GODBEY SONS CONST CO v. DEANE

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District Court of Appeal, Second District, Division 2, California.

D. L. GODBEY & SONS CONST. CO. v. DEANE et al.

Civ. 18590.

Decided: December 14, 1951

Glen Behymer and Lewis M. Andrews, Los Angeles, for appellant. Edmond Gattone, Los Angeles, for respondents.

Defendants' general demurrer to plaintiff's fourth amended complaint having been sustained without leave to amend, plaintiff appeals from the ensuing judgment.

The complaint is in two counts: (1) for money allegedly due on a contract; (2) for the reasonable value of alleged services and materials furnished to defendants. Count I pleads the written contract in haec verba and declares that appellant was to furnish materials and perform certain concrete work for respondents, consisting of, insofar as applicable here, the construction of foundation and retaining walls. Respondents therein agreed to compensate appellant at the rate of 76 cents per cubic foot. The contract further recited that the ‘basis of payment to be determined by actual measurement of forms.’ Count I alleges that subsequent to the execution of the contract the parties agreed that the last above quoted phrase was ambiguous and it did not provide a method for computing cubic concrete work not contained within the form, and ‘in exchange for their mutual covenants and agreements in that respect, and for the purpose of eliminating possible future dispute between the parties to said contract and in order to provide for that portion of the concrete that under the plans were required to be poured outside of forms (and which ultimately were actually poured outside of forms) orally expanded and clarified said written agreement by entering into an understanding that, in order to properly arrive at the amount of cubic concrete work in foundation and retaining walls and footings upon said jobsite, whether poured within or outside of forms, the parties to said contract would calculate the amount of cubic yards of concrete actually poured, whether within forms or outside of forms, and with respect to such classes of work only (to wit: cubic concrete work in foundation and retaining walls and footings), at the contract price of 76 cents per cubic foot * * * and the plaintiff would furnish to defendants each day * * * copies of delivery tickets * * * to show the actual cubic yards of concrete poured on the jobsite each day * * *.’ Count I proceeds to declare that the contract as modified by the oral agreement was faithfully and punctually performed by plaintiff; all computations were made in accordance therewith by plaintiff who relied upon the oral amendment which fact defendants knew and by reason thereof defendants are estopped by their conduct from questioning the oral clarification of the writing.

On the basis of form measurement appellant was paid $74,647.94. In this action he seeks an additional $12,182.99—a sum allegedly resulting from computing the payment basic according to the actual amount of concrete delivered.

Respondents contend that the alleged oral modification of the written contract was a nullity by reason of the fact that it was not supported by a sufficient consideration nor was it an ‘executed oral agreement’ within the meaning of section 1698 of the Civil Code. The question thus posed for decision is whether the complaint alleges a valid cause of action on the oral modification of the original written contract.

Civil Code section 1698 provides that ‘A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise.’ Since plaintiff relies herein upon an oral modification alone, the issue is whether it meets the code requirement of ‘executed oral agreement’.

Section 1661 of the Civil Code provides that ‘an executed contract is one, the object of which is fully performed. All others are executory.’ ‘An oral agreement altering a written agreement is not executed unless its terms have been fully performed. Performance on the one side is not sufficient. There must be a complete execution of the obligations of both parties * * *’ Pearsall v. Henry, 153 Cal. 314, 325, 95 P. 154, 157; see also Klein Norton Company v. Cohen, 107 Cal.App. 325, 330, 290 P. 613; 4 Cal.Jur.Supp., Contracts, sec. 226, p. 162.

From the agreement as allegedly modified herein, appellant was to construct certain foundations and retaining walls on respondents' construction sites. Thereafter, it rendered full performance as promised. Respondents on the other hand were to perform by compensating appellant for his labors at the rate of 76 cents per cubic foot of concrete delivered to and poured on the jobsite. This they have not done. How can it be said, then, that the oral agreement has been executed when complete performance has taken place only on one side?

Appellant, however, argues that under section 1698 where materials have been supplied or services rendered and accepted and when all that remains is for payment to be made, a suit may be maintained on the contract as modified. Such contention is at variance with the law that full payment is essential to render an oral agreement executed. In Western Machinery Company v. Graetz, 42 Cal.App.2d 296, 298–299, 108 P.2d 711, a lessee sought to show that a lease agreement had been orally changed to a contract of sale. It was there held that the oral agreement was not executed under section 1698 when an $87.75 balance remained to be paid on the alleged agreed price of $700. In Bennett v. Potter, 180 Cal. 736, 744, 183 P. 156, 159, an action based upon an alleged oral modification of a contract for attorney's fees, the modification relied upon was in the form of an account stated which the court held to be a ‘mere unperformed promise’ and not an executed contract and denied recovery. Likewise, in Puritas Laundry Company v. Green, 15 Cal.App. 654, 661, 115 P. 660, 663, it was held error to admit evidence of an oral modification increasing sales commissions above the rate provided for in a written contract for the reason that the ‘agreement as to the sum claimed was unexecuted’.

The decisions involving construction contracts later modified by oral agreements, Nuttman v. Chais, 101 Cal.App.2d 476, 225 P.2d 660, Anderson v. Johnston, 120 Cal. 657, 53 P. 264, and Gottlieb v. Tait's, Inc., 97 Cal.App. 235, 275 P. 446, are distinguishable on their facts. In Nuttman v. Chais [101 Cal.App.2d 476, 225 P.2d 661], the builder commenced construction of certain additions to defendants' residence, then the plans at the instance of defendants were revised and a ‘much larger and more expensive structure’ was agreed upon and completed by the contractor. In Anderson v. Johnston the plans for constructing the building were altered orally in that defendant requested the contractor to omit two windows; also, certain posts furnished by the defendant were not of the proper height as designated in the contract and the defendant therefore requested that the building be constructed lower in height than provided for in the written agreement. The owner sought to avoid payment to the builder on the ground that the building had not been completed according to the plans. In Gottlieb v. Tait's Inc., the builder, pursuant to an oral agreement, completed extra construction work above and beyond that called for in the written contract. The decision in favor of the contractor, however, turned on the point that there was a new contract substituted for the original and section 1698 was not applicable.

Thus, in each of the decisions cited by appellant, it is seen that the plaintiff at the defendant's request has performed work or service outside the scope of the written contract, something beyond that which he was originally obligated to do. In each situation, an element of estoppel was present: the defendant was properly not permitted to stand idly by while the other party acted in reliance upon the oral promise. ‘To apply section 1698 * * * to such a state of facts would * * * be to make it an engine for the perpetration of fraud, instead of a defense against it.’ 4 Cal.Jur.Supp., Contracts, sec. 226, p. 164. A contrary situation is present herein since appellant has performed only the very duties called for in the initial written building contract.

Appellants also contend that the provision ‘Basis of payment to be determined by actual measurement of forms' is ambiguous and therefore that parol evidence of the subsequent agreement is admissible to make such terms definite. The ready answer to such contention, however, is that in the quoted phrase no ambiguity exists. The contract clearly and precisely provides that the cement work is to be paid for at the rate of 76 cents per cubic foot and that the cubic area is to be computed by measuring the forms. On no basis can the infinitive phrase be declared ambiguous or uncertain. Accordingly, in the absence of fraud, the plain, unmistakable, unambiguous language cannot be stricken or altered upon a mere declaration of appellants' concept of the contract. Fleming v. Law, 163 Cal. 227, 234, 124 P. 1018.

Appellants' argument that an estoppel should be invoked against respondents cannot be adopted for the good reason that no detriment or prejudice has been suffered by plaintiff in reliance upon any act or promise of respondents. Code of Civil Procedure, section 1962, subd. 3, therefore, has no application.

Count II necessarily falls since the original written agreement contemplated that plaintiff would furnish all the materials and labor required for the fulfillment of the contract. Also, where a demurrer is properly sustained to the first count, a second cause of action framed in the form of a common count and based upon the same facts necessarily must likewise fall before the demurrer. Rose v. Ames, 53 Cal.App.2d 583, 589, 128 P.2d 65.

Judgment affirmed.

MOORE, Presiding Justice.

McCOMB, J., concurs.