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District Court of Appeal, Second District, Division 1, California.


Civ. 12467.

Decided: June 20, 1941

B. H. Prentice, in propria persona. Cobb, Campbell & Kelley, of Los Angeles, for respondent.

Defendant, doing business as Smileage Company, appeals from a summary judgment by which the trial court awarded to plaintiff the sum of $2,879.87, with interest from the time plaintiff made demand for payment of that sum.

Section 437c of the Code of Civil Procedure, under which the judgment was entered, provides that upon motion and notice to the other party, an answer may be stricken out or a complaint dismissed and judgment entered, “in the discretion of the court unless the other party, by affidavit or affidavits shall show such facts as may be deemed by the judge hearing the motion sufficient to present a triable issue of fact”.

The record before us presents an affidavit filed by H. F. Nelson, president of the plaintiff corporation, in support of the motion for summary judgment, and in opposition, affidavits by defendant and N. Fisher. It appears from the Nelson affidavit that during the period March 9, 1939, to July 13, 1939, goods and merchandise in the form of gas and other hydrocarbon substances were delivered to the defendant for which invoices were furnished in an amount aggregating $32,364.44, and that the sum of $29,484.57 was paid thereon, leaving the balance for which suit is brought, namely, $2,879.87. It also appears from the affidavits on file that during the month of May, 1939, discussions took place between the parties relating to establishment of credit in favor of appellant. According to Mr. Nelson the defendant asked him to accept a trust deed on certain real estate in Los Angeles county, “as security for a note in the sum of Two Thousand Dollars to be credited upon his account. That affiant prepared a trust deed and note for said amount and submitted it to the defendant”. Instead of executing the note and trust deed, it appears from the Nelson affidavit that the defendant returned it to Mr. Nelson, with a mortgage covering the same parcel of property, reciting that it was security for three thousand dollars. Certain objections to the form and amount of the mortgage were made by this affiant, who states that the defendant asked that a conference be had toward working out a form of payment with respect to his account, at which time defendant was advised that the mortgage was unsatisfactory, and the affiant further states that the mortgage was returned to the defendant, “who now has and holds the same”. Mr. Nelson also states in his affidavit that neither he nor any of the officers of his corporation agreed to accept or retain the mortgage, “nor did they agree that said account should be paid in installments”; further, that the answer of the defendant to the complaint filed in the action “is false wherein it recites that on July 13, 1939, plaintiff entered into a further agreement with the defendant respecting the payment of any sum owing plaintiff by the defendant; one of the requirements of said agreement was the payment to plaintiff by defendant of the minimum sum of Two Hundred Dollars ($200.00) per month.” The portion of the amended answer to which affiant refers reads as follows: “Furthermore, that on July 13, 1939, plaintiff entered into a further agreement with defendant, respecting the payment of any sum owing plaintiff by defendant, that one of the requirements of said agreement was the payment to plaintiff by defendant of the minimum sum of Two Hundred ($200.00) Dollars per month.” Attached to the Nelson affidavit is a letter dated June 17, 1939, addressed to the defendant, in which no credit is mentioned, but the following demand is made: “We find it necessary to advise you that the account be paid in full at this time. Will you, therefore, kindly arrange to pay off the amount owing now, it being the amount of $3,163.81 as of June 16, 1939.” Under date of July 3d, the defendant wrote Mr. Nelson saying that he did not believe it would be possible to pay him the entire sum of $3,000 in the next few days as requested. “We have, however, shown our good intentions by mailing you a check on account and presume that if your patience holds out that we will be continuing to do this from time to time until we have either wiped out the entire account in this matter, or until we have arranged with some other refinery to carry our gasoline purchase account for us on terms somewhat similar to that which we have with you. You may be assured that we will do all that can be reasonably expected of us to liquidate this account as soon as possible. We have no desire to pay interest to you on the sum involved. In the meantime, we want you to feel that as far as we are concerned that there are no hard feelings over the rather short business relationship between yourselves and ourselves. * * *” It is quite apparent from this letter that whatever discussions may have been had concerning the establishment of credit and the furnishing of security therefor prior to July 3d, came to naught. The following statements, however, concerning a meeting which took place at the office of the Eagle Oil & Refining Co. in Santa Fe Springs, on or about July 13th, are gleaned from the Fisher affidavit: “That there were present at that time a Mr. H. F. Nelson, Mr. B. H. Prentice, and Mr. Sterling, and this affiant; that the matter of the account of the Smileage Company was discussed for some two and one–half hours; that as a result of said discussion Mr. Sterling and Mr. Nelson agreed that the Eagle Oil and Refining Company would issue certain credits to Smileage Company to offset overcharges previously made against the Smileage Company; that Mr. Nelson agreed to draw a trust deed covering certain real property located in South Gate, California, and to also draw a chattel mortgage covering the improvements and equipment of the Smileage Refinery also located in South Gate; that Mr. Prentice stated he wanted the payment on the trust deed and chattel mortgage to be not more than $200.00 per month, and Mr. Nelson said this would be O.K.; that Mr. Prentice stated he wanted the chattel mortgage to be satisfied when he had paid the sum of $1,000.00. Mr. Nelson insisted that the chattel mortgage should not be satisfied until Mr. Prentice had paid $1,400.00 to the Eagle Oil & Refining Company. Mr. Prentice, after a long argument, stated this would be satisfactory. Mr. Prentice mentioned that both the mortgage and chattel mortgage would bear the same rate of interest as did the real estate mortgage then held by Eagle Oil and Refining Company, to which Mr. Nelson agreed; that it was further stated by Mr. Nelson that upon the execution of the trust deed and chattel mortgage the Eagle Oil and Refining Company would surrender to B. H. Prentice a certain real estate mortgage which had been previously executed and delivered by B. H. Prentice to the Eagle Oil and Refining Company, to which Mr. Prentice agreed.”

Attached to Mr. Prentice's affidavit is a copy of a letter dated July 13, 1939, reading as follows:

“Eagle Oil & Refining Company,

“Santa Fe Springs, California,


“Without conceding that there is any reason that we should give you any additional security for the amount owing you, if you care to do so we will exchange the mortgage you now hold for a trust deed on the same property and the improvements thereon as is described in the mortgage payable at a minimum of $200.00 a month, and at the same interest rate as the present mortgage; and as additional security we will give you a chattel mortgage on the equipment at your refinery located just west of Perry Road and just south of Firestone Boulevard, with the understanding that the chattel mortgage is to be satisfied when the first $1,400.00 has been paid on the principal of the mortgage first above referred to.

“Yours very truly,

“Smileage Company,

“B. H. Prentice, Manager.”

(Emphasis added.)

Another exhibit attached to the Prentice affidavit is a copy of the following letter:

“August 22, 1939

“Mr. B. H. Prentice,

“4705 Firestone Boulevard,

“South Gate, California.

“Dear Sir:

“I am returning your check No. 5787 in the amount of $200.00 payable to the Eagle Oil & Refining Company, Inc., due to the fact that you make the same conditional upon the same being under some agreement which Eagle Oil & Refining Company, Inc., dispute as having ever been entered into.

“Very truly yours,

“Cobb, Campbell & Kelley

“By Francis B. Cobb.”

The trial judge perusing these letters and considering particularly the conditional phrase in Mr. Prentice's letter which we have emphasized, “if you care to do so”; was justified, especially in view of the written reaction of plaintiff to the proposed monthly payment of $200, in concluding that no definite arrangement for credit was ever reached between the parties.

Whatever affiant Fisher may have heard at the meeting on or about July 13th concerning possible establishment of secured credit must be considered as of a preliminary nature, for Mr. Prentice's letter of that date, July 13th, stamps it as such. It failed to bear fruit in the form of an enforceable contract. A somewhat similar situation was disposed of in Warson v. Talpey–Arnold Syndicate, 202 Cal. 656, at page 659, 262 P. 716, at page 717, by the statement: “it is perfectly clear, from the facts alleged in the complaint, that the minds of the parties never met upon the details of such supplementary agreement.” While in the instant case the clarity does not arise from the complaint, it appears from other documents in the record.

It remains now to determine whether a “triable issue” was presented by the pleadings or affidavits in regard to the amount due on the account between the parties. The complaint alleged that the defendant “became indebted to plaintiff upon an open book account in the sum of $2,879.87. That no part of said sum has been paid. That demand was made upon the defendant on the 21st day of July, 1939 for the payment of said sum, but the defendant has failed and refused to pay the same or any part thereof. That the entire sum of $2,879.87 remains now due, owing and unpaid from defendant to plaintiff”.

The answer “Denies that defendant is indebted to plaintiff upon an open book account in the sum of $2,879.87. Furthermore, defendant denies that there is any sum now due, owing and unpaid which defendant has not offered to be paid”. The Nelson affidavit states: “That no objection has been made by the defendant to said account, the invoices or the charges therein, and that said charges were the reasonable market value of said product so delivered and were the agreed prices of said items so delivered, and that all of said items were delivered to the defendant at his request.”

By the Prentice affidavit, “Affiant denies that no objection was made to plaintiff in respect to the account and denies that the charges for merchandise furnished by plaintiff were the reasonable value thereof; on the contrary affiant alleges that objections were made to said account at various times, and particularly at a certain conference with said Nelson on or about July 13, 1939, and that plaintiff stated that affiant's objections were proper and well taken and that proper credit would be given affiant which credit never has been given to affiant's account.”

We have already quoted the Fisher affidavit as follows: “That as a result of said discussion Mr. Sterling and Mr. Nelson agreed that the Eagle Oil and Refining Company would issue certain credits to Smileage Company to offset overcharges previously made against the Smileage Company”.

Appellant concedes that his answer constitutes a negative pregnant but feels that, since pleadings are to be liberally construed under section 452 of the Code of Civil Procedure, any deficiency in the answer is supplied by the quoted excerpts from the Prentice and Nelson affidavits. This view we cannot accept, for section 437c provides that “The facts stated in each affidavit shall be within the personal knowledge of the affiant”, and “shall be set forth with particularity”. In his answer appellant failed entirely to mention that any credit on account was due him and in his affidavit made no statement of the amount for which credit might be allowed, or the reason therefor. To satisfy the trial judge that there was an “arguable defense” to any part of this account, it was necessary to furnish him with particulars of the amount for which credit was claimed and in connection with what shipment or shipments it arose. Neither the Prentice nor Fisher affidavit furnished any information on those subjects.

Judgment affirmed.

DESMOND, Justice pro tem.

We concur: DORAN, Acting P. J. WHITE, J.

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