellants contend that the trial court erred in admitting parol evidence to establish another and different oral agreement contrary to the written agreements of the parties. Appellants contend that the parol evidence rule prohibits the introduction of evidence of negotiations prior to the signing of the instruments in question. 'The rule comes into operation when there is a single and final memorial of the understanding of the parties. When that takes place, prior and contemporaneous negotiations, oral or written, are excluded; or, as it is sometimes said, the written memorial supersedes these prior or contemporaneous negotiations.' (Estate of Gaines, 15 Cal.2d 255, 265, 100 P.2d 1055, 1060; see also Harrison v. McCormick, 89 Cal. 327, 330, 26 P. 830; Jennings v. Petrol Corporation, 87 Cal.App.2d 63, 65, 195 P.2d 899.)

Respondent contends there was a joint venture agreement between the parties that consisted of the written documents and certain oral agreements, and that parol evidence was admissible to prove the oral agreements and the intention of the parties as to the written documents.

Respondent maintains the trial court correctly admitted parol evidence because an issue in the case was whether the written agreements constituted the final integrated agreement of the parties, citing Schwartz v. Shapiro, 229 Cal.App.2d 238, 251, 40 Cal.Rptr. 189 and Masterson v. Sine, 68 Cal.2d 222, 65 Cal.Rptr. 545, 436 P.2d 561.

In Schwartz the court stated at page 250 of 229 Cal.App.2d, at page 197 of 40 Cal.Rptr.: 'Where there has been a partial integration, parol evidence is admissible to prove that part of the contract not reduced to writing but is not admissible to vary or contradict that part which is. (Citations)' As stated in American Ind. Sales Corp. v. Airscope, Inc., 44 Cal.2d 393 at 397, 282 P.2d 504, at 506, cited in Schwartz: 'It has long been the rule that when the parties have not incorporated into an instrument all of the terms of their contract, evidence is admissible to prove the existence of a separate oral agreement as to any matter on which the document is silent and which is not inconsistent with its terms. (Citations)' In Masterson v. Sine, Supra, 68 Cal.2d at page 225, 65 Cal.Rptr. at page 547, 436 P.2d at page 563, the court stated, 'When the parties to a written contract have agreed to it as an 'integration'--a complete and final embodiment of the terms of an agreement--parol evidence cannot be used to add to or vary its terms. (Citations) When only part of the agreement is integrated, the same rule applies to that part, but parol evidence may be used to prove elements of the agreement not reduced to writing. (Citations)'

In the instant case, the joint venture agreement found by the court was inconsistent, in several respects, with the written documents signed by the parties. In the Land Development Agreement executed by Leroy B. Thomas and L. E. Weisenburg, Jr. it was provided that Thomas would grant an option to purchase his property to a corporation to be formed, in which both men would be the principal stockholders. The option agreement that was signed stated that the Thomases granted the option to Delta Lakes, Inc., a California corporation. (The corporation's name was changed to Delta Coves by agreement of the parties.) The court found that by the terms of the joint venture, established by the extrinsic evidence, the appellants were to convey their property to the co-venturers. It was also testified that under the terms of the joint venture the appellants were to contribute one-half of whatever monies the joint venture might require. However, the Land Development Agreement provided that Leroy B. Thomas and L. E. Weisenburg, Jr. were to each purchase $5,000 worth of the stock which the corporation would issue. The signed agreement also provided that the corporations to be formed were those 'necessary to carry on the development and sale' of the property involved. However, testimony was admitted that the corporation was formed by appellants and respondent solely for the tax advantages to be derived from its use by the parties and that it was not intended by them to be a real, operating factor in their joint venture or the development. If was found that appellants breached the joint venture by failing to give respondent control over the development of the joint venture. Jean G. Thomas was found by the court to be a joint venturer, while the only document signed by her was the option agreement in which she was classified as a seller of the land. Thus extrinsic evidence was admitted that varied or contradicted the terms of the written agreement.

Respondent also contends that Leroy B. Thomas testified that the Land Development Agreement was merely an outline of the agreement between the parties, not their complete and final agreement and thus parol evidence was admissible to show the true and correct...