BRANT v. CALIFORNIA DAIRIES (1934)

Plaintiff, a dairyman, sued to recover damages for alleged breach of contract by defendant as milk distributor. The two corporate names set out in the complaint refer to but one defendant; the name California Dairies, Inc., having been changed to Western Dairy Products, Inc.

Defendant's predecessor had marketed plaintiff's product on a schedule of prices agreed upon and subject to change by mutual agreement, the distributor receiving a commission on the retail bottled and wholesale milk thus sold. In February of 1929, after defendant had taken over the milk distributing business, plaintiff became dissatisfied with this agreement and indicated his intention of reducing his herd unless a more satisfactory marketing agreement could be consummated. Certain letters were exchanged between plaintiff and one Carver, an official of defendant corporation, which plaintiff contends constituted a contract between the parties and pursuant to which defendant undertook to market an amount of milk which was to be increased each month until a certain maximum had been attained. Upon failure to distribute the amount set out in the letters or to reach an agreement with reference to future sales, the relations between the parties terminated and plaintiff sued for damages. Upon judgment for defendant he appeals.

Plaintiff contended that certain correspondence should be construed as constituting a contract to the effect that defendant would market milk produced by him on a commission basis in a volume starting at 950 quarts per day in January and increasing to a maximum of 1,500 quarts per day at the monthly rate of increase of 50 additional quarts per day, at a price fixed at that time, advertising costs being shared by the parties, and providing that defendant could withdraw from the agreement to sell such quantities of milk at the fixed price only upon one year's notice. The trial court found in effect that plaintiff in good faith placed this construction on the correspondence and that plaintiff believed that the official Carver, of defendant corporation with whom plaintiff was dealing, placed the same construction on it. The court found that Carver in good faith placed a different construction on the correspondence and believed that plaintiff shared with him the view he entertained as to its effect. This latter construction included terms which permitted defendant, if the distribution were unsuccessful as to quantity or price, to negotiate with plaintiff for such a reduction of price or other modification of terms as appeared requisite to a successful marketing arrangement, and if no such modification could be agreed upon they would be mutually released, and that the agreement to give a year's notice was subordinate to the above agreement as to modification of terms.

The court found “that the minds of said plaintiff and said Carver never met, and that they did not understand their correspondence in the same sense or, as hereinbefore found, give to it the same interpretation or construction.” It further found that the letters in dispute were ambiguous and “that the fairest and most logical and reasonable interpretation of said correspondence as a whole” and of the said letter was that contended for by defendant, and that the construction urged by plaintiff was “an extremely unfair, unjust and unreasonable construction.” Certain other findings uphold the good faith and diligence of defendant in its relations with plaintiff.

While the construction of a contract is always a matter of law for the court, no matter how ambiguous or uncertain or difficult its terms (O'Connor v. West Sacramento Co., 189 Cal. 7, 207 P. 527), if the facts and circumstances to be considered in the interpretation of the contract are in dispute, their determination by the trial court on conflicting evidence will not be disturbed on appeal. That is, where the contract is ambiguous, so that there might be two possible and reasonable constructions, “if the construction given by the trial court is one which is tenable, and one which appears to us consistent with the true intent and meaning of the parties, it would not lie within the province of an appellate court to set aside the judgment of the trial court and substitute its own interpretation, simply because another interpretation thereof is also possible.” Manley v. Pacific Mill & Timber Co., 79 Cal. App. 641, 648, 250 P. 710, 713. Similarly, where it appears, as in this case, that there are two possible constructions and that the trial court has found that one construction was adopted by one party and the other different construction was adopted by the other, this court on appeal will not undertake to substitute its views for those of the trial court.

The difference in understanding centered around plaintiff's contention that he had a right to a year's notice if defendant was to cease distributing the quantity fixed, at the price under which they were then working, and defendant's contention that such requirement for notice was agreeable only if they mutually adjusted the quantity and price to meet market conditions. The oral testimony properly admitted, together with correspondence of the parties, was such as to justify if not require the determination made by the trial court that there was no meeting of minds of the parties and there could be, therefore, no contract. Civ. Code, § 1580. “It is essential to the validity of a contract that the parties should have consented to the same subject-matter in the same sense.” Harvey v. Duffey, 99 Cal. 401, 33 P. 897, 899. “There can be no contract unless the minds of the parties have met and mutually agreed.” German Savings & Loan Soc. v. McLellan, 154 Cal. 710, 99 P. 194, 196.

By reason of the above views it appears unnecessary to consider the other points raised.

Judgment affirmed.

SCOTT, Justice pro tem.

We concur: STEPHENS, P. J.; CRAIL, J.