Mary Lou WALBERGH, also known as Mary Lou Francis, Plaintiff and Appellant, v. Jessie E. MOUDY, also known as Jessie Moudy Francis, Defendant and Respondent. *
Appeal by plaintiff from a judgment in favor of defendant in an action for specific performance, or, in the alternative for damages for breach, of a contract to construct improvements on plaintiff's realty.
On December 18, 1946, James H. Francis, as lessor, and Willard F. Jones and Agnes E. Jones, as lessees, executed a lease of improved realty in Tecopa, Inyo County, California, known as ‘Tecopa Auto Court.’ On May 1, 1950, with lessor's consent the lessees assigned the lease to defendant Jessie E. Moudy and she took possession of the property on that date. Francis died on March 12, 1953. Plaintiff Mary Lou Walbergh, daughter of Francis, is the owner of the leased property, it having passed to her on his death.
The lease of December 18, 1946, was for a term of 23 years, ending October 31, 1969. The lessor owned a total of 880 acres. The lease covered 26 acres. The consent to the assignment of the lease reads:
‘Assignment of Lease
‘This Agreement, made and entered into this day of May, 1950, by and between James H. Francis, hereinafter called ‘First Party,’ and Jessie E. Moudy, a widow, hereinafter called ‘Second Party,’
‘That in consideration of the mutual covenants and agreements herein contained, it is hereby agreed between said parties, as follows:
‘First party, as lessor in that certain lease dated December 18, 1946, between James H. Francis, as lessor, and Willard F. and Agnes E. Jones, as lessees, hereby consents to the assignment of said lease between James H. Francis and Willard F. and Agnes E. Jones to Jessie E. Moudy, second party herein.
‘It is hereby agreed that said lease dated the 18th day of December, 1946, shall be extended for a period of four (4) years and six (6) months from and after the termination of said lease, to wit, until April 30, 1975; the rental thereof to be the same as set forth in said original lease. The last four (4) years and six (6) months of said lease the rental shall be One Hundred and Fifty Dollars ($150.00) per month.
‘In consideration of second party building or erecting fifteen (15) dwellings or units on said property during the next five (5) years, first party agrees that he will not execute any lease for motel or hotel purposes to any other person, firm or corporation other than second party for a period of five (5) years from and after the date of this agreement. In this connection, it is agreed that second party obligates herself to erect said fifteen (15) dwellings or units during said period of five (5) years, and at least three (3) units are to be completed each year, but that the four units or dwellings now being constructed by second party shall be considered as a part of fifteen units, and in the event that second party shall erect a total of fifteen units, including the four now being constructed, at any time prior to the expiration of said five years, then second party shall be relieved of any further obligation to build units on said property.’
On April 29, 1951, the lessor signed this instrument:
‘I the undersigned owe Jessie E. Moudy $1,000.00 cash.
‘I also grant Jessie E. Moudy the extension of Two years on building more courts as lease calls for 3 courts to be built each year.’
Defendant paid the rental under the lease and has remained in possession at all times, but except for four units constructed in May 1950 she did not construct any units or dwellings on the property.
Plaintiff brought the action to compel defendant to specifically perform the agreement to construct 11 additional units or dwellings or, in the alternative, for damages for breach of the agreement.
The court found: the agreement of May 1950 provided that defendant would erect 15 dwellings or units on the leased property during the years from May 1950 to May 1957 comparable to those already situated or which were then being constructed upon the premises in or about May 1950; the agreement was not subject to specific performance; ‘[t]he defendant Jessie Moudy Francis has breached said Agreement of May, 1950, in that she has failed to erect and place upon said premises all of said fifteen (15) units or dwellings, but the plaintiff has sustained no damage as a result thereof’; ‘[p]laintiff is the owner of other real property in Tecopa, County of Inyo, California, near the aforesaid leased premises. The said dwellings or units already erected or constructed on the said leased premises have failed to enhance or add to the value of the property which is the subject matter of said lease, or to the value of plaintiff's other said property. Additional buildings of the same kind and character as those already erected or constructed on said leased premises likewise would add nothing to enhance the value of the property which is the subject matter of said lease, or to the value of plaintiff's said other property, at the present time or at any subsequent time, up to and including the expiration of the lease term, to wit: April 30, 1975, nor thereafter; likewise the failure so to erect or construct said dwellings or units has not, nor will it, detract from, nor reduce, the value of said premises which are the subject matter of the said Lease or of plaintiff's said other property’; ‘[i]t is untrue that the cost of construction of dwellings or units in Tecopa, County of Inyo, California, as contemplated in said Lease and Amendment or Modification thereof would be $5,110.00 per dwelling or unit, and in view of the type of sub-standard construction of said dwellings and units already on said premises, which were shack-like structures of little, if any, value, the cost, if any, of similar type buildings would be merely nominal only.’
The court concluded that plaintiff ‘is not entitled to specific performance of the said Lease Agreement. for the reason that an adequate remedy at law was, and has been, available to her.’
Judgment was for defendant. Plaintiff appeals. Her only assignment of error is the insufficiency of the evidence to support the finding that no damages resulted to her by reason of defendant's breach of the agreement of May 1, 1950. This is the only question before this court. Plaintiff argues that the measure of damages is the reasonable cost of constructing the additional dwellings or units.
Defendant merely asserts: 1. the agreement of May 1, 1950, between Francis and defendant is not subject to specific performance (plaintiff does not contend that it is); 2. no damages were sustained by plaintiff. She argues that even if it were held that the cost of constructing the contemplated units is the proper measure of damages, plaintiff would not prevail in view of the court's finding such cost would be nominal only. Defendant makes no contention that an action for damages will not lie because of uncertainty as to the type of dwellings or units which were to be constructed. The question is not mentioned in the briefs.
The finding that defendant breached the agreement is amply supported by the evidence. Defendant does not complain of that finding. Indeed, she could not for in 1953 she said to plaintiff: ‘If you kids think I am going to build any of those buildings called for in the lease, you are crazy.’
The finding that no damages resulted from the breach of defendant's agreement to construct the additional buildings is contrary to the evidence. The evidence is uncontradicted that plaintiff sustained substantial damages from defendant's breach of the agreement.
At the time the agreement to construct 15 dwellings or units was executed defendant was constructing four units on the leased premises. They were motel units. She had acquired two officers' barracks in Tonopah, Nevada, and had them moved to the leased property. She had had tie foundations laid. Both parties tried the case on the theory the buildings were affixed to the soil. The outside dimensions of each of the two buildings were 20 feet 4 inches by 50 feet 4 inches. There was a 1 by 6 subfloor on which there was a tongue and groove Douglas fir floor and, on that, asphalt tile throughout each building. The floors were on 2 by 6 joists. The roofs were composed of 1 by 6 solid sheathing nailed on with batting, with asphalt rags, and stone topping. Each unit had three rooms: a living room and kitchen combined, a bedroom, and a bath. Each unit had two doors. The inside walls were in part 1/4-inch Douglas fir plywood and in part 1/2-inch plasterboard. The outside walls were 1- by 12-inch Douglas fir boards. The ceilings were 1/2-inch plasterboard. Each unit had seven electrical outlets, a floor furnace, a cooler, a bath or stall shower, a toilet, a washbasin, and a medicine cabinet. Three units each had a 25-gallon water heater. The units were connected to a cesspool. The photographs in evidence show the interiors of the four units to be modern in every respect and to compare favorably with the average motel unit. The agreement was executed about May 1, 1950 and the four units were completed by the first week in June 1950.
Defendant testified the cost of constructing the four units she erected in May 1950 was about $4,000, exclusive of furnishings. Plaintiff's witness, a general building contractor who had examined the four units in 1956, testified that in his opinion the cost at that time of erecting structures comparable to the four units in Tecopa was about $5,117.10 a unit. There was no other evidence on the question of damages.
The measure of damages for a breach of contract, except where it is otherwise expressly provided by statute, is the amount that will compensate the party aggrieved for all the detriment proximately caused to him by the breach, or which, in the ordinary course of things, will be likely to result therefrom. Civ.Code, § 3300. In Sprague v. Fauver, 71 Cal.App.2d 333, 162 P.2d 865, this court held that where a lessee covenants in a lease to construct improvements on leased realty and breaches the contract, the lessor is entitled to recover the reasonable cost of construction. Also see Turner v. Howze, 28 Cal.App. 167, 172–173, 151 P. 751; Fabian v. Lammers, 3 Cal.App. 109, 113, 84 P. 432; Taylor v. North Pac. Coast Ry. Co., 56 Cal. 317, 319; Trainor Co. v. Aetna Cas. & S. Co., 290 U. S. 47, 54 S. Ct. 1, 78 L.Ed. 162, 164. The Restatement says that for a breach by one who has contracted to construct a specified product the other party can get judgment for ‘the reasonable cost of construction and completion in accordance with the contract, if this is possible and does not involve unreasonable economic waste.’ Rest., Contracts, 573, § 346.
It is patent from the agreement of May 1, 1950, that the dwellings or units were to be for motel or hotel purposes. It is further unmistakable that the four units or dwellings then under construction were part of the 15 units to be constructed; and it is also manifest that the parties knew and intended that the dwellings or units which defendant agreed to construct were to be of the type and the standard of those under construction, which were for motel purposes.
We find no reasonable ground for holding, under the finding that defendant breached the contract, that the cost of constructing similar buildings would be nominal only and defendant's failure to construct them resulted in no damage to plaintiff.
We are not concerned with any provision of the lease between Francis and the Joneses. It is the written agreement between Francis and defendant, and that agreement only, with which we are concerned. The assignment of a lease creates a privity of estate between the original lessor and the assignee on the acceptance by the latter of the assignment. No contractual relation comes into existence between them by the mere force of the assignment. 30 Cal.Jur.2d 370, § 224. Defendant did not assume the contractual obligations of the lease or agree to be bound by any of its provisions. In the absence of a new contractual stipulation there is no privity of contract between the assignee and the lessor. An assignee who holds the demised property merely by virtue of an assignment of the lease, without any contractual relation with the lessor to fulfill the covenants of the lease, is bound only for obligations arising from actual possession or privity of estate, as distinguished from privity of contract. 30 Cal.Jur.2d 371, § 227. The only contractual stipulations between Francis, the original lessor, and defendant are to be found in the agreement of May 1, 1950.
We conclude the finding that plaintiff suffered only nominal damages by defendant's breach and that the units constructed in May 1950 were of little, if any, value, is unsupported by the evidence.
The judgment is reversed for a new trial on the issue of damages only. Appellant shall recover her costs on appeal.
I dissent. The buildings which Mrs. Moudy purchased from Jones were rested upon railroad ties and were chattels, the property of Jones. The ‘barracks' buildings which defendant placed upon the land were rested upon railroad ties, were understood to be and were the property of defendant, and this would be true of any additional buildings to be provided by defendant. The lease to Jones so provided, in the following clauses ‘(f)–1. Interest in ownership of all buildings and improvements on Lessee's lease shall start reverting to the Lessor at the rate of 4% per year from the time they are built. 2. Present buildings on lease to B. Elias shall start reverting to Lessor at the rate of 4% per year November 1, 1947. 3. Lessee shall report date and value of all buildings as constructed to Lessor.’ (Italics ours.)
The majority opinion reverses the judgment for a retrial of the issue of damages only. Under that opinion, upon a retrial, the evidence being the same, the following propositions would be the law of the case:
1. Francis and Mrs. Moudy understood and agreed that all additional buildings would be the equivalent of the two ‘barracks' buildings that defendant had placed upon the land.
2. If more barracks buildings were unavailable (and there was only one more) Mrs. Moudy would have to duplicate them with new construction.
3. The buildings which defendant agreed to provide would be permanently affixed to the soli and the property of the lessor.
4. It is wholly immaterial that under express provisions of the lease the buildings would be chattels in which the lessor would acquire an interest only at the rate of 4% a year.
5. It is immaterial whether the barracks buildings, which defendant provided and which the majority opinion holds were to be duplicated, were chattels, and the property of defendant, subject to the provisions of the lease.
6. That the proper measure of damages would be the cost of new construction, duplicating the barracks buildings, namely, $10 per square foot, without taking into consideration the age of the barracks buildings or the fact that the lessor would not acquire full ownership or use of the buildings for 25 years, both of which facts would necessarily require application of the factor of depreciation.
Under the holding of the majority opinion the trial court would be required to find that defendant agreed to duplicate the barracks buildings with new construction, and that expert testimony that new construction would cost $10 or $12 or $14 per square foot was competent to prove plaintiff's damage. Therefore, since there was no other evidence of the cost of new construction, and no evidence of the cost of duplicating the barracks buildings in their obsolescent condition, the trial court would be justified in findings that each unit in the barracks building, which was approximately 20 by 25 feet square, would cost new at least $5,000 per unit, and that plaintiff had been damaged in the sum on at least $55,000. That would be a shocking result in a case in which plaintiff could establish, under proper evidence, no more than nominal damages.
The problems I have mentioned are interrelated but they all flow from the same basic errors.
I shall discuss first the nature of plaintiff's interest in the buildings that were to be provided. The agreement required defendant to ‘erect’ (not construct) additional units. In attempting to establish a claim for damages for defendant's failure to ‘erect’ eleven more ‘dwellings or units' it was necessary for plaintiff to prove what her interest in the buildings would have been if they had been erected. She proved this, but without realizing that she had proved it, by placing the Francis-Jones lease in evidence. She assumed that the buildings when erected would be affixed to the soil as a part of the realty and that she would own them. Her proof established that this was not so, but that the buildings and five trailers which Mrs. Moudy had acquired from Jones, and any additional buildings were and would be and remain chattels. There was no provision in the lease or in the agreement between Francis and Mrs. Moudy that the units would be affixed to the soil or that they would become the property of Francis as they were placed on the land, or even that they would be left on the land. In May, 1950, at the time of the Francis-Moudy agreement Francis had acquired something less than a 12 per cent interest in the old buildings and five house trailers. Mrs. Moudy provided four units in 1950, leaving two to be provided in 1952 and six by May, 1957. If the units had been erected as agreed Francis would have had a 100 per cent interest in them at verying times between 1975 and 1982.
The majority opinion disregards these provisions of the lease by misapplying the rule that the assignee of a lease does not, without special agreement, assume all the obligations of his assignor. No one has contended to the contrary. No one is attempting to enforce the lease as against Mrs. Moudy. It is manifest that the rule relied upon in the majority opinion could not operate to transfer from Mrs. Moudy to Mr. Francis title to additional units which would be erected under an express provision of the lease that Francis would acquire an interest in the chattels only at the rate of 4 per cent per year from the time each building was erected. Francis, and consequently plaintiff, had no interest in the buildings other than that to be acquired under the foregoing provisions of the lease. Plaintiff is bound by those provisions, equally with the defendant.
The majority opinion disregards facts that lie at the very foundation of the controversy. These are that it was conclusively established by the evidence that all the old buildings were personal property and were sold by Jones to Mrs. Moudy as such; it was a covenant of the lease that additional buildings would be personal property, and the barracks buildings were rested upon ties and were personal property.
Mrs. Moudy, as assignee of the lease, had a right to rely upon the provisions of the lease with respect to ownership of additional units. Francis had a right to rely upon those same provisions, and Mrs. Moudy could not have denied him the right to acquire ownership in the chattels as provided in the lease. These propositions are elementary. 30 Cal.Jur.2d 367.
How then, can this court say that additional dwellings or units would belong to the lessor as soon as they were placed upon the land? And how can it be said, as plaintiff contends and as the majority opinion holds, that the two barracks buildings belong to the lessor and that additional buildings would be real and not personal property?
The cost of new construction was a false base for the ascertainment of plaintiff's damages. Plaintiff, assuming that she had proved that she would own the buildings as they were erected, introduced the testimony of a contractor. He described the barracks buildings and testified that new construction of the same size, class and type would cost, at Tecopa, at least $10 per square foot. Each of the four units in the two barracks buildings was approximately 20 by 25 feet and accordingly the cost of each unit would be $5,000. The witness also testified that if each unit were built separately the cost would be $12 or $14 per square foot. This testimony was objected to and the objection was overruled; it should have been sustained. Mrs. Moudy testified that the four units had cost her approximately $1,000 each. She had acquired and transported the two buildings for $1,950. Altogether it cost $1,000 per unit to complete them, or $4,000 less per unit than the cost of new construction. There was no other evidence relevant to the issue of damage.
Regardless of the type, size, class or cost of units that the parties had in mind (if they had anything definite in mind), plaintiff would have had no possession or use of any of the buildings except at various intervals between 1975 and 1982. Defendant would have had the exclusive use of each of them for 25 years. Plaintiff's damage for failure to erect eleven more buildings, if she had adopted that theory of damage, could have been no more than the value of the buildings after they had been in use for 25 years. In ascertaining this value the court would have been required to determine the normal rate of depreciation of the type and class of buildings defendant was required to erect. That would have been impossible for the trial court to do for two reasons, first, as I shall presently point out, there was no agreement as to the type or class of buildings that were to be erected, second, there was no evidence as to the annual rate of depreciation of a building of any type or class. Obviously this was not a matter that was judicially known to the court, and it is not known to this court. (If what is generally used as a normal rate of depreciation should be applied the buildings would be 100 per cent depreciated by the time plaintiff acquired full ownership in them.) There is no need to resort to any rule of law for the proposition that the element of depreciation could not be ignored. Common everyday practices in business and trade tell us that when defendant was obligated to erect eleven buildings and surrender possession and title to plaintiff at the expiration of 25 years she had no duty in order to meet that obligation to pay plaintiff presently the cost of new construction.
An additional point that is fatal to plaintiff's case is that there was never any meeting of the minds of Mr. Francis and Mrs. Moudy as to the type, class, size of cost of the buildings that were to be provided. Plaintiff alleged that it was the understanding that the buildings would be just the same in every particular as the barracks buildings. The answer denied this allegation and alleged there was no agreement with respect to the kind or type of ‘dwellings or units' that were to be erected. This defense was urged upon the trial with respect to the claim for specific performance and also the claim for damages. This was a vital factual question presented to the trial court which, upon the evidence, could reasonably have been resolved against the plaintiff and I think that properly interpreted the court's findings did determine the issue against her. The majority opinion amounts to a finding of the factual issue in favor of plaintiff, as if it were a pure question of law.
The majority say ‘it is also manifest that the parties knew and intended that the buildings or units which defendant agreed to construct were to be of the type and the standard of those under struction, [and] which were for motel purposes.’
By treating this factual issue as if it presented a mere question of law the majority opinion not only purports to impose upon defendant an obligation to construct new buildings at $10 per square foot, but it also is a holding that the contract was definite, certain and capable of enforcement. The opinion proceeds upon this erroneous premise.
The court found that Mrs. Moudy obligated herself to ‘erect or place upon the property’ fifteen buildings comparable to the old buildings that she had acquired from Jones or to the barracks buildings which she had placed upon the property. This could only mean that the trial court was unable to decide, and did not decide, what type or class of buildings were agreed upon, but inferentially decided that there had been no meeting of the minds upon that point. Plaintiff does not complain of the failure of the court to make a more definite finding, nor does she show that she objected to the finding or requested a better one. It therefore stands as a finding that plaintiff's proof failed to establish that there was a meeting of the minds as to the type or class of buildings to be erected or placed upon the property. Nevertheless this court holds as a matter of law that it was the understanding of Francis and Mrs. Moudy that the latter was required not only to duplicate the barracks buildings but to duplicate them with new construction. Not only is this holding gravely in error, but there was no evidence whatever of any discussion between the parties with respect to the type of class of buildings to be provided. Moreover, in their agreement care was taken to use the word ‘erect’ instead of ‘construct’. There cannot be read into the agreement an obligation to ‘construct’ anything.
Some time after May of 1950, Mr. Francis married Mrs. Moudy. Some two months after the barracks buildings had been moved on but before the parties were married, Mr. Francis and Mrs. Moudy discussed placing more buildings upon the property. Mrs. Moudy testified as follows:
‘A. At that time there was still one more of these buildings available at Tonopah, and I had considered getting another one, but we had a discussion and my son was for getting another one, but Mr. Francis said no, that those five houses that I had taken over very definitely needed the money spent on them, so that is what I did.
‘Q. Did he ask you not to spend it on any more units? A. He persuaded me not to get any more units but to take care of those five houses, because they needed to be done over completely.
‘Q. Did you then spend money on those five houses? A. Yes, I did.
‘Q. How much money did you spend on those five houses?
‘Mr. Stegman: I object as being incompetent, irrelevant and immaterial as to how much money she spent on the five houses on a separate lease, your Honor.
‘The Court: Overruled.
‘A. Actually how much I spent on them I don't know, but at least thousand dollars a house, I should say, I spent on them because they had to be practically new-roofed and some of them floored and partitions put in them and, of course, furnished, and flush toilets—there were no toilets. One house had a toilet in it; the rest of them none had flush toilets.’
Mrs. Moudy's son died in 1952 and Mr. Francis died in 1953. There was no evidence whatever of any conversation between Mr. Francis and Mrs. Moudy with respect to additional buildings except the one to which she testified as above. Mr. Francis never suggested that Mrs. Moudy bring in or erect any more buildings. The trial judge was so discouraged with plaintiff's attempt to prove an agreement as to the type, size and class of buildings that were to be erected that he found himself unable to make that determination. Wherefore, he found only that they were to conform either to the barracks buildings or to the old ones.
It is manifest that the plaintiff could not prove an agreement to bring in more old ‘barracks' buildings and that the trial court could not have found there was such an agreement. There was only one more available and Mr. Francis did not want it brought in. How, then, can this court hold, in view of the absence of any obligation to ‘construct’ anything, in view of the equivocal finding of the trial court, and as a matter of law, that Mrs. Moudy was obligated to ‘construct’ eleven more new dwellings or units comparable to the barracks buildings?
The reasons for the inability of the court to make a more definite finding will appear in my discussion of the next point.
The trial court properly refused to make a contract for the parties where they had made none that was enforceable.
I have made note of the fact that the agreement was to ‘erect’ (not construct) additional dwellings or units. The words ‘erect’ and ‘units' are significant. By ‘erect’ the parties no doubt had in mind that used structures would be brought in and that defendant was not obligated to construct new ones.
There were five houses and five house trailers which defendant had purchased from Jones. Some trailers were on wheels, others on railroad ties. They were rental ‘units'. They served the same purpose as the houses, and were superior to some of them. Bringing in more trailers would be erecting units.
I doubt that there could be found, except, perhaps, in some desert ghost town, a more heterogeneous and nondescript collection of so-called dwellings.
In all the cases of construction contracts in which the thing to be built was not described with reasonable certainty enforcement has not been decreed except upon competent evidence of an understanding of the parties which supplements the contract by removing its uncertainty and thus rendering it susceptible of enforcement. There has been evidence of some standard which the parties understood would be met. In the present case there was none. Some of the five buildings were very ancient but they were used as rental units. Two of them were built on railroad ties. Plaintiff's expert contractor ridiculed these, and perhaps some of the others, which he said were constructed of 1 by 12 planks, as having been put together not by a carpenter but by a handyman. It appears that the buildings had rough cement floors and that some of them had aluminum roofs with no sub-roof; these buildings the witness said, with an excess of moderation, would become ‘warm’ in summer under the desert sun. In fact as to the several buildings he expressed doubt that anyone would want to live in them. Some buildings consisted of one room each, others of two rooms. Some had plumbing, others had none. Some had plywood partitions, others had wallboard partitions. Some had built-in cabinets, others had none. One was built of artificial stone and had double doors but no windows in front. Another was built of heavy planking with no windows in front. No two were alike as to size, and except for those that were built of railroad ties, no two were the same with respect to exterior construction. There was no uniformity of interior construction. Only one had a flush toilet. And yet all were ‘dwellings or units', and duplication of any of them with old buildings brought in could be held to be performance upon defendant's part.
I have found no case, and am sure none can be found in the books, in which enforceability was decreed of a contract so lacking in essentials as the present one. I have found many in which contracts considerably less uncertain than the one before us were held unenforceable for uncertainty.
Defendant's obligation to erect units was an inseparable part of the lessor-lessee relationship, since the erection of additional units was a matter that was in material respects controlled by the provisions of the lease. It is not necessary to decide whether defendant's agreement was within the statute of frauds. No question is presented as to the right to supply any essential of the contract by extrinsic evidence. Plaintiff offered none.
In Ellis v. Klaff, 96 Cal.App.2d 471, 216 P.2d 15, 17, an action for damages, the agreement was to build a “building or buildings as soon as building conditions reasonably shall permit. * * * Any building or structure constructed by the lessee shall comply strictly with the Building Code of the city of Buenaventura.” Of that contract we said (96 Cal.App.2d at page 478, 216 P.2d at page 20): ‘The construction clause in the lease, as written, however, is too vague and uncertain to give rise to a contractual duty. Aside from the requirement that the ‘building or buildings' comply with the city building code, and the implication that it (or they) be sufficiently substantial to be a valuable asset after expiration of the term, the lease is manifestly incomplete in failing to specify whether the lessee was to construct one or more buildings and is wholly silent as to the size, type, materials, location, cost, appearance, or any other details of construction. The language of the construction clause thus shows that, at the time of the execution of the lease, the parties expected to supplement it by a future agreement with respect to the improvement of the property. Although the terms of a contract need not be stated in the minutest detail, it is requisite to enforceability that it must evidence a meeting of the minds upon the essential features of the agreement, and that the scope of the duty and limits of acceptable performance be at least sufficiently defined to provide a rational basis for the assessment of damages. 12 Am.Jur., sec. 64, p. 554. Tested by these settled rules, the construction clause in the present lease upon its face is manifestly unenforceable.’
In Ferrara v. Silver, 138 Cal.App.2d 616, 292 P.2d 251, the agreement was to build a ‘banquet hall’. The court wrote (138 Cal.App.2d at page 619, 292 P.2d at page 253): ‘How large was the building to be? How much of the lot was to be covered? How much was it to cost? Was it to be of concrete, brick or wood? How many stories? How finished inside and out?’ I do not quote more of the opinion that followed. It is illuminating and I suggest that anyone interested in a sound statement of the law should read it.
The majority say that defendant does not argue in her brief that the agreement is so uncertain as to be unenforceable in damages. This is true. She argues only against specific performance. This is no reason for reversing the judgment. The point was strongly urged at the trial; it will be urged again upon a retrial, and in my opinion, will be sustained. If the judgment is to be reversed because defendant has not argued all available reasons for affirmance of the judgment, all I can say is that if counsels' ‘missing the boat’ in this lawsuit is to be taken as a reason for penalizing the innocent parties, neither of them would have got closer to court than the courthouse steps. The merits of this appeal cannot be determined without deciding whether the contract sued on is enforceable by way of damages. If plaintiff should prevail upon a retrial there will be another appeal and the question of enforceability will be for decision.
It is a fact that the parties overlooked and continue to overlook the provisions of the lease with respect to the lessor's requiring an interest in the buildings at the rate of 4 per cent per year. The significance of those provisions, as they affect the plaintiff is that if she does not rely upon them she has not established any interest in the units that have been erected or the missing ones. From the standpoint of the defendant those provisions destroy plaintiff's contention that she is entitled to the cost of present construction, without consideration being given to the factor of depreciation.
It is evident that the trial court had in mind the possible condition of the units ‘up to and including the expiration of the lease term, to wit: April 30, 1975.’ The court found ‘Additional buildings of the same kind and character as those already erected or constructed on said leased premises likewise would add nothing to enhance the value of the property which is the subject matter of said lease, or to the value of plaintiff's said other property, at the present time or at any subsequent time, up to and including the expiration of the lease term, to wit: April 30, 1975, nor thereafter; likewise the failure so to erect or construct said dwellings or units has not, nor will it, detract from, nor reduce, the value of said premises which are the subject matter of the said Lease or of plaintiff's said other property. It is untrue that the cost of construction of dwellings or units in Tecopa, County of Inyo, California, as contemplated in said Lease and Amendment or Modification thereof would be $5,110.00 per dwelling or unit, and in view of the type of substandard construction of said dwellings and units already on said premises, which were shack-like structures of little, if any, value, the cost, if any, of similar type buildings would be merely nominal only.’
Plaintiff by her complaint elected to claim as damages the detriment she allegedly sustained in the loss of the appreciation in value of her land which she would have realized had all the buildings been placed upon the land. This would have been one measure of damage had the buildings been permanently affixed to the land. She introduced no evidence in support of her theory of damage. Therefore the court found that she had sustained no damage, consisting of the alleged appreciation in value of her land. What else could the court have found. If a plaintiff seeks damages and proves none the court has to find that no damage has been sustained. The court found that all the buildings were sub-standard, the old ones, and the barracks as well. So they were. But sub-standard or not, the court could not find, in the absence of all evidence on the subject, what value, if any, the contemplated buildings would have added to the value of the land, as of April 30, 1975.
I could have placed this dissent upon the sole ground of the unenforceability of the contract. But if the majority opinion should prevail and be given full effect as the law of the case the consequences to Mrs. Moudy would be ruinous. In any event it would be a grave injustice to her to reverse the judgment for the purpose of allowing the plaintiff to revise her theory of damages, and to supply competent evidence, which she miserably failed to do when she had the opportunity. One trial of this case is enough.
I would affirm the judgment.
PARKER WOOD, J., concurs.