Gibbs v. Ranard

California Supreme Court Nov 29, 1890 No. No. 12631Published

Before: Works

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Holding. The court held that a party cannot arbitrarily refuse to perform a contract based on a condition of 'satisfactory arrangements' when such arrangements were objectively reasonable, and that a seller may recover damages for breach of an agreement to sell by reselling the property and claiming the difference in price.

Issues

Whether the defendant's refusal to perform was justified by a failure to reach satisfactory arrangements with third-party newspaper publishers.
Whether the plaintiff was required to follow statutory lien enforcement procedures for a sale of property that was never consummated.
Whether evidence of the resale price of the business was competent to establish damages for the breach of the agreement to sell.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The contract cannot be construed as giving him the right to say, arbitrarily, that the terms to be procured from the papers were not satisfactory, if they were reasonable and just”

“The contract, a breach of which is alleged, was not one of sale, but an agreement to sell upon certain terms.”

Synopsis

Action for Breach of Contract — Sale of Newspaper-stand—Provision for Satisfactory Arrangements. — In an action to recover dam- • ages for the failure of the buyer to comply with a contract for the purchase of a newspaper and stationery stand, which, by its terms, was to be void unless such arrangements could be made with certain newspapers as would be satisfactory to him, evidence that the buyer made arrangements with the newspapers upon the same terms that they had given to the seller, and that such terms were stated to the buyer at the time of the negotiation, and were then agreed to be satisfactory to him, sufficiently shows a compliance with the condition upon which the contract was to become operative.

Id. —Parol Evidence—Written Contract — Merger. — In such action, parol evidence as to the conversation between the buyer and the seller, with reference to the arrangements with the newspapers, whether had before or after the written contract was executed, is admissible to show that the buyer knew what the arrangements of the seller with the newspapers were at the time of the agreement, and that he would be satisfied with a renewal of the same arrangements, and to show that his repudiation of the agreement was not in good faith.

Id.—Lien oe Seller — Passing Title — Breach oe Executory Contract. — Such contract being but an agreement to sell, section 1749 of the Civil Code, and other sections relating to the enforcement of a lien of the seller, do not apply, as the title to the property remained in the seller, and he could not enforce a lien against his own property, or sell it as the property of the buyer; and an action for damages for the breach of such executory contract will lie without the enforcement of any lien, or a rescission of the sale, as provided in section 1749 of the Civil Code.

Id.—Damages — Loss on Resale — Evidence. — Evidence that the seller notified the buyer, upon his refusal to consummate the agreement of purchase, that he would sell the property to some one else for what he could get for it, and hold him responsible for the difference, and that he advertised it and sold it for a certain price, which was the highest price he could get, is competent as tending to show the amount of damages actually resulting from the breach of the contract.

Id. — Value Fixed by Contract — Evidence. —In an action for damages for the breach of an agreement to buy, where the value of the property is fixed as between the parties by the contract, it is not necessary for the seller to prove the value of the property.

Works, J. — The parties to this action entered into the following contract: —

“ This agreement, made and entered into this twenty-eighth day of June, in the year of our Lord one thousand eight hundred and eighty-six, between J. D. Gibbs, of the city of Petaluma, county of Sonoma, and state of California, the party of the first part, and J. H. Ranard, of the same place, the party of the second part,—

“ Witnesseth, that the said party of the first part, in consideration of the covenants and agreements on the part of the said party of the second part hereinafter con[533]tained, agrees to sell and convey unto the said party of the second part, and said second party agrees to buy, the newspaper route, business, good-will of said business, as carried on and conducted by the party of the first part in said city of Petaluma, state and county aforesaid, and more particularly described as follows: The buying and selling of daily and weekly newspapers, the buying and. selling of magazines, the buying and selling of other reading matter, and the delivery of the same, and the buying and selling of stationery, books, and other goods, as conducted and sold at his newspaper-stand, in the Masonic Block, situate on Western Avenue, in said city of Petaluma, for the sum of five thousand dollars, lawful money of the United States; and the said party of the second part, in consideration of the premises, agrees to pay to the said party of the first part the sum of five thousand dollars, lawful money, as follows, to wit: One dollar in hand paid, the receipt whereof is hereby acknowledged, and the balance, four thousand nine hundred and ninety-nine dollars ($4,999), by note on demand, drawing interest from date at the rate of ten per cent per annum, interest payable quarterly. It is understood and agreed, on the part of both parties hereto, that in the event that such arrangements as shall be satisfactory to the party of the second part cannot be made with all the San Francisco daily papers, then this agreement shall be null and void. It is also understood and agreed that on making a bill of sale of this said business by the party of the first part, he will enter into a written agreement not to go into the same kind of business in said city of Petaluma for the period of five years from this date. It is understood that this sale shall take place on the first day of July, A. D. 1886, and that the note shall be dated July 1, 1886.

“ And it is understood that the stipulations aforesaid are to apply to and bind the heirs, executors, administrators, and assigns of the respective parties.

Gibbs v. Ranard

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