Opinion
Rehearing Granted July 10, 1928.
Appeal from Superior Court, City and County of San Francisco; James M. Troutt, Judge.
Action for damages for breach of contract by the Master Builders’ Company against the Clinton Construction Company of California. From a judgment for plaintiff, defendant appeals. Affirmed.
COUNSEL
Ernest K. Little, of San Francisco, for appellant.
Willard P. Smith, of San Francisco (Walton C. Webb, of San Francisco, of counsel), for respondent.
OPINION
CAMPBELL, Justice pro tem.
This is an appeal from the judgment awarding plaintiff $3,060 upon a contract found by the court to have been entered into between plaintiff, an Ohio corporation, and defendant, a California corporation, whereby plaintiff agreed to manufacture for, and deliver to, defendant 21,500 pounds of colormix at 22 cents per pound, to be delivered f. o. b. Cleveland, Ohio, between January 21 and May 1, 1925, upon which contract plaintiff manufactured and delivered between January 21 and April 13, 1925, 3,550 pounds of the colormix, and was at all times ready and willing to deliver the balance, but that defendant refused to accept the same, and finding that, by reason of defendant refusing to accept the balance of the colormix called for in the contract, plaintiff was damaged in the sum of $3,060, for which judgment was entered, and from such judgment defendant has instituted this appeal.
Appellant urges under general headings the following points on which he relies for a reversal of the judgment: (1) There was no meeting of the minds of the parties; (2) an oral order would have been within the statute of frauds; (3) plaintiff did not perform, nor offer to perform, the alleged contract on its part; (4) the vice president of defendant corporation had no authority to bind the corporation by an oral order; (5) the complaint does not set forth facts sufficient to constitute a cause of action.
Under the first general heading, appellant asserts:
"(a) Plaintiff communicated its acceptance of a written proposition, bearing the false signature of defendant and its vice president, but which was never submitted to defendant; (b) there was no acceptance by either party; (c) there was no acceptance communicated until February 3, 1925, while Mr. Rodgers admits that he knew, as early as January 30, 1925, that Mr. Huber desired to withhold the alleged order for redtile colormix; and (d) the letter of January 21, 1925, from Mr. Rodgers was not a proposition from plaintiff; it was merely a suggestion from Mr. Rodgers as to the proposition which defendant should make to plaintiff."
These four contentions may be considered together.
The record contains the following evidence relative to the transaction between the parties. In January, 1925, Joseph E. Rodgers, local agent of plaintiff, called upon A. Huber, vice president of defendant corporation, at defendant’s place of business, and discussed the placing by defendant of the order for colormix. Mr. Rodgers testified:
"We figured up the quantity of material that would be required from the plans and specifications of the San Francisco Relief Home,"
-and Mr. Huber then placed the order at 27 cents per pound. Mr. Huber stated that "for the quantity involved the price was, in his judgment, a little bit high," and, in an effort to secure a price that might be a little more favorable to defendant, he (Rodgers) wired to Cleveland, and received a reply to his telegram by wire, which he showed Huber:
"Best price on eighteen thousand pounds red colormix twenty two cents per pound f. o. b. Cleveland."
Mr. Rodgers further testified as follows:
"Mr. Huber then told me to go ahead and write up the order on the basis of 18,000 pounds of one color and 3,500 pounds of another color, which I did. He requested if I could not make that price which was mentioned in the telegram the guaranty delivery price at San Francisco, and I said that that would be impossible, because it would-as the material was then requested for delivery later in the year, I didn’t know definitely whether a carload of material would be coming forward at that time, in which this could be included, or whether it would have to come by itself, and, of course, it would take different rates of freight both ways. I then phoned in Mr. Huber’s-I phoned the railroad-and told him the difference in the rates between the two materials, and why it was impossible for me to give a guaranty delivery price at San Francisco. I told Mr. Huber then, if a full car was coming forward at the time when he would require his material, that the company would give him the benefit of the carload rate rather than L. C. L. (less carload lots) rate, but that I wanted it understood that, if we did not have a car coming forward, he would have to pay the 22 cent price f. o. b. Cleveland, plus whatever freight was involved."
Mr. Rodgers wrote and mailed a letter, which bears date January 21, 1925, to defendant, containing the following:
"Confirming our verbal agreement of to-day we are entering your order for 18,000 lbs. Master Builders’ tile red colormix and 3,500 lbs. battleship gray colormix, at the agreed price of 22¢ per pound, f. o. b. Cleveland, Ohio-same price both colors."
Mr. Rodgers received no reply to this letter. Prior to February 5, 1925, Rodgers received a phone message from Mr. Huber requesting that the red part of the order be held up, and Rodgers informed him that it would be impossible to hold up any part of the order originally given, because the matter was entirely in the hands of the Master Builders’ Company, and they would be the ones to come to any decision regarding the matter. On January 23, 1925, Rodgers filled out an order blank, and forwarded it to plaintiff, calling for 18,000 pounds of red colormix and 3,500 pounds of battleship gray, and at the bottom wrote in the name under the signature of purchaser, "Clinton Const. Co. A. Huber." On February 5, 1925, defendant wrote J. E. Rodgers & Co.:
"Kindly enter our order for approximately 3,500 lbs. battleship gray colormix. Price: 22 cents per pound, f. o. b. Cleveland Ohio. Deliveries: 700 lbs. immediately. Balance April 1, 1925. Confirming our telephonic conversation of recent date, we wish to inform you that we have not made a decision on the type of red color hardener we intend to use. We will mail you a written order should we decide to use Master Builders’ red tile colormix."
Plaintiff wired to defendant, February 5, 1925, as follows:
"Our representative Rodgers advises substitution for colormix order being attempted Stop Be advised that order accepted manufactured for you and partly shipped Stop Can accept no change or cancellation See order signed by your Mr. Huber."
Sylvester W. Flesheim, president of plaintiff corporation, testified that J. E. Rodgers & Co. of San Francisco acts as their sales agent in California; that J. E. Rodgers & Co. is authorized to solicit orders subject to their approval; that every order J. E. Rodgers & Co. receives must be sent to plaintiff at Cleveland for acceptance; that, when plaintiff received the telegram from Rodgers containing the order for 18,000 pounds of red colormix and 3,500 pounds of gray colormix, the order was immediately accepted, and defendant notified accordingly; that tile red colormix is not a product that has a ready market, and little is carried in stock; that 18,000 pounds is a very large order; and that, when the order was accepted, instructions were immediately given to the factory to manufacture the material.
There was clearly a meeting of minds when defendant accepted the price of 22 cents contained in the telegram from plaintiff and confirmed in Rodgers’ telegram to plaintiff. The fact that plaintiff in its telegram to defendant of February 5, 1925, stating that it would accept no cancellation or modification of the order, referred to the order signed by Huber, does not alter the situation, as the written order to which Rodgers attached Huber’s name was merely an order reciting the terms of the verbal contract before entered into. If this were a case where it was agreed that the terms of the verbal contract were subsequently to be reduced to writing, there would be merit in defendant’s contention (Las Palmas, etc., Distillery v. Garrett & Co., 167 Cal. 399, 139 P. 1077), but such is not the case here.
As to appellant’s second point that the oral agreement is within the statute of frauds, in that "(a) there is no evidence to sustain the finding of the court that there was a contract to manufacture; and (b) the gray colormix was not accepted as and for a part performance of the alleged oral order," it may be said Mr. Huber in his testimony admitted that a part of the colormix was received and used in the building for which it was ordered. "Q. Is it not a fact that the gray colormix was used on this job and part of the red? A. Yes. Q. Where was it used, on the sidewalks? A. No, on the floor. Q. But the gray was used first? A. Yes. Q. Is it not a fact that you got some shipment in January? A. of the gray? Q. Of the gray. A. We might have; I think we did probably." This is sufficient, under section 1739 of the Civil Code, to take the oral agreement out of the statute of frauds. The fact that the gray colormix "and part of the red" was used on the job is sufficient to sustain the finding that the gray colormix was accepted as a part performance of the oral contract.
From the foregoing it is apparent that there is no merit in appellant’s third contention "that plaintiff did not perform nor offer to perform the alleged contract on its part."
It may likewise be said that appellant’s fourth and fifth contentions, viz., that the vice president of defendant corporation had no authority to bind the corporation by an oral order, and that the complaint does not state a cause of action, are likewise without merit. It is true that Mr. Huber testified that he never did give any orders, unless they were in writing, as it is against the rules of the company. He further stated that, as vice president of the company, he had charge of buying the materials for jobs. It appears that Mr. Huber was vice president and manager of the corporation, and therefore, as such, could bind the corporation (Eells v. Gray Bros., etc., Co., 13 Cal.App. 33, 108 P. 735; Fowler Gas Co. v. First Nat. Bank. 180 Cal. 471, 181 P. 663; Davis v. Pacific Studios Corp. [Cal.App.] 258 P. 440). The court, having determined that Mr. Huber did enter into the oral agreement here, evidently did not place credence in his statement that he never gave verbal orders.
The objection to the complaint is that the allegation on which damages are based is insufficient. The paragraph objected to is:
"That defendant has wholly failed and refused to take the balance of said colormix, and that plaintiff has incurred liability for commissions on the sale of the same, and has lost the profits arising from said sale, and has thereby been damaged in the premises in the sum of $3,060."
This allegation is sufficient. Ahlers v. Smiley, 163 Cal. 200, 124 P. 827; Tahoe Ice Co. v. Union Ice Co., 109 Cal. 242, 41 P. 1020.
We have examined the authorities cited by appellant, and do not question the principles they announce, but merely their application to the facts in the present case.
The judgment is affirmed.
We concur: TYLER, P. J.; KNIGHT, J.