Blair v. Brownstone Oil & Refining Co.

MELVIN, J.

This ease went twice to the district court of appeal. On the first appeal (17 Cal. App. 472, [120 Pac. 41]) that court approved the finding of the superior court that Blair had been prevented from completing the contract to deepen one of the oil wells of the defendant corporation by reason of the latter’s failure to furnish the necessary materials for the proper prosecution of the work as provided in said agreement. The judgment was reversed, however, because there was no finding to the effect that the corporation had authorized the cancellation of the contract, although there was sufficient evidence to support a finding that plaintiff had given such authorization. The language of the district court of appeal in deciding this point we quote below:

“The court further found that plaintiff and defendant, in September, 1909, compromised and settled between themselves all claims or demands of any nature existing between them, and did then and there each release the other from any and all claims and demands growing out of the work done by plaintiff under the said contract, and by mutual agreement canceled and destroyed said contract, together with another made between said parties upon the same date. Defendant was a corporation, and the contract made was in writing. It appears from the evidence that several months after plaintiff had ceased work upon the well, he called upon the secretary of the defendant company and, according to the testimony of the secretary, said that he did not want the contract in question, nor another contract made for the drilling of a new well, brought up against him upon a claim for damages. The secretary said: ‘What do you want me to dot’ to which plaintiff replied: ‘I want the contract destroyed.’ The secretary then said: ‘The contract is not here, Mr. Blair; I have not got it, but I can get it.’ ‘Well,’ said the plaintiff, ‘you can destroy the signatures and send it to me.’ Later the secretary sent one copy of the contract, which was executed in duplicate, to plaintiff with the name of the president of the company cut off. Section 1699 of the Civil Code provides: ‘The destruction or cancellation of a written con

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tract, or of the signature of the parties liable thereon, with intent to extinguish the obligation thereof, extinguishes it as to all the parties consenting to the act.’ Under the provisions of this section, the evidence quoted would justify the finding complained of, were it not for the fact that the record is silent in that it fails to show any authority, either express or implied, on the part of the secretary to thus release plaintiff from his obligations under the terms of the contract, if he had in fact, without defendant’s fault, failed to comply with the terms thereof. The act of the secretary was wholly without any authority on the part of the board of directors of the corporation. Nor is it made to appear from the record that the corporation had any notice of the secretary’s act or proposed rescission of the contract, and no facts are shown from which a ratification thereof would follow. The effect of the attempted rescission and release was to make a new contract between the parties, and, conceding that plaintiff made the proposal, it does not appear that the corporation ever assented thereto.”