Innes Food Equipment Co. v. Sanguinetti Fruit Co.

California Court of Appeal Apr 21, 1948 No. Civ. 3712Published

Before: Griffin

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Holding. The court held that the contract requirement that the equipment "works properly" did not require performance to the subjective satisfaction of the defendant, but rather performance that would satisfy a reasonable person under the circumstances. The evidence supported the trial court's finding that the equipment met this standard, particularly given the experimental nature of the project and the defendant's acceptance and use of the equipment for his entire crop.

Issues

Whether the contract term "if this installation works properly" required performance to the subjective satisfaction of the defendant or to a reasonable standard.
Whether there was sufficient evidence to support the trial court's finding that the plaintiff's performance satisfied the contract conditions.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The words “works properly” should be taken in their common usage and understanding. This does not mean that it would have to perform to the satisfaction of Rakow but, considering all of the factors involved, that it would have to perform as well as a reasonable person would expect under the circumstances.”

“The real question, therefore, is whether the evidence justifies the finding of the court that plaintiff’s performance of its part of the contract satisfied the conditions set forth in the agreement.”

GRIFFIN, J.

This is an appeal by defendants from a

judgment in favor of plaintiff foreclosing a lien for labor and materials on certain real property leased to defendants Franklin D. Rakow and Sanguinetti Fruit Company by the defendant Southern Pacific Railroad Company, a corporation. Plaintiff was engaged in the business of developing and making equipment for harvesting potatoes. On November 7, 1945, plaintiff wrote Rakow a letter reading in part as follows:

“This letter is written to set out the agreement w,e have had in our discussions during the past weeks, in concise form.

“This Company is to install in your building at Edison, Calif, equipment to handle potatoes in bulk the same being a reinforced concrete tank, holding 28,000 to 30,000 pounds of potatoes. And a suitable conveyor to convey the potatoes from the bottom of the tank to your sorting and grading means and a pump to pump the muddy water from a sump in or by the bottom of the tank and proper pipes to convey the muddy water away from the pump.

“The cost of this equipment will be the cost of necessary material, the labor and our regular overhead constant but not addition for profit.

“Next June 15th,

if this installation works properly

you to repay this Company the cost of the installation less 10% . . .

“If this proposal is agreeable to your recollection of our discussions will you kindly acknowledge its receipt as a memorandum for our files. ’ ’ (Italics ours.)

On November 10,1945, plaintiff received a reply as follows;

“This is to acknowledge receipt of your letter written Nov. 7,1945, in which you set forth certain agreements with regard to installing a concrete tank, mud pump and conveyor for handling bulk potatoes.

“The terms set forth in this letter are agreeable to me and I so accept them.

“With the sincerest hope that it all operates perfectly and efficiently. ’ ’

This constitutes the extent of the written agreement between the parties. The main question presented is whether there is sufficient evidence to justify the finding of the court that plaintiff’s performance of its part of the contract satisfied

Innes Food Equipment Co. v. Sanguinetti Fruit Co.

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GRIFFIN, J.

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